Council awards $218,000 tenant‑improvement contract for utilities operations facility at 641 Old Gilroy Street

The Gilroy City Council on April 20 authorized $218,000 in tenant‑improvement work at 641 Old Gilroy Street (the Jessup property) to configure space for water and sewer operations.

Interim Utilities Director Carl Bjarki described the site—two buildings totaling about 7,600 square feet with a paved acre—and the planned use for water operations in the front building, sewer operations in the rear, and a crew locker room. Staff solicited informal public‑works bids and received four responsive proposals; the lowest responsible bidder was 17 Mile Construction at $198,900.

The recommended scope includes interior repairs (flooring, drywall, painting), energy‑efficient lighting, minor plumbing, an ADA ramp, cabinetry and related tenant‑improvement work. Staff requested and council approved a 10% contingency of $19,100 for a total authorization of $218,000. The project is to be funded from the utilities budget; staff said the funds were already in the FY26 budget and proposed splitting costs between water and sewer funds.

Bjarki said the city aims to mobilize by May 1 with contractor completion by the end of June and occupancy beginning in July. Councilmember Fogarty noted a local firm was the second‑lowest bidder and discussed local preference policy; staff replied that public‑works prevailing‑wage requirements and registration with the Department of Industrial Relations limit a local‑preference carve‑out.

Council voted 7–0 to award and authorize contract execution and change orders within the contingency.

What happens next: staff will finalize contract paperwork, issue notice to proceed, and begin construction with the target schedule to finish by the end of the fiscal year.