HomeMy WebLinkAboutStaff Report 2603-6129CITY OF PALO ALTO
CITY COUNCIL
Special Meeting
Monday, June 01, 2026
Council Chambers & Hybrid
5:30 PM
Agenda Item
13.Approval of Contract Change Order No. 2 in the Amount of $1,000,000 to Contract No.
C23186274 with Monterey Mechanical Company for On-Call Emergency and Critical
Construction Services at the Regional Water Quality Control Plant, for a Revised Not-To-
Exceed Amount of $4,000,000, and Approval of Contract Amendment No. 1 to Contract
No. S24190553 with Carollo Engineers Inc. for On-call Engineering Services at the
Regional Water Quality Control Plant to Increase Compensation by $995,000 for a
Revised Total Not-to-Exceed Amount of $1,250,000, and to Extend the Contract Term
Through December 31, 2028; CEQA Status – Exempt Under CEQA Guidelines Section
15301
City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Public Works
Meeting Date: June 1, 2026
Report #:2603-6129
TITLE
Approval of Contract Change Order No. 2 in the Amount of $1,000,000 to Contract No.
C23186274 with Monterey Mechanical Company for On-Call Emergency and Critical
Construction Services at the Regional Water Quality Control Plant, for a Revised Not-To-Exceed
Amount of $4,000,000, and Approval of Contract Amendment No. 1 to Contract No. S24190553
with Carollo Engineers Inc. for On-call Engineering Services at the Regional Water Quality
Control Plant to Increase Compensation by $995,000 for a Revised Total Not-to-Exceed Amount
of $1,250,000, and to Extend the Contract Term Through December 31, 2028; CEQA Status –
Exempt Under CEQA Guidelines Section 15301
RECOMMENDATION
Staff recommends that the City Council:
1. Approve and authorize the City Manager or their designee to execute Change Order No.
2, adding $1,000,000 to Contract No. C23186274 with Monterey Mechanical Company
for on-call emergency and critical construction services at the Regional Water Quality
Control Plant, for a revised total not-to-exceed amount of $4,000,000 over a five year
term; and
2. Approve and authorize the City Manager or their designee to execute Contract
Amendment No. 1 to Contract No. S24190553 with Carollo Engineers Inc. for on-call
engineering services at the Regional Water Quality Control Plant, increasing
compensation by $995,000 for a revised total not-to-exceed amount of $1,250,000 and
extending the contract term through December 31, 2028 for a total contract term of
four and a half years.
EXECUTIVE SUMMARY
The Regional Water Quality Control Plant (RWQCP) is an essential wastewater treatment facility
undergoing significant and complex rehabilitation to modernize aging infrastructure and ensure
continued regulatory compliance and service reliability. RWQCP treats wastewater from six
regional partner agencies, including the City of Palo Alto.
The City relies on two on-call contracts to address urgent construction needs and critical
engineering support. These on-call contracts enable the efficient execution of required work,
avoiding the delay and processing of individual contracts and the need to familiarize new
contractors with each project.
BACKGROUND
1 MMC has completed four
work orders and is currently performing two additional work orders addressing high-priority
failures and deteriorated infrastructure.2,3 Total expenditures and commitments under this
contract are approximately $2.8 million to date.
1 City Council, March 6, 2023; Agenda Item #5; SR #2212-0703
2 City Council, May 5, 2025; Agenda Item #9; SR #2502-4128
3 City Council, October 20, 2025; Agenda Item #5; SR #2508-5114
On-Call Engineering Services
ANALYSIS
For context, the Sunnyvale Water Pollution Control Plant utilizes four on-call engineering
services contracts totaling $1,900,000 over four years (2022 - 2026) with an option to extend an
additional year.7 This equates to a yearly average of $475,000 over four years or $380,000 over
five years, if the contract is extended. Sunnyvale’s on-call engineering services agreements are
utilized in the same manner as the RWQCP; however, the higher contract amount enhances
their ability to perform the design services needed. Increasing the on-call engineering contract
value will align the RWQCP with nearby treatment plants and funding authorization, while
improving the efficiency of related projects.
FISCAL/RESOURCE IMPACT
Table 1: Examples of Major Projects funded from WQ-19002
Project Description Total Cost Palo Alto Share Estimated Time
12 kV Electrical Distribution8 $12.3 million $4.6 million*FY2025 – FY2027
Long Range Facilities Plan9 $2.7 million $1.0 million FY2025 – FY2027
On-call Emergency and Critical
Construction
$3.0 million
($4.0 million)
$1.1 million
($1.48 million)
FY2024 – FY2028
7 Sunnyvale City Council, May 6, 2025; Agenda Item #1.E; File #25-0423
8 City Council, October 28, 2024; Agenda Item #5; SR #2408-3389
9 City Council, June 10, 2024; Agenda Item #6; SR #2405-2993
Table 1: Examples of Major Projects funded from WQ-19002
Project Description Total Cost Palo Alto Share Estimated Time
On-call Engineering Services $0.26 million
($1.25 million)
$0.09 million
($0.46 million)
FY2025 – FY2027
(2028)
*Palo Alto’s share of the project is being reimbursed by Valley Water by the Guiding Principle
Five (GP5) grant.13 If additional funds are required, they will be subject to Council approval
through the City’s standard appropriation process.
Recommendations included in this staff report are shown in parentheses for reference.
STAKEHOLDER ENGAGEMENT
This project is part of the RWQCP’s minor capital improvement program funded by the City of
Palo Alto and its five partner agencies who use the RWQCP for wastewater treatment. The five
partner agencies are regularly updated on both the need for and progress of wastewater
treatment capital work. Updates are provided annually and at other periodic meetings to
inform partner agency staff on the major capital improvement program. With respect to Palo
Alto, public meetings associated with the City’s budget process serve as the primary venue for
engaging the community on new projects and associated rate impacts.
ENVIRONMENTAL REVIEW
Council action on this is exempt from review under the California Environmental Quality Act
pursuant to CEQA Guidelines Section 15301 (b), which includes maintenance of existing publicly
owned wastewater facilities involving negligible or no expansion in use.
ATTACHMENTS
Attachment A: Contract C23186274, Change Order No. 2 with Monterey Mechanical Company
Attachment B: Contract S24190553, Amendment No. 1 with Carollo Engineers Inc.
APPROVED BY:
Brad Eggleston, Director Public Works/City Engineer
13 City Council. June 3, 2024; Agenda Item #6; SR #2404- 2877
Contract Change Order
City of Palo Alto
Department: Public Works WQCP
Contract Number: C23186274
CONTRACT CHANGE ORDER PAGE 1 OF 3
Contract Change Order #02
Project Title:On-Call Emergency Construction Services Project No.:WQ - 19002
Contract Number:C23186274 Date:3/11/2026
Contractor:Monterey Mechanical Company Change Order:02
Description of Change Order
Background Information:The 5-year contract runs from March 21, 2023 to March 15, 2028 for
$1,500,000 ($300,000 / year) to cover the cost of immediate mobilization and
construction costs by the on-call contractor for handling emergency and
urgent construction services at the Palo Alto Regional Water Quality Control
Plant. Change Order No. 1 was signed on July 15, 2025 for $1,500,000 being
added to the original contract amount, bringing the revised contract amount to
$3,000,000.
Change Order Justification:The three completed work orders (2301, 2303, 2307) and the three ongoing
work orders (2302, 2304, 2305) amount to approximately $2.8 million to date
for emergency and urgent construction services. This leaves approximately
$200,000 for the remainder of the contract.
Another $1,000,000 is requested to replenish the contract with funds to cover
future unforeseen urgent and emergency work over the next two years. This
C/O will be subject to approval by the Palo Alto City Council.
Description of Work to be Performed:Unexpected breakdowns or failures of equipment, piping, electrical, concrete,
etc., requiring use of the funds in this contract for urgent, critical repair work.
Incorporates Field Order Number(s):N / A
Cost Time
This change order will:
No cost change: N/A
Increase cost by $ 1,000,000
Decrease cost by $ N/A
G/L account number (s):31651
This change order will:
No change in time
Increase time by days
Decrease time by days
The date of completion as of this change order
remains as:
March 15, 2028
CONTRACT CHANGE ORDER PAGE 2 OF 3
Basis for change in cost:
Unit price(s)
Lump sum
Cost plus
Other:
Contract Change Order – continued
CONTRACTOR CERTIFICATION: The undersigned Contractor approves this Change Order as to the changes, if any, in
the contract price specified for each Line Item and as to the extension of time allowed, if any, for completion of the entire
work on account of each Line Item, and agrees to furnish all labor and materials and perform all work necessary to complete
any additional work specified therein, for the consideration stated therein. It is understood that the time and cost adjustments
set forth in this Change Order include full compensation for any impacts or delays associated with the Line Items addressed
in this Change Order.
CLAIM PROCEDURE: Any items in Contractor’s Change Order Request that are not included in this Change Order are
hereby deemed rejected as of the date of this letter. If Contractor wishes to dispute this rejection, it may submit a Claim
pursuant to Section 4.2 of the Contract General Conditions within thirty (30) days of the date of this Change Order.
Accepted for Contractor:Accepted for City of Palo Alto:
By:By:
Title:Monterey Mechanical Co. Project Manager Title:Public Works Department - Project Manager
Date:Date:
PC
O
N
o
.
A
S
I
E
W
A
C
O
R
C
O Description Amount Reason for Change
-02 Unexpected emergency repairs $1,000,000 Replenishment of contract funds for unforeseen work.
Total for this change
order $1,000,000
Scope of Work
CONTRACT CHANGE ORDER PAGE 2 OF 3
Contract Change Order
City of Palo Alto
Department: Public Works WQCP
Contract Number: C23186274
CONTRACT CHANGE ORDER PAGE 3 OF 3
Document Preparation City Approval – WQCP Head
By:By:
Title:Tom Kapushinski
Sr. Project Engineer Title:Aaron Gilbert
Plant Manager, Water Quality Control Plant
Date:Date:
City Approval – Division Head
Signature required on all change orders
By:
Title:Karin North
Asistant Director, Public Works, ESD
Date:
City Approval – Department Head
Signature required when any individual Change Order exceeds $10,000.
By:
Title:Brad Eggleston
Director of Public Works
Date:
Contract Change Order – continued
Summary of Amounts Payable Under Contract (For Internal Purposes Only)
Original Contract Amount:$1,500,000.00
Previous Change Orders $1,500,000.00
This Change Order $1,000,000.00
Revised Contract Amount:$4,000,000.00
Compare to:
Original Contract
Authorization:$1,500,000.00 Contingency:0.00
Contract Amendment
Authorizations $1,500,000.00 Contingency added:0.00
Contingency
Authorizations:$0.00 Used to date 0.00
Total Authorized Funding:$4,000,000.00 Balance remaining 0.00
Change orders shall not be initiated for Council-approved contracts if the revised contract total exceeds the total
authorized funding amount.
Commented [RG1]: Pending Council approval.
Commented [RG2]: Pending Council approval.
Contract Change Order
City of Palo Alto
Department: Public Works WQCP
Contract Number: C23186274
CONTRACT CHANGE ORDER PAGE 3 OF 3
Vers.: Aug. 5, 2019
Page 1 of 5
AMENDMENT NO. 1 TO CONTRACT NO. S24190553
BETWEEN THE CITY OF PALO ALTO AND
CAROLLO ENGINEERS, INC.
This Amendment No. 1 (this “Amendment”) to Contract No. C24190553 (the “Contract” as
defined below) is entered into as of June 1, 2026, by and between the CITY OF PALO ALTO, a
California chartered municipal corporation (“CITY”), and Carollo Engineers, Inc., a corporation,
located at 2795 Mitchell Drive, Walnut Creek, CA 94598 (“CONSUNTANT”). 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 hereto
for the provision to supplement engineering services for the Regional Water Quality Control Plant
(the “Project”) and to provide engineering consulting services on an as-needed basis in connection
with the Project (the “Services”), as detailed therein.
B. An ongoing task order as part of the Contract is focused on the structural,
mechanical, and electrical rehabilitation of the existing four gravity thickeners. The estimated
construction completion is at the end of 2028. Additional time for contract performance is required
to leverage the existing engineering consulting knowledge to promote project consistency and
efficiency. The project is being designed and will be eventually constructed such that phasing is
incorporated to facilitate plant operation during construction
C. The Parties now wish to amend the Contract in order to extend the time for
performance by 78 weeks (from 156 weeks to 234 weeks) and increase the maximum
compensation by Nine Hundred Ninety-Five Thousand ($995,000) from Two Hundred Fifty-Five
Thousand Dollars ($255,00) to One Million Two Hundred Fifty Thousand Dollars ($1,250,000 ).
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. C24190553
between CONSULTANT and CITY, dated June 13, 2024, as amended by:
This Amendment No.1, dated June 1, 2026
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:
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“The term of this Agreement shall be from the date of its full execution through
December 31, 2028.”
SECTION 3. Section 4 “NOT TO EXCEED COMPENSATION” of the Contract is hereby
amended to read as follows:
“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, with a total Not to Exceed Compensation of One
Million Two Hundred Fifty Thousand Dollars ($1,250,000). 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.”
SECTION 4. The following exhibit(s) to the Contract is/are hereby amended or added, as
indicated below, to read as set forth in the attachment(s) to this Amendment, which is/are hereby
incorporated in full into this Amendment and into the Contract by this reference:
a. Exhibit “B” entitled “SCHEDULE OF PERFORMANCE”, AMENDED, REPLACES
PREVIOUS.
b. Exhibit “C-1” entitled “SCHEDULE OF RATES”, ADDED / 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.)
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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
APPROVED AS TO FORM:
City Attorney or designee
COROLLO ENGINEERS, INC.
Officer 1
By:
Name:
Title:
Officer 2 (Required for Corp. or LLC)
By:
Name:
Title:
Attachments:
Exhibit “B” entitled “SCHEDULE OF PERFORMANCE”, AMENDED, REPLACES PREVIOUS
Exhibit “C-1” entitled “SCHEDULE OF RATES”, AMENDED, REPLACES PREVIOUS
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Rick Chan
Senior Vice President
Katy Solem
Client Services Director
Vers.: Aug. 5, 2019
Page 4 of 5
EXHIBIT B
SCHEDULE OF PERFORMANCE
AMENDMENT NO. 1
(AMENDED-REPLACED PREVIOUS)
CONSULTANT shall perform the Services so as to complete each milestone within the number of days/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 (“NTP”) from the CITY.
Milestones
Completion
Number of Weeks (as specified below)
from NTP
1. Year One Services 52
2. Year Two Services 104
3. Year Three Services 156
4. Year Four Services 208
5. Year Five Services 234
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.
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EXHIBIT “C-1”
SCHEDULE OF RATES
AMENDMENT NO. 1
(AMENDED-REPLACED PREVIOUS)
CONSULTANT’s schedule of rates is as follows:
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