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HomeMy WebLinkAbout10 Red Mountain Tank Change Order Allowance AGENDA ITEM #10 Page 1 of 3 MEETING DATE: July 21, 2021 TO: Board of Directors FROM: Neil Kaufman, Water System Engineer SUBJECT: Consideration of an Additional Change Order Allowance for the Construction of the Red Mountain Water Storage Tank APPROVED BY______________________________ Brian C. Wright, General Manager RECOMMENDATION: Approve an increase in change order allowance for the Red Mountain Tank Construction Project from 10% ($86,982) to 12% ($104,379), for a new total project amount not to exceed $974,199. BACKGROUND: At the August 5, 2020 meeting, the Board approved an amendment to the Coldstream Development and Reimbursement Agreement between the District and Coldstream Properties, LLC for the construction of ce rtain potable water system improvements associated with Phase 3 of the Coldstream Development (PC -1). The water utility system improvements included the on-site water utility distribution system infrastructure within the development's Phase 3 parcels, as well as the design and construction of a potable water storage tank at the Red Mountain site, which is located on the south side of Donner Lake. A copy of the First Amendment to the agreement has been included with this report as Attachment 1 In June, 2020, the developer had issued a request for bids for the construction of the Red Mountain Tank. The scope of work included the construction of a welded steel potable water storage tank as well as site work such as grading, foundation construction and the associated underground piping. Following review of bids for compliance with District standards and specifications, contractor experience and familiarity with similar projects in the region, and proposed construction schedules, the developer with approval f rom staff, identified Crosno Construction from Arroyo Grande, CA as the most favorable contractor for the project. The total bid price for the tank project was $869,820. The development agreement outlines specific provisions for reimbursements to the developer for construction of the storage tank. An initial change order allowance of ten Page 2 of 3 percent ($86,982) was included in reimbursement agreement. Construction of the tank began in June 2020. It was planned to complete all of the grading, tank foundation and site piping work during 2020. Work would then pause for the winter of 2020-21, with construction of the actual tank and completion of the project planned for the summer of 2021. The contractor encountered some difficulties during the site grading p ortion of the project involving large boulders and saturated soils. A number of discussions occurred involving Crosno, the developer and the District along with the design engineer and geotechnical engineer for the project. It was eventually agreed that Crosno was due an additional $55,428.68. This total covered the issues associated with the boulders and soils, along with some modifications to the site piping and additional rebar for the retaining wall at the site. In June 2021, a change order for $26,551 was approved by District staff. This change order covered the addition of three items not included in the original design:  A safety handrail along the top of the retaining wall  A safety platform for improved access to the exterior tank ladder  A stilling well for level sensing instrumentation inside the tank These change order items total $81,979.68, which is approximately 9.4% of the original contract amount. Additionally in June 2021, District staff worked to finalize approval of the proposed exterior coating for the tank. The area near the Red Mountain tank site has heavy tree cover. The tank site is generally not visible to the community with the exception of two existing residences. One is adjacent to the tank site and the other is across the street and uphill from the tank site. A site meeting was held with the se two property owners identified a coating color with a shade of dark green acceptable to both owners was selected. During this time, a number of discussions were also held with the local representative for the tank coating manufacturer (Tnemec). The District has used the same exterior coating specification since the mid-1990s and construction of Gateway Tank. There have been a number of changes and improvements regarding the coatings for steel water tanks since that time.  The intermediate coating system listed in the specification has been discontinued. A different intermediate coating system is required due to regulatory changes associated with volatile organic compounds (VOCs).  Better exterior coatings for steel tanks have been developed. Tnemec is currently recommending that the finish coating system listed in the specification be used on concrete only. They are recommending a newer product with improved durability Page 3 of 3 and graffiti resistance for steel tanks. Based on the new recommendations from Tnemec, Crosno was contacted to determine if there would be a cost increase associated with the exterior coating changes. Crosno provided a revised quote for the proposed coatings with a total price increase of $14,110 (materials only). There was no change in the labor costs. It is the opinion of staff that the improved durability and graffiti resistance is worth the additional expense. Based upon recent experiences in graff iti repairs and early signs of exterior coating failures observed at other District owned storage tank facilities, staff intends to modify District construction standards to reflect the updated coating specifications on all future projects. However, an increase in the change order allowance is necessary to proceed with the modifications associated with this project. Section 3.1 of the First Amendment to Phase 3 Final Development Agreement and Reimbursement Agreement Between Truckee Donner Public Utility District and Coldstream Properties, LLC for Construction of Certain Potable Water System Improvements requires that “any Change Order that would increase the original amount owed under the Construction Contract by more than 10% may be approved by the District’s Board of Directors.” FISCAL IMPACT: As noted above, there is aBoard approved reimbursement agreement between the District and the Developer associated with the construction of the Red Mountain storage tank. Construction costs due to change orders are funded from the Water Department’s Facility Fees Reserve Fund. Sufficient funds exist within this reserve to cover the increased cost, with a current balance of approximately $1.84M.