title
APPROVE FINDINGS AND ADOPT A RESOLUTION AUTHORIZING CONTRACT CHANGE ORDER NO. 2 WITH GATEWAY PACIFIC CONTRACTORS, INC. FOR IMPROVED SOURCE CAPACITY AND EFFICIENCY OF THE GROUNDWATER RECHARGE PROJECT
recommended action
RECOMMENDATION
It is recommended that the City Council adopt a resolution to:
1. Approve findings pursuant to Stockton Municipal Code section 3.68.070 in support of an exception to the competitive bidding process.
2. Authorize Contract Change Order No. 2 with Gateway Pacific Contractors, Inc. (Gateway Pacific), in the amount of $2,336,169, to increase the capacity and efficiency of the groundwater recharge project, for a total contract amount not to exceed $19,533,982.
It is also recommended that the City Manager be authorized to take appropriate and necessary actions to carry out the purpose and intent of this resolution.
body
Summary
The Municipal Utilities Department (MUD) Water Utility operates the Delta Water Treatment Plant, which supplies drinking water to Stockton’s northern and southern regions. The central region is served by California Water Service Company and San Joaquin County. Since beginning operation in May 2012, the Delta Water Treatment Plant has delivered up to 30 million gallons per day of treated surface water from the San Joaquin Delta and Mokelumne River.
The Delta Water Treatment Plant was also designed to protect the groundwater basin through conjunctive water management and to strengthen the City’s water supply reliability. New groundwater recharge basins adjacent to the plant will expand this capacity by allowing the City to directly recharge the basin using water from Water Right Permit 21176, contract supplies from the Woodbridge Irrigation District, and potentially stormwater from the City of Lodi. Recharged water can be stored and pumped during dry years or droughts, helping stabilize groundwater levels in the critically over-drafted Eastern San Joaquin Groundwater Subbasin and supporting the region’s compliance with the Sustainable Groundwater Management Act.
If approved by the City Council, this action will authorize Contract Change Order No. 2 (CCO No.2) with Gateway Pacific (Exhibit 1 to the Resolution), in the amount of $2,336,169, for a total contract not-to-exceed amount of $19,533,982.
DISCUSSION
Background
In November 2005, the City Council certified the Delta Water Supply Project (DWSP) Environmental Impact Report (EIR) (State Clearinghouse No. 2003112060), which evaluated environmental impacts associated with future groundwater recharge basins at the Delta Water Treatment Plant (DWTP).
In 2012, MUD commissioned the DWSP, a major component of the City’s conjunctive use program and an important tool for stabilizing groundwater levels in the Eastern San Joaquin Groundwater Subbasin. The DWSP now delivers surface water to nearly 200,000 customers in north Stockton through a river diversion and pumping station that conveys water to the DWTP along Lower Sacramento Road.
The proposed groundwater recharge project covers approximately 130 acres, with a construction footprint of about 70 acres. Its infrastructure will divert surplus surface water from the Delta and the Mokelumne River to replenish the local groundwater basin.
In 2023, Geosyntec Consultants completed a feasibility study confirming that soil conditions at the DWTP site are suitable for groundwater infiltration. Based on these findings, MUD initiated procurement of design, permitting, CEQA compliance, and construction services for the recharge basins.
On September 10, 2024, through Resolution 2024-09-10-1207, the City Council awarded a design-build contract to Gateway Pacific to construct three recharge basins, associated dry wells, access roads, SCADA integration, underground piping, automatic modulating valves, flow meters, and operational and maintenance programs.
This project advances the Eastern San Joaquin Subbasin Groundwater Sustainability Plan (GSP) and supports compliance with the Sustainable Groundwater Management Act (SGMA) by addressing critical overdraft conditions and improving long-term groundwater reliability.
On August 12, 2025, by Resolution 2025-08-12-1215-01, the City Council approved an Addendum to the 2005 DWSP EIR, awarded a construction management contract to Inferrera Construction Management Group, Inc., and authorized Contract Change Order No. 1 to Gateway Pacific, increasing the project’s estimated recharge capacity from roughly 11,000 acre-feet per year to nearly 20,000 acre-feet per year.
Present Situation
Design modifications to the original design-build contract with Gateway Pacific are needed to expand the project's operational capacity and improve site functionality. The updates will increase the amount of water available from the Woodbridge Irrigation District, add a park water system to support sanitation needs, install an additional variable frequency drive - an electronic device that controls motor speed and energy use by adjusting the frequency and voltage supplied to the pump motor - on the DWTP’s treated water pumps, and add all-season service roads along the basin levees to ensure reliable access for operations and maintenance. In August of 2025, it was not clear these updates would be necessary, but now staff has determined that without them the DWSP will not meet its recharge goals or operate as envisioned.
Environmental Clearance
CEQA Guidelines Section 15164 allows for an addendum to a certified EIR if changes to the project do not result in new significant environmental effects or substantially more severe impacts. The proposed Groundwater Recharge Basins Project:
• Does not involve new or expanded project elements outside the scope analyzed in the 2005 DWSP EIR.
• Does not trigger any new significant impacts not previously disclosed.
• Remains consistent with the original project objectives and environmental mitigation framework.
An Addendum to the certified 2005 DWSP EIR satisfies environmental requirements for this project. The addendum was approved by the City Council on August 12, 2025.
Findings
Pursuant to Stockton Municipal Code section 3.68.070, the City Council may approve findings that support and justify an exception to the competitive bidding process. The following findings support and justify an exception:
1. The existing contract between Gateway Pacific and the City was negotiated following an evaluation of competitive proposals in accordance with SMC section 3.68.070.A.3.
2. Gateway Pacific possesses unique familiarity with the Groundwater Recharge Project and the Delta Water Treatment Plant site, project design, and operational requirements, and is therefore best positioned to efficiently implement the necessary design modifications and improvements without duplicating work, increasing project costs, or delaying construction.
Staff recommends that the City Council adopt the proposed resolution authorizing Contract Change Order No. 2 with Gateway Pacific in the amount of $2,336,169 to increase the capacity and efficiency of the groundwater recharge project, for a total contract amount not to exceed $19,533,982.
FINANCIAL SUMMARY
There are sufficient funds available in the Water Capital Improvement Projects Fund under Project Number UH21005 to cover the costs associated with approving CCO No. 2 to Gateway Pacific in the amount of $2,336,169 for a total contract not-to-exceed amount of $19,533,982.
The City has secured three separate grant awards to support this project:
• Sustainable Groundwater Management Act Round 1 Grant - $300,000, fully received in FY 2024.
• Integrated Regional Water Management Grant - $1,893,769, with $1,095,424.70 received across fiscal years 2026 and 2027.
• WaterSMART Grant - $400,000, fully received between fiscal years 2025 and 2026.
This action has no impact on the General Fund or any other unrestricted funds.