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After $2.7M→$6.9M project increase debate, council asks staff to draft change‑order guardrails
Summary
Council urged staff to propose procurement guardrails after the North Center Street water/sewer contract grew from approximately $2.7M to $6.9M through change orders; staff and contractors defended the approach as saving time and money, while others warned of appearance or risk of impropriety and recommended percentage triggers for additional review.
Council reviewed the procurement process and large change orders for the North Center Street water and sewer project after staff reported that previously approved change orders would increase the contract from roughly $2.7 million to $6.9 million.
Unidentified Speaker 12 reported the project numbers and noted municipal code and policies do not set a specific cap on the number or total amount of change orders. Concerned council members (Unidentified Speaker 5 and others) said very large change orders can undermine the competitive bidding process, create legal challenge risk and raise perception issues. Unidentified Speaker 5 described a hypothetical scenario in which an RFP is manipulated by design and large change orders are later used to expand scope and favor a particular contractor.
Contractors and project managers (Unidentified Speaker 11 and others) countered that partial design and working with an on‑site contractor can save substantial time and money; one staff/contractor speaker estimated the city may have saved up to about $1 million on the project by using the current approach and partial design. Council members suggested several possible guardrails: automatic additional review if change orders exceed a percentage of the original contract (examples discussed included 50% or 100%), requiring rebid for work when scope changes materially, or posting unit prices to solicit competitive offers immediately.
The council directed staff to (1) clean up outdated purchasing and change‑order code language, (2) draft specific guardrail options (percentage triggers and related review steps) for council consideration, and (3) separately evaluate whether a proposed parking lot should proceed as a change order under the existing project or be issued as a separate RFP to attempt to capture competitive bids while preserving cost savings.
No formal ordinance was adopted; staff was tasked to return with draft language and options for a future council agenda.
