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Upcoming Balancing Change Order As stated in the summary above a balancing change order is expected on this project that will reduce the final cost of the project by approximately $1,000,000. This reduction is a result of the final measured quantities being less than the estimated quantities on which the bidding process was based. In some cases, the estimated quantities were found to be inaccurate when the pipeline alignment was laid out in the street after the "potholing" of existing utilities to determine their exact location and depth. The plans as bid assumed some worst case scenarios, but based upon the actual location of the existing utilities, in many cases the installation was simplified by eliminating bends and other fittings. This resulted in a better installation at a reduced cost. In some cases, the unit costs just could not be applied to the work required by field conditions. In these cases staff directed the contractor to perform the work on a time and material basis. Staff monitored the contractor's time spent and material used to perform certain work and wrote change orders to add the work to the contract scope. These change orders are part of the $558,000 in change orders discussed above. Performing the pipeline installation work on a time and material basis compensated the contractor more fairly for the work performed in certain instances, while at the same reduced the work that was paid for at the unit costs. The balancing change order addresses these circumstances. Current Loan and Grant Funds Available Based upon the original budget for contingency less the change orders to date, the full lane width paving found to be an ineligible expense, and the expected balancing change order, it is anticipated there will be approximately $2,532,000 of Grant and Loan Funds remaining. These funds are available to expand the recycled water system, but with two key eligibility requirements: 1. The proposed expansion must have been identified in the City of Pleasanton Recycled Water Feasibility Study that was considered in the CEQA and NEPA analysis of the project. 2. The public works construction contract documents must include all the Federal Cross Cutter provisions, e.g., Buy America provisions, Davis Bacon Wages, Disadvantages Business Enterprise, etc. The current contract with Ranger Pipelines does include all required provisions. DISCUSSION Because there is remaining Loan and Grant funding available, staff is recommending that the Director of Engineering be authorized to approve and execute change orders to include additional work eligible for Loan and Grant reimbursement. There are three recommended components of work. City staff discussed the work with SWRCB staff and determined the work is eligible for Loan and Grant reimbursement. The proposed additional work is described below: 1. Gibraltar Avenue Pipeline. Installation of recycled water pipeline in Gibraltar Avenue is included in the Recycled Water Feasibility Study, but it was not included in the first phase of the project due to budget concerns. The proposed work Page 5 of 8