I. RECOMMENDATION:
Authorize the City Manager to approve and process payment of Invoice No. 2220 from Michael K. Nunley & Associates (MKN) in the amount of $79,931 related to additional construction management services and supporting consultant services associated with the Derrick Reservoir Rehabilitation Project.
II. BACKGROUND:
The City of Coalinga completed the rehabilitation of the Derrick Reservoir, an important component of the City’s municipal water storage and distribution system. The project involved significant structural repairs to the tank shell and floor, abrasive blasting, recoating of interior steel surfaces, and associated inspection and testing services.
The City retained MKN & Associates to provide engineering services and construction management for the project. Due to the age of the facility and the complexity of rehabilitating an existing steel reservoir, unforeseen conditions were encountered during construction which required additional oversight, specialized inspection services, and coordination between the contractor and various technical consultants.
Throughout the project, the City approved multiple construction change orders associated with the contractor’s work. However, certain consultant-related services that supported construction oversight and materials testing were not included in previously approved construction management amendments.
III. DISCUSSION:
MKN recently submitted Invoice No. 2220, dated November 19, 2025, in the amount of $79,931, which includes previously unbilled services associated with the Derrick Reservoir Rehabilitation Project.
The invoice reflects the following breakdown of services:
- MKN Construction Management Labor: $33,940
- CSI Services (Coating Inspection Services): $42,707.50
- Salem Engineering Group (Testing & Inspection): $2,596
- Buehler Engineering (Structural Engineering Support): $687.50
These services included construction management support, coating inspection during steel blasting and recoating operations, welding inspections, materials testing, and structural engineering consultation necessary to address field conditions encountered during the reservoir rehabilitation.
MKN has acknowledged that certain vendor-related costs were not included in the previously approved construction management change order. However, the firm has indicated that the services were necessary to address construction challenges encountered during the rehabilitation and to ensure the contractor completed the work in accordance with engineering specifications and industry standards.
The majority of the services reflected in this invoice occurred earlier in the construction timeline during the period of intensive repair work on the reservoir shell and floor. These services included coating inspection oversight, materials testing, and coordination between engineering consultants and the contractor performing the steel repairs and blasting operations.
Despite the complexities encountered during construction, the rehabilitation project successfully extended the useful life of the Derrick Reservoir. Staff estimates that completing the rehabilitation project resulted in several million dollars in savings compared to full reservoir replacement, while preserving a critical component of the City’s water infrastructure.
Approval of this invoice will allow the City to close out the remaining consultant costs associated with the project.
IV. ALTERNATIVES:
- Approve the recommendation and authorize payment of the additional invoice.
- Deny authorization and direct staff to further negotiate or dispute the charges with MKN & Associates.
- Provide alternative direction to staff.
V. FISCAL IMPACT:
The invoice amount of $79,931 will be paid from the Water Enterprise Fund within the existing capital project budget allocated for the Derrick Reservoir Rehabilitation Project.
While this represents additional consultant costs beyond previously approved amendments, the overall project cost remains significantly lower than the alternative of replacing the reservoir entirely. |