City Council Memorandum
TO: HONORABLE MAYOR AND CITY COUNCIL DATE: APRIL 5, 2022 FROM: PUBLIC WORKS DEPARTMENT WARD: 4
SUBJECT: VAN BUREN BOULEVARD SEWER INSTALLATION PROJECT – APPROVAL OF THE VAN BUREN SEWER PROJECT INTERAGENCY FUNDING AGREEMENT WITH THE RIVERSIDE COUNTY OFFICE OF ECONOMIC DEVELOPMENT THE AMOUNT OF $6,440,000 – SUPPLEMENTAL APPROPRIATION ISSUE:
Approve the Van Buren Sewer Project Interagency Funding Agreement with the Riverside County Office of Economic Development in the amount of $6,440,000 to support the project costs associated with the Van Buren Sewer Installation Project.
RECOMMENDATIONS:
That the City Council:
Approve the Van Buren Sewer Project Interagency Funding Agreement with the Riverside County Office of Economic Development; With at least five affirmative votes, and upon execution of the Agreement, authorize the Chief Financial Officer, or his designee, to record an increase in revenue and appropriate expenditures in the amount of $6,440,000 to the Sewer Fund, Van Buren Sewer (Woodcrest) project accounts; and Authorize the City Manager, or his designee, to execute the agreement with the Riverside County Office of Economic Development, including making minor and non-substantive changes.
BACKGROUND:
The Van Buren Boulevard corridor between Wood Road and King Avenue is in the City of Riverside’s (City) sewer service area, although 46% of the project is located within the County of Riverside. The lack of sewer service is impeding property and business development, increasing operational and maintenance costs of private septic systems, affecting the environment and public health, and impacting Woodcrest Elementary and Woodcrest Christian High School. Efforts have been made to establish sewer service in the Woodcrest area, but have fallen short due to legal challenges preventing bonds from being sold and the dissolvement of an assessment district, as not enough businesses and property owners participated to finance the project.
Due to the funding challenges, on March 21, 2017, the City Council approved a conceptual plan for the City to provide new sewer facilities on Van Buren Boulevard between Wood Road and King Avenue (“Project”) and authorized the Public Works Department to begin engineering design, environmental clearance, and right-of-way acquisition for the construction of the new sewer facilities.
On February 5, 2019, the City Council approved a Memorandum of Understanding between the City, Western Municipal Water District, and the County of Riverside to support the construction of the Van Buren Boulevard Sewer project, including acquisition of the vacant lot at 16476 Washington Street.
On January 19, 2021, the City Council approved a potholing contract to locate utilities within the project limits as well as a Purchase and Sale Agreement with Western Municipal Water District for the acquisition of a lot located at 16476 Washington Street to construct the sewer pump station. Since a large portion of the project is in the County, the City Council directed staff to work with the County to assess available grants and/or pursue an interagency funding agreement to reduce project costs outside the City limits.
On April 13, 2021, the City Council authorized the submission of a grant application to the U.S. Economic Development Administration (USEDA) in the amount of $3,000,000 to construct the sewer improvements along Van Buren Boulevard from Wood Road to King Avenue.
DISCUSSION:
Staff coordinated with the County of Riverside on the grant application effort since April 2021. However, part of the USEDA grant requires a strong demonstration that the construction of the project would create at least 300 full-time, non-construction related jobs, within a 9-year period. To demonstrate commitment to this goal, property/business owners needed to complete Form ED-900B – Beneficiary Information. Unfortunately, Van Buren Boulevard within the project limits is mostly undeveloped and the property owners have been noncommittal to completing development projects within the 9-year period or committing to land-use projects that would generate full-time positions, especially as the real estate market and housing demand is a priority for the region. Thus, the City and the County secured only one completed ED-900B form which is precluding us from submitting a USEDA grant application. Due to this challenge, the County of Riverside is pivoting and is considering ARPA and other funding sources for their funding commitment.
In October 2021, the Riverside County Office of Economic Development (County) indicated that they would be able to commit $6,440,000, which is 46% of the project’s estimated cost of $14,000,000, as the County’s fair share to this Project. The County and City would enter into an Interagency Funding Agreement (“Agreement”) in which the City would secure environmental clearance, and design, construct, and manage the Project. The County would reimburse the City for its share of the Project’s cost, which is estimated at $6,440,000. The City would be entitled to all sewer fees collected as properties and businesses connect to the system, except for the portion of the connection fee that is attributed to the expansion of the sewer system. Since the County would have already paid for their fair share of the Project, the fee associated with the sewer system expansion prorated for this Project would need to be reimbursed to the County on an annual basis as connection fees are collected from properties within the unincorporated areas of the Riverside County (attachment 1).
STRATEGIC PLAN ALIGNMENT:
This Project aligns to Strategic Priority No. 6 – Infrastructure, Mobility and Connectivity and Goal No. 6.2 – Maintain, protect, and improve assets and infrastructure within the City’s built environment to ensure and enhance reliability, resiliency, sustainability, and facilitate connectivity.
Community Trust – This Project proposes to install sewer infrastructures on Van Buren Boulevard between King Avenue and Wood Road to serve the communities fronting the corridor in order to eliminate health hazards associated with sewer septic tank system and to promote community growth.
Equity – The Project will provide a higher degree of sewer service reliability and capacity compared to septic tank system to all properties fronting Van Buren Boulevard between King Avenue and Wood Road.
Fiscal Responsibility – This Project exemplifies the strong partnership between the City and County to share the cost and to deliver wastewater services to the City, as well as to the unincorporated areas of the County. Once the construction documents are finalized, the City will publicly advertise the project to solicit bids for the construction of this project. The construction contract will be awarded to the lowest responsive and responsible bidders.
Innovation – This Project will utilize composite manhole covers, which are lighter, air-tight, and environmental friendlier compare to conventional cast iron lids to prevent infiltration of surface water from getting into the sewer system, as well as preventing sewer odor from escaping into the air.
Sustainability & Resiliency – The construction materials that will be specified for this project are considered best practices in the industry and are expected to last well into the future.
FISCAL IMPACT:
The total fiscal impact of this action is $6,440,000. Upon Council approval and execution of the agreement, an increase of $6,440,000 will be recorded in revenue and an equal amount appropriated in the Sewer Fund, Van Buren Sewer (Woodcrest) Project revenue account number 9896900-331300 and expenditure account number 9896900-440120.
The estimated total Project including design, construction, construction engineering, and contingencies is $14,000,000 listed in Table 1 below.
Table 1—Estimated Project Costs
Task
Amount
Engineering (In House)
$215,000
Geotechnical Investigation Engineering (Consultant)
$55,000
Potholing Services (Contractor)
$150,000
Pump station Engineering (Consultant)
$300,000
Environmental (Consultant)
$80,000
Construction Contract (Estimated)
$11,000,000
Construction Contingencies
$1,100,000
Construction Engineering, Inspection, and Survey (In House) Construction Materials Testing (TBD from Approved Panel) $1,100,000
Total
$14,000,000
Prepared by: Gilbert Hernandez, Public Works Director
Certified as to
availability of funds: Edward Enriquez, Chief Financial Officer/City Treasurer Approved by: Kris Martinez, Assistant City Manager
Approved as to form: Phaedra A. Norton, City Attorney
Attachments:
Interagency Funding Agreement
Presentation
Van Buren Boulevard Sewer Project – Interagency Funding Agreement ● Page 2