SUBJECT: FOURTH AMENDMENT TO AGREEMENT WITH THE CITY OF MILPITAS
RECOMMENDATION
Approval of a fourth amendment to the agreement with the City of Milpitas to secure additional funding for construction of South Bay Water Recycling projects, increasing the maximum amount payable by $348,622, from $12,155,631, for a total not to exceed $12,504,253, and extending the term of the agreement by nine (9) months, from December 31, 2002 to September 30, 2003. CEQA: Resolution No. 64667.
South Bay Water Recycling (SBWR) is one of the main components of the 1997 South Bay Action Plan implemented by the City of San Jose on behalf of the Water Pollution Control Plant (WPCP) and the tributary agencies as a means of maintaining the amount of freshwater flows from the WPCP to 120 million gallons per day (mgd). A master planning process was approved by the City Council in 1998 to identify the most appropriate areas and types of expansion to the SBWR system.
In June 1995, San Jose entered into an interagency agreement with the City of Milpitas to secure engineering design, construction, and construction inspection services for SBWR facilities within Milpitas at a cost not to exceed $200,000. The agreement was amended in June 1997 to authorize a customer-retrofit grant program; in August 1999, to design and construct the Alder Drive and McCarthy Boulevards extensions; and in March 2000, to design and construct three major infill projects (M-2, M-3, and M-4) as well as several other smaller pipelines extensions. Approval of the Third Amendment increased the total compensation to an amount not to exceed $12,155,632.
On May 22, 2001 bids were opened for construction of the M-4 segment, with an apparent low bid of $3,410,000. Since the amount allocated in the third amendment for construction of this project was $3,268,000 an additional $142,000 is required to award this contract. In addition, the engineer’s estimate prepared in May 2001 for projects M-2 and M-3 totaled $4,315,000, which is $358,000 over the budgeted amount of $3,957,000. Total additional funds required for completion of these projects is now estimated at $500,000, approximately 6.9% over the originally estimated cost. An additional $762,500 is also recommended as a contingency to ensure completion of the projects and to provide for additional pipeline construction requested by the City of Milpitas and authorized by the Director of Environmental Services. Total additional funds recommended for construction of work specified in the agreement is $1,262,500.
Other elements of work specified in the agreement have been completed at a lower cost than originally estimated. Savings in the cost of work specified in the original agreement and Amendments #1 and #2 totaled $178,547.48. In addition, out of $3,900,331 budgeted, only $3,165,000 will be needed to complete design work specified in Amendment #3 increasing the total savings to $913,878.48. It is recommended that these funds be reallocated from the tasks completed and be applied to the additional funds required for completion of the remaining pipeline projects.
Overall, it is recommended that the Milpitas Agreement be amended to increase the budgeted amounts by $348,622, with other funds reallocated as specified above.
The specification and alignment of projects covered in this agreement were developed with input from various stakeholders, including the cities of San Jose, Santa Clara, and Milpitas, other tributary agencies, and the Santa Clara Valley Water District and an Advisory Committee comprised of community and business leaders. In addition, public meetings were held in Milpitas, San Jose, and Santa Clara to review the proposed improvements.
COORDINATION
The activities in this memo have been coordinated with the cities of Milpitas, Santa Clara, and the City Attorney’s Office. This is scheduled to be heard at the June 14, 2001, Treatment Plant Advisory Committee (TPAC) meeting.
COST IMPLICATIONS
This amendment would increase compensation by $348,622. Existing funds are available in the current budget to cover this cost increase.
BUDGET REFERENCE
Page 517
CEQA
SBWR Nonpotable Water System Environmental Impact Report, San Jose City Council Resolution 64667; Addenda No. 5 and 6, South Bay Water Resources Program Environmental Impact Report, was approved by the Milpitas City Council February 1, 2000.
CARL W. MOSHER
Director, Environmental Services Department