AGENDA TITLE:
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Adopt a Resolution Authorizing the City Manager to Execute Additional Change Orders up to ($1,400,000) with Bobo Construction, Inc. for a Total not to Exceed ($11,866,433) for Construction of The Lodi Access Center and Emergency Shelter (Access Center) and Approve Amendment No. 2 to Bickford Ventures, Inc., doing business as Division 1 Construction Management Services in the Amount of $50,000 (Not to Exceed $232,200), Amendment No. 2 to Terracon Consultants, Inc. in the Amount of $100,000 (Not to Exceed $130,020), and Amendment No. 6 to NJ Associates, Inc. in the Amount of $50,000 (Not to Exceed $1,371,430) (CD)
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MEETING DATE:
August 20, 2025
PREPARED BY:
Jennifer Rhyne, Neighborhood Services Manager
recommendation
RECOMMENDED ACTION:
Adopt a Resolution Authorizing the City Manager to Execute Additional Change Orders up to ($1,400,000) with Bobo Construction, Inc. for a Total not to Exceed ($11,866,433) for Construction of The Lodi Access Center and Emergency Shelter (Access Center) and Approve Amendment No. 2 to Bickford Ventures, Inc., doing business as Division 1 Construction Management Services in the Amount of $50,000 (Not to Exceed $232,200), Amendment No. 2 to Terracon Consultants, Inc. in the Amount of $100,000 (Not to Exceed $130,020), and Amendment No. 6 to NJ Associates, Inc. in the Amount of $50,000 (Not to Exceed $1,371,430)
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BACKGROUND INFORMATION:
On September 4, 2024, the City Council approved the plans and specifications for the Access Center Project and authorized the advertisement for construction bids. The Community Development Department released the bid advertisement on October 16, 2024. On November 13, 2024, the City received seven bids, and at a Special City Council Meeting on November 19, 2024, Bobo Construction, Inc. was awarded the contract as the lowest responsible bidder. A construction contract was executed in the amount of $9,866,433, with an initial change order authority of $600,000.
Since the award of contract, several unanticipated costs have emerged:
The City originally intended to execute a separate agreement for the ADA-compliant slab and associated site work required for the temporary Access Center. However, due to project time constraints, the City directed Bobo Construction, Inc. to perform the work. The funds originally set aside for this scope must now be incorporated into the existing contract via change order.
San Joaquin County Behavioral Health has committed $575,910 to support the construction of a mental health quiet ward and respite beds, necessitating an increase to the contract.
During construction, unforeseen environmental conditions were encountered, including impacted soil and debris discovered during sub-slab trenching for new utility installations. As these findings were discovered beneath the building slab during utility trenching, conditions could not have been known prior to construction. Terracon was engaged to assess and characterize the affected soil to facilitate off-haul and ensure compliance with hazardous material handling protocols.
In June and July 2025, Terracon conducted multiple rounds of subsurface soil sampling in four interior locations where trenching was planned. Analytical results identified contaminants of concern including arsenic, copper, lead, total petroleum hydrocarbons (diesel range), and PCBs. These findings require specialized soil handling and disposal procedures in accordance with hazardous waste regulations. Terracon subsequently developed an Environmental Health and Safety Plan and Soil Management Plan to guide remediation and safe continuation of construction activities.
To address these emerging needs, staff has evaluated available funding sources, including existing grant allocations and projected cost savings from a planned reduction in initial bed count and potential efficiencies under a new operator Request for Proposals (RFP). Staff has determined there are sufficient resources to support the necessary contract modifications as seen in the summary funding table, attached as Exhibit A.
Operational Cost Savings and Projections: Operational cost estimates used to identify potential savings are based on known factors, including the continued need to operate the temporary Access Center through at least April 30, 2026, and the anticipated transition to the permanent facility thereafter. Using a prior $2.75 million operator proposal as a baseline and applying a cost of approximately $75 per bed, per day, an initial 60-bed model is projected to result in annual operating costs of $1.65 million. Estimated savings of $1.1 million, along with funds previously allocated for the ADA-compliant slab at the temporary site, have been redirected to support construction change orders.
Despite the increased construction costs, should operational cost responses received during the RFP be in line with projections, the City should have sufficient operational funds covered through ARPA funds (through Dec 31, 2026) and PLHA/HHAP funds (through Apr 30, 2027).
Recommended Action(s):
Staff recommends that the City Council adopt a resolution to:
1. Authorize the City Manager to execute additional change orders with Bobo Construction, Inc. in the amount of $1.4 million, increasing the total not-to-exceed amount to $11,866,433 for the Access Center construction contract.
2. Approve Amendment No. 2 to the professional services agreement for Construction Management and Testing with Bickford Ventures, Inc., doing business as Division 1 Construction Management Services, in the amount of $50,000, for a revised not-to-exceed total of $232,200.
3. Approve Amendment No. 2 to the agreement with Terracon for Special Inspection and Testing Services in the amount of $100,000, for a revised not-to-exceed total of $130,020.
4. Approve Amendment No. 6 to the agreement with NJ Associates, Inc. in the amount of $50,000, for a revised not-to-exceed total of $1,371,430.
Expenditure Timeline:
The City has allocated American Rescue Plan Act funds to the Access Center Project and has a deadline of December 31, 2026. With that in mind, if the temporary Access Center needing to be extended and anticipated cost savings from initial operating bed count reduction, those funds must continue to be tied to the Access Center project and cannot be reallocated to any other project. This provides the opportunity for the City to utilize these funds toward the scope changes ensuring continued progress on the project while maximizing the use of available federal resources and avoiding the risk of returning unspent funds to the U.S. Treasury.
Attachments:
1. Exhibit A - Summary Funding Table
2. Amendment No.2 - Bickford Ventures, Inc., doing business as Division 1 Construction Management Services
3. Amendment No. 2 - Terracon Consultants, Inc.
4. Amendment No. 6 - NJ Associates, Inc.
5. Resolution
STRATEGIC VISION:
4C. Housing: Continued progress towards Regional Housing Needs Assessment goals.
FISCAL IMPACT:
Fiscal impact for the contract amendments and change order authority overall is $1.6 million. The proposed amendments result in an increase of $1.4 million to the construction contract for the Access Center Project, bringing the total not-to-exceed amount to $11,866,433. Additional amendments to professional services agreements total $200,000, which includes $50,000 for construction management, $100,000 for special inspection and testing, and $50,000 for architectural services. These cost increases are offset by a combination of secured external partnership funding and anticipated project savings.
Notably, San Joaquin County Behavioral Health has committed $575,910 toward the development of critical mental health components within the facility, directly supporting expanded service capacity. In addition, the temporary Access Center is now anticipated to operate through at least April 30, 2025, with associated cost reductions stemming from a decreased operating bed count that will be provided in RFP (capacity remains at 208) and efficiencies expected from a forthcoming operator RFP.
While the scope of work has evolved to address unanticipated site conditions and enhanced facility features, staff has carefully evaluated funding resources and determined that there are sufficient available and anticipated funds to fully support the recommended contract amendments without requiring additional City General Fund allocations. These changes position the project for long-term success and reflect the City's commitment to delivering a high-quality, responsive facility for individuals in need of access to housing and behavioral health services.
FUNDING AVAILABLE:
Revenue and Appropriations have already been allocated through prior Council actions through the acceptance of various grants and appropriated to the Access Center Capital Improvement Project. There is no impact to General Fund at this time as staff is looking to utilize anticipated operational cost savings and funds from San Joaquin County Behavioral Health for the mental health quiet ward and behavioral health respite care beds.