HomeMy WebLinkAbout12 - Reassignment and Amendment of the Services Agreement for Sewer Manhole Lining ServicesQ �EwPpRT
CITY OF
s NEWPORT BEACH
`q44:09 City Council Staff Report
April 29, 2025
Agenda Item No. 12
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Mark Vukojevic, Utilities Director - 949-644-3011,
mvukojevic@newportbeachca.gov
PREPARED BY: Casey Parks, Utilities Superintendent - 949-718-3477,
cparks@newportbeachca.gov
TITLE: Reassignment and Amendment of the Services Agreement for Sewer
Manhole Lining Services
ABSTRACT:
The Utilities Department manages the City of Newport Beach's wastewater utility system,
which includes a comprehensive network of pipelines, pump stations, laterals and
manholes. An on -call contractor is used to perform as -needed lining rehabilitation of
City manholes. The current vendor, Sancon Technologies Inc. (Sancon), was recently
acquired by Vortex Services LLC (Vortex). The Utilities Department is requesting
City Council approval to reassign the agreement to Vortex, as well as to extend and
increase the agreement limits.
RECOMMENDATIONS:
a) Determine this action is exempt from the California Environmental Quality Act (CEQA)
pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because
this action will not result in a physical change to the environment, directly or indirectly;
b) Approve assignment agreement from Sancon Technologies, Inc. to Vortex Services,
LLC for on -call maintenance/repair services agreement C-8934-1 for sewer manhole
lining services; and
c) Approve Amendment No. 1 to the On -Call Maintenance/Repair Services Agreement
with Vortex Services, LLC for Sewer Manhole Lining Services, extending the term to
July 28, 2027, and increasing the agreement amount by $200,000, and authorize the
Mayor and City Clerk to execute the Agreement.
DISCUSSION:
The operation and maintenance of the City's wastewater collection system, also known
as the sewer system, are managed by certified Utilities Department staff members and
contractors.
Due to the corrosive marine environment, concrete and brick sewer manholes deteriorate
over time. Staff generally prefers to rehabilitate the manholes with a lining instead of
replacing the manhole. Replacements involve street closures, sewer diversions, and
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Reassignment and Amendment of the Services Agreement
for Sewer Manhole Lining Services
April 29, 2025
Page 2
customer outages and are therefore a last resort. The lining process includes preparing,
cleaning, patching and installing a polyurethane -sealed lining inside the manhole. This
slows the damaging corrosion of the manhole and significantly extends its lifespan. The
process is also quicker, more cost-effective than replacement, and less disruptive to the
community and traffic. The City has successfully used this process for many years.
The Utilities Department originally entered into an agreement with Sancon in 2022
following a competitive selection process. Sancon recently reorganized and assigned its
existing agreement to Vortex. The agreement is set to expire on August 22, 2025. Despite
the transition, the contractor's staff and project manager have remained unchanged, and
the company has consistently performed satisfactorily over the years. Additionally,
Sancon/Vortex provides pipe -lining rehabilitation services under another existing
agreement with the City. Staff recommends City Council approval to reassign the
agreement to Vortex, extend the agreement to July 28, 2027, and increase the agreement
compensation limit by $200,000.
FISCAL IMPACT:
The adopted budget includes sufficient funding for this purchase. It will be expensed to
the Sewer Manhole Lining Program and Maintenance and Repair accounts in the
Utilities Department, 7119061-851050 and 7119061-851037.
ENVIRONMENTAL REVIEW:
Staff recommends the City Council find this action is not subject to the California
Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not
result in a direct or reasonably foreseeable indirect physical change in the environment)
and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA
Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no
potential for resulting in physical change to the environment, directly or indirectly.
NOTICING:
The agenda item has been noticed according to the Brown Act (72 hours in advance of
the meeting at which the City Council considers the item).
ATTACHMENTS:
Attachment A —Assignment Agreement Between the City of Newport Beach, Sancon
Technologies Inc. and Vortex Services LLC.
Attachment B —Amendment No. One Maintenance/Repair Agreement with Vortex
Services LLC for Sewer Manhole Lining Services
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ATTACHMENT A
ASSIGNMENT AGREEMENT
BETWEEN THE CITY OF NEWPORT BEACH,
SANCON TECHNOLGIES, INC., AND VORTEX SERVICES, LLC
THIS ASSIGNMENT AGREEMENT ("Assignment") is made and entered into as of
this 29th day of April, 2025 ("Effective Date"), by and between the CITY OF NEWPORT
BEACH, a California municipal corporation and charter city ("City"), SANCON
TECHNOLGIES, INC., a California corporation ("Assignor"), whose address is 5841
Engineer Drive; Huntington Beach, California 92649, and VORTEX SERVICES, LLC, a
Delaware limited liability company ("Assignee"), whose address on file with the California
Secretary of State is 18150 Imperial Valley Drive, Houston, Texas 77060, and is made
with reference to the following:
RECITALS
A. On July 29, 2022, City and Assignor entered into an On -Call Maintenance/Repair
Services Agreement (Contract No. C-8934-1) ("Agreement"), to engage Assignor
to perform on -call maintenance and/or repair services for City sewer manhole
lining services ("Project").
B. The parties desire to enter into this Assignment to assign the rights under the
Agreement from Assignor to Assignee.
NOW, THEREFORE, it is mutually agreed by and between the undersigned parties
as follows:
1. ASSIGNMENT
As of the Effective Date of this Assignment, Assignee hereby accepts such
assignment and hereby assumes, agrees and undertakes to perform all obligations of
Assignor pursuant to the Agreement. As of the Effective Date of this Assignment, any
reference to SANCON TECHNOLGIES, INC., a California corporation, or reference to
"Contractor," in the Agreement, shall be deemed to be a reference to Assignee.
As of the Effective Date of this Assignment, Assignor shall have no further rights
of any kind whatsoever under the Agreement.
2. CITY CONSENT TO ASSIGNMENT
Pursuant to Section 17 of the Agreement, City approves of this Assignment.
3. INTEGRATED CONTRACT
Except as expressly modified herein, all other provisions, terms, and covenants
set forth in the Agreement shall remain unchanged and shall be in full force and effect.
[SIGNATURES ON NEXT PAGE]
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IN WITNESS WHEREOF, the parties hereto have executed this Assignment
Agreement on the date first above written.
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
Date:
CITY OF NEWPORT BEACH,
a California municipal corporation
Date:
By: By:
Aa n C. Harp �A, A� Joe Stapleton
City Attorney All Mayor
ATTEST:
Date:
Leilani I. Brown
City Clerk
ASSIGNOR: SANCON TECHNOLGIES,
INC., a California corporation
Date:
Chuck Parsons
Chief Executive Officer
Date:
By:
Gary Drew
Secretary
ASSIGNEE: VORTEX SERVICES, LLC,
a Delaware limited liability company
Date:
By:
Michael Evan Vellano
Chief Executive Officer
[END OF SIGNATURES]
VORTEX SERVICES, LLC Page 2 12-4
ATTACHMENT B
AMENDMENT NO. ONE TO
ON -CALL MAINTENANCE/REPAIR SERVICES AGREEMENT
WITH VORTEX SERVICES, LLC FOR
SEWER MANHOLE LINING SERVICES
THIS AMENDMENT NO. ONE TO ON -CALL MAINTENANCE/REPAIR
SERVICES AGREEMENT ("Amendment No. One") is made and entered into as of this
29th day of April, 2025 ("Effective Date"), by and between the CITY OF NEWPORT
BEACH, a California municipal corporation and charter city ("City"), and VORTEX
SERVICES, LLC, a California limited liability company ("Contractor'), whose address on
file with the California Secretary of State is 18150 Imperial Valley Drive, Houston, Texas
77060, and is made with reference to the following:
RECITALS
A. On July 29, 2022, City and Sancon Technologies, Inc. entered into an On -Call
Maintenance/Repair Services Agreement (Contract No. C-8934-1) ("Agreement")
to engage Assignor to perform on -call maintenance and/or repair services for City
sewer manhole lining services ("Project").
B. On April 29, 2025, City, Sancon Technologies, Inc., and Contractor entered into
an Assignment Agreement assigning rights under the Agreement from Sancon
Technologies, Inc. to Vortex Services, LLC.
C. The parties now desire to enter into this Amendment No. One to extend the term
of the Agreement to July 28, 2027 and to increase the total compensation.
NOW, THEREFORE, it is mutually agreed by and between the undersigned parties
as follows:
1. TERM
Section 1 of the Agreement is amended in its entirety and replaced with the
following: "The term of this Agreement shall commence on the Effective Date, and shall
terminate on July 28, 2027, unless terminated earlier as set forth herein."
2. COMPENSATION TO CONTRACTOR
Section 4.1 of the Agreement is amended in its entirety and replaced with the
following: "City shall pay Contractor for the Services -on a time and expense not -to -exceed
basis in accordance with the provisions of this Section, the Letter Proposal and the
Schedule of Billing. Rates attached hereto as Exhibit B and incorporated herein by
reference. Except as otherwise provided herein, no rate changes shall be made during
the term of this Agreement without the prior written approval of City. Contractor's
compensation for all Services performed in accordance with this Agreement, including all
reimbursable items, shall not exceed Four Hundred Eighty Thousand Dollars and
00/100 ($480,000.00), without prior written amendment to the Agreement."
The total amended compensation reflects Contractor's additional compensation for
additional Services to be performed in accordance with this Amendment No. One,
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including all reimbursable items and subContractor fees, in an amount not to exceed Two
Hundred Thousand Dollars and 00/100 ($200,000.00).
3. INTEGRATED CONTRACT
Except as expressly modified herein, all other provisions, terms, and covenants
set forth in the Agreement shall remain unchanged and shall be in full force and effect.
[SIGNATURES ON NEXT PAGE]
VORTEX SERVICES, LLC Page 2
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IN WITNESS WHEREOF, the parties have caused this Amendment No. One to be
executed on the dates written below.
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
Date7—t
By:
Aa n C. Harp U,L5
City Attorney Lo .M
ATTEST:
Date:
Leilani I. Brown
City Clerk
CITY OF NEWPORT BEACH,
a California municipal corporation
Date:
By:
Joe Stapleton
Mayor
CONTRACTOR: VORTEX SERVICES,
LLC, a California limited liability company
Date:
No
Michael Evan Vellano
Chief Executive Officer
[END OF SIGNATURES]
VORTEX SERVICES, LLC
Page 3
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