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San Leandro council approves larger change-order cap for road project after questioning over PLA threshold

2478028 · March 4, 2025
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Summary

The San Leandro City Council voted unanimously March 3 to allow an increased construction change-order cap for a pavement rehabilitation contract after discussion about potholing, unexpected base repairs and whether the change order would trigger a project labor agreement.

The San Leandro City Council voted unanimously March 3 to allow an increase in construction change orders for a roadway rehabilitation project, after councillors raised concerns about investigative potholing work, project labor agreement (PLA) thresholds and contracting practices.

Councilmembers debated item 5b—a consent calendar item later pulled for discussion—after Councilmember Simon and others asked why radar had been used instead of more precise but disruptive potholing and how the change order would affect the city’s PLA requirements. “I think 25 is high for a change order,” Councilmember Simon said during the discussion, expressing support for more preconstruction investigation on future projects.

Public Works Director Sheila Marquis told the council that the city typically uses radar and subcontracted potholing under design contracts rather than holding a standalone potholing contract. Marquis said the bulk of the unexpected costs were for base repairs discovered after crews encountered shallow utilities and softer-than-expected material, which required more manual on-site work and hand-mixing rather than large machinery.

Council members pressed whether the $887,000 change order would push the project over the PLA threshold. City Attorney advised the council that the PLA (referred to during the meeting as the community workforce or project labor agreement) applies based on the initial engineer’s estimate and the contract award; change orders that later push the total past the $1,000,000 threshold do not automatically trigger PLA requirements. Council discussion also noted the project was funded by a mix of grants, ARPA funds, Measure BB and gas tax funds, and staff said they would confirm which specific funding sources apply to the contract.

Public commenters raised fiscal-responsibility concerns. An online commenter said the stated objective “to deliver public projects on schedule and on budget” was inconsistent with frequent change orders; another urged more oversight of city spending. Councilmember Bolt and others said the city must be diligent about PLA compliance and asked that staff clarify past practice if a change order causes a project to cross a PLA threshold.

After discussion, Councilmember Resvedo moved the item forward; Vice Mayor Bowen seconded. The council voted 7-0 to approve the requested change in the construction change-order cap from 15% to 25% for the De Silva Gates segment of the pavement rehab contract (original contract amount cited in the staff report as approximately $3,500,000). Staff noted the work had already been completed and the request was to authorize the increased cap to cover additional change orders rather than halt construction in midwork.

Councilmembers said they would pursue broader policy discussions about when to require more upfront investigation and whether to negotiate different PLA terms on future projects.