Adopt Resolution #25-031 Approving Construction Contingency Expense No. 8 for Improvement Project #21-09, Centralized Water Treatment Plant

Purpose:
The purpose of this case is to adopt Resolution #25-031 approving Construction Contingency Expense No. 8 for Improvement Project #21-09, Centralized Water Treatment Plant.  

Background:
The Water Treatment Plant (WTP) project includes a construction contingency cost of $950,000 intended to pay for new items during construction that were not contemplated during the design process or for items that the owner, engineer, or contractor(s) propose to revise during construction.

The attached letter from Resident Project Representative Ryan Hanson with Advanced Engineering and Environmental Services, Inc. (AE2S), the City’s contracted project engineer, identifies those items approved under previous Construction Contingency Expense requests, as well as the items proposed to be adjusted during construction as part of Construction Contingency Expense No. 8.  

No extension of time is being requested as part of Construction Contingency Expense No. 8.  However, the contractor may decide at a later date to request an extension of time for any of the Construction Contingency Expenses.  If a time extension request is made, it will be presented at a later date in the form of a formal Change Order request.   

Notifications are not required for this case.   

Observations:
The modifications proposed with Construction Contingency Expense No. 8 will reduce maintenance costs and improve environmental conditions within the WTP over the life of the plant, and are necessary to accommodate previous plan modifications resulting from Department of Labor and Industry requirements and modifications approved as part of Construction Contingency Expenses #1 and #3.    

Alternatives:
Motion to adopt Resolution #25-031 approving Construction Contingency Expense No. 8 for Improvement Project #21-09, Centralized Water Treatment Plant.   

Costs associated with Construction Contingency Expense No. 8 total $31,463.77.  The original Construction Contingency amount was $950,000.  Approving Construction Contingency Expense No. 8 will reduce the available construction contingency amount to $416,890.92, which equals 43.9-percent of the original contingency amount.

Attached to this case is a project budget status letter prepared by the project engineers at AE2S.  As is noted in the letter, AE2S feels the construction of the water treatment plant is progressing well and is not likely to require additional funding to cover change orders beyond what is already reserved in the construction allowances. However, this letter also states that over the last six months, AE2S invoices to the city have averaged $31,000 per month and at that current burn rate they expect to run out of budget by August 2025, which will likely leave them short on budget to provide the necessary start up assistance at the new Substantial Completion date of July 28, 2025.  Staff will therefore meet with AE2S to discuss reducing their efforts on-site or amending their fee to ensure enough budget remains to complete the project.   

Staff and AE2S recommend approving Construction Contingency Expense No. 8 for reasons summarized in this case and the attached letter.   

Motion to adopt Resolution #25-031 approving Construction Contingency Expense No. 8 for Improvement Project #21-09, Centralized Water Treatment Plant.