AGENDA ITEM
TO: HONORABLE MAYOR
AND MEMBERS OF THE CITY COUNCIL
FROM: CARLO TOMAINO
CITY MANAGER
BY: GABINO C. LUNA
PUBLIC WORKS DIRECTOR
SUBJECT:
title
RESOLUTION AUTHORIZING APPROPRIATIONS FOR THE GUNDRY RESERVOIR ROOF REPLACEMENT AND REHABILITATION PROJECT
summary
Summary:
The City’s Water Master Plan identifies the Gundry Reservoir Roof Replacement Project as a critical priority project. The Gundry Reservoir, located within Reservoir Park at 3315 Gundry Avenue, is a cylindrical concrete water storage tank with a capacity of five-million-gallon, originally constructed in 1929. Over the decades, the reservoir has undergone multiple upgrades, including the replacement of its original wooden roof framing with a steel structure in the 1990s and the application of a watertight coating in 2006. In March 2022, an interior and structural inspection identified failing structural roof members, necessitating a complete roof replacement and recoating to maintain water quality and structural integrity.
In June 2025, the City Council awarded a Public Works contract to Spiess Construction Company, Incorporated to construct the project. After demolition and construction began, staff identified several additional critical concrete repairs. The City authorized the contractor to complete these repairs utilizing available contract contingencies, exhausting available project contingencies. Staff recommends the City Council authorize a $100,000 contingency, for a total project budget of $7,848,717. If approved, staff would use the funds to support the project through necessary additional concrete repairs found during the removal of the existing surface coating and by incorporating a protective coating for the floor slab of the reservoir.
Strategic Plan Goals:
Goal No. 4 Infrastructure: Maintain and improve the City’s physical Infrastructure, water system, and recreational spaces.
Goal No. 5 High-Functioning Government: Strengthen internal communications, recruitment, retention, systems, and processes to increase the effectiveness and efficiency of City services.
recommendation
Recommendation:
Adopt a Resolution, entitled:
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SIGNAL HILL, CALIFORNIA, AMENDING THE ADOPTED BUDGET AND AUTHORIZING BUDGET APPROPRIATIONS FOR FISCAL YEAR 2026-27.
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Fiscal Impact:
The Gundry Reservoir Roof Replacement and Rehabilitation Project (Project No. 95.23001) is funded through the Water Fund and two loans from the General Fund for a total project budget of $7,748,717. Staff is requesting a $100,000 budget appropriation from the Water Enterprise Fund Balance into the FY 2026-27 Water Fund Capital Improvement Program budget for Project No. 95.23001 (Account No. 500-40-5840), resulting in a revised project budget of $7,848,717.
The proposed budget adjustment is consistent with the Water Master Plan (WMP) and the Water Rate Study (RS), which projected $8.3 million in expenditures for this project within the water rate model. Even with the requested appropriation, the total project budget remains below the amount projected in the water rate analysis. The following table summarizes the project costs, including the requested $100,000 contingency, that supports the project budget, a detailed breakdown is also included in the analysis section.
Project Costs:
|
Description |
Projected Amount |
|
Design Consultant Services |
$279,885 |
|
Material Testing Consultant Services |
$20,000 |
|
Engineering Support Services |
$100,000 |
|
Construction Management Services |
$285,000 |
|
Construction Contract |
$7,029,515 |
|
Misc. Project Costs |
$10,869 |
|
Remaining Project Contingency |
$23,449 |
|
Requested Project Contingency |
$100,000 |
|
Total Projected Cost |
$7,848,717 |
Background:
Gundry Reservoir, located on the south side of Reservoir Park and north of 33rd Street, is a partially buried cylindrical concrete water storage tank with a capacity of five million gallons. The reservoir measures approximately 200 feet in diameter and 20 feet in height. Since its original construction in 1929, the reservoir has undergone several significant improvements. In the 1990s, the City replaced the original wooden roof framing system with a steel truss and plate system. In 2006, the City applied a watertight interior coating and completed a partial roof replacement, resulting in two distinct roof structures.
Over time, the steel roof plate and several structural components deteriorated, which caused certain framing members and exhaust fan penetrations to fail. In March 2022, the City inspected the reservoir’s interior and structural elements to ensure compliance with routine maintenance and ongoing water quality standards. After thoroughly assessing both the interior and exterior structure, staff determined that the project requires a complete roof replacement, as well as the removal and reapplication of the existing watertight coating, to preserve water quality standards and maintain the facility’s structural integrity.
Over the past three years, staff has taken the appropriate steps to prepare this significant project by initiating an exploratory evaluation, engaging in extensive design work, and securing funding. On April 25, 2023, the City Council awarded a professional consulting services agreement to Ardurra Group, Incorporated (Ardurra) to develop engineered plans and specifications for the Gundry Reservoir Roof Replacement and Rehabilitation Project (Project), with a design cost not-to-exceed $299,313. Subsequently, in July 2024, Ardurra provided the final bid-ready plans and specifications, approved by the Public Works Department and the City Engineer.
Subsequently, on June 24, 2025, the City Council awarded a Public Works contract to Spiess Construction Company, Incorporated (Spiess) to construct the Project with a construction cost, including contingency, not to exceed $7,337,851. To support project delivery, the City assembled a project team by retaining active on-call contract consultants with specialized expertise. Associated Soils Engineering, Incorporated (ASE) to provide materials testing services, KPFF Consulting Engineers for construction support services, and MCM Management Company for construction management services.
Analysis:
Project construction commenced January 26, 2026, beginning with the decommissioning of the treatment plant and demolition activities. Concurrently, Spiess and the City coordinated with the roof manufacturer to prepare two specialty roof cover structural shop drawings. During the initial construction phase, City crews dewatered the reservoir, and the contractor demolished the existing roof cover and coating systems over an eight-week timeframe. Afterward, Public Works staff and City consultants entered the reservoir to inspect the exposed concrete surface walls and slab. During the inspection, staff discovered that the number of concrete joint and crack repairs was significantly higher than the original bid estimates. These conditions were not identified during the design phase because the existing rubberized coating prevented a thorough evaluation of the concrete surfaces during prior dive inspections.
Due to these unforeseen conditions, the extent of crack and joint repair work exceeds the quantities included in the original bid items. Completing these repairs is essential to ensure proper adhesion and long-term performance of the protective coating system. In addition, the inspection revealed that the condition of the concrete floor warrants application of a complete coating system. Staff executed a change order to coat the entire reservoir floor to provide a continuous protective barrier to maximize the service life of the reservoir. Spiess and its subcontractor, Simpson Sandblasting and Coating, have proposed completing the floor coating application for a cost of $468,702.
This proposed coating system would serve the following purposes in the water system:
• Protect the aging concrete surface from physical wear caused by changing tank levels, resist oxidation, and resist chemical reactivity.
• Prevent water intrusion or extrusion through cracks or joints and mitigate further expansion of existing crack repairs.
• Extend the life of the reservoir and reduce the number of future repairs needed to the concrete surface.
• Comply with NSF/ANSI 61 (National Sanitation Foundation and American National Standard Institute) State requirements for contact with drinking water.
The following table evaluates the anticipated project costs, including additive and deductive change orders, proposed coating protection for the reservoir floor, and other soft costs such as design, construction management, and engineering support.
|
Projected Cost Analysis |
|
Description |
Amount |
|
Soft Costs Summary |
|
Design Consultant Services |
$279,885 |
|
Material Testing Services |
$20,000 |
|
Engineering Support Services |
$100,000 |
|
Construction Management Services |
$285,000 |
|
Miscellaneous Project Costs |
$10,869 |
|
Total Soft Costs |
$695,754 |
|
Construction Contract Summary |
|
Original Construction Contract |
$6,707,137 |
|
Original Construction Contingency (10%) |
$670,714 |
|
Original Construction Budget |
$7,377,851 |
|
Additive Change Orders Approved to Date |
$425,984 |
|
Less: Deductive Change Orders |
($572,308) |
|
Proposed Change Order - 100% Reservoir Floor Slab Coating |
$468,702 |
|
Projected Construction Contract Value |
$7,029,515 |
|
Remaining Construction Contingency |
$348,336 |
|
Overall Project Budget Summary |
|
Total Soft Costs |
$695,754 |
|
Projected Construction Contract Value |
$7,029,515 |
|
Projected Project Costs |
$7,725,269 |
|
Current Project Budget |
$7,748,717 |
|
Budget Remaining |
$23,448 |
|
Requested Project Contingency |
$100,000 |
|
Revised Project Budget |
$7,848,717 |
As shown in the project cost analysis table above, the project under current conditions can absorb the change order costs and the protective slab coating application; notwithstanding, the estimated budget available after accounting for these costs is $23,448, which would not allow for cost variability or unknowns. While the project is estimated at 50% completion and many of the challenges related to existing conditions have been resolved, staff recommends mitigating potential cost variations or other unknowns that could cause budgetary issues during construction by adding a contingency amount of $100,000. The revised project budget would remain below the $8.2M project budget identified in the water rate model and analysis completed in 2025.
Staff recommends approval of the budget resolution authorizing the transfer of funds from the Water Enterprise fund balance to the project capital improvement budget to support the project in mitigating administrative delays and with variations in project costs.
Reviewed for Fiscal Impact:
_________________________
Siamlu Cox
Attachments:
A. Budget Resolution