Agenda Item Wording:
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Change Order Committee Approval Limits - Recommendation to increase the City of Visalia Change Order Committee approval limits for large construction projects.
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Deadline for Action: 4/7/2025
Submitting Department: Community Development
Contact Name and Phone Number:
Christopher Crawford, City Engineer, 713-4331; chris.crawford@visalia.city
Jason Huckleberry, Eng & Bldg Director, 713-4495; jason.huckleberry@visalia.city
Department Recommendation:
Staff recommends that the City Council give the City of Visalia Change Order Committee (COC) authority to approve change orders up to the following limits: $200,000 per change order for projects with construction costs of $10 million to $50 million, and $300,000 per change order for projects with construction costs over $50 million.
Background Discussion:
Approximately 20 years ago, the City of Visalia established a Change Order Committee, also referred to as the COC, compromised of five (5) city staff members who are responsible for providing an independent review of change orders for consultant contracts and construction projects. The COC was established to provide oversight and guidance to staff members dealing with change order related issues and to keep all parties accountable for additional costs the City incurred. The COC has also proved very beneficial on grant-funded and federally funded projects due to the added layer of review and the high level of confidence this has given to outside agencies auditing these funds.
Since the COC was established, it was given authority to approve change orders up to $100,000 per change order. Currently, if the change order is higher than this amount, it would have to be reviewed and approved by the COC and then it would have to be sent to City Council for final approval. These processes are supposed to be completed prior to proceeding with the change order work. The COC meets every week so it is relatively quick for staff members to get a change order to the committee so construction projects can keep moving forward. When a change order also requires approval from the City Council, it typically extends this approval process to around 3 to 4 weeks. This can cause significant issues for staff trying to keep construction projects moving forward, which can also result in significant additional delays, and delay related costs, to the City’s construction projects.
Over the last two decades, there have been significant construction cost increases. However, the COC approval limits have not been increased equivalently to stay relative to these rising construction costs. If these approval limits are not increased to reflect current construction costs, particularly on the larger construction projects the City is building, staff is concerned that the City could incur significant delays and delay related costs waiting on City Council approvals. Some of the upcoming example projects that have this potential issue are the Caldwell Widening Project from Santa Fe to Lovers Lane ($14.7 million), Shirk Capacity Enhancement Project ($17 million), and the Civic Center Project ($80 million estimate).
In order to keep projects moving forward on schedule and on budget, staff recommends that the City Council give the City of Visalia Change Order Committee (COC) authority to approve change orders up to the following limits: $200,000 per change order for projects with construction costs of $10 million to $50 million, and $300,000 per change order for projects with construction costs over $50 million. Current limits will remain in place for construction projects under the $10 million threshold, allowing for up to a $100,000 per change order COC limit without Council approval.
Fiscal Impact:
Staff expects that this change will keep projects moving forward on schedule and under budget, and that this change will reduce unnecessary delay costs due to construction stopping and waiting for change order approvals.
Prior Council Action:
None.
Alternatives: None recommended.
Recommended Motion (and Alternative Motions if expected):
recommendation
I move to give the City of Visalia Change Order Committee (COC) authority to approve change orders up to the following limits: $200,000 per change order for projects with construction costs of $10 million to $50 million, and $300,000 per change order for projects with construction costs over $50 million.
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CEQA Review: N/A
Attachments: None