City of Sacramento
City Council - 2PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2025-01477 9/16/2025
I Street Bridge Replacement Project (T15136000): Caltrans Funding Commitment Letter and Project Baseline Agreement
File ID: 2025-01477
Location: A new bridge crossing of the Sacramento River at Railyards Boulevard upriver from the existing I Street Bridge; District 4
Recommendation: Pass a Resolution authorizing the Interim City Manager or designee to: 1) execute the Funding Commitment Letter with the California Department of Transportation (Caltrans) for the I Street Bridge Replacement Project (T15136000); and 2) execute a Project Baseline Agreement with the California Transportation Commission (CTC) for the I Street Bridge Replacement Project (T15136000).
Contact: Jesse Gothan, Supervising Engineer, (916) 808-6897; Ofelia Avalos, Engineering Services Manager, (916) 808-5054, [email protected]; Lucinda Willcox, Assistant Director, (916) 808-5052, [email protected]; Department of Public Works Presenter: None
Attachments:
1-Description/Analysis
2-Resolution3-Funding Commitment Letter
4-CTC Baseline Agreement
Description/Analysis
Issue Detail: The I Street Bridge Replacement Project is a once-in-a-generation investment that will construct a new movable bridge over the Sacramento River, linking the cities of Sacramento and West Sacramento. This transformative project supports major transit-oriented and infill developments adjacent to the regional core, enabling the creation of thousands of new homes, jobs, and opportunities for employment, entertainment and recreation. The new bridge will enhance access to regional rail and transit facilities, major healthcare centers and riverfront amenities, while providing safe, direct routes for cyclists, pedestrians, emergency responders, and transit vehicles. The project will generate hundreds of high-paying construction jobs and stimulate regional economic growth. It is funded primarily through federal and state transportation programs.
File ID: 2025-01477 9/16/2025
Over the past decade, through the federal Highway Bridge Program (HBP) which supports replacement of aging bridges, the California Department of Transportation (Caltrans) has allocated federal funds to support preliminary engineering, environmental permitting, and right-of-way acquisition for the I Street Bridge Replacement Project. Most recently, Caltrans provided a letter committing $250 million in HBP funds for construction. On June 27, 2025, the California Transportation Commission (CTC) approved $25 million in competitive grant funding for the project through the State Local Partnership Program (LPP). Final plans and bid documents for the project are expected to be completed this summer.
These recent funding commitments will allow the City to begin construction in 2026, pending execution of agreements required to access HBP funds, secure the remaining project funds, and establishing interim financing for cash flow. The most critical funding and financing agreements include a Funding Commitment Letter with Caltrans. The letter defines the conditions and timeline for receipt of federal reimbursement for project construction costs. Based on this letter, the City will be reimbursed $20 million or more annually depending on the annual availability of federal HBP funds.
The availability of reimbursement funds is contingent upon statewide delivery of the Highway Bridge Program and the future renewal or extension of the federal transportation act. Financing costs such as interest incurred by the city while borrowing funds are not HBP eligible.
The City will need a financing agreement to cover costs during the four-year construction schedule.
Staff will return to the Council later this year for approval before any contract award or financial commitment.
To receive allocation of the $25 million in competitive grant funding for the project through the CTC administered State and Local Partnership Program the City must first execute a project Baseline Agreement with the CTC.
An overview of these actions were previously discussed at the July 29, 2025, meeting of the City Council..
Policy Considerations: General Plan Policy M 4.1.5 states the City shall continue to work with adjacent jurisdictions to establish the appropriate responsibilities to fund, evaluate, plan, design, construct, and maintain new river crossings.
This project will provide a new multi-modal bridge, crossing the river between C Street in West Sacramento to Railyards Boulevard in Sacramento. The new bridge is included in the Mobility Element of the General Plan, the Railyards Specific Plan, and the Bikeway Plan.
Economic Impacts: None
Environmental Considerations: California Environmental Quality Act (CEQA): The City Council
File ID: 2025-01477 9/16/2025
certified an Environmental Impact Report (EIR) and adopted a Mitigation Monitoring Program for the I Street Bridge Replacement Project in compliance with CEQA on June 25, 2019 (Resolution No. 2019 -0276). Following certification of the EIR, Staff filed a Notice of Determination with the Sacramento County Clerk on July 2, 2019. The current action consists of steps to implement the project that was approved and is consistent with the analysis contained in the certified EIR. No further environmental review is required.
As a responsible agency the City of West Sacramento also has permit jurisdiction or authorization over certain aspects of the project. The City of West Sacramento approved the EIR on August 7, 2019, and adopted the Findings and Notice of Determination authorizing the project within their jurisdiction. On November 16, 2022, the City of West Sacramento approved minor revisions to the local circulation access.
National Environmental Policy Act (NEPA): The project is funded in part by federal funds. As a result, the project is also subject to requirements of the NEPA. Caltrans is the delegated lead agency for NEPA documentation. On June 10, 2019, Caltrans approved a Final Environmental Assessment (FEA) / Finding of No Significant Impact (FONSI) for the Project pursuant to the requirements of NEPA. The NEPA document was revalidated by Caltrans in February 2023.
Sustainability: The project is consistent with the City’s sustainability goals to support direct connections that support infill development, promote walking and bicycling, and access to transit. The project will reduce dependence on private automobiles, decrease the use of fossil fuels, and help meet air quality standards by providing an array of transportation choices near jobs for a balanced, healthy city.
While supporting substantial new infill development, the bridge will result in an overall reduction in Vehicle Miles Travelled (VMT) and support reductions in greenhouse gas emissions and other pollutants.
Commission/Committee Action: The I Street Bridge Replacement Project was reviewed by the Active Transportation Commission on September 17, 2020, and on June 29, 2019. The project was presented to the Disabilities Advisory Commission for review and comment on May 4, 2022.
Comments included consideration of sidewalks connecting to the bridge be accessible and review of any gaps in the sidewalk network approaching the bridge.
Rationale for Recommendation: To access Highway Bridge Program (HBP) funding for any project exceeding $35 million, Caltrans requires local agencies enter into a Funding Commitment Letter, also referred to as a high-cost bridge agreement, which provides for reimbursement of eligible costs with federal grant funding over multiple years. Because the reimbursement schedule is longer than the anticipated four-year construction schedule, interim financing will be required to front construction costs ahead of reimbursement.
File ID: 2025-01477 9/16/2025
The Funding Commitment Letter must be signed and provided to Caltrans before the end of this federal fiscal year (ends September 30, 2025) in order for the project to access federal funding in 2026.
To receive allocation of the $25 million in competitive grant funding for the project through the CTC administered State and Local Partnership Program, the City must first execute a project Baseline Agreement with the CTC.
As a partner in the project, the City of West Sacramento is responsible for sharing costs and risks, so the two cities will also need to enter into additional agreements regarding West Sacramento’s responsibilities. City staff will return to the City Council for approval and execution of a financing agreement and a cooperative agreement with the City of West Sacramento prior to contract award.
Financial Considerations: The total construction cost for the I Street Bridge Replacement Project is estimated at $300 million, including contingencies but excluding financing costs. Proposed project funding includes $250 million in federal HBP funds and $25 million in State LPP funds.
A local funding need of $25 million remains for construction, to be shared between the two cities. In addition, debt financing costs are projected to range from $15 to $40 million, depending on the financing structure and the terms. This results in a total local funding obligation of $20 to $33 million per city.
To meet its share of local match and debt service costs, the City of Sacramento intends to use New Measure A Specific Project funds (Fund 2023) which STA has allocated in its Measure A Capital Program for the I Street Bridge Replacement. The current STA budget includes $16 million available through 2030, with an additional $14 million available after 2030.
The City of West Sacramento also has identified local funding to cover its share of the project costs.
Staff from both cities are continuing to analyze the local funding needs and are working to minimize overall debt service costs. In parallel, staff are also exploring alternative funding sources to help cover loan principal payments in the event of delayed grant reimbursements. Updated funding and financing plans will be presented to the City Council for review and approval prior to executing any formal agreements.
While this request is to sign the Funding Commitment Letter, which is necessary to move ahead with the project so it can be advertised, no financial commitment from the City will take place until funding and financing agreements to support award of a construction contract are approved by the City Council.
The intent is to identify sources of funding that would be reserved annually from the City of
File ID: 2025-01477 9/16/2025
Sacramento and the City of West Sacramento that would be available to cover principal debt payments if Caltrans reimbursements are delayed. Additional risk mitigation will also be included in the final agreements for the City Council consideration.
Local Business Enterprise (LBE): Not applicable.
Background: These actions were previously discussed at the July 29, 2025, City Council meeting..
Built by the Union Pacific Railroad over 113 years ago, the existing I Street Bridge is a combination bridge that accommodates vehicles on the upper deck and heavy rail on the lower deck. The upper deck has nine-foot travel lanes, which are too narrow for larger vehicles or buses. Additionally, there are no bicycle lanes, and the sidewalks are too narrow and steep to meet accessibility requirements.
The existing bridge and transportation network present challenges for vehicles, pedestrians, and cyclists. The narrow vehicle lanes, lack of protective medians, narrow sidewalks, and absence of bike lanes create safety concerns for all roadway users. Collision data from the Statewide Integrated Traffic Records System (SWITRS) Database, managed by the California Highway Patrol, shows that from 2017 to 2021, there were 57 collisions on the bridge and nearby roadway segments, including 19 crashes resulting in injuries and seven involving bicyclists. The new bridge aims to provide a safer connection for all modes of travel.
In 2011, the Cities of Sacramento and West Sacramento completed the Sacramento River Crossings Alternatives Study, which identified the need for new bridge crossings. The study concluded that a crossing to the north was necessary to replace the existing I Street Bridge.
Caltrans has determined that the five approach structures connecting the vehicular bridge deck to the roadway network are functionally obsolete and/or structurally deficient. In 2013, the project qualified for federal funding through the Highway Bridge Program (HBP) administered by Caltrans. This program aims to replace bridge structures owned by local agencies that are at or near the end of their design life.
With these funds, the City of Sacramento, as the lead agency, began work in 2013, which included evaluating crossing locations, conducting engineering studies, coordinating public engagement, and preparing environmental documents. In 2019, the project completed both the California Environmental Quality Act (CEQA) and the National Environmental Policy Act (NEPA) reviews. This process involved all the state and federal resource agencies with regulatory oversight of the Sacramento River, including the United States Coast Guard, the United States Fish and Wildlife Service and the Central Valley Flood Protection Board among others. After selecting an architect in 2018, in 2020 the cities concluded the architectural design through an 18-month community engagement campaign resulting in the current design of the bridge. Based on this design, in 2022, the cities began preparing the construction plans and securing the necessary property rights to construct the project.
File ID: 2025-01477 9/16/2025
Planned upriver from the existing I Street Bridge, the new bridge must be movable to accommodate boat travel per the United States Coast Guard and meet the vertical clearance established by the Highway 50 Pioneer Bridge. The new bridge will feature buffered bike lanes, 12-foot shared-use sidewalks in each direction, and multi-use paths connecting the bridge’s bicycle and pedestrian facilities to the Sacramento River Parkway in Sacramento and the Riverwalk Trail in West Sacramento. New signalized intersections will be constructed at the Railyards Boulevard intersections with Jibboom Street and Bercut Drive, and the existing I Street/Jibboom Street intersection will be removed. The project will also modify existing traffic signals at the C Street intersections with 3rd Street and 5th Street in West Sacramento. The new bridge will include 12-foot travel lanes to accommodate bus transit, trucks, and emergency vehicles.
In addition to supporting significant infill development in the Railyards and the Washington District in West Sacramento, the new bridge will directly open access to previously inaccessible land along the river by demolishing the approach bridges. Removing the Jibboom Street approach structure will allow the development of riverfront Lot 35, a 5.15-acre site entitled for mixed-use development, including approximately 32,000 square feet of regional retail, 450 hotel rooms, and 905 multifamily residential units. Riverfront access will also be improved with the removal of the Jibboom Street approach.
The new bridge will accommodate an all-weather crossing in the event of a 200-year flood and incorporate levee improvements. The existing I Street Bridge will remain, with the upper deck converted to a bicycle and pedestrian deck only, while trains will continue on the lower deck.
A Benefit Cost Analysis (BCA) prepared for the project indicates that the bridge will generate a benefit with a ratio of 1.4 times the estimated cost, including reduced vehicle operating costs, safety benefits, increased property value, access to recreational facilities, and improved hospital access.
The City has been coordinating with Caltrans for several years to determine the amount of HBP funding available. In June 2025, Caltrans agreed to update the construction phase funding to a total of $250 million. Due to the project's size, scope, and cost, Caltrans requires local agencies to enter into a Fund Commitment Letter outlining reimbursement conditions related to construction costs.
According to this letter, the City agrees it will be reimbursed for incurred construction costs over seven to thirteen years, depending on HBP commitments and the City's construction progress. The construction phase and associated costs are expected to be completed over four years, from 2026 to 2029, requiring the City to implement a financing plan while awaiting full grant funding reimbursement.
The project was approved by the California Transportation Commission for grant funding from the 2024 Local Partnership Competitive Program and received $25 million in construction funding at the June 27, 2025, Commission meeting. As part of the award, the California Transportation Commission
File ID: 2025-01477 9/16/2025
requires agencies to enter into a project Baseline Agreement to meet the requirements of the Road Repair and Accountability Act. The agreement commits agencies to adhere to items such as: the program guidelines, accountability and transparency policies, to submit periodic project reporting requirements, to secure any additional funding needs, and to maintain financial records in accordance with the Generally Accepted Government Auditing Standards.
Spanning both cities, the City of West Sacramento, as a partner agency, has shared all local costs based on previously executed cooperative agreements. An additional cooperative agreement is being developed to detail shared costs during construction, including local match requirements, construction costs not covered by grant funds, financing costs, and any additional costs exceeding available grant funding. Another interagency agreement will be developed to outline responsibilities and costs associated with the ongoing operation and maintenance of the bridge once constructed.
The project team continues to advance toward authorization to proceed into construction. The tentative schedule for the project is as follows:
· Discussion of Potential Loan Agreement with STA Board - August 14, 2025 · Determination of Financing Terms with STA and West Sacramento - August to October 2025 · City of Sacramento Execution of Funding Commitment Letter and Baseline Agreement - September 16, 2025
· City of Sacramento Initial Award of Construction Management and Inspection Services Consultant Agreement - November 2025
· Federal Authorization for Construction Funding - November 2025 · Advertisement of Construction Contract for Bids - December 2025 · Execution of Cooperative Agreement for Financing and Construction Costs with the City of West Sacramento - March 2026
· Execution of Financing Agreement with STA - January to March 2026 · Award of Construction Contract and Full Construction Management Agreement - March 2026 · Begin Construction - April 2026
More information about the project is available on the project website https://www.cityofsacramento.gov/public-works/engineering/projects/i-street-bridge-replacement- project.
RESOLUTION NO. 2025-
Adopted by the Sacramento City Council
September 16, 2025
APPROVING THE FUNDING COMMITMENT LETTER WITH CALTRANS AND THE
BASELINE AGREEMENT WITH THE CALIFORNIA TRANSPORTATION
COMMISSION – I STREET BRIDGE REPLACEMENT PROJECT (T15136000)
BACKGROUND
A. The California Department of Transportation (Caltrans) has programmed $250 million of Highway Bridge Program (HBP) funding for the construction of the bridge. It has been demonstrated that high cost projects commit large sums of federal funds but cannot spend the funds in one year due to local agency contract processes, time to mobilize the contractors and the actual time it takes to construct large projects. Caltrans states that cash management is critical to effective stewardship of the HBP and requires local agencies to sign the Funding Commitment letter, also referred to as the high-cost bridge agreement, that lists the conditions for receiving grant reimbursement.
B. As part of the Road Repair and Accountability Act of 2017 passed by the State legislature, the California Transportation Commission established the 2024 Local Partnership Competitive Program as a two-year, $195,670,000 program covering fiscal years 2025-26 and 2026-27. The I Street Bridge Replacement Project was approved by the California Transportation Commission for grant funding from the 2024 Local Partnership Competitive Program and received $25 million in construction funding at the June 27, 2025, Commission meeting.
C. As part of the award, the California Transportation Commission requires agencies to enter into a project Baseline Agreement to meet the requirements of the Road Repair and Accountability Act. The agreement commits agencies to adhere to items such as: the program guidelines, accountability and transparency policies, to submit periodic project reporting requirements, to secure any additional funding needs, and to maintain financial records in accordance with the Generally Accepted Government Auditing Standards. This resolution and agreement must be executed prior to allocating the grant funding.
BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE CITY COUNCIL RESOLVES AS FOLLOWS:
Section 1. The Interim City Manager or designee is authorized to execute the Highway Bridge Program Funding Commitment Letter to concur with the California Department of Transportation and commit local resources.
Section 2. The Interim City Manager or designee is authorized to execute the Project Baseline Agreement and any related grant documents with the California Transportation Commission and the California Department of Transportation for the 2024 Local Partnership Competitive Program.