REPORT TO COUNCIL
SUBJECT
Title
Approval of Budget Modification Number 3 for Hendy Avenue Complete Streets Project: Appropriate $400,000 in Santa Clara Valley Transportation Authority Vehicle Registration Fee Grant Funds; Increase Federal Transportation Program Grant Funds by $25,975; and Increase the Construction Contract Contingency by up to $400,000
Report
BACKGROUND
On January 28, 2014, City Council authorized the City Manager to execute a funding agreement between the City of Sunnyvale and the Santa Clara Valley Transportation Authority for 2010 Measure B Vehicle Registration Fee Countywide Program funds. The agreement allowed for up to $400,000 in Vehicle Registration Fees (VRF) to be transferred to the City for utilization on the Hendy Avenue Complete Street Improvements project for issues related to soil contamination. The construction activities associated with the soil contamination are not part of the original construction contract and are not covered by the Federal funds obtained for the street renovation. The agreement with the Valley Transportation Authority (VTA) was fully executed by both parties in February 2014 (see Attachment 1).
Also on January 28, 2014, City Council increased the project's construction contingency by $450,000 for installation of a new 12" water main in Hendy Avenue. The new water main design was completed by the engineer. However, construction costs received from the contractor, even after negotiations with staff, were well in excess of the available funding. Per the discussion of the staff report (14-0077 - Attachment 2), construction proceeded absent the construction of the new water main. The new Hendy water main will need to be constructed as part of a future water main replacement project. It will be included with all other City water main replacement needs and its priority will need to be determined based on available funding and overall City needs.
O'Grady Paving, Inc., the project's construction contractor, is well underway with construction activities and has a current anticipated completion date of October 2014. City staff and the contractor are working closely to maintain the existing main in working condition and will complete spot repairs as needed. Unless a significant issue occurs with the water main during construction, the majority of the $450,000 contingency, which can only be used towards water projects, will be returned to the Water Supply and Distribution Fund at project completion.
EXISTING POLICY
Council Policy 7.1.5 Donations, Contributions and Sponsorships
Council approval of a budget modification to appropriate grant monies is required before funds can be expended by staff. Such a budget modification shall include the use to which the grant would be placed; the objectives or goals of the City which will be achieved through the use of the grant; the local match required, if any, plus the source of the local match; any increased cost to be locally funded upon termination of the grant; and the ability of the City to administer the grant.
The VTA grant is over the threshold of $5,000 to be administratively appropriated by the City Manager; therefore Council authorization is required. Grant funds from VTA have external reporting requirements.
ENVIRONMENTAL REVIEW
Prior environmental findings for this project are as follows:
1. Exempt per CEQA Guidelines Section 15301 (c), Existing Facilities.
2. Exempt per CEQA Guidelines Section 15330 (b)(5), Minor Actions to Prevent, Minimize, Stabilize, Mitigate or Eliminate the Release or Threat of Release of Hazardous Waste or Hazardous Substances
DISCUSSION
At the time of the execution of the funding agreement, construction activities had not yet started. It was not known then if the City would need to draw down upon the VRF funding; there was a possibility that the existing construction contingency would be enough to complete the project. However, now with construction well underway, other projected change order work will consume most of the project's existing construction contingency, and it will be necessary to utilize the VRF funding.
Appropriation of the full amount of the VRF funding into the project's budget and construction contract contingency will streamline the process for allowing the construction contractor to proceed with change order work related to the soils contamination. The City's construction manager will work to minimize the overall amount of VRF funding needed for these activities. Any unutilized VRF funds will be returned to the VTA as part of the close-out process for the project. The previously approved $450,000 from the Water Supply and Distribution Fund is limited to work only related to water supply projects. As discussed, the funds will be available in the project's contingency should water main repairs be needed during construction operations.
FISCAL IMPACT
The Hendy Avenue Complete Street project, which provides for the reconstruction of Hendy Avenue from Sunnyvale Avenue to Fair Oaks Avenue, is funded by multiple sources including Federal Surface Transportation Program grant funds, local transportation grant matching funds, and the City's Wastewater Fund. The original project budget does not provide resources to address soil remediation. The VRF funding from the Valley Transportation Authority identified in this report is an additional resource that can be used to perform the construction activities associated with soil contamination.
Also, the Federal grant funds available to the Hendy Avenue Complete Street project are $25,975 higher than originally estimated. On July 20, 2010 (RTC 10-188), Council appropriated grant funding of $2,715,000 from the Federal Surface Transportation Program to the Hendy Avenue Complete Street Project (828900) and the Old San Francisco Road Left Turn project (828910). At the time, Staff estimated the breakdown of the grant funding would be $2,051,025 for the Hendy Avenue Complete Street project, and $663,975 for the Old San Francisco Road Left Turn project. Actual funding for the two projects ended up being $2,077,000 and $638,000, respectively. The Old San Francisco Road Left Turn project revenue appropriation was decreased on July 17, 2012 (RTC 12-170), by $25,975. Budget Modification No. 3 includes an increase of $25,975 to the Hendy Avenue Complete Street Project.
The VRF funding does not require a local match, and has a termination date of two years after the agreement execution date. The project is anticipated to be completed in October 2014, well ahead of the funding termination date.
Budget Modification No. 3 has been prepared to appropriate the Santa Clara Valley Transportation Authority Vehicle Registration Fee grant funds in the amount of $400,000 and increase Federal Transportation Program grant funds by $25,975 for the Hendy Avenue Complete Streets project.
Budget Modification No. 3
FY 2014/2015
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City's official-notice bulletin board outside City Hall, at the Sunnyvale Senior Center, Community Center and Department of Public Safety; and by making the agenda and report available at the Sunnyvale Public Library, the Office of the City Clerk and on the City's website.
RECOMMENDATION
Recommendation
Approve Budget Modification Number 3 to appropriate the Santa Clara Valley Transportation Authority Vehicle Registration Fee grant funds in the amount of $400,000 and increase Federal Transportation Program grant funds by $25,975 for the Hendy Avenue Complete Streets project, and increase the Hendy Avenue Complete Street Improvements Project construction contract contingency by up to $400,000.
Staff
Prepared by: Jennifer Ng, Senior Civil Engineer
Reviewed by: Kent Steffens, Director, Public Works
Reviewed by: Grace K. Leung, Director, Finance
Reviewed by: Robert A. Walker, Assistant City Manager
Approved by: Deanna J. Santana, City Manager
ATTACHMENTS:
1. Funding Agreement between the City of Sunnyvale and the Santa Clara Valley Transportation Authority for 2010 Measure B Vehicle Registration Fee Countywide Program
2. Report to Council 14-0077