CITY COUNCIL STAFF REPORT
Meeting Date: February 27, 2023
TO: THE HONORABLE MAYOR AND CITY COUNCILMEMBERS
SUBJECT: ADOPT RESOLUTION NO. ___-23 APPROVING THE APPROPRIATION
OF MEASURE K FUNDS TO FUND THE RESURFACING OF
RESIDENTIAL ZONE 17 AS PART OF THE 2022 STREET
RESURFACING PROJECT NO. PSC-01-22 AND AUTHORIZING THE
MAINTENANCE SUPERINTENDENT TO EXECUTE A CHANGE
ORDER WITH MCK SERVICES, INC.
SYNOPSIS
The Budget Committee received the audited annual Measure K Fund report for fiscal year 2021/2022 (FY 21/22). The Measure K Fund has approximately $10.2 million in total fund balance with $6.0 million that is unassigned. The unassigned fund balance could be used towards a reserve and projects that are currently unfunded and/or have insufficient funding to complete.
The 2022 Street Resurfacing Project No. PSC-01-22 provides for a pavement surface treatment on selected streets within the City. The purpose of this item is to consider the appropriation of available Measure K Funds to fund the inclusion of Residential Zone 17 in the project scope and to seek authorization to execute a construction change order with MCK Services, Inc. for the work. The Budget Committee reviewed staff’s proposal at its meeting of February 22, 2023 and approved forwarding a recommendation to the City Council to approve the funding for the project as proposed.
DISCUSSION
Background
Pleasant Hill voters adopted Measure K, a one-half cent transactions and use tax in November 2016. The tax became effective on April 1, 2017 and will sunset on March 31, 2037 unless extended by Pleasant Hill voters. At the time, annual revenues to the City were estimated at $4.0 million.
During 2020, the City was dealing with the health and financial impacts of the Coronavirus (COVID-19) pandemic. The assumption at the beginning of COVID 19 was that sales tax revenues would decline significantly. This was based on reduced sales since health officials’ guidance was to shelter at home and only purchase essential (i.e. food and medicine) goods. The City Council was aware of this concern and reduced Measure K spending except for the costs related to the new library.
COVID-19 did cause disruptions to the economy but sales tax revenues was an exception as consumers continued to purchase essential and non-essential goods online during this time. The City has seen historical highs for sales tax revenues over the last couple of years including in the Measure K Fund. The City budgeted $3.8 million and $4.0 million and received $4.9 million and $5.3 million in sales tax revenue for FY 20/21 and FY 21/22, respectively.
This has resulted in the Measure K Fund having a fund balance of $10.2 million in FY 21/22, with $4.2 million restricted for debt proceeds for the library and $6.0 million that is unassigned. The Budget Committee, at its November 30, 2022 meeting, directed staff to utilize a portion of the unassigned fund balance for Measure K approved projects that are currently unfunded and/or not fully funded to complete.
On September 12, 2022, the City Council, under Resolution No, 81-22, awarded the 2022 Street Resurfacing Project No. PSC-01-22 to MCK Services in the base bid amount (including contingency) of $4,587,305. Construction began in October 2022, and to date this project has resurfaced two collector streets (Chilpancingo Parkway, and Grayson Road (Heritage Hills Drive to Reliz Valley Road)), utilizing 3,822 tons of new asphalt concrete. Construction stopped early in December 2022, due to inclement weather, and will restart early March 2023. Remaining project work includes the resurfacing of 41 residential streets in Poet’s Corner (RZ7 and RZ20).
Analysis
The contract documents originally identified 13,500 tons of Hot Mix Asphalt (HMA) to be constructed on two collector streets and 41 residential streets in the Poet’s Corner neighborhood as part of the contract. Given the increase in revenues from Measure K, it is appropriate to amend the project scope of the contract to include additional street resurfacing.
Residential Zone 17 was previously identified for a street resurfacing treatment in the City’s Five Year Street Resurfacing Program. Based on field data collected, staff has determined that RZ17 is a suitable candidate for the HMA treatment identified in the 2022 Street Resurfacing project specifications. Staff has coordinated with East Bay Municipal Utility District (EBMUD) and the Central Contra Costa Sanitary District (CCCSD) and confirmed that the potential resurfacing in this neighborhood does not conflict with any upcoming utility infrastructure projects.
The Engineer’s Estimate for this work is $1,100,000. Staff is recommending an appropriation of $1,100,000 from available Measure K funds to the Street Resurfacing Fund and that MCK Services, Inc. be issued a change order for the work, with all bid items being paid at the contract unit price for the 2022 Street Resurfacing Project. Additional work will include utility adjustments and thermoplastic restriping of project streets. By combining the resurfacing treatment of RZ17 with this project, staff believes that better economy of scale pricing will be obtained at a cost savings to the City. Staff has confirmed with MCK Services that they are available to perform the work as part of the 2022 Street Resurfacing Project.
Staff has confirmed with the City Attorney’s office that the resurfacing of RZ17 may be added to the 2022 Street Resurfacing Project No. PSC-01-22 by change order, as the scope of work is not a material change to the contract.
The Budget Committee has reviewed staff’s request for an appropriation of $1,100,000 from unassigned Measure K funds to fund the resurfacing of RZ17 and authorize the Maintenance Superintendent to execute a change order to MCK Services, Inc. The Budget Committee has recommended the City Council approve the funding as proposed in the resolution.
FISCAL IMPACT
This change order will be funded from Fund 3, Measure K fund.
PUBLIC CONTACT
Public contact was made through posting of the City Council agenda on the City’s official notice bulletin board, at the Pleasant Hill Senior Center and at the Pleasant Hill Police Department. The agenda and staff report are posted on the City’s web page.
RECOMMENDED CITY COUNCIL ACTION
Adopt the proposed resolution to approve the resurfacing of Residential Zone 17 as part of the 2022 Street Resurfacing Project No. PSC-01-22 and authorize the Maintenance Superintendent to execute a construction change order with MCK Services.
ALTERNATIVES TO RECOMMENDED ACTION
Not authorize a change order to resurface Residential Zone 17 as part of the 2022 Street Resurfacing Project No. PSC-02-22.
ATTACHMENT(S):
Proposed Resolution
Project Map
Prepared by: Ann James, Maintenance Superintendent
Approved by: June Catalano, City Manager