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February 26, 2024
ITEM TITLE
Reimbursement Agreement: Approve the First Amendment to the Reimbursement Agreement with RIDA Chula Vista, LLC to Recognize Approved Change Orders, Add Construction of the G Street Sewer Pump Station Overflow Tank, and Appropriate Funds Accordingly
Report Number: 23-0273
Location: 1001 H Street
Department: City Manager, Development Services, and Engineering & Capital Projects G.C. § 84308: Yes
Environmental Notice: The Project qualifies for a Class 3 Categorical Exemption pursuant to Section 15303 (New Construction or Conversion of Small Structures ) of the California Environmental Quality Act State Guidelines.
Recommended Action
Adopt a resolu tion approving the First Amendment to Reimbursement Agreement with RIDA Chula Vista, LLC to Construct Specified Bayfront Sewer Improvements to recognize various administratively approved change orders, add construction of the G Street Sewer Pump Station Overflow Tank, and amending the fiscal year 2023-24 Capital Improvement Projects program budget (SWR0321). (4/5 Vote Required)
SUMMARY
On September 10, 2019, the City Council adopted Resolution 2019 -170, approving a Reimbursement Agreement between the City and RIDA Chula Vista, LLC to construct specified sewer improvements (the “Original Agreement”) and making certain findings, waivers, approvals, and delegations of authority related to procurement of the subject improvements. The Original Agreement was entered into on September 15, 2020. Since that time, several change orders have been administratively approved, as authorized by the Original Agreement, however it is necessary to appropriate additional funds to cover these expenses. In addition, t he City and RIDA Chula Vista, LLC now desire to amend the Original Agreement to include construction of an overflow tank that will serve the G Str eet Sewer Pump Station project and appropriate associated funding.
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ENVIRONMENTAL REVIEW
The Director of Development Services has reviewed the proposed project for compliance with the California Environmental Quality Act (CEQA) and has determined that the project qualifies for a Categorical Exemption pursuant to State CEQA Guidelines Section 15303 Class 3 (New Construction or Conversion of Small Structures) because the proposed project would not result in a significant effect on the environment, create a cumulative impact, or damage a scenic highway. Thus, no further environmental review is required.
BOARD/COMMISSION/COMMITTEE RECOMMENDATION
Not applicable.
DISCUSSION
On April 24, 2018, the City of Chula Vista and the San Diego Unified Port District approved a Disposition and Development Agreement (“DDA”) with RIDA Chula Vista, LLC (“RIDA”) for the development of a large -scale destination resort and convention center project on parcel H-3 of the Chula Vista Bayfront Master Plan. The DDA obligated RIDA to desi gn and construct certain public improvements, subject to a combination of reimbursements and Bayfront Development Impact Fee ( “BFDIF”) credits. Sewer infrastructure related commitments by both the City and RIDA were memorialized in the Original Agreement, approved by the City Council via Resolution 2019 -170 on September 10, 2019 (Attachment 1). Table 1 below summarizes the sewer improvement list (the “Original Improvements”) and related estimated costs as reflected in the Original Agreement.
Table 1 – Original Agreement Improvements and Estimated Cost Improvement Description Estimated Cost
E Street (G Street to H Street) 730,000
G Street Connection 85,000
H-3 Utility Corridor 380,000
Total 1,195,000
The Original Agreement was executed on September 15, 2020, and RIDA subsequently completed the final design, permitting and bidding of the Original Improvements. Based on final bids, on May 10, 2022, the City Council approved appropriating an additional $3 ,231,584 from the Trun k Sewer Capital Reserve Fund to fund these improvements , bringing the total estimated cost of constructing the Original Improvements to $4,426,584, as summarized in Table 2 below.
Table 2 – May 10, 2022 Amended Budget
Improvement Description Original
Amended Value as
of 5/10/2022
E Street (G Street to H Street ) $ 730,000 $ 1,695,826 G Street Connection $ 85,000 $ 561,871 H-3 Utility Corridor $ 380,000 $ 1,192,664 H Street (Bay Blvd to Street A) $ - $ 10,380 H Street (Marina Pkwy to E Street) $ - $ 965,843 Total $ 1,195,000 $ 4,426,584
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Unforeseen Condition Change Orders
Since the 2022 action, RIDA has undertaken construction of the Original Improvements. In that process, RIDA’s general contractor, Mortenson McCarthy Joint Venture (MMJV), has encountered unforeseen site conditions that have resulted in cost increases. These cost increases have been thoroughly vetted by City staff and consultants and determined to be appropriate project costs and eligible for reimbursement. Table 3 below summarizes the sewer related change orders. These costs have been administratively approved for reimbursement pursuant to the terms of the Original Agreement. Staff recommends appropriating an additional $900,000 from the Sewer Income Fund and an additional $912,055 from the Trunk Sewer Capital Reserve Fund for this purpose.
Table 3 – Unforeseen Condition Change Orders
Unforeseen Condition Description Amount
Cleanup/Repair Bypass Pump $ 8,258
Trench Stabilization - E Street Sewer $ 122,053 Trench Stabilization - G Street Sewer $ 1,013,798 Trench Stabilization - H Street Sewer $ 112,731 Trench Stabilization - Marina Parkway Sewer $ 330,901 Time Impacts - Additional Stabilization $ 128,478 Added Gravity Feed to Park Restrooms $ 95,835 Total $ 1,812,055
Staff recommends appropriating an additional $3,000,000 from the Trunk Sewer Capital Reserve Fund for the purpose of covering cost increases due to unforeseen conditions encountered in the construction of the Original Agreement improvements.
G Street Sewer Pump Station
In addition to other business terms, the DDA also reflected the City’s commitment to upgrade the existing G Street Pump Station. On October 3, 2023, the City Council adopted Resolution 2023-151, awarding a public works contract for the construction of the “Sewer Force Main at G Street Pump Station and G Street Pump Station Upgrade (SWR0275 and SWR0309)” projects. The construction of the G Street Pump Station upgrade necessitates the construction of an overflow tank (the “Pump Station Overflow Tank”).
Staff recommends that the Pump Station Overflow Tank be sited on RIDA’s leasehold on the Chula Vista Bayfront and constructed by RIDA, pursuant to the terms of the Original Agreement. This approach will result in time and financial efficiencies, that would not be achievable if the City were to construct the improvement.
RIDA has tentatively agreed to construct the Pump Station Overflow Tank on the City’s behalf, provided the Original Agreement can be amended to include this additional scope.
A First Amendment to the Original Agreement has been negotiated and is recommended for City Council approval (Attachment 2). Construction of the Pump Station Overflow Tank is projected to cost $5,555,000.
Actual costs will not be known until construction is complete. Staff recommends appropriating an additional $5,555,000 from the Trunk Sewer Capital Reserve Fund for this purpose.
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DECISION-MAKER CONFLICT
Staff has reviewed the property holdings of the City Council members and has found no property holdings within 1,000 feet of the boundaries of the property which is the subject of this action. Consequently, this item does not present a disqualifying real property -related financial conflict of interest under California Code of Regulations Title 2, section 18702.2(a)(7) or (8), for purposes of the Political Reform Act (Cal. Gov’t Code §87100, et seq.).
Staff is not independently aware and has not been informed by any City Council member, of any other fact that may constitute a basis for a decision-maker conflict of interest in this matter.
CURRENT-YEAR FISCAL IMPACT
Approval of this resolution amends the fiscal year 2023-24 Capital Improvements Projects program budget (SWR0321) by appropriating $900,000 in Sewer Income Funds and Trunk Sewer Reserve Funds to fund the approved construction changes for the Original Improvements and $9,467,055 in Trunk Sewer Reserve Funds to fund the construction of the Pump Station Overflow Tank. There is sufficient fund balance in the Sewer Income and Trunk Sewer Capital Reserve Fund s for this appropriation. The original budget, amendments to date, and current action are summarized in Table 3 below.
Improvement Description Original
Budget
Amended
Value
as of
5/10/2022
Change
Orders to
Date
Overflow
Tank
Amendment
Projected
Future
Change
Orders
Total Amended
Value
E Street (G Street to H Street ) $ 730,000 $ 1,695,826 $ 1,812,055
$ 3,000,000 $ 9,238,639
G Street Connection 85,000 561,871
H-3 Utility Corridor 380,000 1,192,664
H Street (Bay Blvd to Street A) 10,380
H Street (Marina Pkwy to E Street) 965,843
G Street Pump Station Overflow Tank $ 5,555,000 $ 5,555,000 Total $ 1,195,000 $ 4,426,584 $ 1,812,055 $ 5,555,000 $ 3,000,000 $ 14,793,639
Appropriations to date $ 4,426,584
Additional Appropriation Requested $ 10,367,055
Total Amended Value $ 14,793,639
ONGOING FISCAL IMPACT
Upon completion of the project, the improvements will require routine sewer facility maintenance, which will incur additional costs to the Sewer Service Revenue Fund. These expenses will be considered in conjunction with the regular annual budget process.
ATTACHMENTS
1. Original Agreement
2. First Amendment
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Staff Contact: Kara Peterson, Development Project Manager William Valle, City Engineer/ Director of Engineering & Capital Projects Tiffany Allen, Assistant City Manager