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CASSCLBERRY CITY COMMISSION Minutes of November 15, 2021 — Regular Meeting Page i 1 of 26 Account Number Account Description Amount Increase: 402-0752-535.63-40 Infrastructure $651,593 401-0000-389.90-00 Other Non-operating Sources $651,593 Recommendation: The City Manager and the Public Works Director recommended approval of Change Order No. 5 to the agreement with L7 Construction, Inc. for the Lift Station #31 Bend -in -the -Road Renovation Project in the amount of $8,568.22 and approval of related Budget Amendment #22-010 in the amount of $651,593. Discussion: City Manager Randy Newlon asked Assistant Public Works Director/Utility Manager Tara Lamoureux to address this item and advised that Procurement Manager Rhonda Ulmer was also present to respond to questions from the Commission if needed. Commissioner Meadows clarified that his question was that the PVC material price appeared to have doubled and he asked how the City was addressing the issue, as it could possibly be repeated with the current economic conditions. He also inquired whether anything was being done to protect the City in the unlikely event that there is a bid amount for materials in a specific amount and the cost of materials drops substantially by the time the project happens. Ms. Lamoureux explained that this was an extraordinary circumstance where the manufacturer of the PVC pipe for this project was no longer able to supply it, and the contractor stated in writing that they were going to have to use a different manufacturer to obtain the materials. This was only around $1,000, and most of the change order amount is related to tanks that are needed as an unforeseen circumstance in order to relocate a reclaimed line. Procurement was consulted about the PVC issue, and it was determined to be an extraordinary circumstance and appropriate for the contractor to request the change order even though there was a possibility the City would not reimburse them for the additional cost. Ms. Ulmer explained that increases in the cost of materials has been an industry -wide problem and staff had looked at the producer price index for the PVC product and found the cost had gone up significantly since the contractor bid on the project in March. Prior to submitting a request for a change order, the vendor was asked to provide four different quotes on the same materials, and costs had ranged from $1361 to $3700. Therefore, it was decided that it would be best to allow the vendor to have the price increase in order to not interfere with project delivery. In response to the question of how decreases in material prices would affect the City's projects, Ms. Ulmer explained that the City typically puts a CPI (Consumer Price Index) Escalation Clause in its solicitations so that if the cost of materials goes down, the vendor would have to provide that decrease to the City as well. Audience Participation: No one came forward to address this item. MOTION: Commissioner Meadows moved to approve Change Order No. 5 to the Agreement with L7 Construction, Inc. for Lift Station #31 Bend -in -the -Road Renovation Project and Related Budget Amendment #22-010 Special Budgetary Rollover, as presented. Motion was seconded by Commissioner Aramendia. Motion carried unanimously by voice vote 4-0.