Part two of two.
The City Council is expected to continue its consideration of planned improvements for the Lampson Avenue water well this month. Staff has asked for council direction on how to proceed with the project.
Last week, the council voted unanimously to continue the Sept. 22 item. At the time, members of the public raised concerns about costs. At a previous council meeting, council members raised concerns at a significant cost increase as well as lack of time to review hundreds of pages of related documents.
At the Sept. 22 meeting, staff brought up an alternative proposal to have the proposed management consultant Bustier Engineering, Inc., perform an independent review of the project.
(A sentence on page 2 of the Sept. 22 staff report suggested having a third party look the project’s design.)
Technically, the Sept. 22 discussion was continued from the Sept. 8 council meeting and then continued to a future meeting after that.
Due to space limits, the following is not a transcript of the entire discussion, but highlights from the Sept. 22 meeting.
The water well on Lampson Avenue produces water that, according to staff, is fit to drink but generates a foul odor. The city needs to get rid of the stench, which is why the improvement project is needed.
Discussion
Staff recommended rejecting all bids on the Lampson project, largely due to unexpected cost increases. Staff had originally recommended accepting the second-highest bid but by the time the council continued its discussion on Sept. 22 that bid had expired.
At the Sept. 8 meeting, District Four Councilwoman Patty Senecal proposed rebidding the project.
During the staff presentation, Cho said the project cost went up from $4.35 million to $5.7 million. According to Cho, labor, material costs increased. She attributed this to the cost of steel due to tariffs.
Cho said water treatment contractors were currently busy and less likely to offer discounts or underbid.
She also addressed the question of why the city needed to hire a construction manager. According to Cho, Seal Beach doesn’t have enough people for the project.
Cho said staff recommended going ahead with the project because of the condition of the city’s water infrastructure.
It was at this point Cho brought up the newly proposed independent project review by the consultant that staff originally proposed to hire to manage the project.
“This would allow us to explore potential cost-saving opportunities,” Cho said.
Cho described the proposal to hire Bustier Engineering to review the project as an alternative for the council to consider.
District One Councilman Joe Kalmick asked about how common it was to hire outside inspection services.
Public Works Director Iris Lee, asked Mark Bustier of Bustier Engineering to explain how agencies deliver construction management and inspections.
“Typically, the smaller projects can be done in-house,” Bustier said.
“This is a large project for the city of Seal Beach,” Bustier said.
“This is something that is going to last 50 years, hopefully,” Bustier said.
In response to a question from District Five Councilman Nathan Steele, Bustier confirmed that his company specialized in water projects.
“And of course we don’t want to waste $7 million of our taxpayers’ money and not get it right,” Steel said.
Senecal expressed concern that the council learned after the fact that the bids were higher.
She said the city had a threshold and this was the city’s first water project out of the gate. According to Senecal, the engineer’s estimate was two-and-a-half years old. Senecal requested that the next City Council strategic workshop emphasize on improvement projects of all types city wide.
She said tariffs should have been factored in earlier.
Senecal proposed holding the matter over for two weeks. Later, that was what the council voted to do.
District Two Councilman Ben Wong asked when bids were received.
“July 16th,” Cho said.
Wong asked when the city realize that bids were higher than expected.
“We knew at that point,” Cho said.
“However, we did receive phone calls from bidders informing us of a potential bid protest. At that point, we did not know if we would be moving forward and then they proceeded to submit the bid protest,” Cho said.
She said staff reached out to the city attorney to work through that.
Wong asked when staff worked out that the city should go with the second lowest bidder.
“The week before Sept. 8th,” Cho said.
Wong said that was after Aug. 11. Cho confirmed that was correct.
Wong said from the Aug. 11 (on water and sewer rates) vote to Sept. 22 (the water well project discussion), he couldn’t help feeling some sticker shock.
“I think we’re all going to be very fearful of what the bids might look like going forward,” Wong said.
Senecal said the sheets handed out to the public during the open house events for the water and sewer rates weren’t clear.
“That tells me that a lot of the information we’ve put out needs to be updated,” Senecal said.
Kalmick raised concern about price changes. He said the tariffs varied from day to day.
Mark Bustier said he had been in the business for 39 years and never seen more volatility among contractors.
He also said there was no question that some of the suppliers were taking advantage of the fears in relation to tariffs.
In response to a question from Senecal, Deputy Public Works Director Cho said that staff typically requests a 10% contingency in bids.
Senecal and Wong said they were told 20%.
Public Works Director Lee said there was a 10% construction contingency and a 10% contingency for construction management and inspection services.
Wong said prior to that, at workshops, engineering consultants told the council that they padded with 20% in contingency costs.
Councilman Steele asked Bustier if construction costs have ever come down.
Bustier chuckled. He said no. According to Steele, the longer Seal Beach delays the projects, the more likely the costs would increase. Butier agreed.
The next council meeting is set for Monday, Oct. 13.
