CITY OF COMMERCEAGENDA REPORTCITY OF COMMERCEAGENDA REPORT
CITY OF COMMERCE
AGENDA REPORT
CITY OF COMMERCE
AGENDA REPORT
TO: Honorable City Council
FROM: City Manager
SUBJECT: Award of Environmental Contract to Ramboll American Engineering Solutions, Inc. for the implementation of the $7 Million DTSC-ECRG Grant Awarded for Veterans Park Remediation Meeting Date: August 27, 2024
RECOMMENDATION
The City Council adopt an Emergency Resolution to implement the DTSC-ECRG grant of $7 million prior to expiration of the Grant, and Approve a standard form of contract for environmental services with Ramboll American Engineering Solutions, Inc.
Authorize the City Manager to enter Multiple contracts with Ramboll American Engineering Solutions, Inc.to not exceed $6,750,000.
BACKGROUND
On April 7, 2022, the City of Commerce applied for the Department of Toxic Substance Control Equitable Communities Revitalization Grant (DTSC-ECRG). The City was awarded the Grant on June 6, 2022, in the amount of $7 million. The Grant contract between the City and DTSC-ECRG required that the $7 million in grant funds be:
Expended within two (2) years of the date of Grant; or June 6, 2024.
Grant funds could only be expended on City owned parcels. The Parcels indicated in the Application and Grant Contract were Assessor Parcels Numbered 6357-019-900 and 6347-019-904.
City had anticipated that the DTSC-Grant funds could be expended simultaneously in conjunction with Comstock Development and the associated remediation on the privately owned Comstock parcels.
Comstock, due to the impacts of the financial markets, could not secure feasible project financing to fund the anticipated remediation for both City and privately owned parcels.
During the course of the two (2) year DTSC-ECRG grant period no funds were expended as reported to the DTSC through the FLUXX portal (State invoicing system) The City commenced the grant extension application process in April 2024 DTSC provided a six (6) month extension of the Grant contract period from June 6, 2024, through December 13, 2024.
ANALYSIS
City staff, legal counsel and project advisor have confirmed that the DTSC-ECRG Grant funds may only be expended on City owned parcels and not privately owned parcels. City staff, DTSC Senior Staff and the Development Agreement partner Comstock, Inc. have held multiple discussions to address and confirm that expenditure of DTSC-ECRG grant funds may only be on City owned parcels, specifically at the common address of 6364 Zindell Avenue, Commerce, CA 90040 and Assessor Parcels Numbered 6357-018-900 and 6357-019-904.
The City has four (4) months remaining to utilize the DTSC-ECRG funds to expend the grant funds and remediate the City parcels.
Ramboll American Engineering Solutions, Inc. has provided the City with a proposal to implement remediation efforts on the City Parcels. The proposal and analysis are based on past documentation of the City parcel conditions and Remedial Action Plan (RAP) approved by the Los Angeles Water Board of the City parcels and adjacent privately owned parcels.
The Ramboll proposal indicates the following expenditures of the $7million DTSC-ECRG grant funds during the Grant extension:
The necessary planning, permitting, excavation and remediation processes must be completed by December 13, 2024. Our expert consultants have advised staff that this timeline cannot be met if the City must proceed through the normal public works competitive bidding process. The City Attorney’s office has reviewed the potential of awarding contracts to timely complete the remediation work without the use of the normal public works competitive bidding process. California statutory and case law allow exemptions to the public works bidding processes in instances of emergency or where the nature of the subject of the contract is such that competitive proposals would be unavailing or would not produce advantage, and advertisement for competitive bid would thus be undesirable, impractical, or impossible.
Municipal law authorities have stated that the purposes of the competitive bidding laws are to guard against favoritism, improvidence, extravagance, fraud and corruption; to prevent the waste of public funds; and to obtain the best economic result for the public. Such authorities have also stated that where competitive proposals work an incongruity and are unavailing as affecting the final result, or where competitive proposals do not produce any advantage, or where it is practically impossible to obtain what is required and to observe such form, competitive bidding is not applicable.
California courts have held that competitive bidding laws should not be applied so as to impede the usual and regular progress of the public business, or to deprive the inhabitants, even temporarily, of those things necessary and indispensable to their subsistence, their health, or the security and protection of their persons or property. Contingencies such as the severely limited time to expend the ECRG funds may arise when services, materials and property, may be immediately needed, and where competitive offers and written contracts would be unserviceable, impractical or impossible to meet the needs of the public interest of completing the remediation of the properties. The competitive bidding process does not apply in such cases.
In a situation similar to the ECRG funds the court held that competitive bidding did not apply to a public construction contract funded by bonds. The court reasoned that the delay caused by the competitive bidding process would jeopardize the issuance of the bonds. In our situation delay in the completion of the remediation work caused by competitive bidding would have a direct bearing on the financial ability of the City to meet its financial obligations and statutory purpose.
If the City fails to expend the DTSC-ECRG Grant funds in a timely manner, December 13, 2024, the City will lose the $7m in remediation funding. The activities set forth in this staff report and corresponding actions provides the City the best measures to prevent this enormous loss. Additionally, the agreement with Ramboll also provides for City Manager discretion and approval to allow contractor to subcontract with any parties that may be familiar with said project to more quickly advance the remediation.
Staff recommends that City Council approve staff’s recommendation and adopt the attached Resolution.
FISCAL IMPACT
The total DTSC Grant is $7 million. The remediation described in the Ramboll proposal is anticipated to be covered through the Grant. Given the nature of the project, environmental remediation, there may be a chance of costs exceeding the DTSC-ECRG grant funds.
ALTERNATIVES:
Approve recommendation
Reject recommendation
Provide staff with further direction
Recommended by: Louis Morales, Department of Planning and Economic Development Reviewed by: Vilko Domic, Assistant City Manager
Approved as to form by: Noel Tapia, City Attorney
Respectfully submitted by: Ernie Hernandez, City Manager ATTACHMENTS:
Resolution
Remediation Proposal
Remediation Contract