Memorandum — San Jose City Council, April 19, 2022

TO: HONORABLE MAYOR FROM: Matt Cano
AND CITY COUNCIL Jill Bourne
Rob Lloyd
Jim Shannon

SUBJECT: SEE BELOW DATE: April 7, 2022

Approved Date
4/7/2022

COUNCIL DISTRICT: 5, 8

SUBJECT:

CITY ROADMAP - DIGITAL EQUITY: ACTIONS RELATED TO THE
CONSTRUCTION CONTRACTS FOR THE MT. PLEASANT AND

SILVER CREEK COMMUNITY WIFI INFRASTRUCTURE, JAMES

LICK TECH REFRESH, AND DIGITAL INCLUSION PROGRAM

RECOMMENDATION

(a) Adopt a resolution authorizing the Director of Public Works to:
(1) Decide any timely bid protests, including any issues of bidder responsiveness or responsibility;
(2) Make the City’s final determination as to the lowest responsive and responsible bidder;
(3) Award and execute two contracts for the construction of the Mt. Pleasant and Silver Creek Projects, to the lowest responsive, responsible bidder on each Project, in an amount not to exceed $1,750,000 for each Project, in a total amount for both Projects not to exceed $3,500,000; and
(4) Establish a construction contingency of 10% of the amount of the construction contracts for each Project.

(b) Adopt the following 2021-2022 Appropriation Ordinance and Funding Sources Resolution amendments in the General Fund to:
(1) Establish the ESUHSD Community WiFi – Mt Pleasant City-Wide Expenses appropriation to the Public Works Department in the amount of $1,671,203; (2) Establish the ESUHSD Community WiFi – Silver Creek City-Wide Expenses appropriation to the Public Works Department in the amount of $1,671,203; (3) Establish the ESUHSD Community WiFi – Tech Refresh City-Wide Expenses appropriation to the Information Technology Department in the amount of $493,204; and
(4) Increase the estimate for Revenue from Local Agencies by $3,835,610.

COUNCIL AGENDA: 04/19/2022
FILE: 22-512
ITEM: 2.10

HONORABLE MAYOR AND CITY COUNCIL
April 6, 2022
Subject: Actions Related to the Construction Contracts for the Mt. Pleasant and Silver Creek Community WiFi Infrastructure, James Lick Tech Refresh; and Digital Inclusion Program

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OUTCOME

Adoption of the recommendation in this memorandum will allow for the award and construction of the East Side Union High School District (ESUHSD) Mt. Pleasant and Silver Creek Community WiFi Infrastructure Projects, as well as final completion of the technology refresh of the James Lick network area. Approval of a ten percent contingency for the Mt. Pleasant and Silver Creek Community WiFi Infrastructure Projects will provide funding for any unanticipated work necessary for the proper completion of the projects.

BACKGROUND

In January 2020, the City issued Council Policy 0-30 “the San José Education Initiative” which sets forth the City’s policy related to the education of the City’s youth, recognizing the importance of education to the prosperity of our communities, while not supplanting the good and necessary work of the schools. The policy also includes internet and communications services and plans in the range of City services that should actively consider children and families as a primary group that should benefit from services and support.

In April 2020, the Digital Inclusion (DI) branch was activated within the Emergency Operations Center (EOC) to explore numerous potential approaches for expanding access to broadband connectivity. Staff developed a digital inclusion priority index, which analyzes aggregate demographic datasets at the census tract level and combines the demographic data with geographic school data. The complete dataset is converted to an index with numerical scores to produce a distribution and is then weighted. To identify the areas of most need, staff looked for concentrated areas of kindergarten through 12th grade enrollment, higher poverty rates, households less likely to have computers or internet access, and areas with lower English language proficiency.

The priority index identified high priority areas in several attendance areas including James Lick, Yerba Buena, Overfelt, Independence, Andrew P. Hill, and Oak Grove. Residential areas with the highest priority index scores were found in City Council Districts 3, 4, 5, and 7, followed by Council Districts 1, 2, and 6.

In June 2020, Council approved a funding strategy for proposed connectivity investments through the use of the General Fund and the Coronavirus Relief Fund for projects that provide broadband services and connectivity devices for unconnected and under-connected San José students and residents experiencing hardship accessing distance learning and critical services due to the impacts of the COVID-19 pandemic. Subsequently, in September 2020, Council approved shifting the funding for Digital Inclusion from the Coronavirus Relief Funds to the General Fund which provided additional flexibility for how the funds can be used and increasing the budget to enable the purchase of more hotspots.

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To address the urgent need due to the COVID pandemic, with support from City Council, the EOC DI Branch team worked closely with the Santa Clara County Office of Education, the California Emerging Technology Fund, school districts, the City of San José Housing Department and other key partners to explore a number of opportunities that may increase connectivity for student households and all residents currently lacking internet access.

ANALYSIS

The current partnership and cost sharing agreement with ESUHSD establishes that the school district will pay the City for the costs associated with the Mt. Pleasant and Silver Creek network areas. The City received the initial payment of $1,250,000 for each area in March 2022 for feasibility and design and is expecting a progress payment in April 2022 for an additional $421,203 per area for design consultant fees. The current budget for each of the projects is recommended as part of the memo to be $1,671,203 and as additional costs beyond the initial budget to construct the two sites are identified, the City will request reimbursement from the school district and will recognize and appropriate the funding for the project accordingly.

The original estimate of each network attendance area was $1,250,000 covering 200 access points. Prior to finalizing the bid documents, the revised Engineer Estimate of the project cost for each network area, including City project management and consultant costs, was estimated at $2.2 million. Cost increases are a direct result of escalating costs for equipment and labor. The staff recommendation to authorize the Public Works Director to award construction contracts is intended to avoid project delays that will likely occur as the City Council is on recess in July.

Reducing the time to award the project may also avoid further cost increases to equipment and labor.

The bid opportunities for the Mt. Pleasant and Silver Creek Community WiFi network construction projects will be advertised in June and July 2022, respectively. The delegation of authority to the Public Works Director will allow the projects to move forward and keep them from being further delayed. The current project schedule assumes a construction start in October 2022 for Mt Pleasant and December 2022 for Silver Creek, due to required lead time associate with equipment and materials acquirement in current market condition. The networks are expected to be available for public use in early 2023. Staff will continue to work to reduce the project timeline and expedite beneficial use, whenever feasible.

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ESUHSD Attendance Area Design
Completion Award Construction
Start Beneficial Use
Independence Completed Dec 2021 March 2022 June 2022*
Oak Grove Completed March 2022 April-May 2022* July 2022* Andrew Hill Completed Jan 2022 May 2022* July 2022*
Mt. Pleasant** May 2022 July 2022 Oct-Nov 2022* Jan-Feb 2023* Silver Creek** June 2022 Aug 2022 Dec 2022-Jan
2023* Feb-Mar 2023*
Mt. Pleasant Fiber Pull*** Completed N/A Nov 2021 Jan 2022 James Lick Technology
Refresh
February
2022 N/A N/A March 2022

San José Municipal Code Section 27.04.050 provides that the contingency for all public works contracts (except those involving the renovation of a building or buildings) cannot exceed ten percent of the total contract amount. Staff recommends a ten percent contingency for each Project, which should be sufficient to account for unforeseen conditions that might arise in the construction.

Upgrade and replacement of the wireless equipment is planned and included for all network areas to ensure that the networks are operating effectively and using utilizing the appropriate technology and equipment. Network upgrades are planned for 3-5 years after installation, the cost is paid for by the school district, and the work is completed by the City’s vendor, Smartwave. The James Lick network upgrades began in January and completed in mid-March 2022. The work was completed while maintaining the uptime of the existing network, and at a slightly lower cost than originally estimated. The network is now operating with the latest version of equipment and may not require a future upgrade for 4-6 years. Overfelt and Yerba Buena networks are scheduled for upgrades in 2023. The upgrades may be deferred by a year if the current equipment maintains an appropriate level of performance to take advantage of newer technology.

* Pending availability of equipment and materials.
** Project costs paid by ESUHSD.
*** Project costs paid by City and ESUHSD

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CONCLUSION

Each construction contract for the community wi-fi infrastructure projects will be recommended to be awarded to the lowest bidder based on the current bidding environment.

The award of these construction contracts and the recommended Appropriation Ordinance and Funding Sources Resolution amendments will be in line with the City’s commitment to addressing equity and ensuring that San José students have access to the necessary tools to continue to learn and develop, regardless of their socioeconomic standing or other barriers that may otherwise impact their ability to achieve educationally. Expansion of these connectivity solutions to all under-connected or marginalized households is the goal.

EVALUATION AND FOLLOW-UP

The projects are currently in design toward beneficial public use in February and March 2023.

No additional action is required to advance the project. Ongoing updates on project delivery will be included in the regular EOC reports to Council and within each Digital Equity Program update to the Neighborhood Services and Education Committee.

CLIMATE SMART SAN JOSE

The recommendation in this memorandum has no effect on Climate Smart San José energy, water, or mobility goals.

PUBLIC OUTREACH

Procurement staff use Biddingo to conduct outreach to local and small business enterprises.

Chapter 4.12 of the San José Municipal Code defines a “local business enterprise” as one with a legitimate business presence in Santa Clara County and “small business enterprise” as a local business enterprise with 35 or fewer employees.

COORDINATION

This memorandum has been coordinated with the EOC Digital Inclusion Branch, the Transportation Department, and the City Attorney’s Office.

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COMMISSION RECOMMENDATION/INPUT

The Library and Education Commission received an update on the Digital Equity Program at the February 16, 2022, regular meeting. The update included information about the Andrew P. Hill Network Area, and the Commission provided positive feedback on the staff direction and approach. No information on the cost increases or proposed bid responses was available for review at that time.

FISCAL/POLICY ALIGNMENT

This action aligns with the City’s existing Broadband and Digital Literacy Strategy, which identifies the current state of unconnected households, and stipulates that the City’s role in closing the digital divide is to provide connectivity solutions and leverage private investment from existing telecommunications companies.

This action also aligns with the City’s Education Policy – Council Policy 0-30. The policy states clearly the City’s position that the educational attainment of San José residents is critical necessity to several priority City outcomes such as a strong economy, a safe city, and thriving residents. The policy states that wherever possible, City assets should be utilized to reduce barriers to accessing education.

COST SUMMARY/IMPLICATIONS

1. AMOUNT OF RECOMMENDATION/ESTIMATED COST OF EACH PROJECT:

Project Delivery $ 180,000
Consultant $ 500,000
Construction - Engineer’s Estimate $ 1,400,000
Contingency 10% $ 140,000
TOTAL ESTIMATED PROJECT COSTS $ 2,200,000
TOTAL ESTIMATED PROJECT COSTS FOR BOTH PROJECTS $4,400,000

2. COST ELEMENTS OF AGREEMENT/CONTRACT: These will be lump sum contract.

3. SOURCE OF FUNDING: The school district previously committed to funding the James Lick Technology Refresh and Mt Pleasant and Silver Creek Community WiFi implementation. These costs were included in the Funding Agreement between the City and ESUHSD for the Expansion of the Community Wi-Fi and the Funding Agreement between the City and ESUHSD relating to Maintenance and Technology Refresh of the Community Wireless Network in the District, which were both approved by Council on June 29, 2021.

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The ESUHSD will make an initial payment of $3,342,406 for feasibility and design of the two areas and will make additional payments as the project progresses. The school district will also make payment for the James Lick Technology Refresh in the amount of $493,204.

4. FISCAL IMPACT: The operations and maintenance, technology refresh, and PG&E costs for the Mt. Pleasant and Silver Creek attendance areas for five years will be approximately $750,000 per project and reimbursed by ESUHSD. These costs were included in the Funding Agreement between the City and ESUHSD for the Expansion of the Community WiFi approved by Council on June 29, 2021 and will be included in the upcoming budget process. Both networks are expected to be available for public use in February and March 2023, with ongoing operations and maintenance costs estimated at $50,000 per year and PG&E costs estimated at $7,385 per year, per site to begin upon beneficial use.

BUDGET REFERENCE

The table below identifies the fund and appropriations to fund the contract recommended as part of this memorandum, including project delivery, construction, and contingency costs.

Fund
#

Appn
#

Appn Name

Current
Total Appn
Amt for
Contract

Rec. Budget
Action
2021-2022
Adopted
Operating
Budget
Last Budget
Action (Date,
Ord. No.)
001 212S Digital Divide $1,852,000 TBD N/A Page 884 10/19/2021, 30682
001 R090 Revenue from
Local Agencies $22,366,230 N/A N/A Page 282 03/22/2022, 80422
001 NEW
ESUHSD
Community WiFi –
Mt Pleasant
N/A TBD $1,671,203 N/A N/A
001 NEW
ESUHSD
Community WiFi –
Silver Creek

N/A

TBD $1,671,203 N/A N/A
001 NEW
ESUHSD
Community WiFi –
Tech Refresh
N/A TBD $493,204

N/A N/A

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CEQA

Statutorily Exempt, File No. PP10-066(d), CEQA Guidelines Section 15262, Feasibility and Planning Studies.

/s/ /s/

MATT CANO JILL BOURNE
Director of Public Works Library Director

/s/

ROB LLOYD JIM SHANNON
Deputy City Manager & Budget Director
Chief Information Officer

I hereby certify that there will be available for appropriation in the General Fund in the Fiscal Year 2021-2022 monies in excess of those heretofore appropriated therefrom, said excess being at least $3,835,610.

JIM SHANNON
Budget Director

For questions, please contact Mathew Nguyen, Deputy Director, Public Works Department at (408) 535-8300 or Ann Grabowski, Library Division Manager – Digital Equity, at [email protected].

San Jose City CouncilApril 19, 2022

San Jose City Council
April 19, 2022