Title
[Contract Amendment] Change Order No. 1: Pioneer Structural Repairs
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FileID
File ID: 2026-00650
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Location
Location: Citywide
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Recommendation
Recommendation: Pass a Motion: 1) authorizing the City Manager or designee to execute Change Order No. 1 to City Agreement No. 2025-0803 with NMI Industrial Holdings, LLC, for an amount not to exceed $310,758, bringing the agreement’s total not-to-exceed amount to $1,525,958; and 2) resetting the City Manager’s or designee’s authority to issue Change Orders for the Agreement.
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Contact
Contact: Tim Moresco, Project Manager, (916) 808-1432, tmoresco@cityofsacramento.org; Sherill Huun, Engineering & Water Resources Division Manager, (916) 808-1455, shuun@cityofsacramento.org; Dalia Fadl, Director, (916) 808-3765, dfadl@cityofsacramento.org; Department of Utilities
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Presenter
Presenter: None
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Attachments
Attachments:
1-Description/Analysis
2-Change Order
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Description/Analysis
IssueDetail
Issue Detail: Staff recommend Council approve Change Order No. 1 to City Agreement No. 2025-0803 with NMI Industrial Holdings, LLC to cover additional work required for the Pioneer Reservoir rehabilitation project. The change order includes: 1) Cleaning reservoir basins to ensure worker safety, 2) Ground Penetrating Radar (GPR) scanning to locate rebar before drilling into the concrete surfaces, 3) Adjustments for material cost escalation due to project suspension, and 4) Fabrication and installation of a 60-inch sluice gate in Basin 1 to improve operational reliability.
These items address unforeseen field conditions and owner-directed improvements that enhance safety, protect structural integrity, and improve long-term functionality of the reservoir. Approval of this change order ensures that the project continues to meet its objectives for public health, safety, and infrastructure resilience while aligning with the City’s long-term sustainability and flood mitigation goals.
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PolicyConsiderations
Policy Considerations: This Change Order exceeds the City Manager’s approval authority and requires Council approval per City Code 3.04.020.
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EconomicImpacts
Economic Impacts: This Change Order is expected to create 1.24 total jobs (0.71 direct jobs and 0.53 jobs through indirect and induced activities) and create $191,872.70 in total economic output ($120,938.83 of direct output and another $70,933.87 of output through indirect and induced activities).
The indicated economic impacts are estimates calculated using a calculation tool developed by the Center for Strategic Economic Research (CSER). CSER utilized the IMPLAN input-output model (2009 coefficients) to quantify the economic impacts of a hypothetical $1 million of spending in various construction categories within the City of Sacramento in an average one-year period. Actual impacts could differ significantly from the estimates and neither the City of Sacramento nor CSER shall be held responsible for consequences resulting from such differences.
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EnvironmentalConsiderations
Environmental Considerations: The subject project was reviewed and determined to be categorically exempt from the California Environmental Quality Act (CEQA). The projects include performing restoration or rehabilitation of deteriorated or damaged structures to meet current standards of public health and safety (CEQA Guidelines Section 15301 (d)).
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Sustainability
Sustainability: The proposed project is consistent with the 2040 General Plan goal PFS-3.6, “Combined Sewer System Rehabilitation and Improvements” as it aims to rehabilitate aging Combined Sewer System (CSS) facilities to continue to decrease flooding, CSS outflows or combined sewer overflows.
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Commission/Committee Action
Commission/Committee Action: Not applicable.
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RationaleforRecommendation
Rationale for Recommendation: Change Order No. 1 is necessary to compensate the contractor for additional work required to address unforeseen field conditions and owner-directed improvements. These changes enhance worker safety, protect structural integrity, and improve the operational reliability of the Pioneer Reservoir, ensuring the project meets its intended goals for public health, safety, and infrastructure performance.
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FinancialConsiderations
Financial Considerations: The original not-to-exceed amount of the contract was $1,215,200. Proposed Change Order No. 1 in the amount of $310,758 would increase the contract not-to-exceed amount to $1,525,958. There are sufficient funds in the CSS Sump/Treatment Facilities Program (X14170500, Fund 6021) to execute this Change Order.
There are no General Funds allocated or planned for this project.
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LocalBusinessEnterprise
Local Business Enterprise (LBE): NMI Industrial Holdings LLC is a LBE.
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Background
Background: On July 22, 2025, City Council approved the contract award for the Pioneer Structural Repairs to NMI Industrial Holdings, LLC. The City then provided the Notice to Proceed to the Contractor on August 12, 2025. The following provides more information on each of the change order items and why they are needed.
1. Cleaning of Reservoir Basins for Enhanced Safety
Upon the first site meeting at Pioneer Reservoir, the City and Contractor reviewed all of the work to be performed on the interior of the reservoir. The Reservoir has three basins, and two of the three basins were found to have accumulated large amounts of sludge that remained slick and slippery, and posed a safety concern to the Contractor. It was determined comprehensive cleaning and spraying would be necessary to ensure compliance with safety standards and to provide a safe working environment for contractors to perform the work.
2. Ground Penetrating Radar (GPR) Scanning for Rebar Detection
Additionally, at that meeting, it was discussed whether or not it would be acceptable for the Contractor to drill into the existing reinforcement within the concrete of the Reservoir. The City took exception to that idea, with fears of compromising the structural integrity of the structure, and given that the reinforcement locations were not clearly marked or identified, the Contractor provided a price to perform GPR to locate all of the reinforcement in the desired areas of the structure.
3. Material Cost Escalation Due to Contract Suspension
When this project was initially bid, the plan was to attempt to complete this work prior to the wet season which begins in October. The Contractor was initially hopeful of completing it before that deadline, however, due to the lead time of 8-10 weeks for the material needed for this project, the City decided to suspend the contract until the following dry season. Therefore, the contract was suspended from August 18, 2025, and will resume on June 1, 2026. This suspension led to delays in material purchases, which resulted in some increased prices for some of the materials.
4. Fabrication and Installation of a 60-inch Sluice Gate in Basin 1
The sluice gate is a vital component for regulating water flow and maintaining operational flexibility within the Pioneer Reservoir. While the Contractor was under contract, it was determined that the existing gate is non-functional. Therefore, the City worked with the Contractor to find a replacement of the gate to enhance the reservoir’s long-term functionality, improve flood control measures, and support compliance with current operational standards. The Contractor will work with the supplier to fabricate the necessary sluice gate and will install it as part of this project.
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