Adopt Resolution #26-060 Approving Construction Contingency Expense #13 for Centralized Water Treatment Plant, Improvement Project #21-09 

Purpose:
The purpose of this case is to adopt Resolution #26-060 approving Construction Contingency Expense No. 13 for Centralized Water Treatment Plant, Improvement Project #21-09.   
 
Background:
Construction costs for the Water Treatment Plant (WTP) include a construction contingency allowance of $950,000 to pay for new items identified 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.  This construction contingency allowance is equal to approximately 3-percent of the overall construction bid price. Any unused allowance funds will be deducted from the final payment.
 
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 No.’s 1 through 12, as well as the two (2) items proposed to be adjusted during construction as part of Construction Contingency Expense No. 13. 
 
No extension of time is being approved as part of Construction Contingency Expense No. 13.  However, if the contractor decides to request an extension of time for any of the Construction Contingency Expenses at a later date, the request would be presented in the form of a formal Change Order.   

Notifications are not required for this case.  

Observations:
The modifications proposed by Construction Contingency Expense No. 13 will serve to reduce operational and maintenance costs and improve operating and safety conditions over the life of the WTP. 

A cash allowance summary is also attached to this case summarizing the current status and expenditures associated with the five (5) dedicated cash allowances identified within the Contract Documents. The total value of the cash allowances equals $350,000.  Based on expenditures approved to date, the remaining aggregate allowance balance is $94,535.21.  In accordance with the Contract, any unused portion of these allowances will be credited to the Owner at final payment.   
 
Alternatives:
Alternative #1 – Motion to adopt Resolution #26-060 approving Construction Contingency Expense No. 13 for Improvement Project #21-09, Centralized Water Treatment Plant.  

Costs associated with Construction Contingency Expense No. 13 total $2,383.10.  The original Construction Contingency amount was $950,000.  Approving Construction Contingency Expense No. 13 will reduce the available construction contingency amount to $238,267.51, which equals 25-percent of the original contingency amount.

Staff and AE2S are confident the construction of the WTP is progressing well and is not likely to require additional funding to cover change orders beyond what is already reserved in the construction contingency allowance.  

Staff and AE2S recommend approving Construction Contingency Expense No. 13 for reasons summarized in this case and the attached letter.   

Motion to adopt Resolution #26-060 approving Construction Contingency Expense No. 13 for Centralized Water Treatment Plant, Improvement Project #21-09.