RESOURCE MANAGEMENT AGENCY - H. MAVROGENES

Authorize the Resource Management Agency Director to enter into a High Cost Agreement with the California Department of Transportation (Caltrans) to secure federal funding from the Highway Bridge Program (HBP) necessary for the construction of the Union Road Bridge Replacement Project – FAP No. BRLS-5943(043) and to secure budget authority to fund the entire estimated construction phase costs currently estimated at $38.4 million while awaiting reimbursement from the HBP grant funding.

SBC FILE NUMBER: 105

This project is funded under the Federal Highway Administration (FHWA) Highway Bridge Program (HBP) was initiated after federal funds were obligated by FHWA to fund the project in 2007 to replace the existing bridge structure on Union Road spanning the San Benito River that is deemed to be structurally deficient and scour critical as the foundation have been subject to severe erosion.  The new structure as proposed will be constructed based on the current design and construction standards as well as current site requirements.  It will be constructed along a new alignment to the south from the existing location.  The existing structure will remain to carry the existing traffic during the construction of the new structure and then removed once the new structure is built and traffic diverted onto it.  Total construction phase costs is currently estimated at $38.4 million consisting of $33.7 million federal grant and $4.7 million local matching share. 

Project delays have occurred during the development of the preliminary engineering phase of this project as follows:

• The project reached the 95% complete level in 2011 but then had to be redesigned due to additional seismic considerations as required by Caltrans based on their reevaluation of the project geotechnical report to include revising the fault line location and increasing lateral fault rupture and creep movements with vertical movement.  The redesign resulted in additional costs as well as an extension of completion date.  

• The project then stalled after 2015 as the design consultant contract with Biggs Cardosa expired resulting in project delays as the project experienced key staff turnover, consultant contractual issues and non-compliance issues with Caltrans procedures.

• On May 31, 2017 County Resource Management Agency (RMA) staff terminated Original Contract #2 because the contract did not go through the public bidding process. On April 11, 2017 the Board of Supervisors approved a resolution that 1) found that it was in the public’s best interest to continue using the services of Biggs Cardosa Associates Inc., and 2) directed the RMA Director to negotiate and enter into a new contract with Biggs Cardosa Associates Inc. to continue providing professional engineering services until the project is complete.

• On December 11, 2018, with consultant contract and Caltrans compliance issues resolved, this board approved a new contract with Biggs Cardosa Associates Inc. to continue providing professional engineering services until the project is complete.

• On February 13, 2019, RMA issued a Notice to Proceed to Biggs Cardosa for the completion of the remaining work.

Environmental clearance required for NEPA and CEQA has been obtained and the updated 95% PS&E has recently been completed.  As the project progresses further, the remaining portion of the work consists of right of way acquisition including work to obtain Caltrans right of way certification, final utility coordination and 100% to Final PS&E for the final bid documents to be delivered on December 2020.

At this juncture of the project, Caltrans notified staff that due to the high project construction cost, the County will need to enter into a High Cost Agreement with Caltrans to secure federal funding from the Highway Bridge Program.  Caltrans Office Bulletin 11-02 (OB11-02) establishes procedures for programming high cost Highway Bridge Program (HBP) funded projects. This project is subject to the high cost policy because construction phase exceeds $20 million.  Total construction phase costs for the Union Road Bridge Replacement Project are currently estimated at $38.4 million.

The purpose of OB11-02 is to address the issue of a single bridge project being allocated more HBP funds in a single federal fiscal year than the project can spend. By avoiding an excessive allocation to a single high cost project, several smaller HBP projects can be advanced.

OB11-02 requires local agencies with high cost HBP projects to enter into a High Cost Agreement. A sample High Cost Agreement is attached.

The High Cost Agreement requires that local agencies with high cost HBP projects commit nonfederal fund sources (local funds) to advance the construction of the project (i.e., assure that the project is fully funded). Once the local agency commits the budget authority for the full construction funding, Caltrans will commit up to $20 million for construction for each federal fiscal year. If there are delays in constructing the project, Caltrans may reduce the amount of HBP funds programmed.

The County is required to secure the availability of local funds (budget authority) to fund the entire estimated construction phase cost of $38.4 million. Caltrans will program up to $20 million in HBP funds each federal fiscal year for reimbursing the County. The attached cash flow requirements spreadsheet shows the estimated payments to Contractor and reimbursements from Caltrans for the project. The spreadsheet shows that the project is expected to span 3 federal fiscal years, so $16 million, $19.2 million, and $3.2 million for the first, second and third federal fiscal years, respectively should be sufficient to meet the cash flow needs of the County. The County will regularly need $1.6 million each month to fund project construction phase costs prior to receiving reimbursement from Caltrans assumed to be at the end of the 3rd billing cycle and then monthly after that.

It is recommended that the Board of Supervisors:

1. Authorize the Resource Management Agency Director to enter into a High Cost Agreement (HCA) with the California Department of Transportation (Caltrans) to secure federal funding from the Highway Bridge Program (HBP) necessary for the construction of the Union Road Bridge Replacement Project – FAP No. BRLS-5943(043), subject to County Counsel's legal review and approval.

2. Authorize RMA Director to secure budget authority as required by the HCA with Caltrans to fund the entire estimated construction phase costs currently estimated at $38.4 million while awaiting reimbursements from the HBP grant funding.