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HomeMy WebLinkAboutSupplemental Communication from Council Member Senecal1 Brandon DeCriscio From:Patrick Gallegos Sent:Monday, May 11, 2026 5:13 PM To:Patrick Gallegos Cc:Gloria Harper; Brandon DeCriscio Subject:RE: Questions for Item K, Lampson Well BCC: CITY COUNCIL Good afternoon, The response to Question #4 was updated (in red). Please see below for your reference. I noticed the scope was expanded to include - instrument and related products manufacturing for measuring, displaying, and controlling industrial. The additional cost was $670K – why was this not included in the first RFP last year? Was this additional work a Butier recommendation? Butier was reviewing to see if any potential money savings – what was the result? Bid Item #34 (furnish & install various diameters electrically actuated isolation/modulating valves, butterfly, and ball valves per plan) – is not new work and was reflected both times the project was advertised for construction bids. It should be noted that Chaffee submitted a bid for $600k under Bid #1, and submitted a bid for $670k under Bid #2. Regarding value engineering measures, a high-level summary of items include: 1. Substitution of underground piping system material with lower cost material and protective coating. 2. Streamlining preconstruction activities to reduce survey visits 3. Allowing precast junction boxes and standardized sizes and lid details 4. Standardized vessel and tank connections details using short spool pieces with grooved or mechanical couplings to reduce field welding and ease of future maintenance 5. Streamlined control panel wiring and conduits 6. Update panel type from NEMA 4x to NEMA 1 since the Programmable Logic Control (PLC) panel will be in an air- conditioned room. 7. Increased construction time for more contractor flexibility 8. Cleaned up the specifications for more clarity While the bid documents with what was believe are cost reductions, staff is unable to provide actual dollar amounts because the bids are still very much dictated by the contractor, their labor costs and sourcing abilities. Thanks, Patrick Gallegos Patrick Gallegos, City Manager 211 Eighth Street, Seal Beach, CA 90740 (562) 431-2527 x 1308 2 View our: Shoreline RecreaƟon Brochure Seal Beach follows Civility Principles by promoting courtesy, respectful listening, open mindedness, issue-focused debate, and embracing respectful disagreement and dissent as democratic rights and tools for sound decisions. For Information about Seal Beach, please see our City website: www.sealbeachca.gov NOTICE: This communication may contain privileged or other confidential information. If you are not the intended recipient of this communication, or an employee or agent responsible for delivering this communication to the intended recipient, please advise the sender by reply email and immediately delete the message and any attachments without copying or disclosing the contents. Thank you. From: Patrick Gallegos Sent: Monday, May 11, 2026 4:48 PM To: Patrick Gallegos <PGallegos@sealbeachca.gov> Cc: Gloria Harper <gharper@sealbeachca.gov>; Brandon DeCriscio <BDeCriscio@sealbeachca.gov> Subject: Questions for Item K, Lampson Well BCC: CITY COUNCIL Good afternoon, For your reference, Councilmember Senecal submitted the following questions, and City staff responded (in blue). 1) Page 6 of the staff report indicated the updated OCWD loan amount does not include soft cost of the pilot program and design that were already paid ($530,167). Is the full amount of $530,167 deducted from the new loan amount? When was that pilot project and design completed? The design plans were completed around May 2025, and posted for construction bid advertisement in June 2025. Yes, the pilot program and design cost that were already paid for is deducted from the new loan amount, which is now $8.1M. 2) The construction support services of Butier started Q4 2025 and I recall seeing some warrants paid. What have we paid to Pace and Butier at this point in time? Are the Pace and Butier cost that we have paid excluded from the $8.1 loan? The delta between the estimated CIP project cost and undated loan (page 6) is $496,959. The PACE (Construction Engineering) and Butier (Construction Management) costs will be part of the $8.1M proposed OCWD Producer’s loan. The PACE design cost is NOT part of the $8.1M loan. Butier’s expenditure to date is: $5,756 PACE’s expenditure to date is: $362,737 since 2021 (post-Incode implementation). A further breakdown may be provided through data via Springbrook (prior ERP system), which will require more time to acquire. 3) Butier was performing a constructability review. Please forward a copy of the final report. Should this be posted for public review? While documents like this are not generally posted on the City’s website, it is available through a Public Records Act Request should a member of the public want a copy. (see attached for copy of value engineering log) 3 4) I noticed the scope was expanded to include - instrument and related products manufacturing for measuring, displaying, and controlling industrial. The additional cost was $670K – why was this not included in the first RFP last year? Was this additional work a Butier recommendation? Butier was reviewing to see if any potential money savings – what was the result? Staff is requesting the origin regarding the instrumentation and the additional cost of $670k question, as we cannot identify an item that correlates to the inquiry. Regarding value engineering measures, a high-level summary of items include: 1. Substitution of underground piping system material with lower cost material and protective coating. 2. Streamlining preconstruction activities to reduce survey visits 3. Allowing precast junction boxes and standardized sizes and lid details 4. Standardized vessel and tank connections details using short spool pieces with grooved or mechanical couplings to reduce field welding and ease of future maintenance 5. Streamlined control panel wiring and conduits 6. Update panel type from NEMA 4x to NEMA 1 since the Programmable Logic Control (PLC) panel will be in an air- conditioned room. 7. Increased construction time for more contractor flexibility 8. Cleaned up the specifications for more clarity While the bid documents with what was believe are cost reductions, staff is unable to provide actual dollar amounts because the bids are still very much dictated by the contractor, their labor costs and sourcing abilities. 5) The terms of the new loan were not included in the materials. What are the terms? What is the interest rate and pre-payment penalties? What happens if the project is under budget and we do not need the full loan amount? Any reset to the terms if rates drop? What is the debt cost to the city until the loan is paid back? Can you estimate the cost for 15 years to repay the loan? Given the City’s inability to timely proceed with the project, OCWD has requested that an amendment be renegotiated upon the City’s official confirmation that the project will proceed. Attached is the current OCWD Loan agreement at $4.45M, noting the following key points. 1. There are no prepayment penalties. 2. Interest is at 3.336% for 20 years (fixed). Total interest payment would be: $1,719,570.93. Annual payments would be: $308,478.55. 3. The 20-year term is set by OCWD; however, the City may opt to pre-pay, if desired. 4. Loan disbursements are based off the amount the City submits for disbursements. If the total project amount comes in less, the disbursement amount would be reflected accordingly. 6) Does the Director of Finance review the loan terms and provide a recommendation? What is our internal control process to analyze terms, repayment, reserves, and long-term liabilities before we take on loans? I assume this is a finance function. Yes – this is a Finance function. The OCWD has not submitted the new loan terms and it will be reviewed by Finance and our municipal advisor (Fieldman and Rollapp) when received. 7) What is Pac Hydro’s expiration date of the winning bid? 4 The WT1902 construction bids were opened on March 31, 2026. Accordingly, the bids would expire 60 days thereafter – May 30, 2026 Thanks, Patrick Gallegos Patrick Gallegos, City Manager 211 Eighth Street, Seal Beach, CA 90740 (562) 431-2527 x 1308 View our: Shoreline RecreaƟon Brochure Seal Beach follows Civility Principles by promoting courtesy, respectful listening, open mindedness, issue-focused debate, and embracing respectful disagreement and dissent as democratic rights and tools for sound decisions. For Information about Seal Beach, please see our City website: www.sealbeachca.gov NOTICE: This communication may contain privileged or other confidential information. If you are not the intended recipient of this communication, or an employee or agent responsible for delivering this communication to the intended recipient, please advise the sender by reply email and immediately delete the message and any attachments without copying or disclosing the contents. Thank you.