CITY COUNCIL STAFF REPORT
December 3, 2024 {{section.number}}{{item.number}}
FIRST STREET UNDERGROUNDING PROJECT: RECEIVE A PROJECT UPDATE; AND APPROPRIATE FUNDS IN THE AMOUNT OF $100,000 TO THE PROJECT BUDGET RECOMMENDATION:
1. Receive a project update and provide direction.
2. Appropriate additional funds in the amount of $100,000 from Community Development Agency Loan Fund 160 to continue with preliminary design and coordination.
3. Authorize the City Manager to approve/amend agreements with consultants, in a form approved by the City Attorney, and pay fees/deposits with utility providers all within the project budget.
BACKGROUND:
Staff last provided a formal project update to the City Council on December 6, 2022, (Attachment 1), which included approving a resolution to advance the planning of the formation of a utility conversion district and appropriating $100,000 from the Community Development Agency (CDA) Loan Fund 160 to the project. The resolution was required for SDGE to initiate the design portion of the project.
On January 10, 2023, staff sent $32,803 to SDGE to initiate the design. The SDGE distribution team indicated once they have determined the trench route design, they would need an additional 6-8 months to complete the preliminary design (for delivery by end of 2023), with final design and a cost estimate being completed 6-8 months after staff approves the preliminary design.
There were repeated delays, and the City had not received the preliminary design as of early October when SDGE communicated that its transmission team had been working with the Navy to provide additional transmission facilities in the same project area (First Street). The transmission team provided a general overview of the Navy project, but provided no plans or schedule. The transmission team inquired about the City’s project and schedule, and to confirm if the City’s project’s timing would align with the Navy transmission facilities project.
Staff stated they could not provide confirmation as SDGE has not produced the preliminary design for the City project to date. One week later, on October 18, 2024, staff received the preliminary plans for the City’s project. As the City and Navy projects are sited in the same area for substantially the same work (trenching and undergrounding of power distribution lines), there is strong logic to consolidate and/or coordinate to the fullest extent possible. However, each project is not dependent on the approval of the other party (City or Navy).
On November 8, 2024, staff and both SDGE teams (distribution and transmission) met virtually to continue to discuss details and potential schedules for both projects.
ANALYSIS:
With this new information about the Navy’s parallel project, staff and its consultants (Scott Huth and Michael Baker Inc.) have been preparing exhibits and cost estimates (Attachment 3) to summarize and consolidate the project status and options since the initial meeting with the SDGE teams.
There are two options to construct the SDGE and City projects:
• Option 1 would construct two separate stand-alone projects (City and Navy trenches). o Staff has conveyed to SDGE that it would not support Option 1, which would be more costly, increase impacts to residents due to a longer construction duration, and add another utility trench in First Street which already has multiple utilities. • Option 2 would combine both projects into one trench. o Staff prefers Option 2 which would eliminate the construction issues from Option
1. In addition, there is a significant benefit from the cost share of a joint trench.
Staff have strongly stated that SDGE should contribute the full cost of its standalone Navy project to the joint project. SDGE expressed it should only contribute the incremental cost of its two conduits at the bottom on the shared trench, thereby having the City bear the majority of the costs.
o Option 2 comes with two concerns. First, the additional depth of the combined City and Navy trench would be 8 feet, versus 6 and 4 feet for separate trenches, which increases impacts from the ground water table, such as increased dewatering costs. Second, there is a cost risk to the City to proceed with a joint trench while the resident portion of the project, the vote to form the assessment district, is unsettled. Should the assessment district not pass, the City’s outlay of expenditures to date would not be recoverable.
Attachment 3, page 1 shows an overall plan view of the two projects with the existing overhead utilities in Green, SDGE project in Blue and City project in Red.
Attachment 3, page 2 shows in detail each of the trench sections and utilities to be included for Options 1 and 2. Each of these sections are being reviewed by staff to distinguish existing facilities from those that will be expanded in the project (potentially not a City cost). Staff is also trying to gain from SDGE an understanding of how much of the existing electrical usage is attributed to the Navy. Preliminary cost estimates for Options 1 and 2 are also included.
While staff continues to update the exhibits and costs estimates, a preliminary schedule with crucial dates was provided by SDGE. These are the dates identified by SDGE in coordination with the Navy. The first table shows dates for Option 2 (Joint Trench) with the City as the lead, the second for Option 1 with the SDGE stand-alone project with other required work (reconductoring).
Considering staff received the preliminary plans weeks ago, staff does not believe it is feasible to for the City to begin construction by September 30, 2025. In addition to the time reasonably needed for design finalization, site assessments, construction bidding and mobilization, the City needs to finalize and present to City Council for approval the assessment district calculations and conduct a vote of the assessment district. While working to expedite to the extent possible, the City will continue to communicate with SDGE about realistic timeframes for this project.
In order to continue on the project, staff seeks additional funding. The remaining project budget stands at $14,086, and an additional $100,000 is requested at this time. Ultimately, staff estimate a total of ~$325,000 (inclusive of the $100,000) to have the project ready for bid/award.
FISCAL IMPACT:
The project (20015) had a previous appropriation of $100,000 from CDA Loan Fund 160. To date $55,954 has been expended, with an additional $29,960 in obligations and encumbrances, and remaining project budget of $14,086.
Staff requests to appropriate an additional $100,000 from CDA Loan Fund 160 to continue forward with preliminary design and coordination. This would include expenses for consultants and for fees required by utility providers for the preparation of their preliminary designs. If funds are appropriated, staff estimates a one-time additional $225,000 would be needed at a later date to complete the full design and have the project ready for bid/award.
ALTERNATIVE:
The City Council could elect to not appropriate additional funds which would delay the project or provide alternate direction.
CALIFORNIA ENVIRONMENTAL QUALITY ACT:
Not applicable.
PUBLIC NOTICE:
No notice required.
ATTACHMENTS:
1. December 6, 2022 - Staff Report
2. SDGE Preliminary Plans
3. Existing Utilities and Trench Options Exhibit
Submitted By: Public Services and Engineering Department / Leon Firsht