Title
Recommendation to Amend the Contract with MCK Services, Inc. to Extend the Term and Increase Compensation by $5,365,739.15, Including Contingency, for a Total Cumulative Contract Amount of $15,078,600.41 for Repair and Resurfacing of Certain Streets, Phase 36, No. P.W. 04-17-24 (Public Works 310)
Body
To: Honorable Mayor and Members of the City Council
From: Jill Keimach, City Manager
Re: Recommendation to Amend the Contract with MCK Services, Inc. to Extend the Term and Increase Compensation by $5,365,739.15, Including Contingency, for a Total Cumulative Contract Amount of $15,078,600.41 for Repair and Resurfacing of Certain Streets, Phase 36, No. P.W. 04-17-24
BACKGROUND
On June 7, 2014, the City Council awarded a contract in the amount of $2,356,430.63 including contingencies, to MCK Services, Inc., for an overlay of nine streets and slurry sealing of two streets. This was a competitive bid, with authorization from Council to extend the contract by up to four additional years. This year is the third of the four allowable extensions. On June 18, 2015, the City awarded a first amendment to the contract in the amount of $2,356,430.63, including contingencies, to MCK Services, Inc., for an overlay of nine streets and slurry sealing of three streets. On June 21, 2016, the City awarded a second amendment, erroneously entitled “First Amendment”, to the contract in the amendment amount of $5,000,000, including contingencies, to MCK Services, Inc., for an overlay of 7.43 miles of streets and slurry seal of 0.42 miles of streets. The proposed contract is for $4.3 million, with contingencies bringing the total to $5.3 million. This information is summarized below.
|
Contract |
Approval Date |
Authorized Amount |
Expended to Date |
|
Original Contract |
6-07-2014 |
$2,356,430.63 |
$2,146,659.03 |
|
1st Amend |
6-18-2015 |
$2,356,430.63 |
$1,556,209.64 |
|
2nd Amend. |
6-21-2016 |
$5,000,000.00 |
$4,655,537.38 |
|
3rd Amend. (proposed) |
6-16-2017 |
$5,365,739.15 |
$ 0.00 |
|
Total |
|
$15,078,600.41 |
$8,358,406.05 |
DISCUSSION
The contract originally signed in 2014 has a clause allowing for a cost of living increase each year equal to the Consumer Price Index (CPI). This year, the CPI was 3.8%. In the past two years, concrete work has risen at a much higher rate than the CPI - in some cities the cost has doubled. As a result, for this year’s resurfacing contract, the Contractor has agreed to use the unit prices for concrete work identical to the unit prices proposed by this year’s low bidder for the Sidewalk Repair Program, with no subcontractor mark up. The remaining unit prices are adjusted in accordance with the CPI. The City is very pleased with the work performed by this contractor, especially as the City has successfully doubled our street paving work and increased our pavement condition to a level of “good” for the first time in many years.
A copy of the amended contract is attached as Exhibit 4.
FINANCIAL IMPACT
On June 2, 2015, the City Council approved the Fiscal Year 2015-2017 Capital Budget with $10,000,000 being allocated for pavement management over a two-year period. The funds for all pavement repair contracts are budgeted in the Capital Improvement Program (Fund 310) Project Number 91610, with funds available from:
• Old Measure B (Fund 215) $400,000
• Measure B (Fund 215.1) $6,010,000
• Measure BB (Fund 215.11) $2,010,000
• Integrated Waste (Fund 274.1) $100,000
• Vehicle Registration Fund (VRF) (Fund 288) $1,000,000
• Sewer Service (Fund 602) $480,000
The total budget of $10,000,000 was later adjusted down to $9,807,000. From this budget, the City expended and committed $5.5M, including the following:
• Fiscal Year 2015-2016 engineering and pothole repair for $0.3M
• Fiscal Year 2016-2017 engineering, pothole repair, and striping for $0.5M
• Resurfacing contract in 2016 for $4.7M
This leaves $4.3M available from the FY 15-17 budget, which covers the proposed base contract (not including contingencies).
On June 6, 2017, the City Council approved the Fiscal Year 2017-2019 Capital Budget with $8,139,000 being allocated for pavement management over a two-year period. The funds from various sources are budgeted in the Capital Improvement Program (Fund 310) Project Number 91810. If funds are needed for the contingency amount of this project, they can be taken from the $2,485,000 of Measure B (Fund 215.1) budgeted for pavement management for Fiscal Year 2017-2019.
There is no impact to the General Fund.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
This project is consistent with the Waste and Recycling Initiative of the Local Action Plan for Climate Protection by requiring recycling of 80% of all construction waste. In addition, the contractor is encouraged to use recycled content in the asphalt concrete.
ENVIRONMENTAL REVIEW
In accordance with the California Environmental Quality Act (CEQA), this project is Categorically Exempt under CEQA Guidelines Section 15301(c), Existing Facilities.
RECOMMENDATION
Amend the contract with MCK Services, Inc. to extend the term and increase compensation by $5,365,739.15, including contingency, for a total cumulative contract amount of $15,078,600.41 for repair and resurfacing of certain streets, phase 36, No. P.W. 04-17-24.
Respectfully submitted,
Liam Garland, Acting Public Works Director
By,
Shahram Aghamir, City Engineer
Financial Impact section reviewed,
Elena Adair, Finance Director
Exhibit:
1. Original Contract
2. First Amendment
3. Second Amendment
4. Third Amendment