The initial $264,000 contract with Nelson and Sons was awarded April 2.
In extending the contract, the council has agreed to pay Nelson an additional $498,000 to replace the waterline between Second and First streets from Imperial Avenue to Heber Avenue and up Heber Avenue to Fourth Street.
The money will come from the Border Environmental Infrastructure Fund, created when the North American Development Bank loaned Calexico millions to upgrade its water plant and pay for other related expenses, including water lines. The money will not come from the city's general fund.
To pave over the alleys after the water lines are replaced, the city's Redevelopment Agency will spend $420,000. The council, seated as the RDA board, recently approved that expenditure.
The contract for that project will be sent out to bid soon, according to Public Works Director Mariano Martinez.
"I'm working on the specs for that one right now, trying to get that one out to bid," he said Thursday.
Ideally, Martinez hopes all the work downtown is done before the holiday season starts.
>> Staff Writer Aaron Claverie can be reached at 337-3419 or email@example.com