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BACKGROUND The City conducts cyclic underwater inspection of interior coatings as well as cleaning and maintenance of all the tanks within the water distribution system. The latest underwater inspection showed the interior coatings for Moller Ranch, Tank 770-1 , and Dublin Canyon tanks have reached their life expectancy within the vapor zones due to the presence of widespread corrosion. It also revealed paint blisters and coating issues within the various floor and wall areas. The project consisted of recoating the vapor zones on Moller Ranch and Tank 770-1 while performing a selective spot repair for the wall and floor areas. Work on Dublin Canyon tank consisted of the recoating of the floor and selective spot repair for the walls and vapor zone. The tanks were drained and placed out of service while the coating operation took place. The work was performed during the winter months when water demand was low and was returned into service before the higher demands were reached. The City, on average, performs tank coating work every 15 years and does not have in- house expertise to oversee field inspection during surface preparation and coating applications. Staff recognized this potential inspection issue and solicited qualified consultants in order to assist the City during surface preparation and coating application. On October 4, 2011, the City Council awarded the construction contract for the project to the lowest responsible bidder, Utility Service Co. Inc. in the amount of $259,840. Council approved a project contingency of $28,785 and a third party inspection contract with Bay Area Coating Consultants Inc. for the not-to-exceed amount of $28,000. The project has since been completed and is ready for acceptance. DISCUSSION Budget The majority of the funding for this project was provided by the Water Tank Corrosion Repairs project, CIP No. 071023, which was originally programmed with $300,000 in fiscal year 2007-08 in the CIP; however $14,125 was used in 2008 for necessary immediate repairs to four water tanks, leaving a balance of $285,875. An additional $31 ,049 of funding was appropriated from the Water Replacement and Improvement Fund balance to cover the project estimated expenditures of $316,924, including the 10% contingency approved by City Council. Contract change orders increasing the contract by $14,766.69 (equivalent to 5.68% of contract amount) were primarily the result of corrosion of the tank support structures and cathodic protection system uncovered during construction. Page 2 of 3