HomeMy WebLinkAboutStaff Report 2505-4733CITY OF PALO ALTO
CITY COUNCIL
Special Meeting
Monday, August 11, 2025
Council Chambers & Hybrid
5:30 PM
Agenda Item
10.Approval of Increase of Construction Contingency for Contract No. C24189237 with SAK
Construction, LCC in the amount of $1,800,000, Funded by the Wastewater Treatment
Enterprise Fund for the Joint Intercepting Sewer Rehabilitation (Phase 1) Project (WQ
24000), and Approval of a Budget Amendment in the Wastewater Treatment Fund;
CEQA Status - Exempt under CEQA Guidelines Section 15301 (Repairs to Existing
Facilities)
City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Public Works
Meeting Date: August 11, 2025
Report #:2505-4733
TITLE
Approval of Increase of Construction Contingency for Contract No. C24189237 with SAK
Construction, LCC in the amount of $1,800,000, Funded by the Wastewater Treatment
Enterprise Fund for the Joint Intercepting Sewer Rehabilitation (Phase 1) Project (WQ 24000),
and Approval of a Budget Amendment in the Wastewater Treatment Fund; CEQA Status -
Exempt under CEQA Guidelines Section 15301 (Repairs to Existing Facilities)
RECOMMENDATION
Staff recommends that the City Council:
1. Approve an increase of construction contingency for Contract No. C24189237 with SAK
Construction, LCC in an amount not to exceed $1,800,000 for a total contract contingency
amount not to exceed $2,534,770; and
2. Approve an amendment to the Fiscal Year 2026 Adopted Capital Budget Appropriation for
the Wastewater Treatment Fund (requires a 2/3 majority vote) by:
a. Increasing the Joint Intercepting Sewer Rehabilitation (Phase 1) project (WQ-24000)
appropriation by $700,000; and
b. Decreasing the Wastewater Treatment Fund balance by $700,000.
EXECUTIVE SUMMARY
The Joint Intercepting Sewer Rehabilitation (Phase 1) Project will install a structural liner in a
critical 72-inch sewer pipeline that conveys over half the influent flow to the Regional Water
Quality Control Plant (RWQCP). The City awarded a $8.1 million construction contract to SAK
Construction, LLC in December 2023, including a 10% construction contingency. During
construction, significant unforeseen site conditions, contractor schedule and sequencing
challenges, and necessary design clarifications required change orders that have nearly
exhausted the original contingency.
While the main pipe rehabilitation work is complete, further work including bypass rerouting,
manhole modifications, and structural evaluation of a major junction structure necessitates an
increase to the construction contingency. Staff recommends increasing the contingency by
$1,800,000. If the contingency is fully utilized, the total contract not-to-exceed amount would
be $9,882,470. Cost-sharing among RWQCP partner agencies will be reconciled based on final
expenditures.
BACKGROUND
The Joint Intercepting Sewer Rehabilitation (Phase 1) Project rehabilitates 2,364 linear feet of
deteriorated 72-inch diameter concrete sewer pipe using cured-in-place pipe (CIPP) lining,
addressing extensive corrosion in a critical section of the Joint Intercepting Sewer (JIS) system
leading to the RWQCP. This section of the JIS conveys most of the wastewater flow from
Mountain View, Los Altos, Los Altos Hills, and Palo Alto to the RWQCP. There are other sewers
leading to the RWQCP, but these are maintained by the Utilities Department, Stanford
University, and the East Palo Alto Sanitary District and not included in the scope of this Project.
City Council awarded the design contract for the Project to Jacobs Engineering Group, Inc. on
May 16, 2022, and the design was completed in August 2023.1 On December 11, 2023, City
Council approved a funding agreement with partners, a construction contract with SAK
Construction, LLC (SAK) for a base amount of $7,347,700 and a 10% contingency of $734,770,
for a total not-to-exceed amount of $8,082,470, as well as an amendment to the construction
management services contract with Tanner Pacific, Inc.2
Construction began in winter 2024 but encountered delays due to unforeseen site conditions,
including difficult access and obstructions not visible during pre-construction investigations, as
well as contractor schedule and sequencing challenges. These delays pushed field construction
activities into the 2025 dry season.
On June 9, 2025, Council approved amendments to related contracts for Jacobs Engineering
Group, Inc., Tanner Pacific, Inc., and Carollo Engineers, Inc. to support continued engineering
and construction management services through the extended schedule.3
ANALYSIS
While the primary pipe rehabilitation (CIPP lining) was successfully completed, during the initial
phases of construction, there were project delays due to unforeseen site conditions, as well as
1 City Council, May 16 2022; Consent Item #7; SR #14164,
https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=81838
2 City Council, December 11, 2023; Consent Item #2; SR #2308-1879,
https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=82522
3 City Council, June 9, 2025; Consent Item #11; SR #2504-4519,
https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=83447
contractor schedule and sequencing challenges. These delays pushed field construction
activities into the 2025 dry season. Additional unforeseen work became necessary, including:
Excavation and backfill to construct pump pads at two additional locations
Landfill cap material import and placement after landfill waste discovered during
excavations
Replacement of a manhole base deemed structurally unsuitable
Modifications to existing manholes to accommodate liner transitions
Addressing complications with the bypass pumping system due to higher-than-
anticipated flow variability.
Isolation and structural evaluation of a critical junction box (JB-0), which was previously
inaccessible
Additional temporary bypass rerouting to enable safe inspection of JB-0 and repair
FISCAL/RESOURCE IMPACT
project (WQ-24000) by $700,000 (there is currently $1.1 million available in the project), from
$12.4 million to $13.1 million.
STAKEHOLDER ENGAGEMENT
Project notices and updates have been shared with the Parks and Recreation Commission and
through City newsletters, with staff responding to public inquiries and keeping stakeholders
informed throughout key milestones. On February 25, 2025, staff briefed the Parks and
Recreation Commission (PRC) on construction progress and on Byxbee Park Western Trail
Temporary Closure from 3/30/2025 to 11/30/2025 for the Sewer Pipe Rehabilitation.4 On July
22, 2025, staff provided an update to the PRC during the Departmental Report.
ENVIRONMENTAL REVIEW
ATTACHMENTS
APPROVED BY:
4 Parks and Recreation Commission, February 25, 2025; Agenda Item #3; SR# 2502-4115,
https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=16875
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Project #: 0038014.01Map Created: July 2020
0 0.1 0.20.05 Miles
Third Party GIS Disclaim er: This m ap is for reference and graphical purposes only and should not be relied upon by third parties for any legal decisions. Any reliance upon the m ap or data contained herein shall be at the users’ sole risk . Data Sources:
!Manholes and Structures
Future
Phase 1
REGIONAL
WATER QUALITY
CONTROL PLANT
REGIONAL
WATER QUALITY
CONTROL PLANT
FLOWFLOW
FIGURE 7: RECOMMENDED PROJECT PRIORITIZATION
21
Palo AltoTrunk Sewer Trunk Sewer Interceptor
Attachment A: SITE MAP
This Projec
t
Attachment B ‐ Partner Agencies Cost Share Summary for Construction Phase
Table B‐1: Project Costs during Construction (Less Bypass Pumping Inside The Plant)
Estimated Cost at Time of Estimated Cost
June 2025
Current EstimatedAgencyFixed Cost Share %Construction Award
December 2023
City of Mountain View
of Palo Alto
of Los Altos
of Los Altos Hills
Subtotal:
62.50%$4,398,734 $4,808,985 $4,808,985
100.00%$7,037,975 $7,694,376 $7,694,376
Table B‐2: Cost for Bypass Pumping during Construction inside The Plant
Cost at Time of Estimated Cost
June 2025
Current EstimatedAgencyEstimated Cost Share %*Construction Award
December 2023
City of Mountain View
of Palo Alto
39.31%$760,885 $799,365 $1,507,000
City of Los Altos
Town of Los Altos Hills
Palo Alto Sanitary District
University
Subtotal:
5.56%$104,904
$122,736
$1,896,996
$113,062
$129,127
$2,033,489
$213,000
$243,000
$3,833,000
6.35%
100.00%
* Estimate only based on FY2025 cost share (actual cost share will be determined after project completion based on wastewater flows and strength
by each partner in 2024, 2025, and 2026).
** Includes additional contingency of $1.8 M
Table B‐3: Not‐to‐Exceed Cost for Partners during Construction (Sum of Table B‐1 and B‐2)
Estimated Total Cost at Time Estimated Total Cost Current EstimatedAgencyOverall Project Cost Share %of Construction Award
December 2023 in June 2025 Total Cost
City of Mountain View
of Palo Alto
54.79%$5,159,619 $5,608,349 $6,316,000
City of Los Altos
Town of Los Altos Hills
Palo Alto Sanitary District
University
Total, Not‐to‐Exceed:
1.85%$104,904 $113,062 $213,000
2.11%$122,736 $129,127 $243,000
100.00%$8,934,970 $9,727,865 $11,528,000