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Council authorizes $1 million to close out Alipaz Street rehabilitation project
Summary
After a detailed staff update on construction overages and scope additions, the council unanimously approved a $1,000,000 appropriation from the General Fund to complete the Alipaz Street pavement rehabilitation and increase contingency to $600,000.
The San Juan Capistrano City Council unanimously approved a $1,000,000 supplemental appropriation on March 17 to close out the Alipaz Street pavement rehabilitation project (CIP 25-101) and increase the contract contingency to $600,000.
City Engineer Jeremy Hoenbaum gave a project-status briefing and said the work to date includes repaving, new bike lanes, pedestrian ramps, new sidewalk, lighting and median landscaping. He told the council the contractor has completed much of the paving but unanticipated material quantity overages, root-uplift tree removals, additional ADA ramp work and other change orders pushed costs above the original contract. Hoenbaum estimated the total construction cost would be about $2.8 million and the overall project near $3.4 million, leaving the city about $1,000,000 short of the original project budget.
Hoenbaum also explained staff pursued a cost-saving opportunity: Hardy & Harper completed a sidewalk replacement at a unit cost lower than a separate contract slated for next summer, which the city advanced into the current contract to net a future savings. He said some of the requested $1,000,000 will be offset by that future savings.
Council members asked pointed questions about whether the low bid was realistic, how contingencies are set, and whether future projects will face similar overruns. The city manager and contracting staff explained California public-works procurement requires awarding the work to the lowest responsive, responsible bidder and that unit-price bidding can produce quantity-driven overages when in-field conditions are worse than anticipated. Staff said they will propose more conservative contingencies in upcoming budget workshops and create a road-reserve approach to reduce the need for mid-project supplemental funding.
Council Member Hart moved to appropriate the funds and increase contingency; the motion passed unanimously.
What happens next: The city manager was authorized to approve contract change orders up to the contingency amount. Staff will report budget adjustments in the upcoming fiscal-year budget workshop and propose mechanisms (road-reserve, adjusted contingency practices) to reduce repeat supplemental requests.
