HomeMy WebLinkAboutItem 5i. Award the Construction Contract for Tank Farm Lift Station Discharge Pipe Replacement Project (Spec. No. 2001050) Item 5i
Department: Public Works
Cost Center: 6102
For Agenda of: 12/5/2023
Placement: Consent
Estimated Time: N/A
FROM: Matt Horn, Public Works Director
Prepared By: Hai Nguyen, Senior Civil Engineer
SUBJECT: AWARD CONSTRUCTION CONTRACT FOR THE TANK FARM LIFT
STATION DISCHARGE PIPE REPLACEMENT PROJECT,
SPECIFICATION NO. 2001050
RECOMMENDATION
1. Award the construction contract for Tank Farm Lift Station Discharge Pipe
Replacement, Specification Number 2001050, to MGE Underground Inc. in the
amount of $215,853; and
2. Approve a budget transfer of $76,000 from the Sewer Fund Undesignated Capital
Account (Completed Projects) to the project account; and
3. Authorize the City Engineer to execute Contract Change Orders within the available
project budget of $276,000.
POLICY CONTEXT
On May 17, 2022, Council approved a Purchasing Policy Update to the Financial
Management Manual that required Council approval for Public Projects that cost over
$200,000.
DISCUSSION
On July 28, 2023, the City Manager authorized staff to advertise construction bids for the
Tank Farm Lift Station Discharge Pipe Replacement (Attachment A) and authorized the
Director of Public Works to award the contract if the lowest responsible bid was within the
Engineer’s Estimate of $170,000.
The project originally went out to bid in August 2023, with bid opening on August 31,
2023. During the first advertising period, two bids were received and publicly opened.
RCH Construction was the apparent lowest bidder with a bid of $282,231. This bid
exceeds the Engineer’s estimate of $170,000 by $112,231. Due to the bid results
significantly exceeding the estimate, the City Manager approved rejecting all bids and re-
advertising the project. Furthermore, to reduce project costs, staff modified the project
scope by removing the requirement for the contractor to complete sewer bypass pumping
(Attachment B).
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Item 5i
During the second advertising period, two bids were received (Attachment C) and opened
on October 31, 2023, and MGE Underground Inc. (MGE) was the apparent lowest bidder
with a bid of $215,853. This bid is greater than the Engineer’s estimate by $45,853 , but
less than the bid amount received during of the first advertisement . Generally, the
increase in costs above the Engineer’s estimate may be attributed to recent economic
trends leading to overall cost increases in construction related to high demand for work
with a limited pool of qualified contractors.
Rank Contractor Bid Total
1 MGE Underground Inc $215,853
2 Ellison Environment Inc $243,429
Award Recommendation
Staff reviewed MGE’s bid proposal and determined that the bid from MGE required
clarification to determine the responsiveness of the bid requirements stated in Section 2-
1.33 of the City Standard Specifications, which requires all spaces for bid prices and totals
filled in. MGE provided the total prices for Bid Items 7 and 8, but no item price was written.
MGE was given an opportunity to respond with information on why its bid should be
considered responsive (Attachment D). MGE responded and provided the item prices
(Attachment E) that are arithmetically consistent with the original total prices for Bid Items
7 and 8 and staff concluded that all requirements as established in Section 2 -1.33 of the
City Standard Specifications have been met.
The Contractor’s references, license, and registration with the Department of Industrial
Relations have been verified. Staff is recommending that the project be awarded to MGE
(Attachment F).
Previous Council or Advisory Body Action
This project was identified in the 2023-25 Financial Plan that was approved by Council.
Public Engagement
Public engagement was conducted during the initial identification of this project to be
included in the 2023-25 Financial Plan.
CONCURRENCE
There is concurrence from the Utilities Department to award the project to the lowest
responsive bid based on the final review of the bid documents.
ENVIRONMENTAL REVIEW
The project is categorically exempt from environmental review under Section 15302 Class
2(c) of the California Environmental Quality Act (CEQA) Guidelines because the
replacement of discharge piping would result in no expansion of use. Section 15302 Class
2(c) specifies that “Replacement or reconstruction of existing utility systems and/or
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Item 5i
facilities involving negligible or no expansion of use” is categorically exempt from
environmental review. A Notice of Exemption has been filed through the Community
Development Department.
FISCAL IMPACT
Budgeted: Yes Budget Year: 2023-25
Funding Identified: Yes
Fiscal Analysis:
Funding
Sources
Total Budget
Available
Current
Funding
Request
Remaining
Balance
Annual
Ongoing
Cost
General Fund
State
Federal
Fees
Sewer Fund $627,921 $276,000 $351,921
Total $627,921 $276,000 $351,921
Tank Farm Lift Station Discharge Pipe Replacement (2001050)
Project Account
(2001050)
Sewer Fund
Undesignated Capital
(Completed Projects)
Project Total
Costs
Total Project Bid $200,000 $15,853 $215,853
Contingencies
(25%) $0 $54,647 $54,647
Material Testing $0 $5,000 $5,000
Printing $0 $500 $500
Total Cost of
Project $200,000 $76,000 $276,000
Current Project
Balance $200,000 $427,921
Remaining Balance $0 $351,921
Funding for this project is available in the Project Account (2001050) which has a current
balance of $200,000. Staff is recommending a transfer of $76,000 from the Sewer Fund
Undesignated Capital (Completed Projects) to fund this project.
ALTERNATIVES
The City Council could deny the request to award the project. Staff does not
recommend this option, as discharge piping included in this project will continue to
deteriorate and pose a high risk of catastrophic failure, requiring expensive repairs.
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Item 5i
ATTACHMENTS
A - City Manager Report Authorizing Advertising
B - City Manager Report Authorizing Re-advertising
C - Bid Results
D - MGE Underground, Inc. Bid Responsiveness Letter
E - MGE Underground, Inc. Bid Item List
F - Draft Construction Agreement with MGE Underground, Inc.
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City of San Luis Obispo, City Manager Report
Final City Manager Approval Approver Name Date Approved
ACM Community Services Shelly 7/28/23
Reviewer Routing List Reviewer Name Date Reviewed
City Engineer BN 7/26/23
City Attorney SMS 7/26/23
Utilities CL 7/26/23
Finance nh 7/26/23
Department Analyst AA 7/24/23
CIP Manager GC 7/24/23
July 24, 2023
FROM: Matt Horn, Director of Public Works G. Cruce
for MH 7/26/2023
PREPARED BY: Hai Nguyen, Senior Civil Engineer
SUBJECT: Tank Farm Lift Station Discharge Pipe Replacement, Specifications No.
2001050
RECOMMENDATION
1. Approve the projects plans (Attachment A) and specifications (Attachment B) for Tank Farm Lift
Station Discharge Pipe Replacement, Specification No. 2001050 (Project); and
2. Authorize staff to advertise for bids; and
3. Authorize the Director of Public Works to award the construction contract if the lowest
responsible bid is within the Engineer’s Estimate of $170,000.
DISCUSSION
Background
Replacements of pumps, valves, fittings, electrical components, telemetry, and related infrastructure
are an ongoing need for reliable wastewater lift stations. The purpose of this program is to replace
major assets needed at lift stations to extend the life of the infrastructure without having to replace
the entire facility.
The Project
The Tank Farm Lift Station Discharge Pipe Replacement (Project) proposes replacement of
discharge piping at the Tank Farm Lift Station originally installed in 2008. With the addition of
East Airport and Avila Ranch Annexations, the lift station has experienced increased sewer flows
that have also increase corrosion problems within the wet well. The corrosive gas within the wet
well has compromised the protective coating of the existing ductile iron pipe and is rapidly
corroding the discharge piping of the four existing sewer pumps. Stainless steel pipe is being
proposed to replace the ductile iron discharge piping for a longer useful life, and these minor
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Tank Farm Lift Station Discharge Pipe Replacement (2001050) Page 2
improvements will extend the life of the entire sewer facility. Stainless steel is highly resistant to
corrosion because a protective layer forms naturally on stainless steel to protect the steel from
corrosion and no additional coating is required.
FISCAL IMPACT
Funding for this project is described in the 2023-25 Financial Plan, Capital Improvement Plan
(page 412). Account 2001050 has a current balance of $200,000 and is sufficient to support the
project costs, estimated at $200,000. This project is funded in full by the Sewer Fund.
Tank Farm Lift Station Discharge Pipe Replacement (2001050)
Construction Estimate $170,000
Contingencies (15%) $25,000
Material Testing $5,000
Printing $500
Total Cost of Project $200,000
Total Funding Available (2001050) $200,000
Remaining Balance $0
ALTERNATIVES
Deny or defer approval to advertise. The City Manager may choose to deny or defer the approval to
advertise this project. Staff does not recommend this option, as discharge piping included in this
project will continue to deteriorate and pose a high risk of catastrophic failure, requiring expensive
repairs.
ATTACHMENTS
1. 2001050 Plans
2. 2001050 Specifications
G:\Projects\ActiveProjects\Sewer\2001050 Tank Farm Lift Station\100 Project Control\102 Staff Reports\CMR to Advertise\2001050 CMR to
Advertise.docx
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City of San Luis Obispo, City Manager Report
Final City Manager Approval Approver Name Date Approved
City Administration WM 9/22/23
Reviewer Routing List Reviewer Name Date Reviewed
City Engineer BN 9/13/2023
Utilities MB 9-14-2023
City Attorney SMS 9/18/2023
Finance EJ 9/21/23
CIP Administrative Manager BN 9/13/2023
UT Financial Analyst AA 9/13/2023
September 12, 2023
FROM: Matt Horn, Director of Public Works MH 9/15/2023
PREPARED BY: Hai Nguyen, Senior Civil Engineer
SUBJECT: Re-advertise Tank Farm Lift Station Discharge Pipe Replacement,
Specifications No. 2001050
RECOMMENDATION
1. Reject all bids and authorize staff to re-advertise the Tank Farm Lift Station Discharge Pipe
Replacement, Specification No. 2001050 for bids.
2. Authorize the Director of Public Works to award the construction contract if the lowest
responsible bid is within the Engineer’s Estimate of $170,000.
DISCUSSION
On July 28, 2023, the City Manager authorized inviting bids (Attachment 1) for the Tank Farm
Lift Station Discharge Pipe Replacement, Specification Number 2001050. The same action also
authorized the Director of Public Works to award the contract if the lowest bid was within the
Engineer’s Estimate of $170,000. Two bids were received (Attachment 2) and opened on August
31, 2023, and RCH Construction was the apparent lowest bidder with a bid of $282,231. This bid
is greater than the Engineer’s estimate of $170,000 by $112,231.
Rank Contractor Bid Total
1 RCH Construction $282,231
2 Specialty Construction $1,113,222
Staff reviewed the bids and the increase in costs may be attributed to the requirement for
contractors to complete sewer bypass pumping during construction operations. Staff is
recommending that all bids be rejected, and the project be re-advertised without the requirement
for contractors to complete sewer bypass pumping in the contract documents. The Utilities
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Tank Farm Lift Station Discharge Pipe Replacement (2001050) Page 2
Department will be responsible for sewer bypass pumping during construction which staff believes
will lower costs and result in multiple competitive bids.
FISCAL IMPACT
There is no direct fiscal impact of the recommended action. No additional funding is being
requested currently.
Funding for this project is described in the 2023-25 Financial Plan, Capital Improvement Plan
(page 412). Account 2001050 has a current balance of $200,000 and is sufficient to support the
total project costs, estimated at $200,000. This project is funded in full by the Sewer Fund.
ALTERNATIVES
Deny project re-advertisement. The City Manager may choose to deny approval to re-advertise.
Staff does not recommend this option, as discharge piping included in this project will continue to
deteriorate and pose a high risk of catastrophic failure, requiring expensive repairs.
ATTACHMENTS
1. City Manager Authorizing Advertising
2. Bid Results
https://slocitycloud.sharepoint.com/sites/SLOHub/Administration/Shared Documents/City Manager Reports/Public Works/2023/CIP
Engineering/2001050 Re-advertise Tank Farm Lift Station Discharge Pipe Replacement/2001050 CMR Re-advertise.docx
Page 262 of 325
TANK FARM LIFT STATION DISCHARGE PIPE REPLACEMENT, SPECIFICATION NO. 2001050Bid Opening: 10/17/2023UNIT TOTAL UNIT TOTALNo. ITEM UNIT QUAN PRICE PRICE PRICE PRICE1COMPLY WITH OSHALS 1 $8,179.00 $8,179.00 $6,465.00 $6,465.002VERIFICATION OF PIPE LENGTHS, FITTINGS AND APPURTENANCESLS 1 $11,642.00 $20,008.00 $8,190.00 $8,190.003PUMP 1 ‐ FITTINGS AND APPURTENANCES REPLACEMENTLS 1 $11,642.00 $11,642.00 $38,083.41 $38,083.414PUMP 2 ‐ FITTINGS AND APPURTENANCES REPLACEMENTLS 1 $11,642.00 $11,642.00 $38,083.41 $38,083.415PUMP 3 ‐ FITTINGS AND APPURTENANCES REPLACEMENTLS 1 $11,642.00 $11,642.00 $38,083.44 $38,083.446PUMP 4 ‐ FITTINGS AND APPURTENANCES REPLACEMENTLS 1 $11,642.00 $11,642.00 $38,083.44 $38,083.447REMOVE EXISTING AND INSTALL (N) 8" STAINLESS STEEL PIPELF 81 $1,150.00 $93,150.00 $685.93 $55,560.338REMOVE EXISTING AND INSTALL (N) CHECK VALVEEA 4 $11,987.00 $47,948.00 $5,220.00 $20,880.00$215,853.00 $243,429.03Ellison EnvironmentalTOTAL PROJECT BIDBASE BIDMGE UndergroundPage 263 of 325
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City of San Luis Obispo, Public Works, 919 Palm Street, San Luis Obispo, CA, 93401‐3218, 805.781.7200, slocity.org
October 20, 2023
MGE Underground Inc.
Michael Jo Goldstein
PO Box 4189
Paso Robles, CA 93447
Subject: Tank Farm Lift Station Discharge Pipe Replacement, Specification No. 2001050
On October 19, 2023, bids were opened for the “Tank Farm Lift Station Discharge Pipe Replacement,”
Specification No. 2001050 (“Project”). Staff reviewed MGE Underground Inc.’s (MGE) bid proposal
and determined that the bid from MGE requires clarification to determine responsiveness to the bid
requirements stated in Section 2‐1.33 of the City Standard Specifications. Bids must have all spaces
for bid prices and totals filled in. MGE’s bid proposal requires clarification to the following items:
The Total price for Bid Item Number 7 (Remove Existing and Install (N) 8” Stainless Steel Pipe)
was listed as $93,150; however, no Item Price was written.
The Total price for Bid Item Number 8 (Remove Existing and Install (N) Check Valve) was listed
as $47,948; however, no Item Price was written.
Bid Item 7 ‐ Based on the total price of $93,150 and the estimated quantity of 81 LF, the calculated
item price would be $1,150/LF.
Bid Item 8 ‐ Based on the total price of $47,948 and the estimated quantity of 4 EA, the calculated
item price would be $11,987/EA.
In response, MGE has an opportunity to clarify the reason for the above bid discrepancy, including
an action for the City to consider regarding the item price. This information will be evaluated prior to
any determination.
MGE may submit written material to the City clarifying its bid no later than 5:00 PM, Friday October
27, 2023. If submitted, the written materials will be evaluated and provided to the City Council for
consideration. The City Council will make a decision following the review of any submitted materials
and you will be notified of that decision.
If you have any questions regarding this matter, please email me at hnguyen@slocity.org or call me
at (805) 781‐7108.
Sincerely,
Hai Nguyen, PE
Senior Civil Engineer
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1,150.00
11,987.00
Page 267 of 325
1
Nguyen, Hai
From:Jordyn Lundy <jlundy@mgeunderground.com>
Sent:Monday, October 23, 2023 1:00 PM
To:Nguyen, Hai; Jeremy Gearhart
Cc:Beech, Ryan
Subject:RE: Tank Farm Lift Station Discharge Pipe Replacement, Specification No. 2001050 - Bid
Responsiveness
Attachments:MGE Underground Inc_.pdf
This message is from an External Source. Use caution when deciding to open attachments, click links, or respond.
Good afternoon Hai,
I appreciate you catching that and sending it over. I’ve filled in all appropriate/required spaces for MGE’s bid. Please
don’t hesitate to reach out if you have any questions or if there is anything else I can help you with.
Please see attached document. Thank you,
Jordyn Lundy
Construction Project Coordinator | Junior Estimator
O: 805‐238‐3510 P: 805‐423‐7473
E: Jlundy@mgeunderground.com
www.mgeunderground.com
From: Nguyen, Hai <hnguyen@slocity.org>
Sent: Monday, October 23, 2023 11:39 AM
To: Jeremy Gearhart <jgearhart@mgeunderground.com>; Jordyn Lundy <jlundy@mgeunderground.com>
Cc: Beech, Ryan <RBeech@slocity.org>
Subject: FW: Tank Farm Lift Station Discharge Pipe Replacement, Specification No. 2001050 ‐ Bid Responsiveness
Jeremy, Jordyn,
Please see attached letter regarding your bid proposal for the Tank Farm Lift Station Discharge Pipe
Replacement Project. Staff reviewed MGE Underground Inc.’s (MGE) bid proposal and determined that the bid
from MGE requires clarification to determine responsiveness to the bid requirements stated in Section 2-1.33
of the City Standard Specifications. Bids must have all spaces for bid prices and totals filled in. MGE’s bid
proposal requires clarification to the following items:
The Total price for Bid Item Number 7 (Remove Existing and Install (N) 8” Stainless Steel Pipe) was listed
as $93,150; however, no Item Price was written.
The Total price for Bid Item Number 8 (Remove Existing and Install (N) Check Valve) was listed as
$47,948; however, no Item Price was written.
MGE may submit written material to the City clarifying its bid no later than 5:00 PM, Friday October 27, 2023.
Page 268 of 325
AGREEMENT
THIS AGREEMENT, made on _______________________, by and between the City of
San Luis Obispo, a municipal corporation and charter city, San Luis Obispo County,
California (hereinafter called the Owner) and MGE UNDERGROUND, INC. (hereinafter
called the Contractor).
WITNESSETH:
That the Owner and the Contractor for the consideration stated herein agree as follows:
ARTICLE 1, SCOPE OF WORK: The Contractor shall perform everything required to be
performed, shall provide and furnish all of the labor, materials, necessary tools,
expendable equipment, and all utility and transportation services required to complete all
the work of construction of
TANK FARM LIFT STATION DISCHARGE PIPE REPLACEMENT,
SPECIFICATION NO. 2001050
in strict compliance with the plans and specifications therefor, including any and all
Addenda, adopted by the Owner, in strict compliance with the Contract Documents
hereinafter enumerated.
It is agreed that said labor, materials, tools, equipment, and services shall be furnished and
said work performed and completed under the direction and supervision and subject to the
approval of the Owner or its authorized representatives.
ARTICLE II, CONTRACT PRICE: The Owner shall pay the Contractor as full consideration
for the faithful performance of this Contract, subject to any additions or deductions as
provided in the Contract Documents, the contract prices as follows:
Item Item Estimated Item Price Total
No. SS(1) Description Quantity (in figures) (in figures)
1 5,7 COMPLY WITH OSHA 1 ‐‐‐ $8,179.00
2 77 VERIFICATION OF PIPE LENGTHS,
FITTINGS AND APPURTENANCES 1 ‐‐‐ $20,008.00
3 77 PUMP 1 ‐ FITTINGS AND
APPURTENANCES REPLACEMENT 1 ‐‐‐ $11,642.00
4 77 PUMP 2 ‐ FITTINGS AND
APPURTENANCES REPLACEMENT 1 ‐‐‐ $11,642.00
5 77 PUMP 3 ‐ FITTINGS AND
APPURTENANCES REPLACEMENT 1 ‐‐‐ $11,642.00
6 77 PUMP 4 ‐ FITTINGS AND
APPURTENANCES REPLACEMENT 1 ‐‐‐ $11,642.00
7 77 REMOVE EXISTING AND INSTALL (N)
8" STAINLESS STEEL PIPE 81 $1,150.00 $93,150.00
DocuSign Envelope ID: 450DCB96-ABBC-4EBD-8161-A9DFD49958DE
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8 77 REMOVE EXISTING AND INSTALL (N)
CHECK VALVE 4 $11,987.00 $47,948.00
BID TOTAL: $ 215,853.00
Payments are to be made to the Contractor in compliance with and subject to the provisions
embodied in the documents made a part of this Contract.
Should any dispute arise respecting the true value of any work omitted, or of any extra work
which the Contractor may be required to do, or respecting the size of any payment to the
Contractor, during the performance of this Contract, said dispute shall be decided by the
Owner and its decision shall be final, and conclusive.
ARTICLE III, COMPONENT PARTS OF THIS CONTRACT: The Contract consists of the
following documents, all of which are as fully a part thereof as if herein set out in full, and if
not attached, as if hereto attached:
1. Notice to Bidders and Information for Bidders
2. Standard Specifications and Engineering Standards
3. Special Provisions, any Addenda, Plans and Contract Change Orders
4. Caltrans Standard Specifications and Standard Plans 2015
5. Accepted Bid and Bid Bond
6. List of Subcontractors
7. Public Contract Code Sections 10285.1 Statement
8. Public Contract Code Section 10162 Questionnaire
9. Public Contract Code Section 10232 Statement
10. Labor Code Section 1725.5 Statements
11. Bidder Acknowledgements
12. Qualifications
13. Non-collusion Declaration
14. Agreement and Bonds
15. Insurance Requirements and Forms
ARTICLE IV INDEMNIFICATION: The Contractor shall indemnify, defend with legal
counsel approved by City, and hold harmless City, its officers, officials, employees and
volunteers from and against all liability, loss, damage, expense, cost (including without
limitation reasonable legal counsel fees, expert fees and all other costs and fees of
litigation) of every nature arising out of or in connection with the Contractor’s negligence,
recklessness or willful misconduct in the performance of work hereunder or its failure to
comply with any of its obligations contained in this Agreement, except such loss or damage
which is caused by the sole or active negligence or willful misconduct of the City. Should
conflict of interest principles preclude a single legal counsel from representing both the City
and the Contractor, or should the City otherwise find the Contractor’s legal counsel
unacceptable, then the Contractor shall reimburse the City its costs of defense, including
without limitation reasonable legal counsel fees, expert fees and all other costs and fees of
litigation. The Contractor shall promptly pay any final judgment rendered against the City
(and its officers, officials, employees and volunteers) with respect to claims determined by
a trier of fact to have been the result of the Contractor’s negligent, reckless or wrongful
DocuSign Envelope ID: 450DCB96-ABBC-4EBD-8161-A9DFD49958DE
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performance. It is expressly understood and agreed that the foregoing provisions are
intended to be as broad and inclusive as is permitted by the law of the State of California
and will survive termination of this Agreement.
The Contractor obligations under this section apply regardless of whether such claim,
charge, damage, demand, action, proceeding, loss, stop notice, cost, expense, judgment,
civil fine or penalty, or liability was caused in part or contributed to by an Indemnitee.
However, without affecting the rights of the City under any provision of this agreement, the
Contractor shall not be required to indemnify and hold harmless the City for liability
attributable to the active negligence of City, provided such active negligence is determined
by agreement between the parties or by the findings of a court of competent jurisdiction. In
instances where the City is shown to have been actively negligent and where the City’s
active negligence accounts for only a percentage of the liability involved, the obligation of
the Contractor will be for that entire portion or percentage of liability not attributable to the
active negligence of the City.
ARTICLE V. It is further expressly agreed by and between the parties hereto that should
there be any conflict between the terms of this instrument and the bid of said Contractor,
then this instrument shall control and nothing herein shall be considered as an acceptance
of the said terms of said bid conflicting herewith.
IN WITNESS WHEREOF, the parties to these presents have hereunto set their hands this
year and date first above written.
ATTEST:
___________________________________
Teresa Purrington, City Clerk
CITY OF SAN LUIS OBISPO
A Municipal Corporation
________________________________
Erica A. Stewart, Mayor
APPROVED AS TO FORM
___________________________________
J. Christine Dietrick
City Attorney
CONTRACTOR:
MGE Underground, Inc.
________________________________
Michaeljoe Goldstein
Chief Executive Officer
________________________________
Elizabeth Summer Goldstein
Chief Financial Officer
DocuSign Envelope ID: 450DCB96-ABBC-4EBD-8161-A9DFD49958DE
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