2025-003 Hickory Creek October 25,2024 Report No. 2025-003
INFORMAL STAFF REPORT
TO MAYOR AND CITY COUNCIL
SUBJECT:
Hickory Creek Phase 3 Capital Project
BACKGROUND:
The Hickory Creek Road Phase 3 project has experienced significant delays due to a series of
unforeseen challenges. The original Notice to Proceed(NTP) was issued on September 28, 2022,
but construction was halted shortly thereafter due to the discovery of numerous franchise utility
conflicts during initial site exploration and survey.
In response to these issues, a revised NTP was issued on February 13, 2023. However, further
delays occurred in September 2023 due to ongoing right-of-way negotiations and conflicts with
overhead electric lines and gas lines. Additionally, the merger of Kansas City Southern(KCSR)
with Canadian Pacific (CPR) in March 2023 necessitated restarting negotiations with the newly
formed Canadian Pacific Kansas City (CPKC)railroad.
Despite these setbacks, the City of Denton secured approval for the right-of-way acquisition on
July 23, 2024. The current proposed NTP for the project is January 2025, and it is anticipated
that construction will resume at that time.
DISCUSSION:
Project Restart and Change Order:
With right-of-way acquired(July 23, 2024), utility conflicts to be resolved by December 1, 2024,
and railroad permits/agreements expected to be in place by the close of 2024, the contractor can
remobilize to restart work.
Change Order Details:
• Initial Amount: Over$11 million
• Negotiated Amount: $9,229,824.91
• Reasons for Increase: Labor and material escalation, additional equipment rental.
Contingency and Total Change Order:
• 5% Contingency: $2,477,258.76
• Total Change Order: $6,752,566.15.
o $10,000,000 was approved for the Hickory Creek 3 project in the FY 24-25 budget.
This money will be used to fund this change order.
October 25,2024 Report No. 2025-003
Impact on Project:
• Original Contract Amount: $49 million
• Change Order Percentage: 13% (well below the contract's allowed percentage)
• Anticipated Remobilization: January 1, 2025
• New Completion Date: Q2 2026
Approval of the change order will allow the project to proceed with the revised timeline and
budget.
CONCLUSION:
Based on the information provided, staff recommends approval of the proposed change order.
Key Reasons for Approval:
• Necessary for Project Completion: The change order addresses essential factors that have
impacted the project's timeline and budget, such as utility conflicts, railroad agreements,
and increased material and labor costs.
• Reasonable Cost Increase: The negotiated change order amount represents a 13%increase,
which is well within the contract's allowable percentage.
• Positive Impact on Project: Approving the change order will allow the project to proceed
with a revised timeline and budget, ensuring its successful completion.
Recommendation:
The change order request is tentatively scheduled for City Council consideration on December 3,
2024. The requested change order of$6,752,566.15 will enable the contractor to remobilize on-
site by January 1, 2025 and complete the project by Q2 2026.
STAFF CONTACT:
Trevor Crain, PMP, PMI-CP
Director of Capital Projects
Trevor.Crain@cityofdenton.com
(940) 349-7426
STAFF TIME TO COMPLETE REPORT: 4 hours