HomeMy WebLinkAboutStaff Report 2505-4653CITY OF PALO ALTO
CITY COUNCIL
Monday, June 16, 2025
Council Chambers & Hybrid
5:30 PM
Agenda Item
15.Approval of Change Order No. 3 to Contract C22183580 with MP Nexlevel of California,
Inc., to reallocate funding from Change Order No. 2 to the Fiber-to-the-Premises (FTTP)
Project and to incorporate FTTP into the Scope of Work extending through August 31,
2025; CEQA Status - For FTTP, Council action on this item is within the scope of the Final
Initial Study and Mitigated Negative Declaration (IS/MND) for the Fiber-to-the-Premises
Project, adopted on June 17, 2024; otherwise exempt. Public Comment
City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Utilities
Meeting Date: June 16, 2025
Report #:2505-4653
TITLE
Approval of Change Order No. 3 to Contract C22183580 with MP Nexlevel of California, Inc., to
reallocate funding from Change Order No. 2 to the Fiber-to-the-Premises (FTTP) Project and to
incorporate FTTP into the Scope of Work extending through August 31, 2025; CEQA Status - For
FTTP, Council action on this item is within the scope of the Final Initial Study and Mitigated
Negative Declaration (IS/MND) for the Fiber-to-the-Premises Project, adopted on June 17,
2024; otherwise exempt.
RECOMMENDATION
Staff recommends that City Council approve and authorize the City Manager or their designee
to execute Change Order No. 3 to contract C22183580 with MP Nexlevel (Attachment A) to
reallocate funding from Change Order No. 2 the Fiber-to-the-Premises project from Change
Order No. 1 and extending the FTTP scope of work through August 31, 2025 in line with Change
Order No. 2, with no further change in the overall not-to-exceed amount or term of the
contract.
BACKGROUND
The City of Palo Alto Utilities (CPAU) contracts substructure and trenching construction services
because the amount of work varies year over year and use of contracted services allows for the
most efficient and cost-effective use of resources for this variable timing. In 2022, MP Nexlevel
was deemed the lowest responsible bidder of a competitive solicitation for utility trench and
substructure installation (Staff Report 139531). The performance and quality of work delivered
by MP Nexlevel has been satisfactory over the years. As part of the task order completion
process, MP Nexlevel’s work is inspected and signed off by internal staff. The original Task
Order Construction Contract C22183580 with MP Nexlevel of California, Inc., was approved by
Council March 21, 2022 in the amount of $8,815,809 for Trenching and Substructure
1 City Council, March 21, 2022: Staff Report #13953
https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=81767
Installation and Materials and a contingency amount of $881,581, for a total not-to-exceed
amount of $9,697,390 over three years through April 30, 2025. For customer-related work,
trenching and substructure work are reimbursed by the customers through the customer
connection charges. Since FY 2023, the City has been reimbursed $4.5 million from customers
for new service connections.
2). Under Change Order #1, MP Nexlevel would install, lash, splice and test approximately
59,500 feet of fiber optic cable; build underground laterals and pad mounts for fiber
distribution cabinets; and build a concrete pad to support the fiber hut and emergency
generator including electric wiring, lighting, HVAC and security fencing. The FTTP pilot is
expected to inform the City of the best mix of insource (internal staff) and outsource
(contractors) staffing to construct and operate the new municipal Palo Alto fiber internet
business. Change Order #1 covered the FTTP Phase 1 pilot area only. Once the pilot area is
complete and can inform the requirements for a competitive solicitation, staff will be
requesting competitive bids for construction of the remainder of the FTTP Phase 1 scope.
3). The
second Change Order was intended to bridge the gap between the existing contract and any
new task-order substructure construction contract following the new competitive solicitation.
ANALYSIS
2 City Council, October 7, 2024: Staff Report #2408-3368
3 City Council, April 14, 2025: Staff Report #2502-4186
approximately $330,000 in construction labor. CPAU hired a civil engineering firm to perform
geotechnical investigation and foundation engineering design for the fiber hut at Colorado
Power Station. The proposed fiber hut is expected to be approximately 11.5 feet by 20 feet
and approximately 10.5 feet in height. The structure is expected to have a dead weight of
55,000 pounds, which applied over the area of the structure yields a pressure of about 240
pounds per square foot. Due to geotechnical concerns of shallow groundwater and potential
severe ground shaking during a major earthquake, the engineering firm recommended a
structural slab supported on a drilled pier which extends to about 18 feet and grade beam
foundation system extending below the fill and the upper liquefiable layer. The construction
quote for the fiber hut site preparation and installation came in approximately $750,000 higher
than staff had originally estimated prior to completion of the geotechnical investigation and
engineering design of the pad mount. The quote includes site grading and bedrock, conduit
and vault installation, fiber hut pad and structural pier supports, and anchoring the fiber hut
and generator upon delivery.
FISCAL/RESOURCE IMPACT
STAKEHOLDER ENGAGEMENT
ENVIRONMENTAL REVIEW
CEQA Guidelines, and the environmental regulations of the City. A final Initial Study-Mitigated
Negative Declaration (IS/MND) that incorporated revisions, as appropriate, based on public
comments was adopted by Council Resolution on June 17, 2024 (Staff Report #2403-27134).
Other portions of work performed by MPNexlevel, including the Foothills Rebuild and Grid
Modernization Project are Exempt Under CEQA Guidelines Sections 15302, 15303 and 15183.
ATTACHMENTS
APPROVED BY:
4 City Council, June 17, 2024: Staff Report #2403-2713
CONTRACT CHANGE ORDER
CITY OF PALO ALTO
DEPARTMENT: ELECTRIC UTILITIES OPERATIONS
_____________________________ Project
Contract Change Order # 3
Project Title: Fiber-to-the-Premises Project No.: FO-24000
Contract Number: C22183580 Date: 5/12/25
Contractor: MP Nexlevel of California, Inc. Change Order No.: 3
Description of Change Order
Background Information: The original contract C22183580 was approved by Council on March 21, 2022 under staff report
ID 13953. The original term of the contract was an annual not-to-exceed amount of $9,697,390
for a total three-year not-to-exceed amount from June 15, 2022 through April 30, 2025. Staff
Report 13953 (laserfiche.com)
Change order #1 was approved by Council on October 7, 2024 under staff report ID 2408-3368.
$1,650,000 was added to the MP Nexlevel (MPNL) contract to perform substructure work for the
new fiber hut and fiber construction for the fiber-to-the-premises (FTTP) pilot. With the FTTP
amendment, the revised not-to-exceed amount is $11,347,390. (Staff Report 2408-3368)
Change order #2 was approved by Council on April 14, 2025 under staff report ID 2502-4186.
$4,000,000 was added to perform substructure and trending work for Foothills Rebuild Wildfire
Mitigation, Grid Modernization, and Customer Connections. (Staff Report #2502-4186).
Change Order Justification: Staff recommends amending the scope of work under change order #2 to include Fiber-to-the-
Premises with no change to the total not-to-exceed amount of $15,347,390 and term of the
contract through August 31, 2025.
Under Amendment No. 2, Staff requested an additional $4,000,000 to provide substructure and
utility trenching construction services for the Foothills Rebuild Wildfire Mitigation, Grid
Modernization, and Customer Connections. Based on recent estimates of pending construction
work, Staff has identified about $450,000 that can be reassigned to FTTP from Amendment No. 2
without impacting the other major projects.
Due to geotechnical concerns of shallow groundwater and severe ground shaking during a major
earthquake, the engineering consultant recommended a structural slab supported on a drilled
pier which extends to about 18 feet and grade beam foundation system extending below the fill
and the upper liquefiable layer. The construction quote for the fiber hut site preparation and
installation came in approximately $750,000 higher than staff had originally estimated prior to
completion of the geotechnical investigation and engineering design of the pad mount. The
quote includes site grading and bedrock, conduit and vault installation, fiber hut pad and
structural pier supports, and anchoring the fiber hut and generator upon delivery.
Description of Work to be Performed:
Of the remaining $4.8M on the contract, contractor will provide estimated substructure
construction work for the following CIP projects:
Foothills Undergrounding (EL-21001) ~ $2.3M
Grid Modernization (EL-24000) ~$0.1M
Customer Connections (EL-89038) ~0.3M
Fiber-to-the-Premises (FO-24000) ~2.1M
Incorporates Field Order Number(s): N/A
Docusign Envelope ID: 4AAA8EA8-2192-465D-A0C9-7370CD6AA9B5
Cost Time
This Change Order will:
No cost change: N/A
Increase cost by $ N/A
Decrease cost by $ N/A
This Change Order will:
Increase time by __0__ days
o _0_ days Excusable Delay
o _0_ days Compensable Delay
Decrease time by ____ days
The date of completion as of this Change Order is:
August 31, 2025_______________________________
G/L account number (s): 40030200 / 31650
Basis for change in cost:
Unit price(s)
Lump sum
X Time and Materials
Compensation for Compensable Delay
Other:
Docusign Envelope ID: 4AAA8EA8-2192-465D-A0C9-7370CD6AA9B5
Contract Change Order – continued
CONTRACTOR CERTIFICATION: By signing below, Contractor agrees that this Change Order constitutes full resolution, settlement, accord and
satisfaction with respect to any and all pending or future Claims for cost and extensions of time that were asserted, or that could have been
asserted, in connection with the Work covered by this Change Order, as more fully set forth in Article 7 of the Contract General Conditions.
FAILURE TO EXECUTE: If Contractor fails to promptly execute this Change Order after it has been submitted for Contractor’s signature, the City
may unilaterally approve this Change Order as set forth in Article 7 of the Contract General Conditions. Contractor may dispute the terms of a
unilaterally-approved Change Order, in whole or in part, by submitting a Claim in accordance with the Dispute Resolution Procedures set forth
herein within fourteen (14) days after the Change Order is approved by the City. If Contractor fails to submit a Claim within that 14-day period,
with respect to all or part of the unilaterally-approved Change Order, those portions of the Change Order which have not been disputed by timely
submission of a Claim shall be deemed to have the same effect as if the Change Order was fully executed by both parties as set forth above.
Accepted for Contractor: Accepted for City of Palo Alto:
By: By:
Title: Title:
Date: Date:
PC
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Description Amount Reason for Change
Adding Fiber-to-the-Premises to Change Order #2
Scope of Work
Docusign Envelope ID: 4AAA8EA8-2192-465D-A0C9-7370CD6AA9B5
5/13/2025
President
Document Preparation
By: Dave Yuan
Title: Utilities Strategic Business Manager
Date: May 12, 2025
City Approval – Division Head
Signature required on all Change Orders
By :
Title : Darren Numoto
Interim Assistant Director, Fiber
Date:
City Approval – Department Head
Signature required when any individual Change Order exceeds $10,000.
By:
Title: Kiely Nose
Interim Director of Utilities
Date:
Contract Change Order – continued
Summary of Amounts Payable Under Contract (For Internal Purposes Only)
Original Contract Sum: $ 9,697,390.00
Previous Change Orders $ 1,650,000.00
This Change Order $ 4,000,000.00
Revised Contract Sum: $ 15,347,390.00
Compare to:
Original Contract
Authorization: $ 8,815,809.00 Contingency: 881,581.00
Contract Amendment
Authorizations $ 5,500,000.00 Contingency added: 150,000.00
Contingency Authorizations: $ 1,031,581.00 Used to date (0.00)
Total Authorized Funding: $ 15,347,390.00 Balance remaining 4,795,577
Change Orders shall not be initiated for Council-approved contracts if the revised Contract Sum exceeds the
total authorized funding amount.
Docusign Envelope ID: 4AAA8EA8-2192-465D-A0C9-7370CD6AA9B5
From:Ah Yun, Mahealani
To:Council, City
Subject:Comcast Letter: Items 15 and 22 for June 16th City Council Meeting
Date:Friday, June 13, 2025 3:14:30 PM
Attachments:Comcast Ltr to Palo Alto 6 2025.pdf
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Hello Councilmembers,
Please see attached letter from Comcast California regarding City Council Meeting June 16th Agenda Item Numbers #15 and #22.
Mahealani Ah Yun
City Clerk
Office of the City Clerk
250 Hamilton Avenue Palo Alto, CA 94301
P: 650.329.2379 | E: Mahealani.AhYun@PaloAlto.gov
www.PaloAlto.gov
June 13, 2025
Ed Shikada
City Manager
City of Palo Alto
250 Hamilton Avenue
Palo Alto, CA 94301
Dear Mr. Shikada:
Since purchasing the original Cable Co-op in 2000 under an entity which was acquired by
Comcast, we have been proud to provide the City of Palo Alto with world class services which
has evolved over the past 25-years to meet the needs of our customers and expand through
advances in technology and entertainment.
Comcast is proud to serve the City of Palo Alto, operate a Xfinity Customer Store on the El
Camino Real near Page Mill Road, and partner with City staff on our efforts to continue to
upgrade our infrastructure throughout the city with the goal of providing existing and new
customers with a next-generation broadband network that continues to get smarter, faster, and
more reliable.
As the City of Palo Alto, Utilities Department staff, Utilities Advisory Commission, and City
Council continue to evaluate the implementation of a Fiber to the Premise pilot program, our
Comcast team would like to ensure that all City stakeholders are informed about Comcast’s
commitment to our customers in Palo Alto and our goal to grow our customer base through
strategic competition, excellent customer service, and investments in our network and services.
Below are several updates which we want to share directly with you and the City Council:
• On April 17, 2023, Elad Nafshi, Chief Network Officer of Comcast Corporation, visited
California to help rollout the new Xfinity 10G network across our footprint. Elad
presented to a group of local officials, which included representatives from the City of
Palo Alto Utilities Department.
• On August 15, 2023, Comcast becomes the first Internet Provider to offer a product
designed to maintain connectivity when a storm hits, trees are down, or a customer
experiences a local outage, with the launch of Storm Ready Wifi.
• On December 15, 2023, Comcast announced that it has begun to introduce the first
residential customers in the world to next-generation Internet powered by DOCSIS 4.0
technology. The latest version of DOCSIS technology is a giant leap forward in Internet
connectivity that can deliver multi-gigabit symmetrical speeds to customers over the
connections that already exist in tens of millions of homes in Comcast markets across
the country. As a part of the launch, Comcast has introduced a new portfolio of
symmetrical products for residential customers which we intend to begin rolling out in the
City of Palo Alto and the Bay Area within the next 24 months.
• And recently, consistent with our mission is to provide fast, reliable, and secure internet
to customers at prices that are clear and consistent – for the first time, new Xfinity
Internet customers get the same monthly price for 5 years. The 5 Year Price
Guarantee includes unlimited data and the best-in-class Xfinity Gateway at one simple,
monthly price. There’s no annual contract required. Customers have the freedom and
flexibility to cancel at any time without penalty.
On behalf of the Comcast team, I would like to thank you and the City of Palo Alto for your
exceptional governance and partnership in supporting our continuous investments in our
broadband network serving our Palo Alto customers.
Please do not hesitate to contact me with any questions or requests for additional information or
briefings from Comcast technical team members. I will also continue to share updates and new
information directly with you moving forward.
Sincerely,
Lennies M. Gutierrez
(she/her/ella)
Director of Government Affairs – Comcast California
South Bay & Southern Peninsula
Email: lennies_gutierrez@comcast.com
Cell: (408) 465-6979