TO: Members of the Governing Board
FROM: Christopher Silke, District Engineer
REPORT BY: Anna Martinez, Assistant Engineer
SUBJECT: Approval of Contract Change Orders exceeding the District Engineer’s authority for Phase II of the Wastewater Ponds Groundwater Inflow Mitigation Project, LB 18-02.
RECOMMENDATION
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Approve and authorize the District Engineer to execute Contract Change Orders No. 2, 3, and 6 through 9, to Agreement No. 260360B (LBRID) with 2C Land and Timber Management Corp, to increase the maximum compensation for the construction contract from $844,514 to $1,143,646 for the “Wastewater Ponds Groundwater Inflow Mitigation Project.” (Fiscal Impact $299,132 Expense; Lake Berryessa Resort Improvement District Fund; Budgeted; Discretionary)
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BACKGROUND
Persistent heavy rainfall in the winter of 2017 filled the District’s wastewater ponds requiring overland disposal of wastewater from the District’s treated wastewater Pond 7 to prevent damage to the earthen pond berm should the pond exceed capacity and overflow. The overland discharge was in violation of the District’s Waste Discharge Requirements issued by the Central Valley Regional Water Quality Control Board (Regional Board). The Regional Board issued a Notice of Violation (NOV) in response to the discharge requiring the District to complete a water balance evaluation and submit a Work Plan to ensure sufficient storage and/or disposal capacity into the future.
GHD, Inc. was retained in 2017 (Contract No 170871B) to provide engineering study services necessary to address the requirement of the NOV. An initial design was proposed - installation of a vertical trench drain, replacement of the vintage 10" tar-coated steel pond inlet pipe, and drainage channel improvements at the site. In September 2018, the District, a designated disadvantaged community with a median household income of $43,200, submitted a Clean Water State Revolving Fund (CWSRF) principal forgiveness funding application to the State Water Resources Control Board, Division of Financial Assistance (DFA) in the amount of $2,000,000 to complete the project.
During the multi-year funding application review by DFA, additional scope was added to the project requiring the approval of Amendments 1 - 4 of Agreement 170871B between 2018 - 2023, with final compensation of Agreement 170871B and its amendments totaling $239,542. After accounting for additions and revisions, preliminary design plans and technical specifications for the project, including the addition of widening and raising the earthen berm height of Ponds 1 -3, were submitted to SWRCB and Central Valley RWQCB for review and comment in the fall of 2023.
In early 2024, the DFA signaled that issuance of a funding agreement was imminent, and staff recommended that the Board approve a new Agreement (24036B) with GHD, Inc. to begin additional geotechnical design tasks related to upgrading the original treatment pond berms that would lead to preparation of final plans and specifications upon receipt and acceptance of the State Water Resources Control Board Funding Agreement.
In May 2024, the District Engineer received and signed a Groundwater Inflow Mitigation funding agreement as authorized by Resolution 2018-05, and on July 2, 2024, a fully executed funding agreement was issued by DFA in the amount of $2,265,934.
On July 23, 2024, Amendment No. 1 to Agreement No. 24036B with GHD, Inc. was approved by the Board. The Amendment added scope and increased compensation to the Agreement that would allow GHD, Inc. to complete the Plans and Specifications for the project - splitting the project scope into two phases thereby front loading construction of Phase I - the vertical trench drain - before winter 2025 followed by bid and construction of Phase II - the earthen berm plus inlet pipe work - over the 2026 construction season when site conditions would be favorable.
Phase I of the project - installation of the vertical trench drain - was advertised for sealed bids on August 20, 2024 and was awarded to the lowest responsive bidder, Benchmark Civil Construction of Napa, CA, on November 12, 2024. Also approved at the November 12, 2024 meeting was Amendment No. 2 to Agreement No. 24036B with GHD, Inc. for construction management and inspection services for Phase I of the Project. Construction of Phase I finished in May 2025, on time, under budget with the trench drain functioning per its designed intent.
Phase II of the project - rehabilitation of the earthen berms plus replacement of inlet pipe network - was advertised for sealed bids on November 10, 2025 and was awarded to the lowest responsive bidder, 2C Land and Timber Management Corp of Folsom, CA for a total contract price of $803,930, on March 24, 2026. As with Phase I, also approved at the March 24, 2026 meeting was Amendment No. 3 to Agreement No 24036B with GHD, Inc. for construction management and inspection services for Phase II of the Project. Additionally, Amendment No. 4 to Agreement 24036B was approved on September 29, 2026, increasing maximum compensation for additional construction management and inspection services necessary to bring the project to successful completion - total of Agreement 24036B and its amendments now equals $457,649.
Construction activity for Phase II began in late April 2026 and completion has been delayed due to 1) a labor strike that delayed access to controlled low density fill supplied by a batch plant needed to backfill trenches for project completion and 2) the submittal of multiple Contract Change Order requests by the contractor and the District to address unforeseen existing conditions encountered during initial construction activities. To date, three contract change orders (CCO) have been approved by the District Engineer, totaling $40,584. These CCOs were CCO 1 for the removal of a large tree stump located within the project boundary ($2,351), CCO 4 to compensate contractor for unanticipated diesel price increases ($18,225), and CCO 5 for dewatering Ponds 1 and 2 ($20,007) increasing the total current contract value from $ 803,930 to $844,514. The expected combined cost of the remaining Change Orders - CCO 2, CCO 3, and CCOs 6 through 9 - is $299,132, which exceeds the District Engineer’s authority and requires Board approval. The additional CCOs are as follows:
CCO 2 - Additional Clay Liner Handling - $ 138,443
CCO 3 - Removal of deadfall trees in clay borrow area - $ 69,989
CCO 6 - Access road grade changes - $ 40,471
CCO 7 - Pond 2 DI material increase- $ 27,430
CCO 8 - Additional grade rings for new manhole structure - $ 3,800
CCO 9 - Continuing fuel price increases - $ 19,000
As stated in previous Board letters, the total funding award from the CWSRF is $2,265,934 - a revised budget summary is attached. The remaining project budget earmarked for Phase II in the project budget after accounting for actual Phase I construction is approximately $1,544,544. Overall, construction of Phases 1 and 2 remains within the DFA funding agreement allocation for construction services and contingency. Should project expenses remain below this allocation after construction of Phase II is complete, the District will request reimbursement for additional design services as allowed under the terms of the funding agreement that were originally funded by the District’s available operations fund balance.
Requested Action:
1. Authorize the District Engineer to execute Contract Change Order Nos. 2, 3, and 6 through 9 in the amount of $299,132, which combined exceeds the District Engineer’s signing authority, resulting in an increase of the total Contract amount from $844,514 to $1,143,646.
FISCAL IMPACT
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Is there a Fiscal Impact? |
Yes |
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Is it currently budgeted? |
Yes |
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Where is it budgeted? |
Fund 5220, Sub-Division 5220500, Project 19007 |
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Is it Mandatory or Discretionary? |
Discretionary |
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Discretionary Justification: |
The revised scope is essential to complete construction. |
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Is the general fund affected? |
No |
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Future fiscal impact: |
Once complete the project will have improved efficiency to the treatment ponds and replaced aged transfer pipelines, reducing maintenance and repair costs. |
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Consequences if not approved: |
If the District Engineer is not granted the authority to execute the Change Orders, the Project will be stalled, exposing the District to potential enforcement action by RWQCB. |
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Additional Information |
Build Healthy, Connected Communities |
ENVIRONMENTAL IMPACT
ENVIRONMENTAL DETERMINATION: Consideration and possible adoption of a Categorical Exemption Class 1: It has been determined that this type of project does not have a significant effect on the environment and is exempt from the California Environmental Quality Act. [See Class 1 (“Existing Facilities”) which may be found in the guidelines for the implementation of the California Environmental Quality Act at 14 CCR §15301; see also Napa County’s Local Procedures for Implementing the California Environmental Quality Act, Appendix B.]