CAO report relative to a proposed First Amendment to the contract with Sterndahl Enterprises, LLC, for pavement marking, striping, and sealing services.

The City Council is considering a First Amendment to Contract C-200173 with Sterndahl Enterprises, LLC for pavement marking, striping, slurry sealing, and other pavement preservation services. This amendment proposes to extend the contract by 48 months (four one-year options) from January 30, 2026, through January 29, 2030, and increase the total compensation by $32,000,000, bringing the total contract value to $40,000,000 over the entire five-year term (January 30, 2025 – January 29, 2030).

Background: The original contract, approved by City Council on December 10, 2024, was for one year at $8,000,000. LADOT sought this amendment for administrative efficiency and cost-effectiveness, as Sterndahl Enterprises was the sole bidder and met all requirements. Funding for these services will come from Measure M Local Return, Measure R Local Return, General Fund, Gas Tax, and Proposition C, with no additional impact on the General Fund.

Key Contract Changes:

• Term: Extended from 1 year to 5 years (Jan 30, 2025 - Jan 29, 2030).
• Compensation: Increased from $8,000,000 to $40,000,000 total, with $8,000,000 allocated per year.
• Unit Price Adjustments: Specific unit prices for certain services are updated, such as "Pavement marking, parking tee" increasing from $125.00 to $175.00, and "Remove, 8' arrow" increasing from $25.00 to $75.00.