REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
June 23, 2026
FROM
MOE YOUSIF, Interim Director, Project and Facilities Management Department
ANDREW GOLDFRACH, ARMC Chief Executive Officer, Arrowhead Regional Medical Center
SUBJECT
Title
Budget Adjustment and Amendment to Construction Contract with Mesa Energy Systems, Inc. for the Arrowhead Regional Medical Center Deaerator Replacement Project in Colton
End
RECOMMENDATIONS
Recommendation
1. Approve a budget increase in the amount of $73,500 to Capital Improvement Program Project No. 20-011, increasing the total project budget from $2,010,483 to $2,083,983, to address unforeseen field conditions, design clarifications, and code compliance requirements identified during construction, for the Arrowhead Regional Medical Center Deaerator Replacement Project in Colton.
2. Approve Amendment No. 2 to Contract No. 24-944 with Mesa Energy Systems, Inc., for the Arrowhead Regional Medical Center Deaerator Replacement Project in Colton, in the amount of $65,000, increasing the total contract amount from $1,627,537 to $1,692,537.
3. Authorize the Auditor-Controller/Treasure/Tax Collector to adjust appropriation within the Capital Improvement Program, as detailed in the Financial Impact section (Four Votes Required).
(Presenter: Moe Yousif, Interim Director, 387-5000)
Body
COUNTY AND CHIEF EXECUTIVE OFFICER GOALS & OBJECTIVES
Provide for the Safety, Health and Social Service Needs of County Residents.
FINANCIAL IMPACT
Approval of this item will not result in the use of Discretionary General Funding (Net County Cost). The recommended budget increase in the amount of $73,500 to the Arrowhead Regional Medical Center (ARMC) Deaerator Replacement Project (Project) (WBSE 10.10.0847) will be funded with ARMC Enterprise Funds supported by additional supplemental revenue from the Global Payment Program and will increase the project budget from $2,010,483 to $2,083,983.
Approval of this recommendation will allow Auditor-Controller/Treasurer/Tax Collector to post the following adjustment to the Capital Improvement Program (CIP) 2025-26 budget:
|
Fund Center |
Commitment Item |
Description |
Action |
Amount |
WBSE |
|
7700004204 |
54304030 |
Structures & Improvements to Structures |
Increase |
$73,500 |
10.10.0847 |
|
7700004204 |
40909975 |
Operating Transfer In |
Increase |
$73,500 |
10.10.0847 |
|
9110004200 |
40449610 |
Global Payment Program |
Increase |
$73,500 |
- |
|
9186104200 |
55305030 |
Operating Transfer Out |
Increase |
$73,500 |
- |
BACKGROUND INFORMATION
The Project at ARMC involves the removal and replacement of an aging deaerator unit within the Central Plant, which is critical to maintaining reliable steam generation for hospital operations, including sterilization and heating systems. The Project includes installation of new mechanical equipment, associated piping, controls, and temporary systems to maintain continuous operation of the hospital during construction. Work was carefully phased to allow the existing system to remain operational while the new unit was installed, tested, and brought online. The Project also included limited modifications to existing infrastructure and coordination with ongoing Central Plant operations to minimize impacts to hospital services.
On April 23, 2024 (Item No. 39), the Board of Supervisors (Board) approved authorization for the Director of the Project and Facilities Management Department (PFMD) to advertise for competitive bids for the Project via Request for Proposals No. ANE223-ANE2C-5381.
On September 24, 2024 (Item No.49), the Board approved the construction contract No. 24-944 (Contract) to Mesa Energy Systems, Inc. (Contractor), in the amount of $1,522,000, with a duration of 180 calendar days for the Project.
On June 25, 2025, under the authority granted by the Board, the Director of PFMD approved Change Order (CO) No.1, a non-compensable contract extension of the projection completion date by 187 calendar days, from 180 days to 367 days, due to material lead time.
On September 23, 2025 (Item No. 61), the Board approved Amendment No. 1 to the Contract for the Project, in the amount of $88,918, increasing the total contract amount from $1,522,000 to $1,610,918, and extending the Project completion date by 30 calendar days, from 367 days to 397 days.
On December 22, 2025, under the authority granted by the Board, the Director of PFMD approved CO No. 2, the additional scope included costs associated with an aborted shutdown that was cancelled mid-process due to hospital operational requirements and subsequently completed the following weekend, as well as the installation of a high-pressure condensate line required for the temporary deaerator system after it was determined that the necessary connection had been omitted from the design documents, increasing the contract amount by $16,619, from $1,610,918 to $1,627,537 and extending the Project completion date by 62 calendar days, from 397 days to 459 days.
On January 22, 2026, a Construction Change Directive (CCD) No. 2 was issued, authorizing a non-compensable contract extension to incorporate clarifications per HCAI approved Non-Material Alteration (NMA) No. 05 and 06, extending the completion date by 49 calendar days, from 459 calendar days to 508 calendar days.
On March 30, 2026, subsequent CCD No. 3 was issued, authorizing a non-compensable contract extension to address associated field conditions encountered during construction and related coordination for Amended Construction Document (ACD) No. 04 review and approval, extending the completion date by 49 calendar days, from 508 calendar days to 557 calendar days.
On May 15, 2026, further CCD No. 4 was issued, authorizing a non-compensable contract extension, to allow for remaining seismic bracing installation, punch list, closeout activities and final construction documentation, extending the completion date by 61 calendar days, from 557 calendar days to 618 calendar days.
Approval of Amendment No. 2 is requested due to constructability issues identified during the contractor's review of the construction documents for the Project. During construction of the Project, several field conditions and design clarifications were identified that required additional work beyond the originally anticipated scope. NMA No. 5 addressed modifications to the existing floor sink to accommodate the installed deaerator equipment and ensure proper system drainage. NMA No. 6 included the installation of discharge piping associated with the deaerator relief valves, along with necessary roof penetrations and roofing modifications to provide a complete and code-compliant system. ACD No. 1 was previously incorporated into Contract Amendment No. 1, which was approved by the Board on September 23, 2025 (Item 61). ACD No. 2 was a non-cost change and therefore did not require a CCD, Change Order, or Contract Amendment. ACD No. 3 involved the fabrication and installation of additional pipe supports required to meet final design coordination and structural requirements. These items were reviewed and consolidated to support completion of the work and facilitate final Project closeout. These changes are required to meet California Building Code and functional requirements and correct incomplete or inaccurate design documents.
The Project is consistent with the County Administrative Office approved CIP Project No. 22-011. Public Contract Code section 20136 requires all construction contract change orders and amendments to have four vote approval by the Board.
PROCUREMENT
Not applicable.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (Daniel Pasek, Deputy County Counsel, 387-5455) on May 5, 2026; Arrowhead Regional Medical Center (Andrew Goldfrach, ARMC Chief Executive Officer, 580-6170) on May 5, 2026; Auditor-Controller/Treasurer/Tax Collector (Charlene Huang, Auditor-Controller Manager, 382-7022) on May 7, 2026; Project and Facilities Management (Jon Aldana, Interim Chief of Project Management, 387-3072) on May 18, 2026; and County Finance and Administration (Jenny Yang, Administrative Analyst, 387-4884, and Yael Verduzco, Principal Administrative Analyst, 387-5285) on June 4, 2026.