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BACKGROUND This project was budgeted under the FY 2007 -2008 Capital Improvement Program in the amount of $130,000. On August 19, 2008, the Pleasanton City Council awarded the contract for the project to ENV2 in the amount of $85,506. The City Council also authorized the Director of Public Works to approve change orders up to the amount of $13,000. The work consisted of removing existing deteriorated asphalt sidewalk and replacing it with approximately 4,200 square feet of concrete sidewalk and accompanying landscaping, along Mohr Avenue between Santa Rita Road and the Alameda County Transportation Corridor. The project also included replacement of two access ramps and approximately 67 linear feet of curb and gutter. DISCUSSION Budget The total project budget approved on August 19, 2008, by City Council was $109,103. This included the base bid of $85,506, change order authorization of $13,000, and an additional $6,100 to construct ADA compliant ramps at Vineyard and Isabel. Due to Certified Payroll irregularities (described below), it was determined that the ramps at Vineyard and Isabel would be completed by a different contractor with which the City has an on -call contract. Additional unexpected costs were incurred due to increasing the width of the concrete sidewalk from 5' to 7.5' in order to match existing field conditions. Furthermore, an electrical contractor had to be retained to determine the cause of electrical problems with an irrigation controller. The issues were determined to be unrelated to the work that ENV2 had performed. These additional expenses brought the total cost of the project to $113,760, which is $4,657 more than the budget approved upon award of the contract. Sufficient funds remain in CIP No. 015032 to cover the additional costs. Contractor Payroll Irregularities During construction, City staff became concerned that the prevailing wages required by State law were not being paid by ENV2 to its employees. This concern was compounded by Stop Notices filed by employees of ENV2 making similar claims, which have now progressed to a formal civil lawsuit. Consequently, the City filed a complaint with the State Department of Industrial Relations, Division of Labor Standards Enforcement, alleging that ENV2 has not paid prevailing wages. Certified payrolls submitted by ENV2 showed that its employees were not being paid prevailing wages. After being revised four different times, the certified payrolls continued to show contradictions and irregularities. While the State's Deputy Labor Commissioner investigates this matter, the City continues to withhold any further payments to ENV2 on A Stop Notice is a formal claim process provided by State law where employees, subcontractors, suppliers and others can advise the public agency which awarded the contract that the general contract has not paid the claimant. Upon receipt of a Stop Notice, the City is required by law to withhold from its payment to the general contractor the amount listed in the Stop Notice. State law does provide a process for resolution of Stop Notices, which ENV2 has not pursued for this project. Page 2 of 3