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  6.       
City Council Regular Meeting
Meeting Date: 04/14/2020  

BACKGROUND
On February 11, 2020, City Council approved Resolution 20-R-16 authorizing execution of a construction contract with Fuquay, Inc. for the 2018 SPAM Resurfacing project.  The resolution also contained a not to exceed contract amount ($755,000) which is greater than the contract amount ($686,199.77) to allow funds ($68,800.23) for unforeseen project changes that can come up during construction of projects.  Such unforeseen changes include a change in ground conditions, variations in constructed quantities versus contract quantities, and additional work needed to complete the project.

The project design effort was undertaken over a year ago.  Since the project design, some street segments in the project deteriorated more rapidly than expected and it took longer to awared a contract.  When construction began, Staff reviewed the street segments with the contractor to verify base repair locations and asphalt leveling.  During this process, staff identified some base repair areas had grown slightly, some new base repair areas appeared, and some new asphalt leveling areas were identified.  If these areas are not properly addressed, they will cause the new driving surface to fail prematurely.  The majority of these additional areas were discovered on Live Oak, at a cul-de-sac in Greenfield Village, and in the Lone Oak subdivision.

These expanded and new areas represent a significant increase to the contract amount - the cost for this additional work is almost $105,000 - about 15% of the original contract which is within the allowance for change orders.  The increase, unfortunately, exceeds the not to exceed contract amount established in Resolution 20-R-16 and given the unexpected issues that have been occurring those contingency funds will likely be needed.  In order to cover these additional costs and not reduce the amount of new surfacing installed by the project, the not to exceed amount must be increased (authorize additional funding for the project). Based on prior similar Council direction (Schertz Parkway reconstruction) staff is recommending not scaling the project back or cutting costs in other areas of the project to come in under the current not to exceed, but to request additional funding to do it correctly so that the full benefit is realized.
GOAL
Increase the maximum, not to exceed contract amount for the 2018 SPAM Resurfacing project to $857,739 (previously authorized amount of $755,000 plus $102,739).
COMMUNITY BENEFIT
The SPAM Resurfacing project will put a new driving surface onto several street segments in the city.  Placement of the new surface is a pavement preservation strategy.  This essentially helps reset the Pavement Condition Index to a perfect, or near perfect, condition at a relatively low cost.  However, before the new surface can be placed, some prep work must be performed to the street segments.  The prep work includes base repairs and asphalt leveling.  If the prep work is not done, then the new surface will not last the typical service life expected.  During the prep work for the project, additional base repairs and asphalt leveling was discovered on some street segments.  Funding these additional repairs is needed to properly prep the street segments for the new surfacing.
SUMMARY OF RECOMMENDED ACTION
Approval of a resolution to increase the not to exceed contract amount for the 2018 SPAM Resurfacing project to provide for some additional base repairs and asphalt leveling.
FISCAL IMPACT
Funding for the proposed increase in the not to exceed contract amount is available from Certificates of Obligation for Road Improvement funding.  The amount of additional funding requested to be authorized ($102,739), together with contingency already authorized, will cover the cost of the additional work quantities and replenish the construction project contingency to be used for any further unforeseen overages without exceeding the statutorily allowable 25% increase to the contract value.
 
  Original
Authorized by 20-R-16
Revised
Authorized by 20-R-37
Contract Amount $ 686,199.77 $ 790,957.34
Contingency $   68,800.23 $   66,781.66
Not To Exceed Amount $ 755,000.00 $ 857,739.00

It should be noted, that the reduction in funds from the Certificates of Obligation for Road Improvement funding will reduce the amount available for future projects. Additionally, given the rapid deterioration on these projects, staff will need to review the cost estimates of future projects as if this is occurring on those streets, the projected budgets will need to increase, further reducing the number projects on next year's CIP that can be undertaken.
 
RECOMMENDATION
Staff recommends Council approve Resolution 20-R-37 and increase the do not exceed amount to $857,739 for the 2018 SPAM Resurfacing project.
Attachments
Resolution 20-R-37
Maps

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