TO: JAMIE EARL, ACTING CITY MANAGER
FROM: BRAD JOHNSON, COMMUNITY DEVELOPMENT DIRECTOR
DATE: MAY 12, 2026
Reviewed by:
Acting City Manager: JE
SUBJECT:
Title
AUTHORIZATION TO AMEND THE AGREEMENTS WITH HARDY & HARPER INC., AND LAE ASSOCIATES FOR THE ARROW HIGHWAY TRANSIT IMPROVEMENT PROJECT, FIRST STREET REHABILITATION PROJECT, AND INDIAN HILL BOULEVARD AT I-10 IMPROVEMENT PROJECT, C.I.P 2025-01, C.I.P. 2025-02, AND C.I.P. 2025-03 (FUNDING SOURCE: (STATE GAS TAX FUND)
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SUMMARY
City Council awarded contract for the Arrow Highway Transit Improvement Project, First Street Rehabilitation Project, and Indian Hill Boulevard at I-10 Improvement Project, C.I.P 2025-01, C.I.P 2025-02, and C.I.P 2025-03 at their September 9, 2025 meeting. This work was awarded to Hardy & Harper Inc. and included contract Construction Management and Inspection services from LAE Associates, in the amount of $1,187,776.
The projects included the construction of a bus pad with adequate space to accommodate accessibility improvements and amenities on Arrow Highway adjacent to the Pepper Tree Square shopping center, east of Indian Hill Boulevard, and a 2-inch asphalt grind and overlay for First Street between College Avenue and Claremont Boulevard, and for Indian Hill Boulevard under the I-10 Freeway.
Concurrently, staff was made aware that the City’s request to exchange Transportation Program-Local (STPL) funds for Proposition C funds had been approved by the Los Angeles County Metropolitan Transportation Authority (LACMTA). The City Council authorized entering into an agreement with LACMTA on October 14, 2025, memorializing the exchange of funds. This authorization allowed for the appropriation of Proposition C funds to amend the contract with Hardy & Harper Inc., in the amount of $331,086. These monies allowed for the expansion of the Indian Hill Boulevard at I-10 Improvement Project. This project originally planned for resurfacing of Indian Hill Boulevard from the south of the I-10 freeway ramps to the north side of the I-10 freeway ramps. The scope was expanded to include resurfacing on Indian Hill Boulevard from American to San Jose Avenues.
As the project progressed, additional costs were incurred to address unforeseen construction items necessary to allow for the completion of the project. As the expansion of the Indian Hill Boulevard paving scope of work was an addition to the project, made possible by the available STPL exchange funds, there was no time to prepare plans, as the project was already underway. The additional work cost estimate was developed based on field observations. This action was necessary to complete the project in a timely manner without having to delay construction or re-schedule the contractor. The expanded scope for Indian Hill Boulevard resulted in project cost overruns.
Staff recommends the City Manager execute contract amendments in the amount of $108,667 to close out the project.
RECOMMENDATION
Recommended Action
Staff recommends the City Council:
A. Authorize the City Manager to amend the contract with Hardy & Harper Inc. in the amount of $73,723, for a total contract amount not to exceed $1,499,309;
B. Authorize the City Manager to amend the contract with LAE Associates in the amount of $34,944, for a total contract amount not to exceed $128,220;
C. Appropriate $108,667 in State Gas Tax funds to fund the contract amendments; and
D. Find this item is exempt from environmental review under the California Environmental Quality Act (CEQA).
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ALTERNATIVE TO RECOMMENDATION
In addition to the recommendation, there is the following alternative:
• Request additional information from staff.
FINANCIAL REVIEW
The staff cost to prepare this report is estimated at $1,036 and is included in the operating budget of the Community Development Department.
Hardy and Harper Inc. was awarded $995,000, and a ten percent contingency in the amount of $99,500 at the September 9, 2025, City Council meeting. A contract amendment to Hardy and Harper was authorized by the City Council at their October 14, 2025, meeting in the amount of $331,086, to include the expansion of the Indian Hill Boulevard resurfacing limits. Staff recommends authorizing a final contract amendment with Hardy & Harper Inc., in the amount of $73,723, for a total contract amount not to exceed $1,499,309. This is necessary to close out the project.
An agreement for professional Construction Management and Inspection Services was approved by the City Council at their September 9, 2025, meeting for LAE Associates. This agreement was approved for $93,276. Staff recommends authorizing a final contract amendment with LAE Associates in the amount of $34,944, for a total contract amount not to exceed $128,220. This is necessary to close out the project.
These final amendments, necessary to address unforeseen construction costs, and additional time required for the construction management and inspection of these unforeseen items is $108,667. The approval of these contract amendments results in a final project cost of $1,627,529.
Project Budget Summary:
|
Funding Source |
Amount |
|
State Gas Tax - Construction |
$995,000 |
|
State Gas Tax - Contingency |
$99,500 |
|
State Gas Tax - Construction Management (CM) and Inspection |
$84,796 |
|
State Gas Tax - CM and Inspection Contingency 10% |
$8,480 |
|
Proposition C - Construction Amendment |
$331,086 |
|
Project Budget Approved at 10/14/2025 City Council Meeting |
$1,518,862 |
|
State Gas Tax - Contract Amendment Request |
$108,667 |
|
Total Project Costs |
$1,627,529 |
ANALYSIS
On September 9, 2025, City Council authorized the award of the Project to Hardy and Harper Inc. and authorized the City Manager to enter into an agreement with Hardy and Harper Inc. and LAE for the construction, construction management, and inspection work.
The Project plan provided improvements at three specific locations, selected using the information provided by the most current Pavement Condition Index (PCI) from the City’s Pavement Management System (PMS). The PMS allows staff to develop street maintenance schedules and to select an appropriate method to provide annual roadway maintenance based on the PCI ratings.
The locations designated for the 2-inch grind and pave method were deemed necessary based on PCI ratings. These areas (First Street from College Avenue to Claremont Boulevard and Indian Hill Boulevard under the I-10 freeway overpass) had low PCI ratings and fit within the project budget.
After the project was awarded, staff received a request to explore extending the roadway maintenance limits along Indian Hill Boulevard, outside the I-10 underpass, from San Jose to American Avenues because these additional portions also had the same low PCI scores.
Concurrently, staff was made aware that the City’s request to exchange Transportation Program-Local (STPL) funds for Proposition C funds had been approved by the Los Angeles County Metropolitan Transportation Authority (LACMTA). The City Council authorized entering into an agreement with LACMTA on October 14, 2025, memorializing the exchange funds. This authorization allowed for the appropriation of Proposition C funds to amend the contract with Hardy & Harper Inc., in the amount of $331,086. These monies allowed for the expansion of the Indian Hill Boulevard at I-10 Improvement Project. This project originally planned for resurfacing of Indian Hill Boulevard from the south of the I-10 freeway ramps to the north side of the I-10 freeway ramps. The scope was expanded to include resurfacing on Indian Hill Boulevard from American to San Jose Avenues.
Both Indian Hill Boulevard and First Street received the following roadway maintenance method:
2-inch full-depth grind and conventional asphalt hot mix paving
Replace all existing street striping
Lastly, the Project included a new concrete bus stop pad that was constructed at the request of a resident who requires an American with Disabilities (ADA) accommodation. This work provided a new Portland cement concrete bus pad and additional space within the public right-of-way to accommodate ADA improvements and to facilitate the placement of bus stop amenities serving all residents, especially those with special needs. Additional amenities, such as a bench and trash and recycling containers, will be coordinated with the City’s maintenance department. The opening of this bus stop has been delayed due to a Golden State Water Company (GSW) main replacement project. Staff will be working with Foothill Transit to place a bus stop sign and formalize route stops to include this location, once GSW finalizes the water main roadway restoration work.
Project Overrun
Indian Hill Boulevard from American to San Jose Avenues was not originally included with the current Capital Budget cycle for Fiscal Years 2024-2026, as the available budget could not accommodate it. It was only because of the availability of the STPL fund exchange to Proposition C funds that the expansion of the Indian Hill Boulevard paving limits was possible.
The original plans for the project did not include this expansion to the roadway resurfacing for Indian Hill Boulevard and required the work to be estimated by field observation and investigation. Unforeseen items were encountered during construction, resulting in costs overruns. These items are summarized as follows:
• Additional asphalt required to meet project specifications for paving. This is typical with paving projects as the depth of asphalt has some tolerance to meet the specification of a minimum 2-inch depth.
• Utility valve adjustments. Typically, these are accounted for, however, not all valves were identified based on field observation (only method available at the time the request to expand Indian Hill Boulevard paving limits was requested).
• Additional traffic signal loops were necessary as not all were able to be verified during the field observation process.
• I-10 Freeway signal and pavement stenciling. These stencils are the shield type that represent a the I-10 logo versus just lettering to provide better visibility of lane assignments between Auto Center Drive and San Jose Avenue. This option was to address a City Council request.
Next Steps
With City Council approval, staff will process the amendments for both Hardy & Harper Inc., and LAE Associates. Once completed, staff will proceed with closing out the project.
RELATIONSHIP TO CITY PLANNING DOCUMENTS
Staff has evaluated the agenda item in relationship to the City’s strategic and visioning documents and finds that it applies to the following: City Council Priorities, General Plan, and the 2024-26 Budget.
CEQA REVIEW
This item is categorically exempt from environmental review under the California Environmental Quality Act (CEQA). Under CEQA Guidelines section 15301 (“Existing Facilities” - Class 1), Arrow Highway Transit Improvements Project, First Street Rehabilitation Project, and Indian Hill Boulevard at I-10 Freeway Improvements Project, C.I.P 2025-01, C.I.P. 2025-02, & C.I.P. 2025-03 qualifies as “repair” and/or minor alteration of existing public or private structures, facilities, mechanical equipment or topographical features, involving negligible or no expansion of use.” None of the exceptions in CEQA Guidelines section 15300.2 are applicable here. Notices of Exemption have been filed for all locations of the Project.
PUBLIC NOTICE PROCESS
The agenda and staff report for this item have been posted on the City website and distributed to interested parties. If you desire a copy, please contact the City Clerk’s Office.
Submitted by: Prepared by:
Brad Johnson Vincent Ramos
Community Development Director Associate Engineer
Reviewed by:
Maria B. Tipping P.E.
City Engineer