Presentation update to City Council followed by discussion and possible direction to staff on any and all matters regarding the West Wastewater Treatment Plant Expansion Project.  (Eulogio Vera, Director of Public Works)

As the City Council is aware, the City of San Luis has been working on planning the expansion of the West Wastewater Treatment Plant for several years. The project was initiated in 2021 with a comprehensive analysis of the existing facility and an evaluation of multiple expansion alternatives. Based on the findings of that study, the City selected the Construction Manager at Risk, or CMAR, delivery method for design and construction of the project.

The City engaged Pacific Advanced Civil Engineering, Inc. (PACE) to serve as the design engineer for the project. Following that selection, the City conducted a separate request-for-qualifications process to select a construction partner, resulting in the selection of PCL Contractors. In July 2025, the City executed a pre-construction services agreement with PCL to work alongside PACE during the design phase.

Throughout the pre-construction phase, PACE, PCL, and City staff conducted multiple design workshops to review the project design and its constructability with the goal of reducing conflicts and risks during construction. As part of these CMAR pre-construction services, PCL collaborated directly with PACE to refine the design and proposed the use of an intensification process intended to improve construction phasing and accelerate the overall schedule. With City approval, PCL retained a third-party engineering firm to evaluate the feasibility of this intensification approach.

In addition, PCL prepared an early procurement Guaranteed Maximum Price (GMP Proposal) for the electrical scope of work and developed a 90% design cost model for the overall project. That cost model was significantly higher, nearly three times the City’s established project budget. The City had also reviewed three separate cost estimates, including estimates prepared by PACE at the 60% and 90% design stages, as well as an independent estimate prepared by a third-party cost estimating firm. Based on these prior estimates, the City has set its total project budget for design and construction at under $30 million.

The City and PCL engaged in multiple negotiations in an effort to reconcile the cost differences. However, both parties ultimately determined that an agreement was unlikely to be reached. As a result, the Department of Public Works, in coordination with the Engineering Department, Finance Department, and City Administration, made the decision to terminate negotiations and conclude the pre-construction services contract with PCL.

Moving forward, the Department of Public Works will transition the project from the CMAR delivery method to a traditional Design-Bid-Build approach. To facilitate this transition, the City has requested a proposal from PACE to provide additional services necessary to support bidding and construction under this delivery method. These services include revisions to the plans and specifications to accommodate competitive bidding, administration of the bidding process, and construction-phase services.

In addition, the project will be divided into three construction phases.

• Phase One will consist of constructing a new sewer force main connecting Lift Station 300 to the West Wastewater Treatment Plant.
• Phase Two will involve the wastewater treatment plant expansion itself, which is the most complex and time-intensive phase.
• Phase Three will include construction of the new operations building within the treatment plant site.

Under a subsequent agenda item, in the near future, staff will present a change order proposal from PACE to incorporate these additional services and accommodate the transition to the Design-Bid-Build delivery method as described.