STAFF REPORT TO THE CITY COUNCIL
DATE: Regular Meeting of October 28, 2025
TO: Mayor and Members of the City Council
VIA: Dante Hall, City Manager
SUBMITTED BY: Glenn Dombeck, Public Works Director
SUBJECT: Authorize an Amendment to the Professional Services Agreement with Terraphase Engineering, Inc. to provide Design Services for the Refugio Lake Restoration Project and Amend the Fiscal Year 2025-26 Budget to Allocate Funds from the General Fund/Capital Reserve to Fully Fund the Design Contract.
RECOMMENDED ACTION:
Adopt a Resolution authorizing the City Manager to execute an amendment to the City’s August 28, 2025 Professional Services Agreement with Terraphase Engineering, Inc. (Terraphase) to provide design services for the Refugio Lake Restoration Project, increasing the cost by $206,879 to a total cost of $238,620 and amend the fiscal year (FY) 2025-26 budget by $118,620 to allocate funds from the General Fund/Capital Reserve to pay for the associated design services.
EXECUTIVE SUMMARY
The Refugio Lake Restoration Project intends to remove accumulated sediment from the man-made lake that was last dredged in 2005. The City previously hired LSA to prepare permit applications and preliminary design documents for the work. An initial phase of work initiated in 2018 was placed on hold pending resolution of a lower cost sediment disposal alternative. An option to use Refugio Lake dredged sediments as fill material in an upland area of the City’s Corporation Yard property has since been identified.
The City is seeking to hire Terraphase to complete elements of the design that were not already addressed by the previously approved design scope. Terraphase will organize and manage the design process resulting in a set of Construction Documents that can be competitively bid for construction in late summer 2026. The cost for these design services is $206,879, resulting in a total cost of $238,620. It is proposed to amend the fiscal year (FY) 2025-26 budget by $118,620 to allocate funds from the General Fund/Capital Reserve to pay for the associated design services.
BACKGROUND:
The Adopted Fiscal Year 2025-26 Capital Improvement Program includes a project to Dredge Refugio Lake. This project has been re-titled the Refugio Lake Restoration Project (Project) to more accurately characterize the work that will be performed.
Refugio Lake was last dredged in 2005. During large storm events, sediment is conveyed down Refugio Creek and settles to the bottom of the lake. Over time, the lake has gradually filled, creating shallow areas which are unattractive and conducive to algae blooms during the summer months when the lake is also more stagnant from lower flows. The algae blooms have proved very difficult to treat, despite the use of aerator fountains and regular application of chemical treatments.
In 2018 LSA Associates, Inc. (LSA), with Balance Hydrologics, Inc. (Balance) as their civil subconsultant, were selected to complete the 30% dredging plans and assist in obtaining the required permits from regulatory agencies. Substantial progress was made at that time; however, the project stalled when the dredging was estimated to cost between $550K to $1.2M. The range in cost was due to the difference between the cost to dispose of f the estimated 6,300 cubic yards of dredged materials by hauling it to an approved disposal facility and the cost to spread it in City open space areas. The cost estimate also included removal of invasive plants and re-planting with native plants, which the Regional Water Quality Control Board (Regional Board) indicated would be required. This cost estimate was preliminary and did not fully account for all necessary Project elements, final design, and consultant support during construction. Due to the high cost and City’s financial position at the time, the Project did not advance.
The Project was re-started in October 2024 on account of the urgency to remove the sediment from the lake and one-time General Fund/Capital Reserves monies that are now available. By May 2025, it was determined that the Project could not be implemented prior to late Summer 2026 due to outstanding permitting requirements.
LSA’s scope of work includes a bathymetric survey, soils sampling/analysis, preparation of sediment dredging plans, and preparation of permit applications. LSA would prepare the permit applications, including the biological assessment, while Balance Hydrologics, as a sub-consultant to LSA, would conduct the bathymetric survey and prepare the sediment dredging plans. Terraphase Engineering was included as a subconsultant to LSA to complete sampling and analysis of the pond sediments for reuse or disposal. This work would build on and update the preliminary design and studies completed in 2019. Permits are needed from the following Regulatory Agencies:
US Army Corps of Engineers – Section 404 of Clean Water Act – Dredged Material Permit Regional Board – Section 401 of Clean Water Act – Water Quality Certification for Dredged Material California Department of Fish and Wildlife – Streambank Alteration Agreement US Fish and Wildlife Service - Biological Opinion
State Water Resources Control Board – Stormwater Pollution Prevention Plan US Federal Emergency Management Administration – No Rise Certification An Ecological Risk Evaluation of Proposed Sediment Reuse, prepared in July 2025 by Terraphase as a subconsultant to LSA, indicates that use of Refugio Lake dredged sediments as fill material in a City-owned upland area is not expected to result in adverse effects to wildlife. The Ecological Risk Evaluation further established that while the potential for ecological risk is low, it could be further reduced by adding a layer of clean cover over the fill to depths at least 12 inches, blending the dredged sediments with clean soils, and/or tilling the sediments into underlying soils. This approach would provide the basis for reuse of the dredged sediments on an approximately 2-acre portion of the City’s 11.2 acre Corporation Yard property. This reuse area is outside of any wetland or flood plain areas that would necessitate additional permits.
The City therefore previously requested that Terraphase identify all elements of such a Project design that were not already addressed by Balance, resulting in the August 28, 2025 Professional Services Agreement with Terraphase. Terraphase has now identified additional elements that are needed to prepare a full Project design and bid package with the alternative sediment disposal method in time to support construction in late summer 2026. Terraphase’s new scope of work will include the following elements:
Organizing and managing the design process, which will be a collaborative effort with individual components (e.g., plan sheets, specification sections, etc.) prepared by Terraphase or Balance.
Preparation of the Stormwater Pollution Prevention Plan and submittal of the Notice of Intent for coverage under the Construction General Permit.
Development of a topographic survey of the Corporation Yard property.
Development of geotechnical data and design details for a new retaining wall to replace the four failing concrete wall sections at the northeast corner of the pond.
Assistance to Balance in preparation of the design of staging and placement of dredged spoils on the Corp Yard property. Management of dredged spoils to include amelioration and stabilization methods to minimize odors and return the site to its original condition.
Development of procedures for sediment dewatering and criteria for disposal of the resulting leachate.
Development of best management practices to limit track-out of dredged material on City streets.
Development of details to restore asphalt paths damaged during construction.
Development of details for placement of a dead tree in the pond to serve as a turtle sunning platform.
Assistance with two community meetings to discuss sediment removal at Refugio Valley Park and sediment placement at the Corp Yard.
Preparation of front end and technical specifications.
Preparation of construction schedule and cost estimates.
ANALYSIS:
Before implementation of the dredging component of the Project, the City must complete permit applications and preparation of drawings for the dredging work pursuant to the LSA contract. Additional design effort is needed to develop the design for reuse of the dredged sediments on the City’s Corporation Yard property, so the City proposes to amend its existing contract with Terraphase to complete this effort.
The design effort will also evaluate amenities at the park to identify items needing repair or replacement that the eventual contractor will perform. This will include removal of the flagpole and repair of a catch basin on the lawn area at the northeast corner of the pond, demolition of failing concrete retaining walls along the path at the northeast corner of the pond and their replacement with a new low profile retaining wall, demolition of chain link fencing along the creek upstream of the pond and replacement with split rail fencing, removal of various tree stumps near park paths, removal of approximately 8 eucalyptus trees in upland areas east of the pond and expanding or repairing portions of the park’s irrigation system.
ENVIRONMENTAL REVIEW:
A Notice of Exemption was filed for the approved Project in May 2019 as the Project involves maintenance of existing facilities. The current Council action to approve design services and construction document preparation for the Project was contemplated by the original Project approval. Even if this action is considered separately, it is not a Project pursuant to the California Environmental Quality Act (CEQA) in accordance with CEQA Guidelines section 15378 because it is administrative and does not authorize any construction that could have an impact on the environment.
FISCAL IMPACT:
This Project was identified in the 2025 Capital Improvement Program along with other Facilities and Parks improvements. In anticipation of the associated cost, General Fund/Capital Reserves funds have been allocated to generate the required funding resources. However, despite this advanced financial planning, there remains insufficient funding available in the current fiscal year to cover the cost related to this design contract.
The FY 2025-26 Adopted Budget allocates $263,901 from the General Fund/Capital Reserves for Engineering Design, Environmental Compliance, and Permitting. Of this amount, $88,259 is currently available, with the remainder either encumbered or already spent. To address this funding gap, it is proposed that an additional allocation of $118,620 from the General Fund/Capital Reserves funds be made to fully finance the design contract.
Furthermore, additional funding will be required in the current and future fiscal years to support the construction and construction management efforts, as well as the statutory reporting work. Previous cost estimates identified the cost to dredge may range from $400,000 to $600,000, depending upon the bid climate. The cost for sediment placement at the Corp Yard has not yet been finalized, but the cost for landfill disposal was previously estimated at an additional $450,000. Lastly, the 5-year reporting and monitoring requirements are projected to cost approximately $150,000. Staff will report back to the City Council with a recommended funding plan for the entire cost to complete the project.
ATTACHMENTS:
Attachment 1- Resolution
Attachment 2- Refugio Lake Dredging Project Location Map Attachment 3- Terraphase Engineering Design Proposal
Accounting Information
(Finance Department Use Only)
Description: Refugio Lake Dredging (Project #63039)
Funding Source: General Fund Capital Reserve (300-6432-642.05-00) Budget Recap:
Total Estimated cost: $238,620 New Revenue: N/A
Amount Budgeted: $88,259 Lost Revenue: N/A
New funding required: $118,620 New Personnel: N/A
Council Policy Change: Yes No