HomeMy WebLinkAboutItem 6e - Authorization to Award California Waterline Replacement (Taft to Mill) SPEC No. 2000563 Item 6e
Department: Public Works
Cost Center: 6004
For Agenda of: 6/16/2026
Placement: Consent
Estimated Time: N/A
FROM: Aaron Floyd, Public Works & Utilities Director
Prepared By: Hai Nguyen, Senior Civil Engineer
Miguel Barcenas, Utilities Deputy Director / Engineering and Planning
SUBJECT: AUTHORIZATION TO AWARD CALIFORNIA WATERLINE
REPLACEMENT (TAFT TO MILL), SPECIFICATION NO. 2000563
RECOMMENDATION
1. Approve the project plans and special provisions for the California Waterline
Replacement (Taft to Mill), Specification No. 2000563; and,
2. Award a construction contract (Attachment A) to Specialty Construction in the amount
of $1,986,673 for the California Waterline Replacement (Taft to Mill), Specification No.
2000563; and,
3. Authorize the City Engineer to issue Contract Change Orders up to the available
project budget (Account 2000563), and up to any amended budget subsequently
approved by the City Manager per City Purchasing Policy approval thresholds ; and
4. Find the action exempt from the California Environmental Quality Act.
POLICY CONTEXT
On January 19, 2016, the City Council approved the Potable Water Distribution System
Operations Plan, which identified this project as a high priority for the City.
On May 17, 2022, Council approved a Purchasing Policy Update to the Financial
Management Manual (Resolution No. 11328), requiring Council authorization to award
Public Works contracts exceeding $200,000.
DISCUSSION
Background
The City’s water distribution system is comprised of approximately 184 miles of pipe with
diameters ranging in size from 4 inches to 30 inches. Some of these pipes have been
identified as undersized or have surpassed their intended design life, which is typically
around 50 years. As waterlines age, the frequency of breaks increases, leading to costly
and disruptive repairs. These breaks can damage roadways, often requiring full -depth
reconstruction and substantial costs to properly restore the pavement.
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Item 6e
Project
The project plans and specifications include the replacement of 1,660 linear feet of water
transmission main along California Boulevard. The critical 16-inch cast iron water
transmission main, originally installed in the 1960s, will be replaced with 1 6-inch ductile
iron pipe. Replacing these waterlines will result in lower costs to the City and reduced
customer impacts associated with emergency repairs. By minimizing or eliminating
emergency repairs, maintenance staff will have more time to focus on pr eventive
maintenance, which in turn extends the service life of other water distribution assets.
In terms of project geography and scheduling, the site is in close proximity to the
upcoming California and Taft Roundabout project. However, construction on t he
roundabout is anticipated to begin in the spring of 2027, ensuring no scheduling overlap
as the waterline replacement work is expected to start in mid-July and be completed
before the end of 2026.
With the design and coordination details finalized, staff proceeded to the bidding phase.
The California Waterline Replacement - Taft to Mill (Project), Specification No. 2000563,
was advertised on April 16, 2026, with bids opened on May 14, 2026. Five bids were
received and opened. Specialty Construction (Specialty) was the apparent low bidder with
a bid of $1,986,673, which is $913,327 below the Engineer’s Estimate of $2,900,000. The
Contractor’s references, license, and registration with the Department of Industrial
Relations have been verified. Consequently, staff recommends that the project be
awarded to Specialty as the lowest responsive and responsible bidder (Attachment A).
Bid Summary Bid Total
Engineer’s Estimate $2,900,000
R. Baker $2,594,500
John Madonna Construction $2,495,430
Hartzell General Contractor $2,076,930
Souza Construction $2,075,495
Specialty Construction $1,986,673
Previous Council or Advisory Body Action
This Project was identified in the 2025-27 Financial Plan that was approved by Council
with a budget of $2,570,000.
Public Engagement
Public engagement was conducted during the initial identification of this project to be
included in the 2025-27 Financial Plan. During construction, staff will proactively
coordinate with and inform the public and Cal Poly about traffic control changes, access
considerations, and other temporary impacts to help minimize disruptions. The contractor
will be required to submit traffic control plans that minimize disruptions to the traveling
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Item 6e
public, and the City will work closely with the contractor to minimize any impacts during
the Cal Poly move-in period. The project will also be featured on the SLO in Motion
Website to keep the community informed about the project, including construction
updates, anticipated impacts, and responses to frequently asked questions.
To ensure direct communication, affected residents within the limits of work will be notified
of upcoming construction via door hangers. These notices, designed in accordance with
City standards, will be distributed to all properties adjace nt to the work area and will clearly
outline the project's start and end dates. Additionally, in areas where parking must be
restricted, "No Parking" signs will be clearly posted at least 24 hours in advance of the
work.
CONCURRENCE
This project was closely coordinated between the Public Works and the Utilities
departments before and during the merger to create the current Public Works and Utilities
Department.
ENVIRONMENTAL REVIEW
The project is categorically exempt from environmental review under Section 15302 Class
2(c) of the California Environmental Quality Act (CEQA) Guidelines (Replacement or
Reconstruction) because the replacement of the water transmission mains would result
in no expansion of capacity. Section 15302 Class 2(c) specifies that “Replacement or
reconstruction of existing utility systems and/or facilities involving negligible or no
expansion of capacity” is categorically exempt from environmental review. A Notice of
Exemption will be filed through the Community Development Department.
FISCAL IMPACT
Budgeted: Yes Budget Year: 2025-2026
Funding Identified: Yes
Fiscal Analysis:
Funding
Sources
Total Budget
Available
Current
Funding
Request
Remaining
Balance
Annual
Ongoing
Cost
General Fund
State
Federal
Fees
Water Fund
(Project #
2000563)
$2,441,908 $2,441,908 $0 N/A
Total $2,441,908 $2,441,908 $0 N/A
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Item 6e
California Waterline Replacement (2000563)
Construction Bid Total $1,986,673
Contingencies (23%) $445,235
Material Testing $9,500
Printing $500
Total Cost of Project $2,441,908
Current Project
Balance $2,441,908
Remaining Balance $0
Waterline improvements identified in this project are described in the 2025 -27 Financial
Plan. Funding is available in Project Account (2000563), which currently has an available
balance of $2,441,908. This is sufficient to cover the water transmission main
replacement contract of $1,986,673, leaving an adequate balance for project
management and construction contingencies. Had the project bids aligned with the higher
engineer's estimate that exceeded the project account budget by approximately $1
million, staff was prepared to recommend a funding transfer from the Water Fund's
Undesignated Capital Account and/or Unassigned Working Capital to fully fund the
project.
Utility improvement projects are generally associated with a higher level of construction
cost uncertainty due to unknown subsurface conditions. Past water line replacement
projects have shown that unforeseen utility conflicts a nd unexpected soil or groundwater
conditions are commonly encountered during excavation, which can increase
construction costs. These conditions can require additional excavation, trench
stabilization or shoring, dewatering, potholing and hand excavation a round existing
utilities, and other field adjustments that are difficult to fully quantify during design.
Based on past experience and typical change orders encountered during similar utility
projects, an additional $445,235 contingency has been included in the project budget.
This amount represents roughly 23% of the estimated construction cost, within the 20–
30% range typically applied to utility projects of this nature, which has historically been
sufficient. Following project completion, any remaining water funds will be transferred to
the Water Fund’s Undesignated Capital Account for future infrastructure improvements
and maintenance work.
ALTERNATIVES
Reject all bids and readvertise the project. The City Council may choose to reject all
bids and readvertise. This option increases the risk of unplanned costs from potential
main failures and delays construction, creating a significant risk of scheduling overlap
with the California and Taft Roundabout project.
ATTACHMENTS
A – Draft Agreement, Specification No. 2000563
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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 City) and SPECIALTY CONSTRUCTION, INC. (hereinafter called
the Contractor).
WITNESSETH:
That the City 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
CALIFORINA WATERLINE REPLACEMENT (TAFT TO MILL),
SPECIFICATION NO. 2000563
in strict compliance with the plans and specifications therefor, including any and all
Addenda, adopted by the City, 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 City or its authorized representatives.
ARTICLE II, CONTRACT PRICE: The City 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 Unit of Estimated Item Price Total
No. SS(1) Description Measure Quantity (in figures) (in figures)
1 7 TRAFFIC CONTROL PLAN AND
IMPLEMENTATION LS 1 $162,400.00 $162,400.00
2 77 TEMPORARY BYPASS SYSTEM LS 1 $125,000.00 $125,000.00
3 77 POTHOLING UTILITIES LS 1 $50,000.00 $50,000.00
4 84
REPLACE TRAFFIC STRIPING,
PAVEMENT MARKERS AND
PAINTED CURBS
LS 1 $12,500.00 $12,500.00
5 7 COMPLY WITH NIGHT WORK
PERMIT LS 1 $8,100.00 $8,100.00
6 7 COMPLY WITH OSHA LS 1 $10,750.00 $10,750.00
7 3 COMPLY WITH CALTRANS
ENCROACHMENT PERMIT LS 1 $5,800.00 $5,800.00
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Item Item Unit of Estimated Item Price Total
No. SS(1) Description Measure Quantity (in figures) (in figures)
8 77 ABANDON WATERLINE, WATER
VALVES AND FACILITIES LS 1 $17,000.00 $17,000.00
9* 19 ROCK EXCAVATION CY 100 $75.00 $7,500.00
10 5,15 REPLACE MONUMENT AND
WELL EA 2 $3,150.00 $6,300.00
11 77
WATERLINE TIE IN AND
APPURTENANCES (DETAIL A,
SHEET 2)
LS 1 $17,400.00 $17,400.00
12 77
WATERLINE TIE IN AND
APPURTENANCES (DETAIL A,
SHEET 5)
LS 1 $43,300.00 $43,300.00
13 77
WATERLINE TIE IN AND
APPURTENANCES (DETAIL B,
SHEET 5)
LS 1 $24,000.00 $24,000.00
14 77
HIGH PRESSURE CONNECTION
(DETAIL C, SHEET 5) EA 2 $26,500.00 $53,000.00
15 77 6" DIP STORM DRAIN LF 60 $466.00 $27,960.00
16 77 12" X 12" PRECAST DI BOX EA 2 $3,200.00 $6,400.00
17 77 8" HDPE DRAIN LINE LF 300 $97.00 $29,100.00
18 77 DRAIN OUTLET (DETAIL D, SHT 2) LS 1 $5,000.00 $5,000.00
19 77 DRAIN OUTLET (DETAIL E, SHT 2) LS 1 $13,000.00 $13,000.00
20 77 16 INCH DIP WATERLINE LF 1660 $550.00 $913,000.00
21 77
INSTALL 16" BUTTERFLY
ISOLATION VALVE EA 2 $9,100.00 $18,200.00
22 77
PRECAST CONCRETE VAULT AND
EXPANSION JOINT EA 2 $75,000.00 $150,000.00
23 77 TYPE 1 WATER SERVICE TIE IN EA 1 $3,800.00 $3,800.00
24 77 TYPE 2 WATER SERVICE TIE IN EA 5 $12,000.00 $60,000.00
25 77 TYPE 3 WATER SERVICE TIE IN EA 1 $16,500.00 $16,500.00
26 77 TYPE 5 FIRE SERVICE TIE IN EA 1 $19,000.00 $19,000.00
27 77 TYPE 6 FIRE SERVICE TIE IN EA 2 $9,100.00 $18,200.00
28 77 REPLACE EXISTING WATER
METER BOX EA 7 $1,700.00 $11,900.00
29 77 2" AIR/VAC RELEASE VALVE EA 1 $14,000.00 $14,000.00
30 77 FIRE HYDRANT AND LATERAL EA 2 $24,000.00 $48,000.00
31 82 BLUE FIRE HYDRANT MARKER EA 2 $29.00 $58.00
32* 73 REPLACE CURB AND GUTTER LF 65 $133.00 $8,645.00
33* 73 REPLACE SIDEWALK / DRIVEWAY
/ CURB RAMP SQFT 390 $30.00 $11,700.00
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Item Item Unit of Estimated Item Price Total
No. SS(1) Description Measure Quantity (in figures) (in figures)
34* 73 RESTORE BIKE PATH CURB AND
RAILING LF 20 $258.00 $5,160.00
35 73
BIKE PATH PAVEMENT
RESTORATION PER ENG. STD.
7040
LS 1 $64,000.00 $64,000.00
(1) refers to section in the Standard Specifications, with modifications in the Special Provisions, that describe required
work.
* Bid item exempt from Section 9-1.06B and 9-1.06C of the Standard Specifications. The unit price will not be adjusted
regardless of the final bid item quantity.
BID TOTAL: $1,986,673.00
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.
If any dispute arises regarding the work or contract price, Contractor must follow the
procedures in the contract documents, including the requirements on change order
requests and dispute resolution.
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 2024
5. Accepted Bid and Bid Bond
6. List of Subcontractors
7. Labor Code Section 1725.5 Statements
8. Bidder Acknowledgements
9. Qualifications
10. Noncollusion Declaration
11. Agreement and Bonds
12. 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 acts or omissions of
Contractor, its employees, subcontractors, representatives, or agents, in bidding or
performing the work or in failing to comply with any obligation of Contractor under 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
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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
acts or omissions in bidding or performing the work or in failing to comply with any obligation
of Contractor under this Agreement. 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.
ARTICLE VI LABOR CODE COMPLIANCE: This Agreement is subject to all applicable
requirements of Chapter 1 of Part 7 of Division 2 of the Labor Code, including requirements
pertaining to wages, working hours and workers’ compensation insurance, as further
specified in the contract documents.
The project is subject to the prevailing wage requirements applicable to the locality in which
the work is to be performed for each craft, classification or type of worker needed to perform
the work, including employer payments for health and welfare, pension, vacation,
apprenticeship and similar purposes. Copies of these prevailing rates are on file with the
City and are available online at http://www.dir.ca.gov/DLSR.
City may not enter into the Agreement with a bidder without proof that the bidder and its
subcontractors are registered with the DIR to perform public work pursuant to Labor Code
section 1725.5, subject to limited legal exceptions.
Pursuant to Labor Code § 1861, by signing this Agreement, Contractor certifies as follows:
“I am aware of the provisions of Labor Code § 3700 which require every employer to be
insured against liability for workers’ compensation or to undertake self-insurance in
accordance with the provisions of that code, and I will comply with such provisions before
commencing the performance of the work on this contract.”
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IN WITNESS WHEREOF, the parties to these presents have hereunto set their hands this
year and date first above written.
APPROVED AS TO FORM CONTRACTOR:
SPECIALTY CONSTRUCTION, INC
______________________________
J. Christine Dietrick
City Attorney
_______________________________
Rudolph C. Bachmann
President
CITY OF SAN LUIS OBISPO
A Municipal Corporation
______________________________
Whitney McDonald, City Manager
________________________________
Jeffery W. Martin
Senior Vice President
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