REPORT TO COUNCIL
SUBJECT
Title
Action on Amendment No. 1 to Agreements with C2R Engineering, Inc., Golden Bay Construction, Inc., O’Grady Paving, Inc., A Teichert & Son, Inc., and West Valley Construction Company, Inc. for As-Needed Asphalt Repair Services to Remove the Annual Compensation Limit Subject to the Previously Authorized Maximum Amount of $10,400,000
Report
BACKGROUND
On July 15, 2025, pursuant to Section 2.105.140(c) of the Santa Clara City Code, the City Council authorized the City Manager to execute an agreement with C2R Engineering, Inc. for as-needed asphalt repair services (RTC #25-709). In addition, the City Council authorized the City Manager to execute additional agreements for as-needed asphalt repair services. Subsequently, staff entered into four additional agreements with Golden Bay Construction, Inc., O’Grady Paving, Inc., A Teichert & Son, Inc., and West Valley Construction Company, Inc.
These agreements support the Water & Sewer Utilities Department’s water main replacement program and unplanned emergency utility repairs.
The authorization included an aggregate maximum compensation across all as-needed asphalt repair agreements of $10,400,000, consisting of $10,000,000 for planned water main replacement work and $400,000 for emergency repairs. The agreements also include an annual compensation limit of $2,000,000 per fiscal year for planned water main replacement work. This limit was intended to align with anticipated annual expenditures and to provide a structured approach for managing contract activity across multiple firms.
DISCUSSION
Since implementation of the agreements, staff have identified operational challenges associated with the annual $2,000,000 compensation limit. Asphalt restoration needs fluctuate based on project timing and construction sequencing, and the annual cap limits staff’s ability to schedule and complete work within the required timeframe.
In practice, pavement restoration needs may exceed the annual limit even when sufficient funds remain within the total authorized amount. This constraint will result in delays and extended periods of temporary paving in the public right-of-way between fiscal years.
To address these constraints, staff recommends amending all five agreements to remove the annual $2,000,000 compensation limit. This change will allow staff to better align project delivery with operational needs and ensure timely completion of pavement restoration work.
Approval of the recommendations does not increase the previously authorized maximum compensation of $10,400,000 over the term of the agreements and does not expand the scope of services. All other terms and conditions of the agreements will remain unchanged. Staff will continue to manage expenditures across the agreements within the total authorized amount.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(5) in that it is a governmental organizational or administrative activity that will not result in direct or indirect changes in the environment.
FISCAL IMPACT
There is no change to the total not-to-exceed amount of $10,400,000 for the existing agreements. Funds are budgeted in the Distribution System Replacement and Restoration project in the Water Utility Capital Fund to cover this cost. Annual funding of at least $2,000,000 is expected to be budgeted for this project in future years. The additional funding of approximately $400,000 would now be spread out over the length of the five-year agreement, subject to appropriations limits, and would be funded through the Water Utility Fund.
COORDINATION
This report has been coordinated with the Finance Department, the Department of Public Works, and the City Attorney’s Office.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office beginning the Thursday evening before the Tuesday meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220 by email clerk@santaclaraca.gov, or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
Authorize the City Manager or designee to execute Amendment No.1, substantially in the forms attached, with C2R Engineering, Inc., Golden Bay Construction, Inc., O’Grady Paving, Inc., A Teichert & Son, Inc., and West Valley Construction Company, Inc. to remove the annual $2,000,000 compensation limit for as-needed asphalt repair services, within the previously authorized maximum compensation amount of $10,400,000, subject to the appropriation of funds and review and approval as to form by the City Attorney.
Staff
Reviewed by: John Ramirez, Director, Water & Sewer Utilities
Approved by: Jovan Grogan, City Manager
ATTACHMENTS
1. Amendment No. 1 - C2R Engineering, Inc.
2. Amendment No. 1 - Golden Bay Construction, Inc.
3. Amendment No. 1 - O’Grady Paving, Inc.
4. Amendment No. 1 - Teichert & Son, Inc.
5. Amendment No. 1 - West Valley Construction Company, Inc.
6. Agreement - Golden Bay Construction
7. Agreement - C2R Engineering
8. Agreement - O’Grady Paving, Inc.
9. Agreement - Teichert Construction
10. Agreement - West Valley Construction
11. RTC 25-709 As-Needed Asphalt Repair