HomeMy WebLinkAboutStaff Report 14918
City of Palo Alto (ID # 14918)
Finance Committee Staff Report
Meeting Date: 11/15/2022 Report Type: Action Items
City of Palo Alto Page 1
Title: Approval of a Construction Contract With Anderson Pacific Engineering
Construction (APEC) in the Total Amount of $161,846,500; Approval of Three
Amendments to Existing Agreements with: 1) Stanford University, 2) East
Palo Alto Sanitary District, and 3) Mountain View and Los Altos; Approval of
Amendment #2 to Contract Number C19171565 with Brown & Caldwell to
Add Services, to Increase Compensation by $1,484,689 for a New Maximum
Compensation Not-to-Exceed $5,908,791, and to Extend the Contract Term
through March 31, 2028; Approval of Amendment #2 to Contract Number
C21176592C with Carollo Engineers to Add Construction Management
Services, to Increase Compensation by $8,237,021; approval of a resolution
to increase Clean Water State Revolving Fund fina ncing to $193,000,000;
approval of a budget appropriation increasing revenue and expenses; and
approval of an exception to Debt Policy 1 -65 for the Secondary Treatment
Upgrades Project (WQ -19001) at the Regional Water Quality Control Plant.
From: City Mana ger
Lead Department: Public Works
Recommendation
Staff recommends that the Finance Committee recommend City Council:
1. Approve and authorize the City Manager or their designee to execute the construction
contract (Contract) with Anderson Pacific Engineering Construction, Inc. (APEC), in the
amount of $161,846,500 for the Secondary Treatment Upgrades (STU) project, funded
in Wastewater Treatment Enterprise Fund Capital Improvement Program (CIP) project
WQ-19001, at the Regional Water Quality Control Plant;
2. Authorize the City Manager or their designee to execute one or more change orders to
the contract with APEC for related, additional but unforeseen work that may develop
during the project, the total value of which shall not exceed $16,184,650 or 10% of the
contract amount, for a total not-to-exceed amount of $178,031,150;
3. Approve Amendment No. 8 to the agreement between Palo Alto and Stanford
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University (Attachment A); Addendum No. 1 to the Agreement between Palo Alto and
the East Palo Alto Sanitary District (Attachment B); and Addendum No. 11 to the
agreement among Palo Alto, Mountain View, and Los Altos (Attachment C);
4. Approve and authorize the City Manager or their designee to execute Amendment No. 2
to Contract No. C19171565 with Brown and Caldwell (BC) (Attachment D) to increase
the contract amount by $1,484,689 to provide design engineering services beyond the
original scope of the contract for the design of the STU Project (CIP WQ-19001), and to
extend the term through March 31, 2028. The revised total contract amount is not to
exceed $5,908,791 including $5,371,628 for basic services and $537,163 for additional
services;
5. Approve and authorize the City Manager or their designee to execute Amendment No. 2
to Contract No. C21176592C with Carollo Engineers (Attachment E) to increase the
contract amount by $8,237,021 to provide construction management and inspection
services during construction for the STU Project (CIP WQ-19001). The revised total
contract amount is not to exceed $8,841,268 including $8,037,516 for basic services and
$803,752 for additional services;
6. Approve a resolution amending Resolution 9945 (Attachment F) to increase the
reasonably expected maximum principal amount of funding to $193,000,000 for design
and construction of the Secondary Treatment Upgrades (CIP WQ-19001) and authorizing
reimbursement of such funding from the Clean Water State Revolving Fund (SRF);
7. Approve an amendment to the FY 2023 Budget Appropriation for the Wastewater
Treatment Fund (requires a 2/3 majority vote) by:
a. Increasing revenue from Other Agencies estimate from a State Revolving Fund
Loan by $44,200,400
b. Increasing the Secondary Treatment Upgrades capital project (WQ-19001)
appropriation by $44,200,400; and
8. Authorize an exception to City Policy and Procedures Debt Policy 1-65 Guideline V.A.6 to
allow the Wastewater Treatment Enterprise Fund to use a debt limit exceeding 15
percent of annual Wastewater Treatment Enterprise Fund operating expenses.
Executive Summary
Staff is seeking a recommendation to advance a key project to upgrade the secondary stage of
the wastewater treatment system for the City’s Regional Water Quality Control Plant. The
Secondary Treatment Upgrades (STU) project will be financed by the state low-interest SRF loan
program and be repaid by Palo Alto and its five partner agencies. The project was identified in
the 2012 Long Range Facilities Plan (LRFP). Design began in 2018 and bids solicited in 2022, with
three bids received on October 6, 2022. Council approval is recommended to award the
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construction contract and ancillary support contracts and financing. Construction would start in
early 2023, to be completed by about November 2027. Loan payments on the debt service will
begin in 2028.
To initiate the construction phase of the project, Council will be approving:
• A construction contract with APEC;
• Amendments to design and construction management service contracts with Brown and
Caldwell (BC) and Carollo Engineers, respectively;
• A Resolution to set maximum SRF loan financing at $193 million;
• Three partner agreements with Stanford, East Palo Alto Sanitary District, and Mountain
View and Los Altos for financing of the capital program;
• Budget amendments to increase SRF Loan revenue and increase the Secondary
Treatment Upgrade capital project (WQ-19001); and
• An increase to the debt policy granting an exception to Debt Policy 1-65 Guideline V
related to the debt level carried by the Wastewater Treatment Enterprise Fund.
Background
The Palo Alto Regional Water Quality Control Plant (Treatment Plant) provides wastewater
treatment services for the cities of Palo Alto, Mountain View, and Los Altos; the Town of Los
Altos Hills; Stanford University; and the East Palo Alto Sanitary District. The Treatment Plant is
an advanced treatment facility that uses a multi-stage process to remove organic materials and
other pollutants from approximately 16 million gallons per day of wastewater generated in the
service area. The treated effluent is predominantly discharged to San Francisco Bay and meets
the stringent discharge requirements of the California Regional Water Quality Control Board as
well as the requirements for reuse in recycled water applications. Palo Alto owns and operates
the Treatment Plant’s wastewater treatment and disposal facilities and is responsible for
managing capital improvements to the plant.
In 2012, Treatment Plant staff conducted a Long Range Facilities Plan (LRFP) to review existing
and future (50-year time frame) capacity needs, plant condition and deficiencies, the impacts of
potential regulatory changes, alternatives to the existing solids incineration and liquid
treatment processes, site layouts for plant improvements and potential expansion, and
preliminary cost estimates. The LRFP, which was the first comprehensive long-range plan since
1966, included recommendations to rehabilitate and replace existing facilities nearing the end
of their useful life. The highest priority projects are being implemented over multiple years to
effectively manage resources and costs. Construction of the sludge dewatering facility was
completed in 2019, which was a key component of the LRFP. The primary sedimentation tank
rehabilitation project is in construction and will be completed in 2023. Other facilities requiring
capital improvement in the next 10 years for facilities at the end of their useful life include a
new outfall pipe, new support facilities, relining of an aging joint intercepting sewer, and a new
headworks facility.
The Treatment Plant was originally constructed in 1934 and has undergone several expansions
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and upgrades. A key upgrade in 1972 included construction of a biological treatment process
unit (i.e., secondary treatment). The process unit consists of four concrete aeration basins (each
measuring 120 feet by 135 feet and 20 feet deep) that allow the growth of specific bacteria to
breakdown and remove organic compounds in the wastewater. Ancillary facilities include an air
blower room and pump stations. This equipment delivers oxygenated process air and
recirculates sludge, as needed. Other equipment includes a standby power generator, electrical
switchgear, and motor control centers to distribute electrical power to the process equipment.
This equipment is between 28 to 50 years old and beyond its useful life. The current secondary
treatment process is not able to remove nitrogen which is a new regulatory requirement to
discharge treated effluent to San Francisco Bay to prevent toxic algae blooms.
Bid documents were prepared and bids solicited from construction contractors. A
memorandum of understanding for proprietary equipment for the STU project was approved by
Council on August 1, 2022 (SR ID#11496) and included in the bid documents.
On June 21, 2021, Council approved five separate five-and-a-half-year contracts (Contract
C21179265, SR ID# 12324) with MNS Engineers, Inc.; CDM Smith; Carollo Engineers; MCK
Americas, Inc.; and Tanner Pacific, Inc. These contracts provide for RWQCP On-Call Construction
Management and Inspection Services; were initially set at a not-to-exceed total amount of $1
per contract; and provide qualified consultants that can provide on-call services during
construction of various capital projects recommended by the Long-Range Facilities Plan (LRFP).
Services to be used are on a per-project basis, at the City’s discretion. One contract with MNS
Engineers was authorized by Council for a not-to-exceed amount of $1.6 million.
Background: California Clean Water State Revolving Fund (SRF) Program
The State Water Resources Control Board Division of Financial Assistance administers the Clean
Water State Revolving Fund (SRF) program. The SRF program provides low interest financing to
agencies for wastewater projects. Under this program, eligible projects can apply for loans with
interest rates that are approximately half of the State General Obligation rate, resulting in
lower project costs and maximizing benefits to ratepayers and partner agencies. For the
Secondary Treatment Upgrades project, Palo Alto executed a loan with the SRF program on
May 9, 2022 with favorable terms including a 0.8% fixed interest rate, a 30-year term, project
financing of approximately $169 million, and debt payments that will start one year after
project substantial completion. Palo Alto has previously obtained SRF loans for the:
• Palo Alto/Mountain View Recycled Water Pipeline project ($9.0 million, 20-year term,
Agreement 07-814-550, executed 10/12/07);
• Ultraviolet Disinfection Facility ($8.5 million, 20-year term, Agreement 09-814-550,
executed 10/27/09);
• Sludge Dewatering and Truck Loadout Facility ($25.7 million, 30-year term, Agreement
D16-01034, executed 6/7/17); and
• Primary Sedimentation Tanks Rehabilitation and Equipment Room Electrical Upgrade
Project ($19.4 million, 30-year term, Agreement D20-01009, executed 7/12/21).
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Council previously approved Resolution 9945 (SR ID#11834), authorizing the reimbursement of
the funding for this project by the SRF program. At that time, project financing was set at $169
million. Having received three actual bids for construction work, staff now requests Council to
approve a revised resolution to authorize reimbursement of $193 million for a new financing
amount. Staff is currently in negotiations with state SRF program staff for the increased loan
amount. SRF program staff have indicated that they can fund the increased amount for the loan
at the same interest rate, however, a revised resolution of authorization approved by Council
for reimbursement is required for the increased funding amount.
The total SRF loan application includes the costs for planning, design, construction, construction
contingency, capital program administration, and construction management. The partner
agreements being approved by Council with Mountain View, Los Altos, EPASD, and Stanford
University will all require modification for the increased funding amount required; the partner
agencies documents should be amended by early 2023. As stated previously, the partner
documents authorize up to $169 million. Because the bids came in higher than the Engineer’s
estimate, the partner agreements will be amended to ensure repayment of the increased SRF
loan financing.
Background: Brown and Caldwell Design Amendment No. 2
On October 1, 2018, Council approved a professional services contract (SR ID#9485) for design
services with BC for the STU Project at the Palo Alto Regional Water Quality Control Plant
(RWQCP). The original contract amount was $2,923,357 including $2,657,597 for basic services
and $265,760 for additional services.
After the initial contract award, BC performed field survey work, equipment condition
assessments, process design modeling, preliminary design calculations, equipment sizing, and
prepared plans. It was through this process that the Membrane Aerated Biofilm Reactor
technology was found to be a superior process component for the long-term operation of the
RWQCP, although the shorter-term design and construction costs are higher than for the
process originally envisioned. This design approach constituted a scope change in the design
work. On December 7, 2020, Council approved Amendment No. 1 (SR ID#11155) to this
contract to increase the contract amount by $1,500,745 to allow BC to provide additional
services required to meet the City’s latest design standards (including Palo Alto's Sea Level Rise
Adaptation Policy (SR ID#9576) approved by Council March 18, 2019), and integrate the new
design into the existing process through a complicated construction and operation phasing
effort. The amendment included an increased contract amount and additional time to perform
the work.
As the design proceeded, it became evident that construction sequencing was becoming more
complicated and required a longer construction duration as a result of attempting to build the
project, while also operating the RWQCP to meet permitted discharge limitations.
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Discussion
The secondary treatment process must be upgraded to a process that removes harmful
nitrogen by creating both oxygen-deficient and oxygen-rich zones in modified aeration tanks.
The project will improve final water quality, ensure the Plant continues to meet effluent
discharge permit limits, and allow for ultimate decommissioning of the aging biotrickling filters
and other aging equipment. The project will rehabilitate four concrete aeration basins as well as
the blower room and sludge pumping stations. Equipment will be replaced including, piping and
ancillary systems, extending the useful life of mechanical and electrical equipment components
by at least another 30 years, while the concrete and steel structure life cycle will be extended
by at least another 50 years. The scope of work includes the following for all four basins:
replacement of the air bubble diffusers and the piping manifolds in the basins; replacement and
automation of influent and effluent flow diversion gates; concrete work to install new flow
channels for flow distribution; replacement of air blowers and sludge pumps; installation of two
pump stations, a standby generator and an electrical power load center; and replacement of
aging motor control centers (i.e., electrical power distribution equipment).
Discussion: Construction Contract Bid Process
On July 21, 2022, the City solicited formal bids from qualified contractors for the STU Project.
The bidding period was 78 calendar days. Three (3) bids were received on October 6, 2022, with
bid prices ranging from $161,846,500 to $167,518,500 as noted in the Bid Summary
Attachment G). Bid process details are summarized in Table 1 below. The lowest bid was
$161,846,500.
Table 1: Summary of Bid Process
Bid Name/Number STU Project (IFB-185822)
Proposed Length of Project 58 months after Notice to
Proceed
Number of Bid Packages downloaded by Contractors and
Subcontractors 41
Number of Bid Packages downloaded by Builder’s Exchanges 14
Number of Bid Packages downloaded by Suppliers and Others 39
Total Days to Respond to Bid 78
Pre-Bid Meeting (In Person) Yes
Number of Companies Attended Pre-Bid Meeting 17
Number of Bids Received: 3
Base Bid Price Range $161,846,500 to $167,518,500
Staff has reviewed all bids submitted and recommends the bid of $161,846,500 submitted by
APEC be accepted and that APEC be declared the lowest responsible bidder. The base bid is
36% above the Engineer's estimate of $118,707,335. Supply chain issues, high inflation
including high oil prices, local market volatility, duration of the contract, and geopolitical events
such as the war in Ukraine, uncertainty about the situation with China/Taiwan are factors
attributed to the bids being much higher than the Engineer’s estimate. However, the “bid
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spread” on the three bids received are within 3.5% of each other, indicating a common
understanding of the project scope and cost. Staff is not recommending a rebid because of the
tight bid spread and the likely risk of higher construction costs due to more inflation-induced
expenses in a rebid situation, including the already negotiated pricing for the Membrane
Aerated Biofilm Reactor equipment with Suez. Furthermore, higher bids in 2022 have been
experienced at neighboring wastewater treatment plants (e.g., City of Sunnyvale’s Secondary
Treatment Upgrade project engineer’s estimate of $150 to $250 million and low bid of $278
million; Union Sanitary District’s Aeration Basin Modifications project engineer’s estimate of
$64 million and low bid of $121 million). The recent neighboring agency examples further
reveal the context of a higher bid environment for construction work, lending additional
support for the recommendation to award to APEC now, which will leverage the favorable
terms of the SRF program loan and move the City forward in a timely manner on needed
wastewater treatment capital investment.
A contingency amount of $16,184,650 (10% of the bid price) is requested for related, additional
but unforeseen work that may develop during the project. Staff confirmed with the
Contractor's State License Board that the contractor has an active license on file.
Discussion: Partner Agencies’ Agreements
Partner agreements were modified, and each agency will be approving the attached
agreements by their Board, Council, or authorized representative on the following dates:
Stanford (pending), Mountain View (11/15/22), Los Altos (11/29/22), and East Palo Alto
Sanitary District (11/3/22). Note that Los Altos Hills has the smallest contribution to the Plant
and has a different agreement that does not require them to approve capital improvement
projects. It is recommended that Council approve the following:
• Amendment No. 8 to the Agreement between Palo Alto and Stanford University
(Attachment A);
• Addendum No. 1 to the Second Amended and Restated Agreement between Palo Alto
and the East Palo Sanitary District (Attachment B); and
• Addendum No. 11 to the Agreement between Palo Alto, Mountain View, and Los Altos
(Attachment C).
In October 2016, Council approved contract amendments (SR ID #7144) with partner agencies
for the planning and design of the STU Project. To fund the SRF loan, the partner agencies
approved up to $169 million in funding. The partners also approved up to $12 million in funding
for the Outfall Pipeline project. Staff will return to Council for approval of construction and loan
financing for the Outfall Pipeline project with details in a separate staff report. Approval of
these partner agreements does not commit the City to the Outfall Pipeline project.
In May 2021, Council approved contract amendments (SR ID #11735) with partner agencies for
the construction of the Primary Sedimentation Tank Rehabilitation Project Council for a total
SRF loan of $19.4 million. In these new partner agreements, the partners agreed to increase the
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project’s maximum financing from $17.0 million to $19.4 million to reflect increases in project
costs, including design engineering, construction management, construction contingency,
program management, and construction costs.
Discussion: Brown & Caldwell Design Contract Amendment No. 2
The 100% design construction schedule is now projecting a construction duration of
approximately five years, with each of the four aeration basins requiring one year to be
converted from the existing to the modified process upgrades. Construction is anticipated to
begin in early 2023 and continue to November 2027. Under the original design contract, it was
anticipated that construction was expected to commence in early 2020 with the upgraded
facility fully operational by spring 2022.
It is recommended that Council approve Amendment No. 2 to add funds in the amount of
$1,484,689 to the project to address the delayed construction start date, additional
construction duration, and for:
1. Additional design services:
a. Further development of an indicative construction schedule.
b. Further development of construction sequencing and constraints specifications.
c. Preliminary design of temporary facilities and systems required during
construction, including development of preliminary design drawings.
d. As-needed additional engineering services for unforeseen site conditions and
coordination with other ongoing major capital projects at the RWQCP
e. Updated opinion of probable construction cost and projection of cash flow during
construction for budgeting purposes.
f. Participation in a constructability review to be conducted by the City’s selected
construction manager.
g. Additional meetings and workshops.
2. Additional bid period services associated with the items listed above and the expanded
scope and complexity of the Project.
3. Additional engineering services during construction associated with a larger volume of
construction documents and resubmittals of the items listed above and the expanded
scope and complexity of the Project.
4. Additional commissioning and startup services to account for staged commissioning and
startup of the Project.
5. Additional project management services associated with the expanded scope and duration
of the Project.
6. Updated costs, accounting for increases in hourly billing rates, for providing engineering
services during construction.
The original BC design contract amount was $2,923,357. Amendment No. 1 to the contract
increased the contract amount by $1,500,746. Amendment No. 2 adds $1,484,689 to the
contract. The revised total contract amount is a not-to-exceed $5,908,791 including $5,371,628
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for basic services and $537,163 for additional services.
Discussion: Carollo Engineers Construction Management Contract Amendment No. 2
On June 8, 2022, staff provided each of the five construction management consultants a scope
of services with a list of tasks needed for the upcoming construction project (i.e., Work Order
#3). Four proposals were received from Carollo Engineers, MNS Engineers, MCK Americas, and
Tanner Pacific with prices ranging from $7,488,200 to 14,482,634.
Table 2: Summary of Construction Management Work Order Proposals
Request for Work Order Proposal Issued June 8, 2022
Deadline for Questions, Clarifications July 11, 2022
Proposals Due July 20, 2022
Proposals Received 4
Finalist Identified 1
Proposals Price Range $7,488,200 to 14,482,634
An evaluation committee consisting of Public Works Department staff was formed to review
the four proposals. The committee carefully reviewed each firm's qualifications and submittal in
response to the criteria identified in the Request for Work Order Proposal, including quality and
completeness of the proposal, quality and effectiveness of services, experience with projects of
similar scope and complexity, prior record of performance, cost, proposer’s financial stability,
and ability to provide future maintenance and/or services.
Council scheduled approval of construction and construction management services for a
separate project on November 14, 2022 (SR-14602), entitled the 12kV Electrical Power
Distribution Loop Rehabilitation Bid Package 1 Project (WQ-19002) at the Regional Water
Quality Control Plant. That construction contract, also with APEC, will also be managed and
inspected by Carollo Engineers under Amendment #1 to Contract Number C21176592C to add
services, to increase compensation by $604,246 for a new maximum compensation not-to-
exceed $604,247 for the Wastewater Treatment Enterprise Fund for the 12kV Electrical Power
Distribution Loop Rehabilitation Bid Package 1 Project (WQ-19002) at the Regional Water
Quality Control Plant.
Staff recommends amending the contract with Carollo, who provided a more comprehensive
approach to the services, demonstrated a clear understanding of needs, had the lowest cost,
and proposed innovative solutions to the challenges of the complex capital program. Total costs
are shown in Table 3 below.
Table 3: Carollo Engineers, C21176592C, Authorized Funding
Staff Report
Basic
Services
Additional
Services
Not-to-
Exceed
Total
SR ID# 12324, initial contract, 6/21/22 $1 -- $1
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SR ID# 14602, Amendment #1, 11/14/22, 12kV
Electrical Power Distribution Loop Rehabilitation
Bid Package 1 Project (WQ-19002)
$549,314 $54,932 $604,246
SR ID# 14918, Amendment #2, 11/15/22,
Secondary Treatment Upgrades Project (WQ-
19001)
$7,488,201 $748,820 $8,237,021
Total: $8,037,516 $803,752 $8,841,268
Timeline
During construction, multiple channels and tanks must be bypassed, taken out of service,
cleaned, upgraded, and returned to service. At least six major phases are anticipated. As a
result, the complex phasing requires a 58-month construction duration. The BC design contract
Amendment No. 2 will extend the consultant contract term from March 31, 2025 to March 31,
2028.
Secondary Treatment Upgrades
Design: Complete
Construction start: January 2023
Construction complete: November 2027: 58-month duration
Design services complete March 2028: 4-month post construction
First STU project loan payment: November 2028: 1-year after substantial completion
Resource Impact
The SRF loan for the in-progress Primary Sedimentation Tanks Rehabilitation Project is being
amended from the already approved $17.0 million to a new financing amount of $19.4 million,
as detailed in partner agreements (Attachments A, B, and C). Loan repayments for the Primary
Sedimentation Tanks Rehabilitation Project will begin in calendar year 2024, one year after
project substantial completion.
The SRF loan for the Secondary Treatment Upgrades Project is approximately $169 million; staff
has revised that financing to $193 million. Total project cost estimates were adjusted when new
Engineer’s cost estimates and design stages were completed. The requested loan amount
reflects securing the initial loan with an approximate total project estimate. The design and
construction of this project, including associated construction management and administrative
costs, will be financed through the SRF loan, which is disbursed to Palo Alto on a
reimbursement basis. Pursuant to SRF policy, the first repayment occurs one year after project
substantial completion, which is estimated to be in calendar year 2028. The annual SRF loan
repayment, which includes principal and interest, is based on an amortized period of 30 years.
The estimated annual repayments paid by each contributing partner agency are summarized in
Tables 4 and 5 below.
Table 4: CWSRF Loan Repayment Partner Agency Estimates
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Primary Sedimentation Tank (PST) Rehabilitation Project
Contributing Partner Agency Percent Share Annual Repayment1
Palo Alto 38.16% $282,682
Mountain View 37.89% $280,681
Los Altos 9.47% $70,152
East Palo Alto Sanitary District 7.64% $56,595
Stanford University 5.26% $38,965
Los Altos Hills 1.58% $11,704
Total: 100.00% $740,779
Note: 1. Based on CWSRF loan amount of $19,400,000 at 0.9% locked interest rate for 30-year
term
Table 5: CWSRF Loan Repayment Partner Agency Estimates
Secondary Treatment Upgrades (STU) Project
Contributing Partner Agency Percent Share Annual Repayment1
City of Palo Alto 38.16% $2,767,754
City of Mountain View 37.89% $2,748,171
City of Los Altos 9.47% $686,861
East Palo Alto Sanitary District 7.64% $554,131
Stanford University 5.26% $381,509
Town of Los Altos Hills 1.58% $114,598
Total: 100.00% $7,253,025
Note: 1. Based on CWSRF loan amount of $192,767,840 at 0.8% locked interest rate for 30-year
term
This is a multi-year contract over the course of design and through the completion of
construction. The funding for this amended contract will be allocated from the Wastewater
Treatment Enterprise Fund Capital Improvement Program Project (WQ-19001). As approved in
the FY 2023 Adopted Budget, WQ-19001 has total funding of $149.2 million, with State
Revolving Fund (SRF) loan revenue of $148.8 million budgeted to offset the costs for this
project, and the remaining $0.4 million covered by the Wastewater Treatment Fund. Staff
previously secured a SRF loan (at 0.8% interest rate) as the source of funding for the design
contract, and future construction and construction management contracts in the amount of
$169.0 million, and recommends increasing this amount to $193.0 million as part of this
memorandum. Increasing the SRF Revenue by $44.2 million will allow staff to increase the WQ-
19001 capital project by $44.2 million to align with the project scope.
Palo Alto RWQCP treats the combined wastewater from Palo Alto, Los Altos, Los Altos Hills,
Mountain View, Stanford University, and the East Palo Alto Sanitary District. Palo Alto’s share of
this project is 38.16% and the other five agencies’ share is 61.84%, based on the fixed capacity
established in partners’ agreements. As the lead agency, the City of Palo Alto will appropriate
the funding for this Project in the Fiscal Year 2023 Wastewater Treatment Enterprise Fund
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Capital Improvement Program Budget for the Secondary Treatment Upgrade Project (WQ-
19001). The design and construction of this project, including associated construction
management and administrative costs, is being financed through the CWSRF loan, which is
disbursed on a reimbursement basis.
Cashflow Impacts from State SRF Loan Reimbursement Process
The City’s Wastewater Treatment Fund cash balance was $12.7 million on June 30, 2022. Staff is
working to improve estimation methods for the cash balance. Potential negative cash balances
could occur in the future (depending on spending patterns). The cash balance is used to handle
cash flows that cover differing timing of revenues and expenses. The RWQCP’s large capital
program will be using several SRF loans in the coming years, including the large SRF loan for the
STU Project. Contractor expenses are expected to be many millions of dollars each month with
standard payment terms within 30 days. The state reimburses the City for these payments to
contractors, however on a much longer timeframe (e.g., four to six months based on past
experience). On past projects funded by SRF, this reimbursement cycle never caused a
Wastewater Treatment Fund drawdown to a negative balance, because those past projects had
much lower monthly contractor bills. For the STU, a much larger project, the mismatch in timing
of reimbursement from the state is expected to cause a much greater drawdown of the
Wastewater Treatment Fund cash balance, potentially causing a negative fund balance over the
life of the STU project. Exact timing of the negative cash balance depends on contractors’
spending patterns over the 58-month construction duration. In discussions with the State, they
have indicated that they cannot improve on the turnaround time for reviewing disbursement
requests.
Potential solutions are being investigated by Administrative Services Department staff including
short term loans from the private financial market, or loans from other City Enterprise Funds
which would help cover the short-term timing issue for cashflow. Staff is planning to return to
the Finance Committee in early 2023 with additional information about this issue, which is
created by use of the SRF loan as the favorable debt financing instrument for the RWQCP
capital program. A loan from the General Fund Budget Stabilization Reserve is also being
studied.
Policy Implications
This recommendation does not represent any change to existing City policies, except as noted
below for the Debt Policy, and supports the Comprehensive Plan Policy N.4-16.
The City’s Debt Policy 1-65, adopted April 11, 2017 (SR ID#7892), includes guidelines for use of
debt and other financing. In Section V, Guidelines for Use of Debt and Other Financing, annual
debt service is not to exceed 15 percent of annual operating expenses unless an exception is
approved by Council. Current debt service is approximately 7.4% of annual operating
expenditures. Future debt service is expected to exceed 15% in November 2028 and be 30%
when the first debt payment on the STU project is due. Council is requested to authorize an
exception to the debt policy for the Wastewater Treatment Enterprise Fund. Use of pay-as-you-
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City of Palo Alto Page 13
go financing for large, complex wastewater treatment projects is impractical and would put an
inequitable and untimely burden on ratepayers that may not ever benefit from the new capital
equipment. Use of debt financing to spread the costs across ratepayers for 30 years of
beneficial use is common for wastewater capital equipment in Palo Alto and in neighboring
agencies. An increase in the pay-as-you-go financing capital program (i.e., about $3.4 million
currently) would not be able to support the large capital projects such as the STU project, which
is triggering the need for an exception.
Stakeholder Engagement
This project is part of the RWQCP’s major capital improvement program funded by Palo Alto
and the five partner agencies who use the RWQCP for wastewater treatment. The five partner
agencies are regularly updated on both the need for and the progress of wastewater treatment
capital work. Updates are provided each year at an annual meeting and at other periodic
meetings established to inform partner agency staff about the major capital improvement
program. With respect to Palo Alto itself, the open meetings on the budget process serve as the
main vehicle for engaging the community on both new projects such as this and associated rate
impacts.
Environmental Review
The construction of the Secondary Treatment Upgrades Project is exempt under sections
15301, 15302, and 15303 of the California Environmental Quality Act (CEQA) Guidelines. The
City of Palo Alto filed a Notice of Exemption for the Secondary Treatment Project Upgrades
Project on April 2, 2021 (State Clearinghouse #2021040051).
Approval of Brown and Caldwell design amendment #2 and the three partners agreements are
not subject to CEQA review under section 15378(b)(4) of the CEQA Guidelines in that it is a
government fiscal activity which does not involve any commitment to any specific project which
may result in a potentially significant physical impact on the environment.
Attachments:
• Attachment A_Amendment 8 to Contract C869 with Stanford
• Attachment B_Revised Addendum 1 to the 2nd Restatement Agreement with EPASD
• Attachment C_Revised Addendum 11 to Basic Agreement with Mountain View and Los
Altos
• Attachment D - Amend 2 to Contract C19171565 with B&C
• Attachment E - C21179265C_Carollo_Amendment #2_For MT draft
• Attachment F - RESO 9945 (Amend for Revised Funding)
• Attachment G - Bid Summary
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ATTACHMENT A
AMENDMENT NO. EIGHT TO CONTRACT NO. C869
BETWEEN THE CITY OF PALO ALTO AND THE BOARD OF
TRUSTEES OF THE LELAND STANFORD JUNIOR UNIVERSITY
This Amendment No. Eight (8) to the Contract is made and entered into on
, by and between the CITY OF PALO ALTO, a chartered city and a
chartered municipal corporation of the State of California (“City”) and the BOARD OF
TRUSTEES OF THE LELAND STANFORD JUNIOR UNIVERSITY, a body having corporate
powers under the laws of the State of California (“Stanford”) (individually, a “Party”; collectively,
the “Parties”).
R E C I T A L S:
A. The Parties have entered into that certain Contract Between Palo Alto and
Stanford, executed on November 30, 1956, as amended by the Addendum and Amendments
described below (collectively, the “Contract”). The Contract has been amended seven times as
follows: Addendum No. One (1) to the Contract Between the City of Palo Alto and Stanford,
dated as of June 11, 1971; Amendment No. Two (2) to the Contract Between the City of Palo
Alto and Stanford, dated as of November 2, 1998; Amendment No. Three (3) to the Contract
Between the City of Palo Alto and Stanford, dated as of March 16, 2009; Amendment No. Four
(4) to the Contract Between the City of Palo Alto and Stanford, dated as of October 17, 2016;
Amendment No. 5 to the Contract Between the City of Palo Alto and Stanford, dated as of August
13, 2018; Amendment No. Six (6) to the Contract Between the City of Palo Alto and Stanford,
dated March 4, 2019; and Amendment No. Seven (7) to the Contract Between the City of Palo
Alto and Stanford, dated May 17, 2021.
B. Palo Alto owns and operates the sewage system (the “System”) pursuant to the
Contract, and is responsible for making capital additions to the System. Under the Contract, prior
to commencement of construction of any capital additions or enlargements of the System, City and
Stanford shall agree upon the terms of payment by Stanford of its proportionate cost.
C. The Parties now desire to increase the maximum amount of financing authorized
for the construction of the Primary Sedimentation Tank Project approved by Amendment No.
Seven (7) to reflect increases in Project Costs as defined therein, including design engineering, construction
management, program management, and construction costs.
D. The Parties further desire to agree to construct a capital addition to improve the
Joint System by upgrading the secondary treatment process (biological process) to a process that
removes harmful nitrogen by creating anoxic and aerated zones in existing aeration basins. This
Secondary Treatment Upgrades or “STU” Project will improve final water quality, ensure the Plant
continues to meet effluent discharge permit limits, and allow for ultimate decommissioning of the
aging biotrickling filters and other aging equipment. The Primary Sedimentation Tank Project and
the STU Project will become part of the Regional Water Quality Control Plant (the “Plant”), which
is owned and operated by City as part of the System.
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DocuSign Envelope ID: F8E00CA5-B77A-4803-B668-7A8E5E533DE3
NOW, THEREFORE, in consideration of the terms, conditions and covenants set forth in
this Amendment No. Eight (8), the Contract is hereby amended as follows:
Section 1. Paragraph 27 of the Contract is hereby added to read, as follows:
“27. MAXIMUM AMOUNT OF FINANCING FOR THE PRIMARY SEDIMENTATION
TANK REHABILITATION PROJECT. The maximum amount of financing authorized for the
Primary Sedimentation Tank Rehabilitation Project described in Paragraph 26 is increased from
$17.0 million to $19.4 million.”
Section 2. Paragraph 28 of the Contract is hereby added to read, as follows:
“28. CONSTRUCTION AND IMPLEMENTATION OF THE SECONDARY
TREATMENT UPGRADES PROJECT. The Parties hereby approve the construction
of various improvements collectively referred to as the Secondary Treatment Upgrades
or “STU” Project. The STU Project includes: new air blowers; air diffusers in aerobic
zones; anoxic zone pulsed air equipment; membrane aerated biofilm reactor cassettes;
slide and sluice gates and valves to isolate and throttle flows; instruments such as
flowmeters and oxygen probes; power distribution equipment including standby diesel
generator and power transfer equipment; and return activated sludge piping and
pumping. Each Party shall pay its share of the STU Project Costs, in proportion to the
capacity it owns in the Joint System or portion thereof as shown in Exhibit “H” to
Amendment No. Two (2) to the Contract. “Project Costs”, as used in this Section 28,
means all costs incurred in connection with the construction and implementation of the
STU Project. Without limiting the generality of the foregoing, Project Costs shall
include, but not be limited to: engineering and other consultants’ fees and costs,
including fees incurred pursuant to agreements with engineers, contractors and other
consulting, design and construction professionals; deposits, applicable permit fees; all
costs to apply for and secure necessary permits from all required regional, state, and
federal agencies; plan check fees, and inspection fees; construction costs; initial
maintenance; attorneys’ fees and costs; insurance; interest from the date of payment on
any contracts.
The Parties authorize City to receive State Revolving Fund (“SRF”) loans from the
State Water Resources Control Board (“SWRCB”) or pursue other project financing
(i.e., utility revenue bonds) to fund the costs of the Project. The maximum amount of
financing for the project is one hundred ninety-three million dollars and no cents
($193,000,000).
The SRF loans will have a thirty-year repayment term. The SRF loan shall be repaid by
the Parties in the same proportionate shares as shown on Exhibit “H” to Amendment
No. Two (2) to the Contract.
If the SWRCB terminates its loan commitment unexpectedly following execution of
the construction contract(s) for the Project or the Projects, the City shall notify Stanford
promptly. Following notification of the termination of the SRF loan commitment, the
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DocuSign Envelope ID: F8E00CA5-B77A-4803-B668-7A8E5E533DE3
y: ___________________________
ATTEST:
City Clerk
Parties shall meet in a timely manner to discuss alternative funding sources and
strategies for completion of the Projects. If the Parties are unable to agree on new
funding sources in a timely manner, then the City shall have the right to terminate the
Project or Projects immediately.
The Parties shall remain responsible for Project Costs and loans incurred, whether
before or after termination of the Project/Projects, including costs incurred in
connection with the termination of the Project planning/design/construction contract(s),
in the same proportion to each organization’s share, as shown on Exhibit “H” to
Amendment No. Two (2) to the Contract.
Stanford shall pay its share of any Project Costs within thirty (30) business days of
receipt of the annual billing statement sent by the City. If Stanford disputes the
correctness of an invoice, it shall pay the invoice in full and the dispute shall be
resolved after payment in accordance with the Contract, and shall not offset against
any payment due.
Section 3. Except as modified herein, the Contract shall remain unchanged, and is hereby ratified
and confirmed.
IN WITNESS WHEREOF, the parties have by their duly authorized representatives executed this
Amendment as of the date first written above.
CITY OF PALO ALTO
By:
Mayor
APPROVED AS TO FORM:
City Attorney or Designee
APPROVED AS TO CONTENT:
City Manager or Designee
THE BOARD OF TRUSTEES OF THE LELAND
STANFORD JUNIOR UNIVERSITY
B
Name:
Title:
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ATTACHMENT B
ADDENDUM NO. ONE TO THE SECOND RESTATED AND AMENDED
AGREEMENT BETWEEN THE CITY OF PALO ALTO AND THE EAST PALO
SANITARY DISTRICT FOR WASTEWATER TREATMENT AND DISTRICT
OUTFALL
This Addendum No. One to the Second Restated and Amended Agreement Between the City of Palo Alto
and the East Palo Sanitary District for Wastewater Treatment and District Outfall is made and entered
into on [DATE], by and among the CITY OF PALO ALTO (“Palo Alto”), a municipal corporation under the
laws of the State of California, and the East Palo Alto Sanitary District (“District”), a special district
formed under the Sanitary District Act of 1923, individually, a “Party”, collectively, the “Parties”.
RECITALS
A. On May 17, 2021, the Parties entered into an agreement entitled the Second Restated and
Amended Agreement Between the City of Palo Alto and the East Palo Sanitary District for
Wastewater Treatment and District Outfall.
B. That agreement establishes the Parties’ respective rights and obligations regarding treatment of
wastewater conveyed from the District’s sanitary sewer system at the City’s Regional Water
Quality Control Plant, payment of treatment costs, debt service for major capital improvement
projects, the District’s sanitary sewer outfall line, and pretreatment requirements.
C. The agreement establishes the Parties’ approval of funding and cost sharing for the
planning/design phases of Primary Sedimentation Tank and Secondary Treatment Upgrades
projects.
D. The Parties now wish to amend the agreement to approve their respective funding and cost-
sharing obligations for the construction phase of those projects.
NOW, THEREFORE, in consideration of the terms, conditions and covenants set forth in this
Addendum No. One, the Second Restated and Amended Agreement Between the City of Palo Alto and
the East Palo Sanitary District For Wastewater Treatment and District Outfall is hereby amended, as
follows:
Section 1. The title of the agreement is amended as follows: (additions in underline text)
Second Restated and Amended Agreement Between the City of Palo Alto and the East Palo Alto Sanitary
District For Wastewater Treatment and District Outfall
Section 2. Section 6, paragraph a, subparagraph ii is amended to add new subsection A as
follows: (additions in underline text)
6. DESIGN OF PRIMARY SEDIMENTATION TANK REHABILITATION, SECONDARY
TREATMENT UPGRADE, LABORATORY SERVICES BUILDING; DESIGN AND
CONSTRUCTION OF SLUDGE DEWATERING AND TRUCK LOADOUT FACILITY; AND
CONSTRUCTION OF OUTFALL AND PRIMARY SEDIMENTATION TANK
REHABILITATION.
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a. Implementation of the “Projects”
i. City and District hereby approve the planning and design of the Primary Sedimentation Tanks,
Secondary Treatment Upgrades, Laboratory/Environmental Services Building, and design and
construction of a Sludge Dewatering and Truck Loadout Facility. Each Party shall pay its share
of Project Costs for the Projects in proportion as it owns capacity in the Treatment Plant or
portion thereof, as shown in Exhibit “H.” For purposes of this subparagraph, “Project Costs”
means all costs incurred in connection with the planning, design, construction and
implementation of the Projects. Without limiting the generality of the foregoing, Project Costs
shall include, but not be limited to: design, engineering, and other consultants’ fees and costs,
including fees incurred pursuant to agreements with engineers, contractors and other consulting,
design and construction professionals; environmental analysis and approval costs, including cost
of compliance with the California Environmental Quality Act; deposits, applicable permit fees;
all costs to apply for and secure necessary permits from all required regional, state, and federal
agencies, plan check fees, and inspection fees; construction costs; initial maintenance; attorneys’
fees and costs; insurance; interest from the date of payment on any contracts.
ii. City and District hereby approve the construction of a new outfall and related improvements
to existing discharge infrastructure (the “Outfall Project”) and the rehabilitation of the primary
sedimentation tanks including electrical upgrades (the “Primary Sedimentation Tank
Rehabilitation Project”). Each Party shall pay its share of Project Costs for the Projects in
proportion as it owns capacity in the Treatment Plant or portion thereof, as shown in Exhibit
“H.” For purposes of this subparagraph, “Project Costs” means all costs incurred in connection
with the construction and implementation of these two projects. Without limiting the generality
of the foregoing, Project Costs shall include, but not be limited to: engineering and other
consultants’ fees and costs, including fees incurred pursuant to agreements with engineers,
contractors and other consulting, design and construction professionals; deposits, applicable
permit fees; all costs to apply for and secure necessary permits from all required regional, state,
and federal agencies; plan check fees, and inspection fees; construction costs; initial
maintenance; attorneys’ fees and costs; insurance; interest from the date of payment on any
contracts.
A. City and District hereby approve the construction of various improvements collectively
referred to as the Secondary Treatment Upgrades or “STU” Project. The STU Project
includes: new air blowers; air diffusers in aerobic zones; anoxic zone pulsed air
equipment; membrane aerated biofilm reactor cassettes; slide and sluice gates and valves
to isolate and throttle flows; instruments such as flowmeters and oxygen probes; power
distribution equipment including standby diesel generator and power transfer equipment;
and return activated sludge piping and pumping. Each Party shall pay its share of Project
Costs for the Projects in proportion as it owns capacity in the Treatment Plant or portion
thereof, as shown in Exhibit “H.” For purposes of this subparagraph, “Project Costs”
means all costs incurred in connection with the construction and implementation of these
two projects. Without limiting the generality of the foregoing, Project Costs shall include,
but not be limited to: engineering and other consultants’ fees and costs, including fees
incurred pursuant to agreements with engineers, contractors and other consulting, design
and construction professionals; deposits, applicable permit fees; all costs to apply
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for and secure necessary permits from all required regional, state, and federal agencies;
plan check fees, and inspection fees; construction costs; initial maintenance; attorneys’
fees and costs; insurance; interest from the date of payment on any contracts.
iii. The projects described in subparagraphs (i) and (ii) immediately above are
referred to individually as a “Project” and collectively as the “Projects”.
Section 2. Section 6, Paragraph b is amended to read as follows: (deletions in strikethrough text;
additions in underline text)
b. Financing for the Projects. The District authorizes the City to pursue and receive State
Revolving Fund (“SRF”) loans from the State Water Resources Control Board (“SWRCB”) or
pursue other project financing (i.e. utility revenue bonds) to fund the costs of the Projects. The
maximum amount of the financing sought for each Project is:
• Planning/design of the primary sedimentation tanks, secondary treatment
upgrades, and a new Laboratory/Environmental Services Building - $6.75
million
• Design and construction of a sludge dewatering and truck load-out facility -
$28 million
• Construction of Outfall Project - $12 million
• Construction of Primary Sedimentation Tank Rehabilitation - $17 19.4 million
• Construction of Secondary Treatment Upgrades - $193 million
Section 3. Except as modified herein, the Basic Agreement shall remain unchanged, and is hereby
ratified and confirmed.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties have by their duly authorized representatives executed this
Addendum as of the date first written above.
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ATTACHMENT C
ADDENDUM NO. ELEVEN TO THE BASIC AGREEMENT BETWEEN THE CITY OF PALO
ALTO, THE CITY OF MOUNTAIN VIEW AND THE CITY OF LOS ALTOS FOR THE
ACQUISITION, CONSTRUCTION AND MAINTENANCE OF A JOINT SEWER SYSTEM
This Addendum No. Eleven (11) to the Basic Agreement for the Acquisition, Construction and Maintenance
of a Joint Sewer System is made and entered into on [DATE], by and among the CITY OF PALO ALTO
(“Palo Alto”), the CITY OF MOUNTAIN VIEW (“Mountain View”), and the CITY OF LOS ALTOS
(“Los Altos”) (individually, a “Party”, collectively, the “Parties”), all municipal corporations under the laws
of the State of California.
RECITALS
A. The Parties have entered into that certain Basic Agreement Between the City of Palo Alto, the City of
Mountain View and the City of Los Altos for the Acquisition, Construction, and Maintenance of a Joint
Sewer System, executed on October 10, 1968, as amended by the Addenda described below (collectively,
the “Basic Agreement”). The Basic Agreement has been amended ten times by addenda, as follows:
Addendum No. One (1) to Basic Agreement Between the Cities of Palo Alto, Mountain View, and Los
Altos for Acquisition, Construction and Maintenance of a Joint Sewer System, dated as of December 5,
1977; Addendum No. Two (2) to Basic Agreement Between the Cities of Palo Alto, Mountain View, and
Los Altos for Acquisition, Construction and Maintenance of a Joint Sewer System dated as of January 14,
1980; Addendum No. Three (3) to an Agreement By and Between the Cities of Palo Alto, Mountain View,
and Los Altos for Acquisition, Construction and Maintenance of a Joint Sewer System, dated as of April 9,
1985; Addendum No. Four (4) to the Agreement By and Between the Cities of Mountain View, Los Altos,
and Palo Alto as further amended and dated May 30, 1991; Addendum No. Five (5) to Basic Agreement
Between the Cities of Palo Alto, Mountain View, and Los Altos for Acquisition, Construction and
Maintenance of a Joint Sewer System, dated as of July 31, 1992; Addendum No. Six (6) to Basic Agreement
Between the City of Palo Alto, the City of Mountain View, and the City of Los Altos for Acquisition,
Construction and Maintenance of a Joint Sewer System dated as of March 16, 1998; and Addendum No.
Seven (7) to Basic Agreement Between the City of Palo Alto, the City of Mountain View, and the City of
Los Altos for Acquisition, Construction and Maintenance of a Joint Sewer System dated as of April 15,
2009; Addendum No. Eight (8) to the Basic Agreement between the City of Palo Alto, the City of Mountain
View and the City of Los Altos for the Acquisition, Construction, and Maintenance of a Joint Sewer System
dated as of October 17, 2016; Addendum No. Nine (9) to the Basic Agreement between the City of Palo
Alto, the City of Mountain View and the City of Los Altos for the Acquisition, Construction and
Maintenance of a Joint Sewer System dated March 4, 2019; and Addendum No. Ten (10) to the Basic
Agreement between the City of Palo Alto, the City of Mountain View, and the City of Los Altos for the
Acquisition, Construction and Maintenance of a Joint Sewer System dated May 17, 2021 (collectively, the
“Addenda”).
B. Palo Alto owns and operates the sanitary sewerage treatment and disposal works and system (the “Joint
System”) pursuant to the Basic Agreement, and is responsible for making capital additions to the Joint
System. Under the Basic Agreement, any major capital additions for the replacement of obsolete or worn-
out units require an agreement by the Parties amending the Basic Agreement.
C. The Parties now desire to increase the maximum amount of financing authorized for the construction of
the Primary Sedimentation Tank Project approved by Addendum No. Ten (10) to reflect increases in Project
Costs as defined therein, including design engineering, construction management, program management,
and construction costs.
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D. The Parties further desire to agree to construct a project to improve the Joint System by upgrading the
secondary treatment process (biological process) to a process that removes harmful nitrogen by creating
anoxic and aerated zones in existing aeration basins. The project will improve final water quality, ensure
the Plant continues to meet effluent discharge permit limits, and allow for ultimate decommissioning of the
aging biotrickling filters and other aging equipment. The Parties also agree to provide for the sharing of
costs associated with this project. The project will become part of the Regional Water Quality Control Plant
(the “Plant”), which is owned and operated by Palo Alto as part of the Joint System.
AGREEMENT
NOW, THEREFORE, in consideration of the terms, conditions and covenants set forth in this
Addendum No. Eleven (11), the Basic Agreement is hereby amended, as follows:
Section 1. Paragraph 41 is hereby added to the Basic Agreement to read, as follows:
“41. MAXIMUM AMOUNT OF FINANCING FOR THE PRIMARY SEDIMENTATION TANK
REHABILITATION PROJECT. The maximum amount of financing authorized for the Primary
Sedimentation Tank Rehabilitation Project described in Paragraph 40 is increased from $17.0
million to $19.4 million.”
Section 2. Paragraph 42 is hereby added to the Basic Agreement to read, as follows:
“42. CONSTRUCTION AND IMPLEMENTATION OF THE SECONDARY
TREATMENT UPGRADES PROJECT. Palo Alto, Mountain View, and Los Altos
hereby approve the construction of various improvements collectively referred to as the
Secondary Treatment Upgrades or “STU” Project. The STU Project includes: new air blowers; air
diffusers in aerobic zones; anoxic zone pulsed air equipment; membrane aerated biofilm reactor
cassettes; slide and sluice gates and valves to isolate and throttle flows; instruments such as
flowmeters and oxygen probes; power distribution equipment including standby diesel generator
and power transfer equipment; and return activated sludge piping and pumping. Each Party shall
pay its share of the STU Project Costs, in proportion to the capacity it owns in the Joint System
or portion thereof as shown in Exhibit “H” to Addendum No. Six (6) to the Basic Agreement.
“Project Costs”, as used in this Section 42, means all costs incurred in connection with the
construction and implementation of these two Projects. Without limiting the generality of the
foregoing, Project Costs shall include, but not be limited to: engineering and other
consultants’ fees and costs, including fees incurred pursuant to agreements with engineers,
contractors and other consulting, design and construction professionals; deposits, applicable
permit fees; all costs to apply for and secure necessary permits from all required regional,
state, and federal agencies; plan check fees, and inspection fees; construction costs; initial
maintenance; attorneys’ fees and costs; insurance; interest from the date of payment on any
contracts.
The Parties authorize Palo Alto to receive State Revolving Fund (“SRF”) loans from the State
Water Resources Control Board (“SWRCB”) or pursue other project financing (i.e. utility
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revenue bonds) to fund the costs of the Project. The maximum amount of financing for the
project is one hundred ninety-three million dollars and no cents ($193,000,000).
The SRF loan will have a thirty-year repayment term. The repayments of the SRF loan shall be
treated in the same manner as debt services under the Basic Agreement and its Addenda, and
repaid by the Parties in the same proportionate shares as shown on Exhibit “H” to Addendum No.
Six (6) to the Basic Agreement. The Parties further agree that, if necessary, each Party shall secure
the funding necessary for repayment of the SRF loan, operations, and/or maintenance of the
Projects, following any appropriate process executed under California Constitution article
XIII C and D (Proposition 218).
If the SWRCB terminates its loan commitment unexpectedly following execution of the planning
and/or construction contract(s) for the Project, Palo Alto shall notify the Parties promptly.
Following notification of the termination of the SRF loan commitment, the Parties shall meet in
a timely manner to discuss alternative funding sources and strategies for completion of the
Project. If the Parties are unable to agree on new funding sources in a timely manner, then Palo
Alto shall have the right to terminate the Project.
The Parties shall remain responsible for Project Costs and loans incurred, whether before or
after termination of the Project/Projects, including costs incurred in connection with the
termination of Project planning/design/construction contract(s), in the same proportion to each
organization’s share of Plant capacity, as stated in Exhibit “H” to Addendum No. Six (6) of the
Basic Agreement. Total Project Costs shall not exceed the authorized maximum financing
amount approved by Parties without prior approval of each Party’s governing body. Unless
earlier terminated, the obligations and responsibilities of the Parties shall commence with the
execution of Addendum No. Eleven (11) to the Basic Agreement and be in force for the term of
the SRF loan or other financing.
Mountain View and Los Altos shall pay their respective shares of any Project Costs within thirty
(30) business days of receipt of the quarterly billing statement sent by Palo Alto. Palo Alto shall
not send more than one invoice in any thirty-day period. If a Party disputes the correctness of an
invoice, it shall pay the invoice in full and the dispute shall be resolved after payment in
accordance with Section 19 of the Basic Agreement, and shall not offset against any payment
due.
Section 3. Except as modified herein, the Basic Agreement shall remain unchanged, and is hereby
ratified and confirmed.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties have by their duly authorized representatives executed this
Addendum as of the date first written above.
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Vers.: Aug. 5, 2019
Page 1 of 18
AMENDMENT NO.2 TO CONTRACT NO. C19171565
BETWEEN THE CITY OF PALO ALTO AND
BROWN AND CALDWELL
This Amendment No. 2 (this “Amendment”) to Contract No. C19171565 (the “Contract” as
defined below) is entered into as of December 5, 2022, by and between the CITY OF PALO ALTO, a
California chartered municipal corporation (“CITY”), and BROWN AND CALDWELL, a California
corporation, located at 201 N. Civic Drive, Suite 115, Walnut Creek, CA 94596 (“CONSULTANT”). CITY
and CONSULTANT are referred to collectively as the “Parties” in this Amendment.
R E C I T A L S
A. The Contract was entered into by and between the Parties hereto for the provision of
design and engineering services to upgrade its existing two-stage secondary treatment
process at the Regional Water Quality Control Plant (RWQCP) (the “Project”), as detailed
therein.
B. The Parties entered into Amendment No.1 to extend the Contract term, specify
Additional Services to be performed, and increase the Compensation, as detailed
therein.
C. The Parties now wish to amend the Contract to extend the term through March 31,
2028, update the Hourly Rate Schedule Exhibit C-1, and increase the total not-to-exceed
compensation by One-Million, Four-Hundred-Eighty-Four-Thousand, Six-Hundred-
Eighty-Nine Dollars ($1,484,689) from Four-Million Four-Hundred Twenty-Four-
Thousand One-Hundred-Two Dollars ($4,424,102) to Five-Million Nine-Hundred-Eight-
Thousand, Seven-Hundred-Ninety-One Dollars ($5,908,791), as detailed herein.
NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this
Amendment, the parties agree:
SECTION 1. Definitions. The following definitions shall apply to this Amendment:
a. Contract. The term “Contract” shall mean Contract No. C19171565 between
CONSULTANT and CITY, dated September 10, 2018, as amended by:
Amendment No. 1, dated October 19, 2020
b. Other Terms. Capitalized terms used and not defined in this Amendment shall have
the meanings assigned to such terms in the Contract.
SECTION 2. Section 2 “TERM” of the Contract is hereby amended to read as follows:
“The term of this Agreement shall be from the date of its full execution through March 31, 2028, unless
terminated earlier pursuant to Section 19 (Termination) of this Agreement.”
DocuSign Envelope ID: 672FDFE4-3BD5-4D2B-BB68-5074D7D1C1F7
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ATTACHMENT D
Vers.: Aug. 5, 2019
Page 2 of 18
SECTION 3. Section 4. “NOT TO EXCEED COMPENSATION” of the Contract is amended and
replaced in its entirety to read as follows:
“The compensation to be paid to CONSULTANT for performance of the Services described in
Exhibit “A” (“Basic Services”), and reimbursable expenses, shall not exceed Five Million Three-Hundred
Seventy-One-Thousand Six Hundred Twenty-Eight Dollars ($5,371,628). CONSULTANT agrees to
complete all Basic Services, including reimbursable expenses, within this amount. In the event
Additional Services are authorized, the total compensation for Basic Services, Additional Services and
reimbursable expenses shall not exceed Five Million Nine Hundred Eight-Thousand Seven Hundred
Ninety-One Dollars ($5,908,791). The applicable rates and schedule of payment are set out at Exhibit
“C-1”, entitled “HOURLY RATE SCHEDULE,” which is attached to and made a part of this Agreement.
Any work performed or expenses incurred for which payment would result in a total exceeding the
maximum amount of compensation set forth herein shall be at no cost to the CITY.
Additional Services, if any, shall be authorized in accordance with and subject to the provisions
of Exhibit “C”. CONSULTANT shall not receive any compensation for Additional Services performed
without the prior written authorization of CITY. Additional Services shall mean any work that is
determined by CITY to be necessary for the proper completion of the Project, but which is not included
within the Scope of Services described at Exhibit “A”.
SECTION 4. The following exhibit(s) to the Contract are hereby amended or added, as indicated
below, to read as set forth in the attachment(s) to this Amendment, which are hereby incorporated in
full into this Amendment and into the Contract by this reference:
a. Exhibit “A” entitled “SCOPE OF SERVICES, AMENDMENT NO. 2”, ADDED.
b. Exhibit “B” entitled “SCHEDULE OF PERFORMANCE, AMENDMENT NO. 2”,
AMENDED, REPLACES PREVIOUS.
c. Exhibit “C” entitled “COMPENSATION, AMENDMENT NO. 2”, AMENDED, REPLACES
PREVIOUS.
d. Exhibit “C-1” entitled “HOURLY RATE SCHEDULE, AMENDMENT NO. 2”, AMENDED,
REPLACES PREVIOUS.
SECTION 5. Legal Effect. Except as modified by this Amendment, all other provisions of the
Contract, including any exhibits thereto, shall remain in full force and effect.
SECTION 6. Incorporation of Recitals. The recitals set forth above are terms of this Amendment
and are fully incorporated herein by this reference.
(SIGNATURE BLOCK FOLLOWS ON THE NEXT PAGE.)
DocuSign Envelope ID: 672FDFE4-3BD5-4D2B-BB68-5074D7D1C1F7
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Page 3 of 18
IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives
executed this Amendment on the date first above written.
CITY OF PALO ALTO
_________________________
City Manager or Designee
APPROVED AS TO FORM:
___________________________
City Attorney or Designee
BROWN AND CALDWELL
Officer 1
By:_____________________________
Name: __________________________
Title: ___________________________
Officer 2
By:______________________________
Name: ___________________________
Title: ____________________________
Attachments:
Exhibit “A” entitled “SCOPE OF SERVICES, AMENDMENT NO. 2” (ADDED)
Exhibit “B” entitled “SCHEDULE OF PERFORMANCE, AMENDMENT NO. 2” (AMENDED, REPLACES
PREVIOUS)
Exhibit “C” entitled “COMPENSATION AMENDMENT NO. 2” (AMENDED, REPLACES PREVIOUS)
Exhibit “C-1” entitled “HOURLY RATE SCHEDULE, AMENDMENT NO. 2” (AMENDED, REPLACES
PREVIOUS)
DocuSign Envelope ID: 672FDFE4-3BD5-4D2B-BB68-5074D7D1C1F7
Vice President
Angela MacKinnon, Vice President
Lori Jones, Vice President
Vice President
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Page 4 of 18
EXHIBIT “A”
SCOPE OF SERVICES, AMENDMENT NO. 2
(ADDED)
Amendment No. 2 is needed to add funds in the amount of $1,484,689 to the project to address the
delayed construction start date and construction duration and to account for:
1. Additional design services to aid in construction bidding and during construction:
a. Further development of an indicative construction schedule.
b. Further development of construction sequencing and constraints specifications.
c. Preliminary design of temporary facilities and systems required during construction,
including development of preliminary design drawings.
d. As-needed additional engineering services for unforeseen site conditions and coordination
with other ongoing major capital projects at the RWQCP
e. Updated opinion of probable construction cost (OPCC) and projection of cash flow durin g
construction for budgeting purposes.
f. Participation in a constructability review to be conducted by the City’s selected
construction manager.
g. Additional meetings and workshops.
2. Additional bid period services associated with the items listed above and the expanded scope and
complexity of the Project.
3. Additional engineering services during construction (ESDC) associated with a larger volume of
construction documents and resubmittals
4. the items listed above and the expanded scope and complexity of the Project.
5. Additional commissioning and startup services to account for staged commissioning and startup
of the Project.
6. Additional project management services associated with the expanded scope and duration of the
Project.
7. Updated costs, accounting for increases in hourly billing rates, for providing engineering services
during construction.
BACKGROUND
The scope, size, and complexity of the Project have increased significantly since its inception. In
addition, the Project’s schedule has been extended from a projecte d completion date in mid-2022
(based on the original baseline schedule) to mid-2026 (based on the September 2021 schedule update).
Likewise, the estimated construction cost of the project has increased from $31 million (based on
February 2018 planning report prepared by Carollo Engineers) to $118 million (based on cost estimate
developed for 90% complete design documents prepared by BC).
Due to the complexity of construction sequencing and constraints associated with the Project, the
originally planned approach using a single specification section to describe construction requirements
in narrative format is not sufficient to communicate requirements to the bidders and selected
contractor. Therefore, more detailed construction requirements, including a deta iled indicative
construction schedule, additional and expanded specifications, and additional drawings, are required
to adequately illustrate the requirements. The intent of this additional effort is to increase certainty
DocuSign Envelope ID: 672FDFE4-3BD5-4D2B-BB68-5074D7D1C1F7
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Page 5 of 18
that bids are based on a common un derstanding of construction requirements and to avoid adverse
impacts during construction, such as disruptions to operation and maintenance of the Plant.
In addition, the City has requested additional services as described herein that were not included in
the original contract or contract amendments issued previously by the City.
TASKS
BC will complete the tasks described below.
Task 230.210 – Additional Design Services
Further Development of Indicative Construction Schedule: BC will refine the construction schedule
developed previously based on further development of construction requirements as described in tasks
below. The schedule will remain in Microsoft Project format and will become an attachment to Section
01 12 16 (Work Sequence and Constraints) of the specifications.
The schedule will be Level 3 as defined by AACE International and will illustrate an indicative approach
for building the project based on the specified construction sequence and constraints. The intent is to
facilitate the bidders’ and selected contractor’s understanding of the project, but the contractor will
be responsible for developing a separate construction schedule based on the specified requirements.
Deliverables for this task are as follows:
Draft construction schedule in pdf and Microsoft Project formats
Final construction schedule in pdf and Microsoft Project formats
Further Development of Construction Sequencing and Constraints Specifications: BC will further
develop specifications for the following:
Construction sequencing and constraints
Temporary facilities and systems, including bypass pumping systems, an aeration blower system, a
standby generator system, and temporary power supply systems serving these items
BC will include requirements in the specifications for the Contractor to obtain any necessary permits
for temporary standby generators required to maintain operations and reliability of the Plant during
construction of the Project. BC will not prepare any applications for such permits.
Deliverables for this task are as follows:
Draft 90% complete specifications in pdf format
Final specifications in pdf format (included with final bid document package for entire project)
Preliminary Design of Temporary Facilities and Systems: BC will develop preliminary design draw ings
for temporary facilities and systems required during construction. The designs will be limited to items
listed below and will not include items such as construction trailers, laydown areas, parking, and
temporary utilities. The intent of the prelimina ry designs is to facilitate the bidders’ and selected
contractor’s understanding of the project, but the contractor will be responsible for developing final
DocuSign Envelope ID: 672FDFE4-3BD5-4D2B-BB68-5074D7D1C1F7
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Page 6 of 18
designs of all temporary facilities and systems. Items included in this task are as follows:
Development of drawings depicting preliminary configurations and minimum requirements for
temporary facilities and systems
Temporary facilities and systems will include the following:
Temporary bypass pumping systems, including general locations of temporary bu lkheads and
coffer dams:
ILS And FFR Temporary Bypass Pumping Plan
FFR Temporary Drainage Pumping Plan
Aeration Tank 1 Temporary Bypass Pumping Plan
Aeration Tank 2 Temporary Bypass Pumping Plan
Aeration Tank 3 Temporary Bypass Pumping Plan
Aeration Tank 4 Temporary Bypass Pumping Plan
Temporary aeration blowers:
Three temporary aeration blowers installed in parking lot adjacent to existing Blower Room
and associated power supply, controls, valves, piping, and appurtenances
Temporary standby generator
One 1,100 kW portable standby generator to replace an existing generator during construction
of a new generator system
Temporary power for Load Center 11
Temporary connection to SW1911.5x (located at the northeast corner of the primary
sedimentation tanks in the yard area east of the Solids Building per direction from the City)
Drawings to be developed for this task are listed in Table 1.
Table 1. List of Drawings for Temporary Facilities and Systems
Drawing Description
GENERAL CONSTRUCTION
000-GC-0000 COVER SHEET, VICINITY MAP, AND LOCATION MAP
000-GC-0001 INDEX OF DRAWINGS
000-GC-0002 SYMBOLS AND LEGENDS
000-GC-0003 ABBREVIATIONS
000-GC-1010 PHASE 1 KEY PLAN
000-GC-1020 PHASE 2 KEY PLAN
000-GC-1030 PHASE 3 KEY PLAN
000-GC-1040 PHASE 4 KEY PLAN
000-GC-1050 PHASE 5 KEY PLAN
000-GC-1060 PHASE 6 KEY PLAN
MECHANICAL CONSTRUCTION
DocuSign Envelope ID: 672FDFE4-3BD5-4D2B-BB68-5074D7D1C1F7
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Table 1. List of Drawings for Temporary Facilities and Systems
Drawing Description
000-DC-0001 SYMBOLS AND LEGENDS
110-DC-1110 ILS AND FFR TEMPORARY BYPASS PUMPING PLAN
110-DC-4110 ILS AND FFR TEMPORARY BYPASS PUMPING PLANS, SECTIONS AND DETAILS
120-DC-1110 FFR TEMPORARY DRAINAGE PUMPING PLAN
120-DC-4110 FFR TEMPORARY DRAINAGE PUMPING PLANS AND SECTIONS
132-DC-1110 AERATION TANK 1 TEMPORARY BYPASS PUMPING PLAN
132-DC-1210 AERATION TANK 2 TEMPORARY BYPASS PUMPING PLAN
132-DC-1310 AERATION TANK 3 TEMPORARY BYPASS PUMPING PLAN
132-DC-1410 AERATION TANK 4 TEMPORARY BYPASS PUMPING PLAN
132-DC-4110 AERATION TANK TEMPORARY BYPASS PUMPING SECTIONS
137-DC-1110 MA COMPRESSORS INSTALLATION IN TEMPORARY LOCATION
ELECTRICAL
000-ED-0001 LEGENDS AND SYMBOLS
000-ED-0002 LEGENDS AND SYMBOLS
005-EC-6010 PHASE 1 ONE-LINE DIAGRAM
005-EC-6020 PHASE 2 ONE-LINE DIAGRAM
005-EC-6030 PHASE 3 ONE-LINE DIAGRAM
005-EC-6040 PHASE 4 ONE-LINE DIAGRAM
005-EC-6050 PHASE 5 ONE-LINE DIAGRAM
005-EC-6060 PHASE 6 ONE-LINE DIAGRAM
005-EC-6010 PHASE 1 ONE-LINE DIAGRAM
005-EC-6020 PHASE 2 ONE-LINE DIAGRAM
P&IDS
000-NC-0001 SYMBOLS AND LEGENDS 1
000-NC-0002 SYMBOLS AND LEGENDS 2
000-NC-0003 SYMBOLS AND LEGENDS 3
000-NC-0004 SYMBOLS AND LEGENDS 4
110-NC-6110 TEMPORARY PE BYPASS PUMPING
120-NC-6110 TEMPORARY FFR BYPASS PUMPING
132-NC-6110 TEMPORARY AERATION TANK 1 ML BYPASS PUMPING
132-NC-6120 TEMPORARY AERATION TANK 2 INFLUENT BYPASS PUMPING
132-NC-6130 TEMPORARY AERATION TANK 3 ML BYPASS PUMPING
132-NC-6140 TEMPORARY AERATION TANK 4 INFLUENT BYPASS PUMPING
133-NC-6110 TEMPORARY BLOWER SYSTEM
133-NC-6210 TEMPORARY AERATION BLOWERS
DocuSign Envelope ID: 672FDFE4-3BD5-4D2B-BB68-5074D7D1C1F7
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Assumptions for this task are as follows:
Existing structures are suitable to loads associated with temporary facilities and systems without
modifications.
Temporary systems will be powered from the Plant’s power distribution network.
Sources and connection points to supply power to temporary systems are sufficient without
modifications.
Deliverables for this task are as follows:
Draft 100% complete drawings in pdf format
Final drawings in pdf format (included with final bid document package for entire project)
Further Coordination with Interfacing Projects: BC will further coordinate construction requirements
for the Project with projects entailing upgrades and rehabilitation of the 12 kV power distribution
system and primary sedimentation tanks based on information provided by the City. Coordination will
include identification of interface and overlap points betw een the projects. BC will include identified
requirements in the specifications and indicative construction schedule. Coordination will include
temporary and permanent interfaces with other projects required to construction and commission the
Project.
Deliverables for this task are as follows:
Included in other tasks.
Updated OPCC and Cash Flow Projection: BC will update the opinion of probable construction cost
(OPCC) based on the specifications and drawings described above. The OPCC will also consider
increased cost escalation experienced in 2021 and estimates of cost escalation in future years.
The OPCC for these items will be included in the final OPCC for the entire Project. The OPCC will be
Class 1 as defined by AACE International.
In addition, BC will cost load the indicative construction schedule (see task above regarding schedule
development) based on the updated OPCC to generate a projection of cashflow during the construction
period.
Deliverables for this task are as follows:
Updated OPCC (to be provided in conjunction with 100% design submittal for entire Project)
Cash flow projection, including cost loaded Microsoft Project schedule and cash flow chart
Participation in Constructability Review: BC will participate in a constructability review to be conducted
by the City’s construction manager based on the 100 percent complete drawings, specifications, and
indicative construction schedule.
The extent of any design changes that may arise from the review is unknown. Therefore, an allowance
of 250 hours is included for responding to questions, comments, and proposed changes to the
document. Any changes will be made in the final bid documents.
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Deliverables for this task are as follows:
Final bid documents
Additional Meetings and Workshops: BC will conduct or participate in additional meetings and
workshops required to complete the foregoing tasks during the design period. Since the number,
duration, and topics of such meetings is not known, an allowance of 80 hours is included for effort
associated with the additional meetings and workshops. This allowance includes effort to prepare for
workshops (e.g., preparation of agendas and presentation materials), attendance, and preparation of
minutes.
Deliverables for this task are as follows:
Meeting and workshop agendas
Meeting and workshop presentation material
Meeting and workshop minutes
Task 300.306 – Additional Bid Period Services
BC will provide additional bid period services associated with the additional design services listed
above. It is expected that additional questions from bidders and addenda will be required based on the
expanded scope and complexity of the Project. In addition, the bid period will be extended from two
months to three months as requested by the City due to the Project’s scope and complexity. Since the
actual added effort is uncertain, an allowance of 100 hours is included in the fee estimate to account
for the additional bid period services.
Deliverables:
Additional responses to bid period questions, up to the budget limit
Additional addenda, up to the budget limit
Task 400.409 – Additional Engineering Services During Construction
BC will provide additional ESDC associated with the work described herein, including the following:
It is assumed that up to 50 additional submittals or resubmittals will be reviewed at an average
duration of 4 hours per submittal.
BC will prepare written responses to requests for information (RFIs) submitted by the contractor.
It is assumed that up to 100 additional RFIs will be reviewed at an ave rage duration of 3 hours per
RFI.
Up to two BC engineers will conduct up to 20 additional site visits to meet with the contractor and
observe the work.
BC will provide additional commissioning support services. For budgeting purposes, 600 additional
hours of effort are included in the budget to accounted for staged commissioning and startup of
the Project.
BC will provide additional technical support regarding change orders. The construction manager
will retain the primary responsibility for managing, admin istering, and negotiating change orders.
For budgeting purposes, 100 additional hours of effort are included in the budget.
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BC will provide additional services associated with preparation of record drawings based on the
expanded scope of the project. For budgeting purposes, 100 hours of additional support are
included.
BC’s subconsultant, Cal Engineering & Geology, will provide on-site field observation services
during construction, including observation of pile foundation construction. The fee estimate
assumes 22 separate site visits with duration of 2 to 8 hours per visit. The services also include
preparation of a technical report regarding the work.
Deliverables for this task are as follows:
Additional submittal reviews, up to the budget limit
Additional RFI responses, up to the budget limit
Additional technical information, drawings, and specifications to support change orders
Additional record drawings
Task 500.504 – Additional Project Management
BC will provide additional project management associated with the expanded scope and duration of
the work, including maintaining the Project schedule, invoicing, reporting, management of staff, and
project controls. For budgeting purposes, 400 additional hours are included.
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EXHIBIT “B”
SCHEDULE OF PERFORMANCE, AMENDMENT NO. 2
(AMENDED-REPLACED PREVIOUS)
CONSULTANT shall perform the Services so as to complete each milestone within the number of weeks specified
below. The time to complete each milestone may be increased or decreased by mutual written agreement of
the project managers for CONSULTANT and CITY so long as all work is completed within the term of the
Agreement. CONSULTANT shall provide a detailed schedule of work consistent with the schedule below within
2 weeks of receipt of the notice to proceed.
Milestones Completion in Weeks Following issuance of NTP.
1. Task 1 - Design Re-Start Meeting 02
2. Task 1 - Submit Draft PDR 24
3. Task 1 - Submit 30% Design (Final PDR) 28
4. Task 2 - Submit 60% Design 48
5. Task 2 - Submit 90% Design 60
6. Task 2 - Submit 100% Design (Bid Documents) 194
7. Task 3 - Services During Bidding 207
8. Task 4 - Services During Construction 494
DocuSign Envelope ID: 672FDFE4-3BD5-4D2B-BB68-5074D7D1C1F7
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EXHIBIT “C”
COMPENSATION, AMENDMENT NO. 2
(AMENDED-REPLACED PREVIOUS)
CITY agrees to compensate CONSULTANT for professional services performed in accordance with
the terms and conditions of this Agreement, and as set forth in the budget schedule below.
Compensation shall be calculated based on the hourly rate schedule attach ed as Exhibit C-1 up
to the not to exceed budget amount for each task set forth below.
CONSULTANT shall perform the tasks and categories of work as outlined and budgeted below.
CITY’s Project Manager may approve in writing the transfer of budget amounts between any of
the tasks or categories listed below provided the total compensation for Basic Services, including
reimbursable expenses, and the total compensation for Additional Services do not exceed the
amounts set forth in Section 4 of this Agreement.
BUDGET SCHEDULE NOT TO EXCEED AMOUNT
Task 1 - (Preliminary Design) $1,259,062
Task 2 - (Final Design) $1,965,570
Task 3 - (Bid Period Services) $136,097
Task 4 - (Eng. Services during Construction) $1,483,395
Task 5 - (Project Management) $396,303
Task 6 - (Wastewater Characterization) $53,211
Sub-Total Basic Services: $5,293,638
Reimbursable Expenses: $77,990
Total Basic Services & Reimbursable Expenses: $5,371,628
Additional Services (Not to Exceed): $537,163
Maximum Total Compensation: $5,908,791
DocuSign Envelope ID: 672FDFE4-3BD5-4D2B-BB68-5074D7D1C1F7
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REIMBURSABLE EXPENSES
The administrative, overhead, secretarial time or secretarial overtime, word processing,
photocopying, in-house printing, insurance and other ordinary business expenses are included
within the scope of payment for services and are not reimbursable expenses. CITY shall
reimburse CONSULTANT for the following reimbursable expenses at cost. Expenses for which
CONSULTANT shall be reimbursed are:
A. Travel outside the San Francisco Bay area, including transportation and meals, will be
reimbursed at actual cost subject to the City of Palo Alto’s policy for reimbursement of travel and
meal expenses for City of Palo Alto employees.
B. Long distance telephone service charges, cellular phone service charges, facsimile transmission
and postage charges are reimbursable at actual cost.
All requests for payment of expenses shall be accompanied by appropriate backup information.
Any expense anticipated to be more than $1,000.00 shall be approved in advance by the CITY’s
project manager.
ADDITIONAL SERVICES
CONSULTANT shall provide additional services only by advanced, written authorization from the
CITY. CONSULTANT, at CITY’s project manager’s request, shall submit a detailed written proposal
including a description of the scope of services, schedule, level of effort, and CONSULTANT
proposed maximum compensation, including reimbursable expense, for such services based on
the rates set forth in Exhibit C-1. The additional services scope, schedule and maximum
compensation shall be negotiated and agreed to in writing by CITY’s Project Manager and
CONSULTANT prior to commencement of the services. Payment for additional services is subject
to all requirements and restrictions in this Agreement
Work required because the following conditions are not satisfied or are exceeded shall be
considered as additional services:
Should an Environmental Impact Report (EIR) be required under CEQA, the additional services
fund may be considered for use on this task, depending upon the estimated cost to perform this
service.
SCHEDULE OF RATES
Beginning on the effective date of the signing of this Contract Amendment, the following hourly rates
shall continue to apply to the Tasks outlined in the scope of services in Exhibit “A .”
DocuSign Envelope ID: 672FDFE4-3BD5-4D2B-BB68-5074D7D1C1F7
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EXHIBIT “C-1”
HOURLY RATE SCHEDULE, AMENDMENT NO. 2
(AMENDED, REPLACES PREVIOUS)
Brown and Caldwell Hourly Rate (3% Escalation Each Year):
Billing Classification: 2022 2023 2024 2025 2026 2027
Office/Support Services I $82 $87 $92 $98 $104 $110
Word Processor I $82 $87 $92 $98 $104 $110
Drafter Trainee $86 $91 $96 $102 $108 $114
Field Service Technician I $86 $91 $96 $102 $108 $114
Office/Support Services II $86 $91 $96 $102 $108 $114
Assistant Drafter $100 $106 $113 $119 $126 $134
Field Service Technician II $100 $106 $113 $119 $126 $134
Word Processor II $100 $106 $113 $119 $126 $134
Office/Support Services III $100 $106 $113 $119 $126 $134
Accountant I $104 $110 $116 $123 $131 $139
Word Processor III $104 $110 $116 $123 $131 $139
Office/Support Services IV $104 $110 $116 $123 $131 $139
Drafter $104 $110 $116 $123 $131 $139
Engineering Aide $104 $110 $116 $123 $131 $139
Inspection Aide $104 $110 $116 $123 $131 $139
Field Service Technician III $111 $118 $125 $133 $141 $149
Accountant II $111 $118 $125 $133 $141 $149
Word Processor IV $111 $118 $125 $133 $141 $149
Geologist/Hydrogeologist I $111 $118 $125 $133 $141 $149
Scientist I $111 $118 $125 $133 $141 $149
Senior Field Service Technician $111 $118 $125 $133 $141 $149
Engineer I $111 $118 $125 $133 $141 $149
Senior Drafter $111 $118 $125 $133 $141 $149
Senior Illustrator $111 $118 $125 $133 $141 $149
Inspector I $111 $118 $125 $133 $141 $149
Accountant III $136 $144 $153 $162 $172 $182
Area Business Operations Mgr. $136 $144 $153 $162 $172 $182
Technical Writer $136 $144 $153 $162 $172 $182
Word Processing Supervisor $136 $144 $153 $162 $172 $182
Geologist/Hydrogeologist II $136 $144 $153 $162 $172 $182
Scientist II $136 $144 $153 $162 $172 $182
Engineer II $136 $144 $153 $162 $172 $182
Inspector II $136 $144 $153 $162 $172 $182
DocuSign Envelope ID: 672FDFE4-3BD5-4D2B-BB68-5074D7D1C1F7
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Brown and Caldwell Hourly Rate (3% Escalation Each Year):
Billing Classification: 2022 2023 2024 2025 2026 2027
Lead Drafter $136 $144 $153 $162 $172 $182
Lead Illustrator $136 $144 $153 $162 $172 $182
Accountant IV $159 $168 $178 $189 $200 $212
Administrative Manager $159 $168 $178 $189 $200 $212
Geologist/Hydrogeologist III $159 $168 $178 $189 $200 $212
Scientist III $159 $168 $178 $189 $200 $212
Engineer III $159 $168 $178 $189 $200 $212
Inspector III $159 $168 $178 $189 $200 $212
Senior Designer $159 $168 $178 $189 $200 $212
Supervising Drafter $159 $168 $178 $189 $200 $212
Supervising Illustrator $159 $168 $178 $189 $200 $212
Senior Technical Writer $182 $193 $205 $217 $230 $244
Senior Geologist/Hydrogeologist $182 $193 $205 $217 $230 $244
Senior Scientist $182 $193 $205 $217 $230 $244
Senior Engineer $182 $193 $205 $217 $230 $244
Principal Designer $182 $193 $205 $217 $230 $244
Senior Construction Engineer $182 $193 $205 $217 $230 $244
Senior Engineer $182 $193 $205 $217 $230 $244
Principal Engineer $225 $239 $253 $268 $284 $301
Principal Construction Engineer $225 $239 $253 $268 $284 $301
Supervising Designer $225 $239 $253 $268 $284 $301
Assistant Controller $259 $274 $291 $308 $327 $346
Supervising Scientist $259 $274 $291 $308 $327 $346
Supervising Geologist/Hydrogeologist $259 $274 $291 $308 $327 $346
Supervising Engineer $259 $274 $291 $308 $327 $346
Supervising Const. Engineer $259 $274 $291 $308 $327 $346
Area Business Ops Mgr. IV $305 $323 $343 $363 $385 $408
Managing Geologist/Hydrogeologist $305 $323 $343 $363 $385 $408
Managing Scientist $305 $323 $343 $363 $385 $408
Managing Engineer $305 $323 $343 $363 $385 $408
Corp Marketing Comm. Mgr. $328 $347 $368 $390 $413 $438
Managing Geologist/Hydrogeologist $328 $347 $368 $390 $413 $438
Chief Scientist $328 $347 $368 $390 $413 $438
Chief Geologist/Hydrogeologist $328 $347 $368 $390 $413 $438
Chief Engineer $328 $347 $368 $390 $413 $438
Executive Engineer $328 $347 $368 $390 $413 $438
Vice President $328 $347 $368 $390 $413 $438
DocuSign Envelope ID: 672FDFE4-3BD5-4D2B-BB68-5074D7D1C1F7
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Notes:
1. Above rates are effective from January 1, 2002 through December 31, 2027. Rates are
escalated at 3% per year from 2022.
2. Rates include salary, overhead and profit.
3. Sub-consultants’ work will be billed to City at cost plus 10% markups. For direct costs where a
10% increase has already been added by the subconsultant(s), Brown and Caldwell is not
authorized to bill the City an additional 10% markups on top of the 10% markups already added
by the subconsultant(s).
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SUB-CONSULTANT RATES
Sub-consultant Firm Name: CAL Engineering & Geology
Scope of Work: To provide geotechnical study, inspection and laboratory test services as ordered and
directed by Kennedy/Jenks:
Rates:
Personnel 2022 2023 2024 2025 Rates/Units
Senior Principal
Engineer/Geologist $290 $300 $310 $320 per hour
Principal Engineer/Geologist $250 $260 $270 $280 per hour
Associate Engineer/Geologist $225 $230 $235 $240 per hour
Senior Engineer/Geologist $210 $215 $220 $225 per hour
Construction Manager $205 $210 $215 $220 per hour
Project Engineer/Geologist $175 $180 $185 $190 per hour
Staff Engineer/Geologist $155 $160 $165 $170 per hour
Technician* (Straight time rate) $140 $145 $150 $155 per hour
Special Inspector* (Straight
time rate) $140 $145 $150 $155 per hour
Senior GIS/CADD Specialist $150 $155 $160 $165 per hour
GIS/CADD Specialist $135 $140 $145 $150 per hour
Computational Geoscientist $175 $180 $185 $190 per hour
Project Assistant $105 $110 $115 $120 per hour
Administration/Clerical $95 $100 $105 $110 per hour
Deposition/Court Testimony
(minimum 4 hours) $420 $435 $450 $465 per hour
* Rates for technician and inspector work that are subject to State of California prevailing wage laws are for straight time,
and reflect wage and benefits scales published by the California Department of Industrial Relations (DIR) for the greater
San Francisco Bay Area as of June 1, 2021. Standard overtime and holiday overtime rates are 15% and 30% more than
the straight time rates. All services subject to prevailing wage laws will be subject to change on a prorated basis to
reflect applicable revisions to the DIR’s published wage and benefit scales.
Notes:
1. Professional Services - These are “all-up” rates, and include direct salary cost, overhead, general
and administrative costs not separately accounted for, and profit. They shall remain in effect
through December 31, 2025. Unless otherwise agreed upon, ongoing work that continues
beyond December 31, 2025 will include an anticipated annual increase of 3 percent or the CPI,
whichever is greater. Rates for services subject to state prevailing wage laws will change as
noted in response to revisions to the published wage and benefit scales.
DocuSign Envelope ID: 672FDFE4-3BD5-4D2B-BB68-5074D7D1C1F7
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Vers.: Aug. 5, 2019
Page 18 of 18
2. Travel Time - Travel time will be charged at regular hourly rates, not to exceed eight (8) hours
per day.
3. Expenses - All direct costs will be billed at actual cost plus 10%, unless there is explicit
agreement otherwise. Direct costs include:
• Third party services – Fees for subcontracted third party services (including drilling and
backhoe services, special consultant fees, permits, special equipment rental, overnight
mail or messenger services and other similar project related costs).
• Travel expenses, including airfares, hotel, meals, ground transportation, and
miscellaneous expenses.
• Reproduction costs, including photocopy, blueprints, graphics, photo prints or
printing.
4. Subconsultants - To the extent that it becomes necessary to use subconsultants, Client will be
invoiced at cost plus 10% to cover insurance liability and other overhead costs.
5. Accounting - The cost of normal accounting services for invoicing has been considered in the
overhead expense which is included in the above hourly rates. Additional requirements for
invoice verification, such as copies of time sheets, detailed expense records, and supplemental
daily work justification will be billed on an hourly basis.
DocuSign Envelope ID: 672FDFE4-3BD5-4D2B-BB68-5074D7D1C1F7
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AMENDMENT NO. 2 TO CONTRACT NO. C21179265C
BETWEEN THE CITY OF PALO ALTO
AND CAROLLO ENGINEERS, INC.
This Amendment No. 2 (this “Amendment”) to Contract No. C21179265C (the “Contract” as
defined below) is entered into as of December 5, 2022, by and between the CITY OF PALO ALTO, a
California chartered municipal corporation (“CITY”), and CAROLLO ENGINEERS, INC., a California
corporation, located at 2795 Mitchell Drive, Walnut Creek, CA 94598 (“CONSULTANT”). CITY and
CONSULTANT are referred to collectively as the “Parties” in this Amendment.
R E C I T A L S
A. The Contract (as defined below) was entered into by and between the Parties to provide
construction management and inspection services on an on-call, as-needed, time-limited
basis in connection with individual projects or inspection tasks at the Regional Water
Quality Control Plant (RWQCP), as detailed therein.
B. The Parties entered into Amendment No. 1 to add Task 2 services (referred to as Work
Order No. 2) for Construction Management and Inspection Services for the 12kV
Electrical Power Distribution Loop Rehabilitation Bid Package 1 Project, and to increase
compensation by Six Hundred Four Thousand Two Hundred Forty-Six Dollars
($604,246.00), from One Dollar ($1.00) to Six Hundred Four Thousand Two Hundred
Forty-Seven Dollars ($604,247.00), as detailed therein.
C. The Parties now wish to amend the Contract in order to (1) extend the contract term
through March 31, 2028; (2) add Task 3 services (referred to as Work Order No. 3) for
Construction Management Services for the Secondary Treatment Upgrades Project; and
(3) increase compensation by Eight Million Two Hundred Thirty-Seven Thousand Twenty-
One Dollars ($8,237,021.00), from Six Hundred Four Thousand Two Hundred Forty-Seven
Dollars ($604,247.00) to Eight Million Eight Hundred Forty-One Thousand Two Hundred
Sixty-Eight Dollars ($8,841,268.00), as detailed herein.
NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this
Amendment, the Parties agree:
SECTION 1. Definitions. The following definitions shall apply to this Amendment:
a. Contract. The term “Contract” shall mean Contract No. C21179265C between
CONSULTANT and CITY, dated June 14, 2021, as amended by:
Amendment No. 1, dated November 7, 2022
b. Other Terms. Capitalized terms used and not defined in this Amendment shall
have the meanings assigned to such terms in the Contract.
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ATTACHMENT E
SECTION 2. Section 4 “NOT TO EXCEED COMPENSATION” of the Contract is hereby amended to
read as follows:
“The CITY is engaging multiple consultants, including CONSULTANT, that are eligible to respond with
proposals to the CITY’s project-specific Task Orders under the process described in Exhibit A. The
compensation to be paid to CONSULTANT for performance of the Services shall be based on the
compensation structure detailed in Exhibit C, entitled “COMPENSATION,” including any reimbursable
expenses specified therein, and the maximum total compensation shall not exceed One Dollar ($1),
unless CITY selects CONSULTANT, according to the process in Exhibit A, to perform services under a Task
Order not to exceed Eight Million Two Hundred Thirty-Seven Thousand Twenty-One Dollars
($8,237,021.00) over the term of the Agreement. No pre-qualified consultant, including the
CONSULTANT under this Agreement, is guaranteed selection or assured of any minimum quantity of
work to be performed. In the event CONSULTANT is not selected to provide Services under a Task Order,
no payment is due from CITY.
The hourly schedule of rates, if applicable, is set out in Exhibit C-1, entitled “SCHEDULE OF RATES.”
Any work performed, or expenses incurred for which payment would result in a total exceeding the
maximum compensation set forth in this Section 4 shall be at no cost to the CITY.
A. The City has selected CONSULTANT to perform Work Order #2, for construction
management and inspection services for the Medium Voltage Electrical Network (12kV Elec.
Loop) Rehabilitation Bid Package 1 Project, in the amount not to exceed Five Hundred Forty-
Nine Thousand Three Hundred Fifteen Dollars ($549,315.00). CONSULTANT agrees to
complete all Basic Services, including reimbursable expenses, within this amount. In the
event Additional Services (as defined below) are authorized, the total compensation for
Basic Services, Additional Services and reimbursable expenses shall not exceed Six Hundred
Four Thousand Two Hundred Forty-Seven Dollars ($604,247.00).
B. The City has selected CONSULTANT to perform Work Order #3, for construction
management services for the Secondary Treatment Upgrades Project, in the amount not to
exceed Seven Million Four Hundred Eighty-Eight Thousand Two Hundred One Dollars
($7,488,201.00). CONSULTANT agrees to complete all Basic Services, including reimbursable
expenses, within this amount. In the event Additional Services (as defined below) are
authorized, the total compensation for Basic Services, Additional Services and reimbursable
expenses shall not exceed Eight Million Two Hundred Thirty Seven Thousand Twenty-One
Dollars ($8,237,021.00).
Optional Additional Services Provision (This provision applies only if checked and a not-to-
exceed compensation amount for Additional Services is allocated below under this Section 4.)
In addition to the not-to-exceed compensation specified above, CITY has set aside the not-to-
exceed compensation amount of Fifty-Four Thousand Nine Hundred Thirty-Two Dollars
($54,932.00) for the performance of Additional Services for Work Order #2 and Seven Hundred
Forty-Eight Thousand Eight Hundred Twenty Dollars ($748,820.00) for Work Order #3 (as
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defined below). The total compensation for performance of the Services, Additional Services and
any reimbursable expenses specified in Exhibit C, shall not exceed Eight Million Eight Hundred
Forty-One Thousand Two Hundred Sixty-Eight Dollars ($8,841,268.00) as detailed in Exhibit C.
“Additional Services” means any work that is determined by CITY to be necessary for the proper
completion of the Project, but which is not included within the Scope of Services described in a
Task Order issued under Exhibit A. CITY may elect to, but is not required to, authorize Additional
Services up to the maximum amount of compensation set forth for Additional Services in this
Section 4. CONSULTANT shall provide Additional Services only by advanced, written authorization
from CITY as detailed in this Section. Additional Services, if any, shall be authorized by CITY with a
Task Order assigned and authorized by CITY’s Project Manager, as identified in Section 13
(Project Management). Each Task Order shall be in substantially the same form as Exhibit A-1,
entitled “PROFESSIONAL SERVICES TASK ORDER”. Each Task Order shall contain a specific scope
of services, schedule of performance and maximum compensation amount, in accordance with
the provisions of this Agreement. Compensation for Additional Services shall be specified by CITY
in the Task Order, based on whichever is lowest: the compensation structure set forth in Exhibit
C, the hourly rates set forth in Exhibit C-1, or a negotiated lump sum.
To accept a Task Order, CONSULTANT shall sign the Task Order and return it to CITY’s Project
Manager within the time specified by the Project Manager, and upon authorization by CITY
(defined as counter-signature by the CITY Project Manager), the fully executed Task Order shall
become part of this Agreement. The cumulative total compensation to CONSULTANT for all Task
Orders authorized under this Agreement shall not exceed the amount of compensation set forth
for Additional Services in this Section 4. CONSULTANT shall only be compensated for Additional
Services performed under an authorized Task Order and only up to the maximum amount of
compensation set forth for Additional Services in this Section 4. Performance of and payment for
any Additional Services are subject to all requirements and restrictions in this Agreement.”
SECTION 3. The following exhibit(s) to the Contract are hereby amended, as indicated below, to
read as set forth in the attachment(s) to this Amendment, which are hereby incorporated in full into this
Amendment and into the Contract by this reference:
a. Exhibit “A-3” entitled ““PROFESSIONAL SERVICES TASK ORDER NO. 3, AMENDMENT NO.
2” (ADDED).
b. Exhibit “B” entitled “SCHEDULE OF PERFORMANCE, AMENDMENT NO. 2” (AMENDED,
REPLACES PREVIOUS)
c. Exhibit “C” entitled “COMPENSATION, AMENDMENT NO. 2,” (AMENDED, REPLACES
PREVIOUS).
SECTION 4. Legal Effect. Except as modified by this Amendment, all other provisions of the
Contract, including any exhibits thereto, shall remain in full force and effect.
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SECTION 5. Incorporation of Recitals. The recitals set forth above are terms of this Amendment
and are fully incorporated herein by this reference.
(SIGNATURE BLOCK FOLLOWS ON THE NEXT PAGE.)
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SIGNATURES OF THE PARTIES
IN WITNESS WHEREOF, the Parties have by their duly authorized representatives executed this
Amendment effective as of the date first above written.
CITY OF PALO ALTO
______________________________
City Manager or Designee
APPROVED AS TO FORM:
______________________________
City Attorney or Designee
CAROLLO ENGINEERS, INC.
Officer 1
By:_____________________________
Name:__________________________
Title:____________________________
Officer 2
By:_____________________________
Name:__________________________
Title:____________________________
Attachments:
Exhibit “A-3”: PROFESSIONAL SERVICES TASK ORDER NO. 3
Exhibit “B”: SCHEDULE OF PERFORMANCE
Exhibit “C”: COMPENSATION
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EXHIBIT “A-3”
PROFESSIONAL SERVICES TASK ORDER NO. 3, AMENDMENT NO. 2
(ADDED)
CONSULTANT shall perform the Services detailed below in accordance with all the terms and conditions
of the Agreement referenced in Item 1A below. All exhibits referenced in Item 8 are incorporated into
this Task Order by this reference. CONSULTANT shall furnish the necessary facilities, professional,
technical and supporting personnel required by this Task Order as described below.
CONTRACT NO. C21179265C
1A. MASTER AGREEMENT NO.: C21179265C
1B. TASK ORDER NO 3: Work Order No. 3 for Construction Management Services for the
Secondary Treatment Project
2. CONSULTANT NAME: CAROLLO ENGINEERS, INC.
3. PERIOD OF PERFORMANCE: START: Immediately Once Notice To Proceed (NTP) is
Issued; COMPLETION: 276 Weeks from NTP
4 TOTAL TASK ORDER NO. 3 PRICE: $7,488,201.00
BALANCE REMAINING IN MASTER AGREEMENT/CONTRACT: $0
5. WBS/CIP: WQ-19001
6. CITY PROJECT MANAGER: Padmakar Chaobal, Public Works Department, Environmental
Services Division, RWQCP
7. DESCRIPTION OF SCOPE OF SERVICES MUST INCLUDE:
Services And Deliverables To Be Provided
Schedule Of Performance
Maximum Compensation Amount And Rate Schedule (As Applicable)
Reimbursable Expenses, If Any (With “Not To Exceed” Amount)
8. ATTACHMENTS: Task Order No. 3 Scope Of Services, including Schedule of Performance
and Compensation Schedule
TASK ORDER #3 SCOPE OF SERVICES
WORK ORDER NO. 3: CONSTRUCTION MANAGEMENT SERVICES FOR THE SECONDARY TREATMENT
UPGRADES PROJECT
Task 1: General Requirements
1. For any work which requires licensing, the Proposers shall be appropriately licensed in
accordance with the laws of the State of California. The cost for any required licenses or
training shall be the responsibility of the successful Proposers and shall not be
expensed as part of this contract.
2. CONSULTANT shall prepare and submit to the City a Project Management Plan to
include schedule; budget; spending projection and staffing level for each month for
the duration of the contract term; personnel roles and construction management
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procedures. CONSULTANT shall provide all necessary administration, project controls,
quality assurance and professional oversight to ensure that:
a. The project remains on schedule, within budget, ensures continuity of
information, and satisfies the requirements of the CONTRACT.
b. The construction project is progressing per construction contract’s
requirements.
3. For the STU Project, the CITY will seek disbursement from SRF for some or all of the
CONSULTANT’s costs. CONSULTANT shall provide SRF required documentation with
the invoices and clearly indicate the eligible SRF disbursement amount. Reimbursable
For personnel travels to the project site from an area outside of the San Francisco Bay
Area and within the State of California, personal vehicle mileage reimbursement rates
and meal allowance shall in accordance with the rates published by the State each
year. See https://www.calhr.ca.gov/employees/pages/travel-reimbursements.aspx
4. At the beginning of each month, CONSULTANT shall prepare and submit to the City
Project Manager a monthly invoice package. The City prefers processing CONSULTANT
pay requests that cover one calendar month. Monthly invoice packages shall include
the cost incurred during previous month including subconsultant cost and expenses,
and a progress report documenting progress. The report shall include the progress by
each task, the budget status (authorized amount, current billing, billed to date,
previously billed, amount remaining, and percent spent), outstanding issues, potential
changes, project schedule and schedule impacts. CONSULTANT shall identify and
mitigate potential budget overruns; and notify CITY Project Manager as soon as the
potential overrun is identified. If SRF funding is used, progress reports shall include a
summary of SRF eligible costs per month.
Task 2: Preconstruction Phase
1. CONSULTANT shall perform reviews of construction drawings and specifications at
varies levels of design, as directed by the CITY with focus on constructability of the
project. (Note that the STU design is 100% completed). At a minimum, the
CONSULTANT shall provide and log comments regarding the plans, specifications, and
construction cost estimate in an Excel Workbook, provided by CITY. Comments should
at a minimum include feedback on measurement and payment, sequencing, schedule,
temporary facilities, constructability, and required contractor qualifications.
2. The City may assign milestone reviews of other projects in the preconstruction phase.
Reviews shall determine the coordination required between the subject project and
other projects for concurrent work and the constructability of other projects following
the completion of the subject project. This work shall be tracked via a separate
subtask.
3. The City may request the COMSULTANT to attend the pre-bid meeting. CONSULTANT
shall assist the City with evaluation of construction bids to determine bid irregularities,
if any. The successful bidder will be based on the lowest responsive and responsible
bid.
4. Administration
a. CONSULTANT shall propose a project administration procedure, including an
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online document tracking system, for CITY approval. The administration
procedure will detail how the CONSULTANT will track, store, distribute, and
manage digital and hardcopy correspondence and project documentation and
strategy for managing project communications.
b. CONSULTANT shall establish and maintain a health and safety plan specific for
CONSULTANT’s staff and subconsultants. Submit a copy for City’s record.
During construction activities, CONSULTANT shall follow CONTRACTOR(S)’s
health and safety plan(s), if it is more stringent.
5. Field Office Setup
a. CONSULTANT shall organize the hardcopy and digital files for the project prior
to commencement of construction and coordinate with the CITY and
CONTRACTOR for office trailer set-up.
b. CITY will designate a location for the office trailer and provide utility
connection points.
c. CONSULTANT will provide furnished office trailer, copier, phone/service, and
internet access, unless otherwise provided by City.
6. Preconstruction Activities
a. Site Walk Observations and Documentation
i. CONSULTANT will conduct preconstruction inspections, documenting
conditions in a log and providing digital photographs and video(s).
b. Preconstruction Submittals
i. CONSULTANT to develop a list of CONTRACTOR pre-construction
submittals.
ii. CONSULTANT to review CONTRACTOR’s pre-construction submittals,
schedule of values, and preliminary schedule.
Task 3: State Revolving Fund (SRF) Compliance
1. CONSULTANT shall prepare and package for submittal all required State Revolving
Fund (SRF) documentation needed to obtain monthly SRF loan disbursements during
the construction period. CITY will submit the documentation to the State.
2. CONSULTANT shall prepare and package for submittal Quarterly Construction reports
and Annual SBE Report required for SRF compliance. Package shall include a
narrative and photos of construction activities performed during the reporting
period. CITY will submit the documentation to the State.
3. CONSULTANT shall document CONTRACTOR’s compliance with all SRF requirements,
including:
a. Project signage meeting SRF requirements
b. American Iron and Steel (AIS) requirements
c. Build America, Buy America (BABA) – if applicable to this project
d. Davis-Bacon Act compliance
i. CONSULTANT shall perform Davis-Bacon Wage Rate Interviews at
intervals required by SRF, but not less than every time a new
contractor, subcontractor, or trade begins work. Subsequent
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interviews shall be required periodically based upon the
CONSULTANT and CITY’s assessment of Risk of Noncompliance.
e. Disadvantaged Business Enterprise (DBE) certifications
f. Project Closeout forms
g. Certified payrolls
4. CONSULTANT shall maintain a submittal log of materials subject to
AIS requirements and/or approved exemptions.
5. CONSULTANT shall prepare and package for submittal Project Close Out Report
required for SRF compliance. CITY will submit the documentation to the State.
Task 4: Construction Phase
1. Construction Administration
a. Project Coordination
i. CONSULTANT shall act as the project coordinator and the point of
contact for all communications with the CONTRACTOR. The
CONSULTANT shall coordinate construction activities of the CITY,
ENGINEER, and CONTRACTOR. CONSULTANT responsibilities include:
conduct team meetings within the consulting firm to review progress,
coordinate evaluations and identify information needs; disseminate
information to the design team; manage the project budget; manage
the project schedule; manage sub-consultants; manage QA / QC team;
Coordinate communications with other ongoing projects’ construction
managers to facilitate the construction of ongoing projects and
continuous Plant operations.
ii. CONSULTANT shall provide a contact phone number to respond to
issues related to construction activity or coordination, 24 hours a day,
7 days a week.
b. Document Tracking System: CONSULTANT shall establish, implement and
maintain an online system for tracking all correspondence and documents
on the Project or shall adopt a project administration procedure previously
approved by CITY. CONSULTANT shall incorporate within the tracking
system the means to track the routing of submittals/RFIs to the CITY’s
other consultants.
c. Construction Administration Services: CONSULTANT shall provide
administrative and management services. The CONSULTANT shall receive
all correspondence from the CONTRACTOR and address all inquiries from
the CONTRACTOR and construction related correspondence. The ENGINEER
will be responsible for providing design input.
2. Meetings:
a. CONSULTANT shall prepare agenda for kick-off meeting, weekly progress
meetings and other construction/technical meetings required during the
term of the Project. CONSULTANT shall preside the meetings, address
administrative and non-design issues, and prepare meeting minutes for
distribution. CITY, ENGINEER and CONTRACTOR’s team will attend the
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Page 10 of 21 Vers.: Aug. 5, 2019
meeting. The ENGINEER will address design issues. CONSULTANT shall have
all pending decisions detailed for the meetings as well as project statistics
(schedule updates, risks as identified by risk register, percent of project
complete, near-term milestones, etc.).
b. Anticipated Meetings
i. Construction kick-off meeting
ii. Weekly progress meetings
iii. As-needed technical meetings with CITY, ENGINEER, CONTRACTOR
and manufacturer’s representative(s) to resolve equipment and/or
installation issues
iv. Minimum two (2) Electrical Service (Power Feed) Coordination
Meeting with Palo Alto Electric Utilities (for LC11)
v. Project close-out Meeting
vi. Attend other concurrent projects’ kickoff meetings
vii. Periodic coordination meetings with other ongoing projects’
construction managers and the City
3. Submittals
a. CONSULTANT shall use the online document tracking system to log and
coordinate the submittal process.
b. CONSULTANT shall receive the submittals, including CONTRACTOR’s red-line
drawings, from the CONTRACTOR and check the submittals for
completeness and general conformity with the Construction Contract
requirements. If obvious deficiencies are apparent in the submittal, the
CONSULTANT shall reject and send the submittal back to the
CONTRACTOR for correction.
c. CONSULTANT shall route the submittals to the ENGINEER for review and
shall route the reviewed submittal back to the CONTRACTOR. The
CONSULTANT shall review comments on the submittals to determine if
additional follow-up with the CONTRACTOR and/or ENGINEER is
warranted and to identify any scope changes.
d. CONSULTANT shall coordinate the ENGINEER’s submittal review and the
track the status of shop drawing resubmittals with the CONTRACTOR.
e. CONSULTANT shall review the submittals for progress schedule, temporary
facilities, construction sequencing, conduit/pipe layout plan,
manufacturer/applicator/installer’s certificates, and other non- technical
submittals.
f. CONSULTANT shall review temporary facilities submittals for operability as
well as conflicts with other ongoing projects’ active and/or proposed
construction. The City may request CONSULTANT to review other
ongoing projects’ temporary facilities submittals for coordination logistics
and constructability issues.
4. Request for Information/Clarification Process
1.e
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a. CONSULTANT shall utilize the online document tracking system for processing
requests for design clarifications.
b. CONSULTANT shall receive all requests for information (RFIs) from the
CONTRACTOR and determine if the request is a valid RFI;
i. If valid, ENGINEER will review the RFIs and provide design response.
CONSULTANT shall review the ENGINEER’s response, verify
acceptability of response and transmit the Clarification Response to
the CONTRACTOR.
ii. If not, CONSULTANT shall return the RFI to the CONTRACTOR with
justifications.
c. CONSULTANT shall provide a response within 10 working days to the
CONTRACTOR for any administrative, field condition specific and general
RFI.
d. ENGINEER shall prepare Design Clarifications where design issues are
identified by the CONSULTANT, ENGINEER, or CITY. CONSULTANT shall
prepare the Clarification Letter for transmittal to the CONTRACTOR of the
ENGINEER’s Design Clarification and other clarifications.
e. CONSULTANT shall work with the CITY Project Manager to maintain an Error
and Omission Log to document change orders, RFIs and RFCs that are a
result of ENGINEER and CONTRACTOR errors in design and construction,
respectively. The log shall record the hours spent by the ENGINEER to
respond to the RFIs/ RFCs and associated cost impact to the construction.
CITY may seek reimbursement from the ENGINEER and/or CONTRACTOR.
5. Change Order Preparation, Negotiation & Processing
a. CONSULTANT shall review all change order requests (either initiated by the
CITY or by the CONTRACTOR).
i. CONSULTANT shall utilize the online document tracking system to log,
track, and process changes.
ii. CONSULTANT shall maintain Change Event files. These files shall
compile all data related to specific items that arise that may have cost
or time impacts or neither.
b. CONSULTANT shall judge the validity and/or merits of all CONTRACTOR
initiated change order requests. CONTRACTOR initiated change orders
deemed unnecessary, or not substantiated by a deficiency in the
construction documents shall be returned to CONTRACTOR unapproved
with an explanation.
c. CONSULTANT shall negotiate change orders with the CONTRACTOR,
considering impact to the schedule, as well as, reasonableness of cost, and
impact to total project budget. CONSULTANT shall provide updates
regarding potential cost and schedule changes to CITY.
d. CONSULTANT shall prepare an independent cost estimate and/or verify the
acceptability of the CONTRACTOR’s cost proposal for each approved
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Page 12 of 21 Vers.: Aug. 5, 2019
change request. At CITY’s discretion, ENGINEER’s opinion may be
requested for specific equipment and material costs.
e. CONSULTANT shall prepare change orders using CITY’s procedure for
execution by the CITY and CONTRACTOR.
i. CONSULTANT shall prepare a Change Order Memorandum, if
requested by the CITY, to provide additional background discussion
for need of the change and reasonableness of cost and schedule
impact.
ii. ENGINEER shall prepare design details for change requests as needed.
CONSULTANT to coordinate schedule and distribution of design
details.
iii. CONSULTANT shall prepare, and issue approved change order
requests to the CONTRACTOR with the appropriate design documents
as directed by the CITY.
f. In the event the CONTRACTOR encounters a time sensitive problem where
time is not available to negotiate a settlement, CONSULTANT shall issue a
field order in accordance with the City’s procedures.
i. All work done under a field order will be completed on a time and
material basis. CONSULTANT to track actual time and material
expended for the field order work.
ii. Field orders shall be reviewed and approved with the CITY prior to
issuance.
6. Documentation of Environmental Compliance
a. CONSULTANT shall document compliance with environmental permitting and
mitigation measures in accordance with the requirements of the
environmental documents and regulatory permits.
7. Progress Payment
a. CONSULTANT shall review the initial schedule of values (cost breakdown)
prepared by the CONTRACTOR and generate a progress payment request
form for the CONTRACTOR’s use which is compatible with the SRF
CONTRACTOR Spreadsheet (Form No. 259) and acceptable to SRF,
Financial Assistance Division.
b. CONSULTANT shall review and process the progress payment requests and
determine whether the amount requested reflects the actual status of the
Contractor’s work in place, materials on site and other contract
requirements.
c. CONSULTANT shall perform the appropriate administration, preparation and
processing of the monthly progress payments so the CITY can respond in
accordance with the time periods set forth in the Public Contract Code.
d. CONSULTANT shall prepare the summary cover sheet for the progress
payments which will be executed by CONSULTANT, CONTRACTOR and
CITY.
1.e
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e. CONSULTANT shall not recommend final payment to the CONTRACTOR until
the CONSULTANT has determined CONTRACTOR has complied with the
project closeout requirements, including submittals of record documents,
warranties, and operations and maintenance manuals. CITY will release
the retention only after a Notice of Completion has been recorded with
the Santa Clara County Clerk’s Recorder Office.
f. CONSULTANT shall work with Contractor to develop an estimate of
contractor’s anticipated monthly pay request (billing/invoicing) schedule
for the entire duration of the construction phase. The estimate shall be
updated quarterly. The information will be used by the City for financial
and cash flow analyses.
8. CONTRACTOR’s Certified Payroll
a. On a bi-weekly basis, or when otherwise requested by the CITY, State, or
other agency or public inquiry, the CONSULTANT shall collect certified
payrolls from the CONTRACTOR. Apart from the regular, bi-weekly
collection, the CONSULTANT shall obtain payroll records within 10 days of
the CITY’s request.
b. CONTRACTOR is responsible for submitting electronically their certified
payroll records to the State Department of Industrial Relations.
c. CONSULTANT shall be responsible for documenting and conducting
interviews of the CONTRACTOR’s field staff/crew for compliance with CITY
prevailing wage ordinance and SRF requirements (SF-1445).
9. Schedule
a. CONSULTANT shall review CONTRACTOR’s initial Baseline schedule submittal
to determine whether it is realistic and prepared in accordance with the
Contract Documents, that the milestone and Substantial Completion dates
meet the overall goal for schedule and that no major conflicts exist. The
CONSULTANT shall advise CITY of the review determination and provide
written comments to the CONTRACTOR.
b. CONSULTANT shall review the CONTRACTOR’s schedule updates and provide
written comments to the CONTRACTOR.
c. CONSULTANT shall review and evaluate the CONTRACTOR’s requests for
Contract time extension and/or monetary claim, and make written
recommendations to the CITY regarding entitlement and the number of
days, if any, to be added to the Contract Time(s). If requested by the
CITY, CONSULTANT shall provide a written assessment of the time
request. CONSULTANT shall evaluate and negotiate schedule adjustments
with the CONTRACTOR.
10. Field Quality Control (Inspection Services)
a. CONSULTANT shall provide field observation services to monitor compliance
with the Contract Documents.
i. CONSULTANT staff shall have sufficient training and experience
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regarding the specific construction activities being performed by
CONTRACTOR.
1) CONSULTANT shall provide staffing at a level that match
construction load and as required to observe CONTRACTOR’s
activities.
2) CONSULTANT shall provide subconsultant(s) as needed to
observe specialty work or conduct specialty tests (see Special
Inspections).
3) CITY may set an allowance on a task order specific basis for
the increased cost only of inspectional services if required
during off hours and on weekends. Consultant to provide
sufficient hours to cover all inspectional services anticipated
at standard rates.
b. Reporting
i. CONSULTANT shall prepare daily inspection reports documenting
observed field activities, field crews, CONTRACTOR equipment, and
field problems. CONSULTANT shall collect and compile CONTRACTOR
daily reports. Such information shall be accessible by the City.
ii. CONSULTANT shall provide and maintain photographs of field
activities for status monitoring of the project.
iii. CONSULTANT shall monitor record documents (redline drawings) on a
bi-weekly basis to determine if they are being maintained by the
CONTRACTOR and are in substantial conformance with the
CONSULTANT’s information/observations.
iv. CONSULTANT shall prepare a monthly report to include major work
performed, outstanding issues, project photographs, schedule status,
pending and executed change orders summary, and quality issues.
This report shall also be part of CONSULTANT’s monthly progress
payment report.
c. Special Inspections
i. CONSULTANT shall furnish the materials testing and special
inspections required to be performed for the Project. Special
Inspection and materials testing include, but not limited to:
1) Soils testing for HazMat compliance
2) Soils compaction and relevant testing
3) Asphalt compaction and relevant testing
4) Concrete sampling and testing
5) Structural steel welding
6) Coating inspection
7) Special inspections as listed in the project specific design
drawings and specs.
It should be noted that the foundation pile installation
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observation special inspections will be performed by the
Geotechnical Engineer (retained by the ENGINEER) on this
project. CONSULTANT only needs to coordinate this effort
with the City Project Manager.
ii. CONSULTANT shall schedule and coordinate the material testing
services and have responsibility for the specialty inspections and
testing services.
11. System Outages
a. CONSULTANT shall review and evaluate the CONTRACTOR’s system outage
requests (SOR) in conjunction with the CITY. CONSULTANT shall assess
the reasonableness of the duration of the requested shutdown.
b. The SORs shall be reviewed and approved at least two weeks ahead of the
actual outage/shutdown.
c. CONSULTANT shall facilitate/coordinate shutdowns with the CONTRACTOR,
CITY and ENGINEER.
i. CITY is responsible for reviewing and approving system outage
request and duration, confirming the outage is properly planned,
implementing the outage, and bringing services back online after the
outage.
12. Means and Methods of Construction
a. CONSULTANT shall not direct the means and methods of construction.
CONTRACTOR shall be solely responsible for the means and methods of
construction. In the event when the CONTRACTOR’s means and methods
and/or work sequence are perceived to have negative impacts on the
final work quality or may damage existing City’s property, the
CONSULTANT shall communicate with the CONTRACTOR and inform the
CITY and ENGINEER.
13. Construction Staging and laydown Area
CONSULTANT shall periodically observe the construction staging and laydown areas
to check if:
a. Equipment and materials are being stored in accordance with the
manufacturers’ procedure (e.g., protection from weathering elements).
b. Exiting plant equipment (e.g., electrical switchgear) are being protected.
c. Heavy loads are not concentrated at or adjacent to locations were
underground utility (s) is present.
14. Safety
a. CONSULTANT shall comply with appropriate regulatory, project and CITY
codes in addition to CONSULTANT’s Health and Safety Plan regarding
necessary safety equipment and procedures used during performance of
the CONSULTANT’s work and shall take necessary precautions for safe
operation of the CONSULTANT’s work, and the protection of the
CONSULTANT’s personnel from injury and damage from such work.
b. Neither the professional activities of the CONSULTANT, nor the presence of
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the CONSULTANT’s employees or sub-consultants at the
construction/project site, shall relieve the CONTRACTOR and any other
entity of their obligations, duties and responsibilities including, but not
limited to, construction means, methods, sequence, techniques or
procedures necessary for performing, superintending, or coordinating
their work in accordance with the Contract Documents, City codes, and
any health or safety precautions required by pertinent regulatory
agencies. CONSULTANT and its personnel have no authority to exercise
any control over any CONTRACTOR or other entity or their employees in
connection with their work or any health or safety precautions.
15. Spare Parts
a. Based on the specifications and vendor O&M Manuals, CONSULTANT shall
prepare a consolidated/complete list of required spare parts in Excel.
b. CONSULTANT shall inventory spare parts as they are delivered by the
CONTRACTOR and transferred to the CITY. The transfer of part shall be
documented via material transmittal, signed by Contractor, CONSULTANT
and CITY.
16. Operation and Maintenance (O&M) Manuals
a. CONSULTANT shall prepare a list of anticipated O&M Manuals and track the
submittal and review process in the online document tracking system.
b. CONSULTANT shall verify that the submitted O&M manuals are the correct
and latest version, and that the ‘lessons learned’ and notes taken during
startup and commissioning are included in the O&M manuals.
CONSULTANT shall coordinate delivery of final hardcopies and electronic
copy from the CONTRACTOR to CITY.
17. Testing and Training
a. CONSULTANT shall coordinate and oversee manufacturer/vendor provided
testing/startup/commissioning activities and training sessions.
b. ENGINEER shall provide technical assistance associated with the design
intent during testing/startup/commissioning operations.
c. CONTRACTOR shall develop and submit a Testing and Startup Plan.
CONSULTANT shall work with CONTRACTOR, ENGINEER and CITY on the
review and revision of the Testing and Startup Plan.
d. CONSULTANT shall observe start-up and testing as the CITY’s representative
and maintain copies of start-up documentation in an organized binder
(and scanned electronic copy) that shall be turned over at the end of the
project.
e. CONSULTANT shall coordinate the training with the CONTRACTOR, vendor
and CITY staff. Some equipment may need training for third party
personnel with whom the CITY may be contracting with. CITY will provide
the vendor contact information for CONSULTANT to coordinate with.
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Trainings shall be coordinated so that key CITY staff can attend; schedule
shall accommodate key CITY staff/ Plant operations shifts. Multiple
training sessions for day shift and night shift operators may be required.
f. CONSULTANT shall attend training sessions and collect attendance sheets
and copies of training material.
g. If required by CITY, CONSULTANT shall coordinate production quality audio
and video recording and editing of training sessions to be used for future
training sessions. The final digital copy shall be labeled and have an
introduction that indicates the type of training, the process area, the
equipment name, the vendor(s) / manufacturer(s) if applicable, the date,
and the CONTRACTOR.
h. Refer to the CITY’s Demonstration and Training Standards for more details.
18. Corrective Work Item List
a. The CONSULTANT shall prepare and maintain a Corrective Work Item list
(CWL) with the input from the CITY and ENGINEER.
b. CONSULTANT shall confirm that the items identified in the CWL are
completed in preparation for issuance of Substantial Completion
Certificate (SCC).
c. CONSULTANT shall prepare the SCC for execution by the CITY and the
CONTRACTOR when the Corrective Work Items are completed to the
CITY’s, ENGINEER’s and The CONSULTANT’s satisfaction.
E. Task 5: Project Closeout Phase
1. Punch List and Final Inspection
a. Punch List
i. CONSULTANT shall identify work with outstanding deficiencies and
generate Punch List in Excel. Coordinate site walkthrough with the
CITY and CONTRACTOR, as needed.
ii. CONSULTANT shall have primary responsibility for verifying that the
Punch List work is complete.
b. Final Inspection
i. CONSULTANT shall have primary responsibility for conducting the
final inspection. Coordinate site walkthrough with the CITY and
CONTRACTOR, as needed.
1) CITY will participate and provide input on the final inspection.
2) ENGINEER will provide design input on final inspection items
if determined necessary by the CITY.
2. Warranty Coordination
a. CONSULTANT shall maintain a warranty file in the online document tracking
system. All warranty documentation shall be handed off to the CITY at
conclusion of the contract.
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Page 18 of 21 Vers.: Aug. 5, 2019
3. Project Closeout
a. CONTRACTOR shall furnish record documents, which the CONSULTANT shall
review and transmit to ENGINEER for preparation of record drawings.
b. CONSULTANT shall prepare necessary CITY documentation recommending
acceptance of the completed work by the CITY.
c. CONSULTANT shall turnover project documentation to the CITY in an orderly
manner and in a timely manner after completion of the project and all
punch list activities. The CONSULTANT shall retain all change event files
at the end of the project. The CITY shall have the right to request review
and/or copies of the change events files.
Work Order No. 3: Milestone Schedule Of Performance
TASK # MILESTONES NUMBER OF WEEKS TO COMPLETION FROM
WORK ORDER #1 NOTICE TO PROCEED (NTP)
Task 1 General Requirements 276 Weeks
Task 2 Pre-Construction 10 Weeks
Task 3 SRF Compliance 276 Weeks
Task 4 Construction Phase 263 Weeks
Task 5 Project Closeout 276 Weeks
Work Order No. 3: Milestone Compensation Schedule
TASK # MILESTONES NOT TO EXCEED
AMOUNT
Task 1 General Requirements $137,470
Task 2 Pre-Construction $41,200
Task 3 SRF Compliance $241,310
Task 4 Construction Phase $6,870,421
Task 5 Project Closeout $47,800
Inspection Allowance $150,000
Sub-total Basic Services $7,488,201
Reimbursable Expenses $0
Total Basic Services and Reimbursable Expenses $7,488,201
Additional Services (per Section 4) (Not to Exceed) $748,820
Maximum Total Compensation $8,237,021
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EXHIBIT “B”
SCHEDULE OF PERFORMANCE, AMENDMENT NO. 2
(AMENDED, REPLACES PREVIOUS)
Optional Schedule of Performance Provision for On-Call or Additional Services Agreements.
(This provision only applies if checked and only applies to on-call agreements per Section 1 or
agreements with Additional Services per Section 4.)
The schedule of performance shall be as provided in the approved Task Order, as detailed in Section 1
(Scope of Services) in the case of on-call Services, or as detailed in Section 4 in the case of Additional
Services, provided in all cases that the schedule of performance shall fall within the term as provided in
Section 2 (Term) of this Agreement.
WORK ORDER #2
Tasks 1-5 completed within 125 Weeks from the Notice to Proceed for Work Order 2, as detailed in
the Milestone Schedule of Performance attached to Work Order #2.
WORK ORDER #3
Tasks 1-5 completed within 276 Weeks from the Notice to Proceed for Work Order 3, as detailed in
the Milestone Schedule of Performance attached to Work Order #3.
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Vers.: Aug. 5, 2019
Page 20 of 21
EXHIBIT “C”
COMPENSATION, AMENDMENT #2
(AMENDED, REPLACES PREVIOUS)
CITY agrees to compensate CONSULTANT for on-call, as-needed, time-limited project
support services performed in accordance with the terms and conditions of this Agreement,
and as set forth in a specific Task Order budget schedule. Compensation shall be calculated
based on the rate schedule attached as Exhibit C-1 up to the not to exceed budget amount
for each task set forth in a specific Task Order.
CITY’s Project Manager may approve in writing the transfer of budget amounts between any
of the tasks or categories within a specific Task Order, provided that the total compensation
for the Services, including any specified reimbursable expenses, and the total compensation
for Additional Services (if any, per Section 4 of the Agreement) do not exceed the amounts
set forth in Section 4 of this Agreement.
CONSULTANT agrees to complete all Services, any specified reimbursable expenses, and
Additional Services (if any, per Section 4), within this/these amount(s). Any work performed
or expenses incurred for which payment would result in a total exceeding the maximum
amount of compensation set forth in this Agreement shall be at no cost to the CITY.
REIMBURSABLE EXPENSES
CONSULTANT’S ordinary business expenses, such as administrative, overhead, administrative
support time/overtime, information systems, software and hardware, photocopying,
telecommunications (telephone, internet), in-house printing, insurance and other ordinary
business expenses, are included within the scope of payment for Services and are not
reimbursable expenses hereunder.
Reimbursable expenses, if any are specified as reimbursable under this section, will be
reimbursed at actual cost. The expenses (by type, e.g. travel) for which CONSULTANT will be
reimbursed are: NONE up to the not-to-exceed amount of $0.00.
WORK ORDER #2
Compensation as detailed in the Milestone Compensation Schedule attached to Work
Order #2., Not to Exceed:
Total Basic Services and Reimbursable Expenses $549,315
Additional Services (per Section 4) (Not to Exceed) $54,932
Maximum Total Compensation $604,247
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Vers.: Aug. 5, 2019
Page 21 of 21
WORK ORDER #3
Compensation as detailed in the Milestone Compensation Schedule attached to Work
Order #3., Not to Exceed:
Total Basic Services and Reimbursable Expenses $7,488,201
Additional Services (per Section 4) (Not to Exceed) $748,820
Maximum Total Compensation $8,237,021
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Resolution No. ####
Resolution of the Council of the City of Palo Alto Authorizing the Reimbursement
of Funding for the Regional Water Quality Control Plant Secondary Treatment
Upgrades from the State Water Resource Control Board
R E C I T A L S
A. The City of Palo Alto (the “City”) desires to finance the costs of constructing
and/or reconstructing certain public facilities and improvements relating to its water and
wastewater system, including certain treatment facilities, pipelines and other infrastructure
(the "Project").
B. The City intends to finance the construction and/or reconstruction of the
Project or portions of the Project with moneys ("Project Funds") provided by the State of
California, acting by and through the State Water Resources Control Board (State Water
Board).
C. The State Water Board may fund the Project Funds with proceeds from the
sale of obligations the interest upon which is excluded from gross income for federal
income tax purposes (the "Obligations").
D. Prior to either the issuance of the Obligations or the approval by the State
Water Board of the Project Funds the City desires to incur certain capital expenditures (the
"Expenditures") with respect to the Project from available moneys of the City.
E. The City has determined that those moneys to be advanced on and after the
date hereof to pay the Expenditures are available only for a temporary period and it is
necessary for the State Water Board to reimburse the City for the Expenditures from the
proceeds of the Obligations.
F. On March 1, 2021, the City Council adopted Resolution No. 9945 authorizing
reimbursement of funding for the Regional Water Quality Control Plant Secondary
Treatment Upgrades with a reasonably expected maximum principal amount of $169
million.
G. The City published an invitation for bids for the construction contract for
Project from July 21, 2022 to October 6, 2022 and received base bids ranging from $161.8
million to $167.5 million, approximately 36% higher than the Engineer’s estimate of
$118.7 million.
H. The City now wishes to amend Resolution No. 9945 and adopt this Resolution
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ATTACHMENT F
increasing the reasonably expected maximum principal amount to $193 million to reflect
the higher-than-anticipated construction costs, as well as contingency and construction
management, and associated planning and design costs.
NOW, THEREFORE, the Council of the City of Palo Alto RESOLVES as follows:
SECTION 1. The City hereby states its intention and reasonably expects to reimburse
Expenditures paid prior to the issuance of the Obligations or the approval by the State Water
Board of the Project Funds.
SECTION 2. The City hereby amends Resolution No. 9945 to increase the reasonably
expected maximum principal amount of the total Project, including associated planning and design
costs, to $193 million.
SECTION 3. This resolution is being adopted no later than 60 days after the date on which
the City will expend moneys for the construction portion of the Project costs to be reimbursed
with Project Funds.
SECTION 4. Each City expenditure will be of a type properly chargeable to a capital account
under general federal income tax principles.
SECTION 5. To the best of our knowledge, the City is not aware of the previous
adoption of official intents by the City that have been made as a matter of course for the
purpose of reimbursing expenditures and for which tax-exempt obligations have not been
issued.
SECTION 6. This resolution is adopted as official intent of the City in order to comply with
Treasury Regulation §1.150-2 and any other regulations of the Internal Revenue Service relating
to the qualification for reimbursement of Project costs.
SECTION 7. All the recitals in this Resolution are true and correct and this City so finds,
determines and represents.
SECTION 8. The Council finds that its authorization of funding reimbursement does not
constitute a project requiring review under the California Environmental Quality Act (CEQA) or CEQA
Guidelines. This action does not meet the definition of a project under Public Resources Code Section
21065 and CEQA Guidelines Section 15378(b)(5), because it is an administrative governmental
activity which will not cause a direct or indirect physical change in the environment.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
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ABSTENTI
ONS:
ATTEST:
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
Senior Deputy City Attorney City Manager
Director of Public Works
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BIDDER Bid Price Remarks % Over Estimate
Anderson Pacific Engineering Construction, Inc.
(APEC)161,846,500$ Low Bidder 36.34%
Kiewit Infrastructure West 166,240,500$ 40.04%
Flatiron West 167,518,500$ 41.12%
Engineer's Estimate 118,707,335$ 0.00%
Bid Summary
Secondary Treatment Upgrades (STU) Project
Invitation for Bids (IFB) Number: 185822
City of Palo Alto Public Works Department, RWQCP
CIP WQ‐19001
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ATTACHMENT G