Project: Mowry Village Project, Partially Recircualted EIR - PRELIMINARY SchedulDate: Tue 4/9/24 Packet Page 140
ID Task
Mode
Task Name Duration Start Finish Predecessors Notes
20 Stantec prepares Screencheck RTC 10 days Fri 12/13/24 Thu 1/9/25 19FF 21 City reviews Screencheck RTC 10 days Fri 1/10/25 Fri 1/24/25 2022 Stantec Prepares RTC for Publication 5 days Mon 1/27/25 Fri 1/31/25 2123 Stantec Publishes RTC 1 day Mon 2/3/25 Mon 2/3/25 2224 Certification Hearing 1 day Tue 2/4/25 Tue 2/4/25 23 TBD Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb
2023
TaskSplitMilestoneSummaryProject Summary
Inactive TaskInactive MilestoneInactive SummaryManual TaskDuration-only Manual Summary RollupManual SummaryStart-onlyFinish-onlyExternal Tasks External MilestoneDeadlineProgressManual Progress
Project: Mowry Village Project, Partially Recircualted EIR - PRELIMINARY SchedulDate: Tue 4/9/24 Packet Page 141
2 Updated Project Application submitted by Applicant, reviewed by City, and approved.
Project redesigned to account for loop line.
3 Stantec prepares REIR project description
PD prepared based on City approved application package/plans. 6 Partially Recirculated EIR (REIR)
REIR includes upfront EIR text, PD, air quality, GHG, bio, cultural, hydrology, noise, and utilities. We anticipate specific questions in these sections, not necessarily the entire resource section. 7 Stantec prepares Admin Draft REIR and Applicant updates technical studies Tech studies and air/noise modeling updated to account for project redesign. Assumes applicant tech studies are available for use in REIR two weeks prior to submission of Admin Draft REIR to City. 15 Planning Commission
Should take place in middle of circulation period. Date to be confirmed. 17 Stantec Prepares Admin Draft RTC
Applicant consultant is responsible for providing responses to applicant-provided information. 24 Certification Hearing
TBD
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AUTHORIZATION FOR ADDITIONAL SERVICES
V:\1857\active\185705508\01_management\proposal\CO_2_augment_DEIR_PC_staff_report_presentation_08032023\stantec_CO_2_mowry_village_08032023.docx Date 3 August 2023
“Stantec” Stantec Consulting Services Inc. Stantec Project # Stantec Proj. No. 185705508 Stantec Pipeline # 825195
1340 Treat Blvd, Suite 300, Walnut Creek, CA 94597
Ph: (925) 285-6541
email: [email protected]
Client City of Newark, Art Interiano Client Project # N/A. 37101 Newark Blvd, Newark, CA 94560
Ph: (510) 578-4331
email: [email protected]
Project Name and
Location:
Mowry Village Project Change Order # Change Order No. 2 This is authorization for Stantec to perform additional services on the project as noted above.
A. Stantec agrees to perform the following additional service(s):
Based on direction from City Staff, we have developed the following scope of work to prepare the Staff Report and Presentation of the Draft Environmental Impact Report (DEIR) for the Mowry Village Project (Project) located on Mowry Avenue in Newark, California, to the Newark Planning Commission anticipated to take place on August 22, 2023. This Change Order 2 is in addition to the scope of work outlined in Change Order 1 executed on November 1, 2022 and in addition to the original Project contract executed on June 10, 2021.
DEIR Planning Commission Staff Report
Stantec will prepare the Project draft Staff Report for City review, using the City of Redwood City 1125 Arguello MixedUse Development Project as a guide for information to be included in the Project draft Staff Report. It is anticipated the Staff Report will be presented to the public and Newark Planning Commission at the August 22, 2023 Newark Planning Commission meeting. Stantec will address one round of City comments on the draft Staff Report, assumed to take no more than two hours to address. As requested by City Staff, Stantec will submit the draft Staff Report to the City by August 10, 2023. Stantec can prepare the DEIR Planning Commission Staff Report for a fee of $4,000.
DEIR Planning Commission Presentation
Stantec will prepare the Project draft Planning Commission Presentation slide deck for City review. It is anticipated the Presentation will be presented to the public and Newark Planning Commission at the August 22, 2023 Newark Planning Commission meeting. Stantec will address one round of City comments on the draft Presentation, assumed to take no more than one hour to address. As requested by City Staff, Stantec will submit the draft Presentation to the City for review by August 10, 2023. Stantec understands that City Staff and Stantec will jointly present the Project (Stantec will present the California Environmental Quality Act [CEQA] / DEIR slides) during the August 22, 2023 Planning Commission meeting. Stantec can prepare the DEIR Planning Commission Presentation for a fee of $1,500.
B. Client agrees to compensate Stantec for such additional services in accordance with the terms of the initial agreement for additional amount(s) stated below:
The time and materials fee for providing the additional scope of work described herein is $5,500. Stantec is not requesting additional budget be added to the total contract value at this time. Rather, Stantec is requesting authorization to charge up to $5,500 to existing Task 5: Administrative Draft Final EIR, to perform the scope of work outlined herein.
EXHIBIT B
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AUTHORIZATION FOR ADDITIONAL SERVICES Page 2
V:\1857\active\185705508\01_management\proposal\CO_2_augment_DEIR_PC_staff_report_presentation_08032023\stantec_CO_2_mowry_village_08032023.docx C. All other terms and conditions of the original agreement shall remain in full force and effect.
Effect on Schedule: Stantec is available to begin work described herein immediately upon execution of this change order. By signing below, the City is also agreeing to extend Stantec's existing contract out to August 31, 2023 to cover the scope of services outlined herein, as well as Stantec's attendance at the August 22, 2023 Planning Commission meeting.
By signing below, the parties agree and affirm that each has reviewed and understands the provisions set out above and that each party shall be bound by each and all of said provisions. A copy of this agreement shall serve and may be relied upon as an original.
Stantec Consulting Services Inc. City of Newark,
Print Name and Title Print Name and Title
Signature Signature
Date Signed: Date Signed:
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1 THIRD AMENDMENT TO THE CONTRACTUAL
SERVICES AGREEMENT BETWEEN THE CITY OF
NEWARK AND STANTEC CONSULTING
SERVICES, INC.
This Third Amendment to Contractual Services Agreement between the City of Newark, a municipal corporation, ("City"), and Stantec Consulting Services, Inc. a Type “C” Corporation (“Consultant”) (collectively the "Parties") dated June 10, 2021 (the “Agreement”), is entered into as of _________ ___, 2024 for professional environmental services.
RECITALS
WHEREAS, the Parties executed the Agreement for the provision of professional environmental services to provide technical assistance by individuals possessing experience consistent with minimum qualifications provided by the City; and
WHEREAS, the Parties previously executed the First Amendment to the Agreement on October 13, 2022; and
WHEREAS, the Parties previously executed the Second Amendment to the Agreement on October 26, 2023; and
WHEREAS, Section 27, Modifications, of the Agreement allows the Parties to amend the Agreement provided that the amendment is in writing signed by the Parties; and WHEREAS, the Parties desire to amend the Agreement, as previously modified by the Second Amendment, to increase the “Not-to-Exceed” compensation amount by $140,500 for a total not to exceed amount of $542,072 (from a previous not to exceed amount of $401,572); and WHEREAS, City staff is authorized to execute this Amendment in a form approved by the City Attorney.
NOW, THEREFORE, the Parties hereby agree as follows:
1. Section 3. A. "Not to Exceed" Compensation, of the Agreement, is amended to increase the not to exceed compensation by $140,500, for a total not to exceed the amount of $542,072 (from a previous not to exceed amount of $401,572).
2. The Agreement’s Exhibit A & B (Scope, Services and Schedule) is amended as outlined in the new Scope of Work, attached hereto and incorporated herein by reference.
3. With the exception of the foregoing, all other terms and conditions in the Agreement, as amended, remain in force and effect.
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2 City of Newark Consultant
_________________________________ _________________________________ David J. Benoun Name
City Manager [Consultant]
Dated: ___________________________ Dated: ___________________________ Attest:
__________________________________
Sheila Harrington
City Clerk
Approved as to Form:
__________________________________
Kristopher J. Kokotaylo
City Attorney
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Item D. 5.
DATE 05/09/2024
TO Honorable Mayor and City Council Members
FROM Roya Gonzalez, Senior Management Analyst
SUBJECT Adopt a resolution authorizing the acceptance of the State of California grants for the Old Town PDA Road Diet and Complete Street Improvement Project in the amount of $1,000,000 and for the Newark Resource Center Improvement Project in the amount of $1,000,000 and amend the 2022-2024 Biennial Budget and Capital Improvement Plan
SUMMARY AND RECOMMENDATION
City staff submitted requests to Assemblymember Alex Lee’s office, asking the Assemblymember to undertake legislative efforts to fund high priority projects within the City. As a result of the request and as a result of Assemblymember Lee’s efforts, the State legislature approved funding for the Old Town PDA Road Diet and Newark Resource Center Project totaling $2 million in grants. Staff recommends that the City Council, by resolution, authorize the City to accept the State of California grants for the Old Town PDA Road Diet through the California Department of Transportation and for the Newark Resource Center through the California Natural Resources Agency and also amend the 2022-2024 Biennial Budget and Capital Improvement Plan.
BACKGROUND
In March 2023, Assemblymember Lee began leading legislative efforts to secure funding for high priority projects that would address citywide service needs. Among the list of projects requested were the Old Town PDA Road Diet and the Newark Resource Center projects. As a result of the efforts of City staff and Assemblymember Lee, the City of Newark was selected to receive $2 million for improvements in accordance with State Administrative Manual Section 8002.1 and Assembly Bill (AB) 102, Amendment to the 2023 California Budget Act. Below is the intended use of funds.
Old Town PDA Road Diet: The requested amount will improve access, safety, and connections for pedestrians, bicyclists, and transit users, while also serving as a catalyst for private investment in buildings and uses within the Old Town PDA.
The project reduces the number of travel lanes and left-turn pockets on Thornton Avenue between Olive Street and Ash Street, freeing up space for wider sidewalks and bicycle lanes. Additional safety and connectivity improvements include new high visibility crosswalks, curb extensions, bus stop amenities and landscaping to Packet Page 147
improve the convenience and comfort of alternative travel modes.
Newark Resource Center: The requested amount would be applied to the capital costs associated with modification of the building based on programming needs.
This includes bathroom renovations, roof repairs, interior building modifications, landscaping in both front and back, playground equipment, pavement construction for additional parking, and security lighting, among others. The City's first resource center will serve as an entry point for social services in the Newark community.
Planned use includes contract services with various health and social service providers and, when not in use by City programs, will be made available for local non-profits.
DISCUSSION/ANALYSIS
The funding for the City of Newark to receive $2 million from the State of California for the Old Town PDA Road Diet and the Newark Resource Center Project was adopted in July 2023 in accordance with State Administration Section 8002.1 and Assembly Bill (AB) 102, Amendment to the 2023 California Budget Act.
Upon acceptance of the funds by the City of Newark, the State of California will work through both the California Department of Transportation (Old Town PDA Road Diet) and California Natural Resources Agency (Newark Resource Center) to disburse funds.
Old Town PDA Road Diet - At the end of 2023, the City contracted with CSW|ST2 to support the City with public outreach efforts, provide engineering services and develop final construction documents that will allow the City to bid the Old Town PDA Road Diet project for construction. Staff kicked off a series of public outreach events to gather community feedback to ensure the final construction plans consider the wants and needs of the community. The final construction documents are anticipated to be ready for bid advertisement in Winter 2024. The $1 million grant received by the State of California will supplement the approved $5.14 million in One Bay Area Grant 3 (OBAG 3) funding distributed by the Metropolitan Transportation Commission (MTC), $69,000 in Transportation Fund for Clean Air (TFCA) from the Bay Area Air Quality Management District (BAAQMD), and approximately $6 million of local match funds from Regional Measure 3 (RM3) funds distributed by MTC. An update construction cost estimate will be prepared by CSW|ST2 as part of the development of the 35% design plans. Construction is anticipated to begin in Spring 2025.
Newark Resource Center - In June 2023, the City contracted with KPA Group to provide architectural and engineering services and develop final construction documents that will allow the City to bid the project for construction. The design is complete, and a request for project bids is expected to be released in summer 2024.
The grant received by the State of California will supplement the $600,000 designated in the City of Newark's American Rescue Plan Act (ARPA) funds for the Newark Resource Center and the $232,023 from the Community Development Block Grant funds allocated for this project. This cumulative $1,832,023 will fully fund the anticipated cost of construction, including engineering and project management costs.
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Construction is expected to begin in early fall 2024.
FISCAL IMPACT
The recommended action of adopting a resolution to accept the AB102 Old Town PDA Road Diet and Newark Resource Center grants through the State of California will increase revenue to help fund the two projects. Staff recommends an amendment to the 2022-2024 Biennial Budget and Capital Improvement Plan to reflect the increased revenue and appropriation as shown below. Any unspent funds and appropriations would be carried forward to the next fiscal year.
Increase Revenue: $1,000,000 of State Grants AB102 for Old Town PDA Road Diet (GL 492.90.094.940.4792CIP1150)
Increase Revenue: $1,000,000 of State Grants AB102 for Newark Resource Center (GL 492.90.094.940.4792.CIP001360)
Increase Appropriation: $1,000,000 for general contractual services for Old Town PDA Road Diet (GL 625.90.094.940.6221.CIP001150)
Increase Appropriation: $1,000,000 for general contractual services for Newark Resource Center (GL 610.90.094.940.6221.CIP001360)
Transfers out: $2,000,000 (GL 492.00.000.000.9999)
Transfers in: $1,000,000 (GL 610.00.000.000.4999)
Transfers in: $1,000,000 (GL 625.00.000.000.4999)
REVIEW AND APPROVAL
Prepared by - Roya Gonzalez, Senior Management Analyst
Reviewed by - Lenka Hovorka, Assistant City Manager
Reviewed by - Krysten Lee, Finance Director
Reviewed by - Kristopher J. Kokotaylo, City Attorney
Approved by - David J. Benoun, City Manager
Attachments
Grant Resolution
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RESOLUTION NO.
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
NEWARK AUTHORIZING THE CITY TO ACCEPT THE
ASSEMBLY BILL 102 (AB102) OLD TOWN PDA ROAD DIET
AND NEWARK RESOURCE CENTER IMPROVEMENTS
GRANTS THROUGH THE STATE OF CALIFORNIA AND
AMEND THE 2022-2024 BIENNIAL BUDGET
WHEREAS, the City of Newark has been selected to receive $2 million from the State of California as a result of City staff requests and the lobbying efforts of Assemblymember Alex Lee for Old Town PDA Road Diet and Newark Resource Center Improvements in accordance with State Administrative Manual Section 8002.1 and Assembly Bill (AB)102, Amendment to 2023 California Budget Act; and
WHEREAS, the State of California included $1,000,000 for Old Town PDA Road Diet in their budget adopted July 2023 to be allocated by the California Department of Transportation; and
WHEREAS, the City of Newark will submit an invoice to the California Department of Transportation for the $1,000,000 allocated for the Old Town PDA Road Diet; and WHEREAS, the State of California included $1,000,000 for the Newark Resource Center Improvements in their budget adopted July 2023 to be allocated by the California Natural Resources Agency; and
WHEREAS, the City of Newark will submit an invoice to the California Natural Resources Agency, Office of Bonds & Grants for the $1,000,000 allocated for Newark Resource Center Improvements; and
WHEREAS, the City Council of the City of Newark authorizes the City to accept Improvements.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Newark authorizes the City to accept the State of California grants for Old Town PDA Road Diet and Newark Resource Center Improvements.
BE IT FURTHER RESOLVED that the City Council of the City of Newark approves an amendment to the 2022-2024 Biennial Budget and Capital Improvement Program as follows:
Increase: 492.90.094.940.4792.CIP001150 State Grants AB102 – Old Town PDA Road Diet
$1,000,000
Increase: 492.90.094.940.4792.CIP001360 State Grants AB102 – Newark Resource Center $1,000,000
Increase: 492.90.094.940.9999 Transfer Out $2,000,000
Increase: 625.90.094.940.6221.CIP001150 Old Town PDA Road Diet $1,000,000 Increase: 625.00.000.000.4999 Transfer In $1,000,000
Increase: 610.90.094.940.6221.CIP001360 Newark Resource Center $1,000,000 Increase: 610.00.000.000.4999
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Transfer In
150
$1,000,000
BE IT FURTHER RESOLVED that any unspent funds and appropriations would be carried forward to subsequent fiscal years.
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Item F. 1.
DATE 05/09/2024
TO Honorable Mayor and City Council Members
FROM James Scanlin, Environmental Services Manager
SUBJECT Adopt a resolution authorizing the City Manager to execute a contractual services agreement with Arup US, Inc. to develop a Sea Level Rise Vulnerability Assessment and Adaptation Strategy and amending the 2022-2024 Biennial Budget and Capital
Improvement Plan
SUMMARY AND RECOMMENDATION
This Sea Level Rise Vulnerability Assessment and Adaptation Strategy project is a critical step in the City's sea level rise adaptation planning process. This project will develop a solid understanding of future flooding risks and associated infrastructure vulnerability. This understanding is essential for the second phase of the project, included in this scope of work, which involves developing risk-informed adaptation strategies and identifying potential partners for implementation. This project can benefit the Newark community by forming the basis for future projects that will protect important infrastructure and community assets from sea level rise.
Staff recommends that the City Council adopt a Resolution authorizing the City Manager to execute a contractual services agreement, in a form approved by the City Attorney, with Arup US, Inc. for an amount not to exceed $275,000 for the development of a sea level rise vulnerability assessment and adaptation strategy.
BACKGROUND
The average sea level in the San Francisco Bay has been rising steadily and is expected to rise at increasing rates into the future. Table 1 below from the DRAFT State of California Sea Level Rise Guidance: 2024 Science and Policy Update (Report) illustrates the range of predicted sea level rise over the next 100 years. This includes Low, Intermediate-Low, Intermediate, Intermediate-High, and High scenarios. Regarding the Low scenario, the report states, "this assumption is inconsistent with current observations of an acceleration in sea level rise, but could still be considered plausible under the most aggressive emission reduction scenarios." The Report states that the Intermediate-Low scenario "provides a reasonable estimate of the lower bound for the most likely sea level rise by 2100" and that the Intermediate scenario "provides a reasonable upper bound for the most likely range of sea level rise by 2100." The Report also recommends evaluating the Intermediate, Intermediate Packet Page 152
High, and High scenarios to inform long-range planning and project investment decisions.
Table 1: Estimated Sea Level Rise in Feet (DRAFT State of California Sea Level Rise Guidance: 2024 Science and Policy Update)
Sea level rise can have significant impacts on coastal communities:
Flooding: Higher sea levels increase the risk of coastal flooding, especially during storms and high tides. This can lead to damage to infrastructure, homes, and businesses located in low-lying areas.
Erosion: Rising sea levels increase coastal erosion. This erosion can threaten coastal structures such as levees, seawalls, and buildings near the shore.
Saltwater intrusion: As sea levels rise, saltwater can intrude into freshwater aquifers. This can contaminate drinking water supplies.
Loss of coastal habitats: Wetlands and other coastal habitats are vulnerable to sea level rise. These habitats provide important ecological functions such as storm protection, and habitat for wildlife.
Infrastructure damage: Sea level rise can damage coastal infrastructure such as roads, bridges, and utilities. This can disrupt transportation networks, affect economic activities reliant on coastal infrastructure, and increase maintenance and adaptation costs.
Increased vulnerability to extreme weather events: Rising sea levels can exacerbate the impacts of extreme weather events such as atmospheric rivers and storm surges. Coastal communities may experience more frequent and severe flooding, erosion, and property damage during these events.
Addressing these impacts requires proactive measures such as coastal defense infrastructure (e.g., seawalls, levees), land-use planning to avoid vulnerable areas, ecosystem restoration to enhance natural defenses, and policies for climate change Packet Page 153
mitigation and adaptation.
Several regional efforts have been initiated to address sea level rise in the San Francisco Bay. One such effort is the San Francisco Bay Shoreline Adaptation Atlas:
Working with Nature to Plan for Sea Level Rise Using Operational Landscape Units report published in 2019. The report defines Operational Landscape Units as follows:
Operational Landscape Units (OLUs) are a practical way to manage the physical and jurisdictional complexity of the Bay shoreline...The framework provided in this report divides the Bay shoreline into 30 OLUs—connected geographic areas that share common physical characteristics and that would accordingly benefit from being managed as individual units. OLUs cross traditional jurisdictional boundaries of cities and counties, but adhere to the boundaries of natural processes like tides, waves, and sediment movement. Taken as a whole, OLUs span the entire Bay shoreline, cover that portion of the region’s land area potentially vulnerable to future sea level rise (SLR), and encompass areas along and adjacent to the shore for which geographically specific and science-based sea level rise adaptation strategies can be developed.
Newark is within the Mowry OLU which spans from the Dumbarton Bridge to Mowry Slough. Part of Fremont is also within the Mowry OLU. As the OLU framework provides a good foundation for the vulnerability assessment and adaptation strategy, the scope of work for the project includes the assessment of the entire Mowry OLU. It does not appear that other studies with a focus on the Mowry OLU have been completed to date.
DISCUSSION/ANALYSIS
CONSULTANT SELECTION
Staff released a request for proposals for a Sea Level Rise Vulnerability Assessment and Adaptation Strategy on January 25, 2024. Five proposals were received by the due date of February 26, 2024. All proposals were evaluated by a selection committee that included staff members from Environmental Services, Community Development and Public Works. A weighted quantitative scoring method was utilized by the committee that considered six factors, including the proposer's understanding and approach of the project, the experience of the firm in completing studies of this type, the overall qualifications of staff, the overall proposed cost and hourly rates, the proposed project schedule, and the references provided. The top three scoring firms were then invited for follow-up interviews and Arup US, Inc. was the selection committee's unanimous top-ranked firm. In terms of overall cost, Arup US, Inc. was very competitive relative to the other proposers. Based on the overall assessment by the committee, Arup US, Inc. clearly provided the most cost-effective proposal and will provide the best overall value to the City for this study. Below is a summary of the scope of work, consisting of six tasks, to be performed by Arup US, Inc.
SCOPE OF WORK
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Task 1: Data Collection, Review, and Agency Coordination Collect and review all available hydrodynamic, flood, and sea level rise (SLR) studies by or for relevant jurisdictions and agencies, including prior relevant project-level studies under the California Environmental Quality Act (CEQA), the Safety Element and Housing Element of the Newark General Plan, and the Local Hazard Mitigation Plan. Coordinate with local agencies that influence the City’s flood infrastructure, such as the surrounding City of Fremont and the Alameda County Flood Control and Water Conservation District (ACFC&WCD).
Task 2: Flood Hazard Modelling
Use the existing data collected in Task 1, populate a compound (i.e., accounting for SLR, storm flows, storm surge, groundwater, and subsidence effects) flooding hazard model of the City and adjacent areas of the Mowry OLU. The model will be built by Deltares, a non-profit sub-consultant for Arup US, Inc., using Deltares' physics-based tools which have been peer-reviewed and used by numerous federal and academic agencies for hazard assessments. This analysis will result in inundation extent and depth estimates for present-day, 2050, and 2100 scenarios, providing the foundation for the vulnerability and risk assessments of Tasks 3 and 4 and ultimately the adaptation measures proposed in Task 5. To represent an extreme inundation scenario, determine the maximum of (a) 100-year tide plus storm surge (i.e., coastal) flooding with 10-year pluvial and fluvial (i.e., inland) flooding and (b) 100-year inland flooding with 10-year coastal flooding.
Task 3: Vulnerability Assessment
Using the inundation extents and depths developed in Task 2, prepare a vulnerability assessment that will include an assessment of the potential impacts on infrastructure, residents, businesses, and the environment. Use existing data to populate a damage model of Newark and adjacent areas of the Mowry OLU that will include residential and commercial buildings to compute the monetary damages to residential and business properties. It will also include all roadways, rail lines, water distribution systems, sanitary sewer systems, flood control channels, levees, high-voltage lines, emergency operation facilities, landfills, and wetlands, and assess their exposure to inundation. Special attention will be given to vulnerable communities by overlying impacts with socioeconomic vulnerability maps.
Task 4: Risk Assessment
Conduct a risk assessment to determine which impacts would result in the most significant consequences by accounting for several storm scenarios. The risk assessment will be conducted through a validated impact model developed as part of Task 3. Financial losses related to inundation of critical assets, including infrastructure, residences, and businesses will be modeled quantitatively, and the impacts on wetlands and vulnerable communities assessed qualitatively.
Task 5: Adaptation Measures
Develop adaptation measure options for the City and the Mowry OLU area. For the highest priority areas identified in the vulnerability and risk assessments, mitigation and adaptation measures will be proposed using those measures promulgated by the SFEI Adaptation Atlas as a foundation. Measures will be prioritized and categorized with Packet Page 155
consideration of implementation cost and timeframe. Adaptation and mitigation measures will be evaluated within the previously developed and validated model framework, which allows for the inclusion of both green and grey infrastructure as well as policy measures that could be implemented soon or over a longer time frame to address the most significant impacts.
Task 6: Public Involvement
Facilitate two community meetings. The first meeting will be held within the first two months of project initiation and have a threefold purpose: (1) to inform the public about the project process and goals, (2) to solicit input on areas of concern, and (3) to educate attendees on important concepts key to understanding this project (e.g., vulnerability, risk, adaptation). The second meeting will occur during Task 5, focused on adaptation measures, and the goal of this meeting will be to present recommendations to reflect how public input was applied from the first meeting and to provide the public with information regarding the scope and key findings for the final draft report.
The Sea Level Rise Vulnerability Assessment and Adaptation Strategy project is expected to be completed within 9 months from contract execution.
FISCAL IMPACT
Community Development Maintenance Fees are collected on building permits for the purpose of implementation and maintenance of the General Plan and Zoning Ordinance. The General Plan's Environmental Hazard Element addresses sea level rise and flooding hazards, making this Sea Level Rise Vulnerability Assessment and Adaptation Strategy eligible for use of Community Development Maintenance Fee revenue. Staff recommends amending the 2022-2024 Biennial Budget and Capital Improvement Plan to allocate $275,000 of Development Maintenance Impact Fee funds in Fiscal Year 2024 to Sea Level Rise Vulnerability Assessment and Adaptation Strategy, Project 1368.
REVIEW AND APPROVAL
Prepared by - James Scanlin, Environmental Services Manager Reviewed by - Soren Fajeau, Public Works Director
Reviewed by - Krysten Lee, Finance Director
Reviewed by - Kristopher J. Kokotaylo, City Attorney
Approved by - David J. Benoun, City Manager
Attachments
Arup Resolution
SLR Presentation
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RESOLUTION NO.
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
NEWARK AUTHORIZING THE CITY MANAGER TO
EXECUTE A CONTRACTUAL SERVICES AGREEMENT
WITH ARUP US, INC. FOR THE DEVELOPMENT OF A SEA
LEVEL RISE VULNERABILITY ASSESSMENT AND
ADAPTATION STRATEGY AND AMENDING THE 2022-2024
BIENNIAL BUDGET AND CAPITAL IMPROVEMENT PLAN
WHEREAS, sea level has been steadily rising and is expected to rise significantly over the next several decades; and
WHEREAS, Newark is located along the shoreline of the San Francisco Bay and will be impacted in the future by a rising sea level; and
WHEREAS, the City wishes to conduct a vulnerability assessment and adaptation strategy to plan for and mitigate the effects of a rising sea level; and WHEREAS, the City released a request for proposals to develop a sea level rise vulnerability assessment and adaptation strategy, and Arup US, Inc. submitted the highestranked proposal; and WHEREAS, Arup US, Inc. is well qualified to assist the City in developing a sea level rise vulnerability assessment and adaptation strategy.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Newark that the City Manager is hereby authorized to execute a Contractual Services Agreement with Arup US, Inc., in a form approved by the City Attorney, in an amount not to exceed $275,000 to develop a sea level rise vulnerability assessment and adaptation strategy.
BE IT FURTHER RESOLVED by the City Council of the City of Newark hereby approves an amendment to the 2022-2024 Biennial Budget and Capital Improvement Plan to allocate $275,000 of Development Maintenance Impact Fee funds to Sea Level Rise Assessment, Project 1368 as follows:
Account Description Amount
To: 625.90.094.940.6221.CIP1368 Development Maintenance Impact Fees $275,000 From: 625.3000 Unappropriated Fund Balance $275,000
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Sea Level Rise Assessment
May 9, 2024
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Sea Level is Rising
• Average sea level has increased by about
200 mm (0.65 ft.) since 1900
• Sea level has been increasing more rapidly
in recent years
City Council: May 9, 2024
Sea Level Rise Vulnerability Assessment
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City Council: May 9, 2024
Sea Level Rise Vulnerability Assessment
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City Council: May 9, 2024
Sea Level Rise Vulnerability Assessment
Sea Level Rise Projections in Feet: Source, DRAFT California Sea Level Rise Guidance: 2024 Science and Policy Update
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Potential Impacts to Newark
• More frequent and intense
flooding
• Erosion of levees
• Emergent groundwater
• Brackish-water intrusion
into drinking water aquifers
City Council: May 9, 2024
Sea Level Rise Vulnerability Assessment
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Approach to Assessment and Adaptation
1) Gather Data
2) Flood Hazard Modeling
3) Vulnerability Assessment
4) Risk Assessment
5) Adaptation Measures
6) Public Involvement
City Council: May 9, 2024
Sea Level Rise Vulnerability Assessment
Deltares Extreme Water Level Model
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Consultant Selection
• RFP Released: Five proposals received
• Three firms invited for interviews
• The Team of Arup US, Inc., along with
subcontractor Deltares, was unanimously
selected
• Arup Project Manager, Jack Hogan, P.E., is
available to answer any questions
City Council: May 9, 2024
Sea Level Rise Vulnerability Assessment
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Recommendation
Staff recommends that Council adopt the
Resolution to authorize the City Manager to
execute a Contractual Service Agreement with
Arup US, Inc. to develop a Sea Level Rise
Vulnerability Assessment and Adaptation
Strategy and Amend the 2022-2024 Biennial
Budget and Capital Improvement Plan.
City Council: May 9, 2024
Sea Level Rise Vulnerability Assessment
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Questions
and Comments
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Item F. 2.
DATE 05/09/2024
TO Honorable Mayor and City Council Members
FROM Krysten Lee, Finance Director
SUBJECT Pension Update and Cost Management Strategies Presentation and, by Motion, provide direction regarding establishment and funding of a New Pension Section 115 Trust
SUMMARY AND RECOMMENDATION
The City of Newark has a reported $118M Unfunded Accrued Liability (UAL) with the California Public Employers Retirement System (CalPERS) as of June 30, 2022. The UAL represents the gap between the present value of benefits projected to be paid to retirees and the market value of assets held and managed by CalPERS on behalf of the City. The City is making payments against the UAL with CalPERS charging a discount rate of 6.8% annually on the outstanding UAL. These payments have increased from approximately $5 million per year to $10 million per year over the last six years, and are currently projected to increase another 40%-50% by Fiscal Year (FY) 2031. Rising pension costs are one of the largest financial challenges facing public agencies State-wide and are projected to impact the City’s budget significantly over the next 5-10 years.
The City has been proactively addressing this pension challenge and has made UAL prepayments (known as additional discretionary payments or “ADP”) as well as setting aside funds in its pension reserve. Staff recommends establishing a dedicated Section 115 Trust (“Trust”) for future pension costs, and initially funding the Trust with $12 million from the existing $12.4 million Pension and Other Post-Employment Benefits (OPEB) reserve fund. The Trust, as described further in this report, provides access to potentially higher investment earning opportunities than those offered by Local Agency Investment Fund (LAIF). Funds in the Trust would be restricted to addressing pension costs (i.e. unfunded liability and/or normal cost payments) but would exist as an asset on the City’s balance sheet and support flexible strategies for managing rising future CalPERS pension costs.
The following information and accompanying presentation materials are intended to provide background information on the City’s CalPERS pension liability, historical actions taken to manage pension costs, various cost management strategies and rationale for staff’s recommendation for City Council approval for the creation of the Trust.
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BACKGROUND
Newark, like most cities in California, has a UAL associated with its CalPERS pension plans for Miscellaneous and Safety employees. A UAL occurs when current pension plan assets are not projected to be sufficient to pay projected pension costs in future years. As of June 30, 2021, the City's UAL was $83 million. CalPERS, however, reported an investment return of negative 7.5% for fiscal year 2022, which has increased the City's UAL to approximately $118 million. CalPERS investment earnings for fiscal year 2023 were 6.1%, which is estimated to further increase the UAL to $119 million in next year’s CalPERS June 30, 2023 valuation.
CalPERS effectively charges the City a 6.8% interest rate on this UAL debt and requires a repayment schedule that escalates over the next decade as shown in the chart below (colored bars represent payments to amortize the UAL). Payments to amortize this debt have risen from $5 million in fiscal year 2018 to nearly $10 million in fiscal year 2023 and are projected to rise to close to $15 million by the end of the decade.
DISCUSSION/ANALYSIS
Historical Efforts: The City has taken proactive steps to address rising pension costs.
In FY 2015 and FY 2016, the City initiated a 20-year Fresh Start amortization for its Safety and Miscellaneous Plans, shortening the UAL repayment schedule by making higher annual payments and creating a significant amount of interest rate savings over time. In February 2017, the City adopted a Pension and OPEB Reserve Policy and Packet Page 168
funded a $5 million Pension and OPEB Reserve Fund (Fund 103). In FY 2021 and FY 2022, the City continued to directly address its UAL with two ADP payments ($10 million and $5 million). The City has also historically taken advantage of the prepayment discount offered by CalPERS by making a lump sum UAL payment at the beginning of each fiscal year. Currently, the prepayment discount is approximately
3.4% (usually half of the CalPERS discount rate of 6.8%).
Cost-Management Strategies: With pension costs increasing significantly in recent years due to poor CalPERS investment performance, it has become imperative for the City to continue evaluating ways to manage growing expenses and implement cost management strategies to help stabilize future pension cost volatility. City Staff, working with NHA Advisors (the City’s long-time financial advisor), evaluated multiple options for maximizing the benefit of the funds in the Pension and OPEB Reserve Fund ($12.4 million). As noted above, staff is recommending establishing and funding a $12 million pension Section 115 Trust.
The Trust is a separate trust whereby funds deposited can legally only be used for pension and OPEB expenses. In addition, funds in a Section 115 Trust have greater flexibility in how they can be managed by the City and its trust provider, which include portfolio options ranging from more conservative to moderate to more aggressive.
Establishing a Trust is expected to serve the City’s objectives for managing its pension liability, which include supporting a flexible strategy to address the upcoming peak UAL payments, while also augmenting the City’s budgetary flexibility, which could be helpful under potential recessionary scenarios in the near term.
Benefits of the Trust include (1) the ability to use the funds in the future to pay down the plan’s UAL or help smooth required CalPERS expenses; (2) enhanced budgetary flexibility; and (3) increased potential long-term investment earnings vs. other City reserves. Staff recommends establishing a Section 115 Trust with CalPERS as the administrator of the Trust. CalPERS currently manages the City’s OPEB Trust.
CalPERS can provide the services efficiently, at a competitive fee and with a couple of Trust investment strategy options. There are other trust administrators; however, they typically charge higher fees because they have more investment options.
The graphic below projects the City’s total UAL payments and the impact of applying a Section 115 Trust investment strategy for payment smoothing, assuming 4.5% long-term investment returns are achieved. This projection assumes continued annual deposits to the Section 115 Trust of approximately $400K - $1.85M from FY 2025 – 2027. Total savings (net of deposits) from this strategy are projected to exceed $6.5 million and reduce the maximum annual UAL payments from about $15 million to $11.5 million through FY 2037.
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Next Steps: Should City Council direct Staff to move forward on establishing the Section 115 Trust, Staff will bring back the necessary resolution and documentation at a May or June meeting for consideration and approval. If appropriate, the City would also anticipate contributing $12 million from the existing pension reserve to the new Trust in FY 2024.
FISCAL IMPACT
Establishing and funding a Section 115 Trust with $12 million and making annual contributions can enhance the City’s ability to manage the ongoing rise in pension payments to CalPERS. A potential costs smoothing strategy using selective Section 115 Trust withdrawals could reduce $22 million of UAL payments through FY 2037, based on current assumptions, or greater than $6.5 million net of Trust deposits.
REVIEW AND APPROVAL
Prepared by - Krysten Lee, Finance Director
Reviewed by - Kristopher J. Kokotaylo, City Attorney
Approved by - David J. Benoun, City Manager
Attachments
Pension Cost Management Strategies PPT
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CITY OF NEWARK
CALPERS UNFUNDED ACCRUED LIABILITY (UAL)
COST MANAGEMENT STRATEGIES
MAY 2024
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3 Table of Contents
I. Background on CalPERS Costs
II. Historical and Projected CalPERS Costs
III. Potential Cost Management Strategies
IV. Conclusion
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I. BACKGROUND ON CALPERS COSTS
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5 Background on How CalPERS Works
Normal Cost (“NC”) = Annual cost for
current employees
Unfunded Accrued Liability (“UAL”):
Annual payment to amortize the
“debt” to CalPERS
*Source: CalPERS Actuarial Reports. Reflects UAL balance as of 6/30/2022.
Market
Value of
CalPERS Assets:
$243 Million
Shortfall
(UAL):
$118 Million
$-
$50
$100
$150
$200
$250
$300
$350
Millions
CalPERS Pension Funded Status*
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6 201720182019202020212022202320242025202620272028202920302031203220332034203520362037203820392040204120422043204420452046204720482049 Note: This graphic represents a hypothetical California public agency’s CalPERS UAL and is provided here for educational purposes.
Net UAL Payments
UAL Payments are like a “Layer Cake”
More Layers Each Year; Increasing or Decreasing Height and Shape of “Cake” Packet Page 175
7 Now …
Sluggish returns outlook (<7%)
Assumptions have changed/changing
Discount Rate: 8.25% → 7.00% →
6.80%
Inflation rate
Mortality rates
Actuarial Valuation → Market
Valuation
Shorter (20 year) amortization
Why CalPERS Costs have Trended Higher
Then (late 1990s)…
Robust investment returns (10%+)
Retirement plans were “SuperFunded” through the late 1990s Earnings on funds were more
than adequate to cover
retirement costs
Super-funded status induced
widespread retirement benefits
enhancements.
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8 Background - Retirement Plans
CalPERS administers
the City’s two
defined benefit plans
PEPRA helpful to
manage long term
pension costs for
new employees
However, over 99%
of UAL is attributable
from Classic plans
and not reduced by
PEPRA
MISCELLANEOUS PLANS
Benefit Group # of Actives % of Actives Benefit Formula Miscellaneous 58 47.9% 2.5% @ 55
PEPRA Miscellaneous 63 52.1% 2.0% @ 62
Total Active Members 121 100.0% -
Total Covered Members 578
SAFETY PLANS
Benefit Group # of Actives % of Actives Benefit Formula Safety Police 23 46.9% 3.0% @ 50
PEPRA Safety Police 26 53.1% 2.7% @ 57
Total Active Members 49 100% -
Total Covered Members 313
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9 16.4%
15.4%
20.2%
19.6%
12.6%
10.8%
-7.1%
-6.0%
3.9%
16.7%
12.6%
12.3%
19.1%
-4.9%
-23.4%
11.6%
20.9%
1.0%
13.2%
18.4%
2.4%
0.6%
11.2%
8.6%
6.7%
4.7%
21.3%
-7.5%
6.1%
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
19951996199719981999200020012002200320042005200620072008200920102011201220132014201520162017201820192020202120222023 Historical Target Discount Rate
CalPERS Historical Investment Returns
Current Discount Rate 5-Year Average 10-Year Average 20-Year Average 30-Year Average
6.8% 6.1% 7.1% 7.0% 7.5%
Source: CalPERS.
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10 Alameda County Cities: CalPERS Funding Status (6/30/2022)
63.9%
71.3%
66.9%
74.1%
69.1% 67.7%
61.2%
70.0%
67.3% 65.5%
71.4%
66.0% 65.4%
71.2%
$327M
UAL
$42M
UAL
$685M
UAL
$23M
UAL
$41M
UAL
$473M
UAL
$543M
UAL
$169M
UAL
$118M
UAL
$2052M
UAL
$42M
UAL
$278M
UAL
$241M
UAL
$122M
UAL
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Alameda Albany Berkeley Dublin Emeryville Fremont Hayward Livermore Newark Oakland Piedmont Pleasanton San Leandro
Union City
Source: CalPERS Actuarial Reports (6/30/2022 Valuation). CalPERS funding status not inclusive of any set-aside reserves for pension costs.
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II. HISTORICAL AND PROJECTED CALPERS COSTS
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12 $-
$2
$4
$6
$8
$10
$12
$14
$16
2018201920202021202220232024202520262027202820292030203120322033203420352036203720382039204020412042204320442045 Millions
2023:
$119M
2022:
$118M
2021:
$83M
2020:
$121M
UAL
Balance
(FYE):
Historical and Projected UAL Payment Schedule
UAL Payments
(6/30/2022 Actuarial
Valuation)
Historical UAL
Payments
Source: CalPERS Pension Outlook Tool & Actuarial Valuation Reports.
Assumes FY 2022-23 CalPERS Investment Returns of 6.1%, 6.8% Investment Returns from FY 2023-24 onward.
Est. New UAL
Payments from 6.1%
FY 2022-23 Returns
Returns:
4.7%
21.3%
-7.5%
6.1%
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III. POTENTIAL COST MANAGEMENT STRATEGIES
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14 Cost-Containment Strategies – Not Mutually Exclusive (3) Prepay UAL early in Fiscal Year (≈ 3.3% discount)
(1) Negotiate Cost Sharing With Employees
(2) Fresh Start Amortization offered by CalPERS
(4) Additional Discretionary Payments (ADP)
(5) Section 115 Trust
(6) Restructure All or Portion of Remaining UAL Currently not recommended;
Continue to monitor
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15 June 2024 Proposed Establishment of Section 115 Trust June 2022 $5 Million CalPERS ADP (Miscellaneous Plan) June 2021 $10 Million CalPERS ADP (Safety Plan)
February 2017 Adopted Pension & OPEB Reserve Policy;
Funded $5 Million Reserve Fund
June 2016 CalPERS 20-Year Fresh Start (Miscellaneous Plan) June 2015 CalPERS 20-Year Fresh Start (Safety Plan)
City’s Proactive Pension Cost Management Actions
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16 Pros:
Reduced future payments
Reduced UAL / higher CalPERS funding ratio
Broader, less restrictive CalPERS investment portfolio has potential for higher returns
Cons:
Re-investment and market timing risk
No options for other investment portfolios
Less budget flexibility
City has proactively managed future pension costs through ADPs to reduce the UAL and save on interest costs in 2021 ($10M) and 2022 ($5M) Use Cash Reserves: ADP
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17 Use Cash Reserves: Section 115 Trust
Pros:
Potential for increased investment returns vs. current General Fund reserves Longer-Term: Trust funds can grow over time and pay off full UAL in the future Short-Mid Term: Apply during challenging budget years or to “smooth” payment spikes
Potential shock absorber for volatility from CalPERS investment performance & assumption changes
Cons:
Market risk
City currently has $12.4 million balance in its pension/OPEB reserve that can be allocated toward funding a Section 115 Trust
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18 Section 115 vs. CalPERS ADP Comparison
OPTION Section 115 Trust CalPERS ADP
Reduced UAL & UAL
Payments with CalPERS No Yes
Reduced Pension Liability in
Financial Report (ACFR)
No (Show up as an asset on the
City’s financial statements) Yes
Control of Investment
Strategy Yes No
Funds Managed By Trust Administrator CalPERS
Flexibility in Uses Yes No
Enhanced Budgetary
Flexibility Yes No
Savings Varies; Depends on when City
utilizes funds to pay liabilities
Immediate; Length of time
varies based on which
amortization component is
paid off
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19 Section 115 Trust Strategy: UAL Payments Smoothing
“Smooth the Peak” and Stabilize Payments with Selective Withdrawals *Assumes 6.80% Discount Rate, 6.1% FY 2022-23 CalPERS Investment Returns; 6.80% from FY 2023-24 onward. Assumes 4.50% Section 115 Trust investment returns. Reflects $12M Section 115 Trust initial deposit in FY 2023-24 and additional deposits through FY 2026-27. $-
$3
$6
$9
$12
$15
$18
$21
2024202520262027202820292030203120322033203420352036203720382039204020412042204320442045 Millions
Projected UAL Payments
Section 115 Trust Deposits
Net Impact to City
(Section 115 Smoothing)
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20 Potential Steps to Implement the Section 115 Trust
1 City determines preferred Section 115 Trust provider
2 City Council adopts resolution (at future meeting) authorizing City to create a Section 115 Trust 3 City sends signed copy of resolution to trust provider 4 Trust provider sends set of signature-ready documents to City 5 Trust provider coordinates meeting with City & investment manager to discuss investment options and select strategy, which will then support development of an investment policy 6 City signs documents and returns to trust provider
7 Trust provider works with trustee bank to establish account 8 City makes contribution once account is ready
After the Trust is implemented, trust provider will conduct annual reviews (unless more frequently desired by the City)
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21 Actions to be Consider from City Council at Future Meeting Date
1. Adopt the Section 115 Trust with trust provider
Initial investment of $12 million from pension reserve
2. Appoint the City Manager, Finance Director or designee, as the City’s Plan Administrator for the Section 115 Trust
3. Authorize the City’s Plan Administrator to execute the trust provider’s legal and administrative documents on behalf of the City Packet Page 190
IV. CONCLUSION
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23 Conclusion
Rising pension costs are a challenge facing most public agencies Newark has taken significant steps in addressing this challenge in the past City should conservatively plan for CalPERS underperformance City can consider establishing a pension Section 115 Trust to manage ongoing pension liabilities
Fund with initial deposit of $12M from existing pension reserve Potential for greater long-term earnings on funds than in LAIF Ability to implement costs smoothing and augment budgetary flexibility versus ADPs
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