2025-036 Hickory Creek Phase 3 Project Update March 21, 2025 Report No. 2025-036
INFORMAL STAFF REPORT
TO MAYOR AND CITY COUNCIL
SUBJECT:
Hickory Creek Phase 3 Project Update
BACKGROUND:
Hickory Creek Road between Country Club Road (FM 1830) and the existing at-grade railroad
crossing with Kansas City Southern Railroad(KCS)was identified as a safety concern. Temporary
improvements were made to the road,but significant reconstruction is required to keep the road in
service.A re-alignment was determined to be the best solution for the corridor. The Hickory Creek
Road Phase 3 project aims to provide a safer and more direct extension from Hickory Creek Road
Phase 2 to FM 1830/Country Club Road.
Project Scope
Hickory Creek Road Phase 3 realignment will create a safer,shorter,and more direct route between
Riverpass Drive and FM1830. The new Hickory Creek Road bridge will span approximately 2,500
feet over the floodway, reducing roadway flooding and over the Canadian Pacific Kansas City
(CPKC) railway (formerly KCS) to separate the at-grade rail/road traffic. Phase 3 will widen the
existing alignment from two lanes to four lanes to provide increased roadway capacity and the new
road/bridge section will include street illumination and 10-foot sidewalks.
Project History
On Feb. 12, 2019, the City executed a design contract for Hickory Creek Road Phase 3. On Nov.
5, 2019, the 2019 Bond Election passed, providing $34M for Hickory Creek Road Phase 3.
Preliminary road designs were submitted to the railroad on Feb. 19, 2021; the road/bridge designs
were completed/signed/sealed on Nov. 5, 2021; and KCS approved the design on Feb. 4, 2022.
Twelve (12) real estate parcels were identified as needed, several utilities were identified as in
conflict, and the KCS railroad agreement coordination was underway. Due to escalating
construction prices, a decision was made to bid the project to secure the best possible bids, with
the known risks of not having a"fully clear"project to construct.
The project was bid for construction on Jan. 14, 2022, and bids were received from three (3)
bidders. On May 3, 2022, the contract was awarded to Mario Sinacola for $52,022,433.88
(including the standard 5% contingency). Real Estate, Utilities, and Railroad conflicts continued
making progress. Eleven(11) of the twelve(12)parcels were acquired by September 2022,but the
twelfth parcel could not be negotiated and required Eminent Domain. The Contractor was issued
a Notice to Proceed (NTP) on Sept. 28, 2022, to begin the project as utility clearance, railroad
March 21, 2025 Report No. 2025-036
coordination, and real estate acquisition continued. The bridge design was modified to clear direct
impact with two gas lines to allow the project to proceed. Railroad agreement review/coordination
with Oncor continued to clear overhead electric conflicts. To allow more time, a modified Notice
to Proceed was issued for Feb. 13, 2023, and construction began.
In March 2023, two (2) years after KCS approved the road/bridge design and almost approving
the railroad agreement,an international merger with KCS and Canadian Pacific Railroad(CP)took
place. On Apr. 14,2023,KCS merged with Canadian Pacific creating the Canadian Pacific Kansas
City (CPKC) railroad. The merger brought the nearly approved railroad agreement to a halt and
required a restart of negotiations with the newly formed CPKC.
On Sept. 12, 2023, road/bridge construction stopped due to work inefficiencies around the
Railroad, Oncor Electric lines (which also required railroad coordination), and the need for the
final right-of-way parcel.
Despite these challenges, significant progress was made in mid-2024 thru March 2025,
specifically: on July 26, 2024, the final parcel was acquired; on Dec. 6, 202,4 the Oncor Electric
lines were cleared; on Dec. 17, 2024, City Council approved the Railroad Agreement; on Dec. 19,
2024,developer-related coordination was complete;on Mar. 3,2025,CPKC executed the Railroad
Agreement; on Mar. 5, 2025, TxDOT approved the access permit for work on FM1830; and on
Mar. 13, 2025 a gas foam line conflict was removed clearing all direct utility conflicts.
Two(2)gas lines requiring relocation remain but are not directly impacted by construction. Capital
Projects is actively working on finalizing the terms of the agreements and relocations. On Mar. 6,
2025,the City met with the Contractor with plans to resume work with the approval of the Change
Order.
DISCUSSION:
Proposed Change Order
The original proposed change order exceeded$12.5 million. Staff negotiated with the contractor
to the current proposal of a not-to-exceed amount of$9,891,549.22 which resulted in
approximately 21% ($2.7 million) lower than the original proposal. The proposed change order
amount of$9,891,549.22 is 15% of the original Not to Exceed amount. The Change Order will
cover the following cost increases: Labor Escalation, Equipment Escalation, Material Escalation,
Subcontractor Escalation, AFCO Steel Freight and Storage, 1%Bond, Extended Overhead and
Delay Time for Project Manager, Extended Project Survey Time, Outside Equipment Rent,
Structural Inefficiencies—Working on columns adjacent to power lines, Reestablish
Construction Site & Creek Crossing, and Traffic Control/Barricades.
The most significant cost increase item is Equipment Escalation which makes up approximately
$5 million (46%) of the proposed change order. The original bid included company-owned
March 21,2025 Report No. 2025-036
equipment. Due to the project delay, that equipment is no longer available as it is being used for
another project. An equipment escalation cost is now required to pay for the needed equipment
rentals. All invoices related to material, labor, and equipment will be reviewed and monitored for
compliance with the quotes provided in the Change Order Proposal.
The change order funding is proposed to use $1,977,258.76 of the existing $2,477,258.76 project
contingency leaving $500,000 of the original contingency to manage future change orders
efficiently and quickly to minimize possible delays.In addition to using the existing$1,977,258.76
contingency, the change order will require an additional $7,914,290.46. Sources for the funds
are identified and shown below:
CHANGE ORDER FUNDING SUMMARY
Change Order
Proposed Change Order Amount $9,891,549.22*
Use of Original 5%Contract Contingency
$ 1,977,258.76
(Original Contingency$2,477,258.76)
New Funding from existing budget $ 7,914,290.46
CHANGE ORDER FUNDING SUMMARY(cont'd)
Funding Source
2019 General Obligation Bond Election $ 1,885,261.00
Streets/Traffic—General Obligation Bonds $ 1,361,532.00
Roadway Impact Fees Fund $ 449,754.00
Streets/Traffic—Certificate of Obligation Bonds $ 6,195,002.22
Total Request to Encumber(Change Order Amount): $ 9,891,549.22
Cost Analysis
The Proposed change order amount is 15% ($7,914,290.46) greater than the Existing Not-to-
Exceed amount. An additional cost analysis was performed applying a standard 5% annual
March 21, 2025 Report No. 2025-036
escalation rate to the Original Not-to-Exceed amount which shows the project is $320,675.66 less
than an expected 2025 Not-to-Exceed amount and therefore not excessive.
Original Contract Proposed Contract For Reference Only
(2022) (2025) "5%/year Escalation"to 2022
Original Contract
Base Bid $49,545,175.12 $49,545,175.12 2022 $ 52,022,433
Contingency $ 2,477,258.76 $ 500,000.00 2023 $ 54,655,238
Change Order $ 0.00 $ 9,891,549.22 2024 $ 57,388,000
Not To Exceed(NTE) $ 52,022,433.88 $ 59,936,724.34 2025 $ 60,257,400
Bidding Options - Cancel Project, Delay Bid, Re-Bid
The existing Hickory Creek Road required closing for safety during construction. This made the
Hickory Creek Road Phase 3 project different from the City's other large roadway
widenings/extensions such as Mayhill Road and Bonnie Brae Road which could allow existing
traffic during construction to maintain access and mobility.
In turn, canceling the project was never considered a viable option due to the demand for the
corridor and traffic having no alternate route with sufficient capacity to mitigate the required road
closure. Delaying the project until all items were clear(ROW, Utilities, Railroad Agreement, gas
lines, developments, etc.) is the most desirable approach to a project, but this project presented
high risks to both schedule and costs and increased inconvenience to local and regional traffic. The
City accepted the risk of bidding the project to exploit the potential to save time and ideally money
by securing 2022 bid prices.
Rebidding the project has always been an option and has been frequently considered. Staff
considered that the original project only received three(3) contractor bidders and no guarantee that
companies would be willing to bid on a partially constructed project. The known risks were too
high to re-bid and outweighed the benefits of keeping the existing contract/bid.
CONCLUSION:
Based on the information provided, it is recommended that a change order be approved.
Key Reasons for Approval:
March 21, 2025 Report No. 2025-036
• 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 15%increase,
which is well within procurement law'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 Apr. 15,2025.
The requested change order of$7,914,290.46 will enable the contractor to remobilize on-site by
Apr. 21, 2025, and complete the project by Q4 2026.
STAFF CONTACT:
Seth Garcia, PMP,
Interim Director of Capital Projects
Seth.Garcia@cityofdenton.com
(940) 349-8938
STAFF TIME TO COMPLETE REPORT: 5 hours