City Council
Report
City Council Meeting: March 24, 2026
Agenda Item: 4.E
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To: Mayor and City Council
From: Rick Valte, Public Works Director, Public Works, Architecture Services Subject: Approval of the Seventh Modification to the Agreement with Hathaway Dinwiddie Construction Company for Additional Design and Construction Services for the City Yards Modernization Project
Recommended Action
Staff recommends that City Council:
1. Adopt a finding that the Microgrid and Water Resources Tenant improvements were analyzed as part of the City Yards Master Plan Environmental Impact Report (EIR) and Addendum, and no further review is required pursuant to the California Environmental Quality Act (CEQA); and
2. Authorize the City Manager to negotiate and execute a seventh modification to Design-Build Contract #10371 (CCS) in the amount of $2,070,157 with Hathaway Dinwiddie Construction Company for additional design and construction services of the Microgrid and Water Resources Tenant Improvements as part of the City Yards Modernization Project for the Public Works Department. This would result in a new total amount not to exceed $100,743,196, with future funding contingent on Council budget approval.
Summary
The City of Santa Monica’s City Yards Modernization Project was initiated to address population growth, technological advancements, and evolving operational needs, aiming to enhance city services through improved efficiency, safety, and sustainability.
Approaching completion of the project’s final phases—including a microgrid and Water Resources tenant improvements —staff recommends executing a seventh modification in the amount of $2,070,157 with Hathaway Dinwiddie Construction Company (HDCC) for a new total amount not to exceed $100,743,196, to accommodate expansion of the microgrid, further-defined scope of the Water Resources tenant improvements, and site improvements.
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Discussion
Located at 2500 Michigan Avenue, the 14.7-acre Santa Monica City Yards operates seven days a week and houses the City’s Facilities Maintenance Division, Resource Recovery and Recycling Division, Street Services, Fleet Maintenance Division, Traffic Operations, Water Resources Division, and the Fire Department Training Facility.
The approved City Yards Master Plan included both a microgrid and Water Resources tenant improvements. Due to the COVID-19 pandemic, there was a $39,925,845 reduction in funding for the City Yards Modernization Project which was one of the largest enacted by Council during the covid pandemic. Project scope reductions were enacted until alternate funding could be identified.
The microgrid, including a photovoltaic array and battery backup storage, would provide efficient, reliable, and cost-effective energy that has a low environmental and carbon impact and the ability to store energy on site. The approved sixth modification included $10 million of grant funding from the California Arts Council for the project. The original design connected new buildings at the City Yards to the microgrid. In September 2024, the City identified additional funding through the Self-Generation Incentive Program (SGIP) in the amount of $1,365,100 and will be reimbursed within sixty days after SGIP confirms project completion. The additional funding supports connecting existing meters throughout City Yards to the microgrid as well, allowing the City to continue critical operations in case of a major power outage. The development of the microgrid required close coordination with Southern California Edison’s (SCE) infrastructure. Additional coordination with SCE was required to accommodate the installation of switchgear and transformers at the City Yards.
The tenant improvement project, including the relocation and construction of a new bulk material storage area, decant area, laydown areas, and equipment storage shed, would support operations in the Water Resources Division and relocate the storage areas away from the homes on the east side of the City Yards. The Fiscal Year 2022-2023 Midyear Budget, approved by Council on April 11, 2023, included $1.5 million of Water 3 of 6
and Wastewater funding for the Water Resources Tenant Improvements (Attachment G). As the design of the budgeted tenant improvements was developed, structural, fire protection, and utility connection requirements were further defined and an additional $692,177 of available Wastewater funds have been identified to complete the project.
The site improvements completed for these projects, including paving, electrical infrastructure expansion, parking lot restriping, and other miscellaneous work would also support adjacent and future projects such as the fire academy at the Santa Monica Fire Training Facility and the relocation of the Public Landscape Division which is required for the Memorial Park Expansion project. Therefore, staff recommends approving a seventh modification to the design-build contract in the amount of $2,070,157 with HDCC for a new total amount not to exceed $100,743,196.
Environmental Review
This project has previously been analyzed through certification of the City Yards Modernization Project EIR (State Clearinghouse No. 2017111053) that was certified on January 16, 2019, with an Addendum approved in May 2022. This project is one component of the City Yards Modernization Project that was described and analyzed in the City Yards Modernization Project EIR. Therefore, no further environmental documentation is required.
Past Council Actions
Meeting Date Description
10/25/2016
(Attachment A)
Award Design Contract for the City Yards Modernization
Project
6/11/2019
(Attachment B)
First Modification to Guaranteed Maximum Price Contract with Hathaway Dinwiddie Construction Company and Award
RFP to Twining Consulting for Deputy and Material Testing Inspection Services for City Yards Modernization Project 4 of 6
12/10/2019
(Attachment C)
Authorization of Second Modification to Guaranteed
Maximum Price Contract with Hathaway Dinwiddie
Construction Company for the City Yards Modernization
Project
4/27/2021
(Attachment D)
Approval of Third Modification to Design-Build Contract with Hathaway Dinwiddie Construction Company for the City
Yards Modernization Project
10/17/2021
(Attachment E)
Approval of Fourth Modification to Design-Build Contract #10371 (CCS) with Hathaway Dinwiddie Construction
Company for City Yards Modernization Project
6/14/2022
(Attachment F)
Approval of City Yards EIR Addendum, Hathaway Dinwiddie Change Order, and SCD License Agreement and Contract
Modification
4/11/2023
(Attachment G)
Fiscal Year 2022-23 Midyear Budget
07/18/2023
(Attachment H)
Approval of Sixth Modification to the Construction Contract with Hathaway Dinwiddie for the City Yards Modernization Project
Financial Impacts and Budget Actions
Staff seeks authority to approve available funding from various City Funds to increase the amount of the Guaranteed Maximum Price (GMP) agreement #10371 (CCS) with HDCC for additional design and construction services for the City Yards Modernization Project.
Contract Modification Request
Funding
Source
Current
Authorized
Amount
FY 2025-26
Request
Amount
Dept/CIP Account #
Total Revised
Contract
Amount
General $19,148,100 $170,359 C0105410.689720 $19,318,459 Miscellaneous
Grants
$10,000,000 $0 C2008760.689000 $10,000,000
Resource
Recovery and
Recycling
$1,750,000 $410,492 C5408070.689000 $2,160,492
Wastewater $350,000 $692,177 C5108790.689000 $1,042,177 Vehicle
Management
$0 $172,508 C7008250.689000 $172,508
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General $0 $186,751 C0104530.689720 $186,751
General $0 $19,853 01190002.529140 $19,853
General $200,000 $418,017 C0104580.689000 $618,017
Water $1,050,000 $0 C5008790.689000 $1,050,000
General $48,426,082 $0 C0105410.689000 $48,426,082
Water $7,406,100 $0 C5005410.689000 $7,406,100
Wastewater $1,084,600 $0 C5105410.689000 $1,084,600
Risk
Management
Administration
$60,300 $0 C7505410.689000 $60,300
Vehicle
Management
$1,500,000 $0 C7007720.689000 $1,500,000
Wastewater $650,000 $0 C5104870.689000 $650,000
Miscellaneous
Grants
$372,857 $0 C2006830.689000 $372,857
General $6,350,000 $0 C0107500.689000 $6,350,000
General $325,000 $0 01500020.52914C $325,000
Total $98,673,039 $2,070,157 $100,743,196
Future year funding is contingent on Council budget approval.
Prepared By: Jared Schultz, CIP Project Manager
Approved Forwarded to Council
Attachments:
A. October 25, 2016 Staff Report (web link)
B. June 11, 2019 Staff Report (web link)
C. December 10, 2019 Staff Report (web link)
D. April 27, 2021 Staff Report (web link)
E. October 12, 2021 Staff Report (web link)
F. June 14, 2022 Staff Report (web link)
G. April 11, 2023 Staff Report (web link)
H. July 18, 2023 Staff Report (web link)
I. 2026-02-25_Levine Act Disclosure
J. 2026-02-25_Oaks Initiative Disclosure
K. Hathaway Contract
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L. Change Order 5