HomeMy WebLinkAboutItem 12 - Request for Escalation Adjustments by OCTA to Measure M2 Public Works Agency
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Item # 12
City of Santa Ana
20 Civic Center Plaza, Santa Ana, CA 92701
Staff Report
November 1, 2022
TOPIC: Request for Escalation Adjustments by the Orange County Transportation
Authority to the Measure M2 Allocations for Regional Capacity Program Projects
AGENDA TITLE
Resolutions Authorizing Requests for Escalation Adjustments by the Orange County
Transportation Authority to the Measure M2 Allocations for the Bristol Street and Warner
Avenue Street Improvement Projects
RECOMMENDED ACTION
Adopt resolutions of the City Council authorizing Requests for Escalation Adjustments by
the Orange County Transportation Authority to the Measure M2 Allocations for the Bristol
Street and Warner Avenue Street Improvement Projects.
DISCUSSION
The City of Santa Ana’s Public Works Agency participated in the 2020 Call for Projects
under the Measure M2 Regional Capacity Program (RCP) and received M2 allocations
(Measure M2 Competitive ACE funds) in the amounts of $3,273,573 and $7,501,206 from
Orange County Transportation Authority (OCTA) to fund the Bristol Street Improvements
from Civic Center Drive to Washington Avenue and the Bristol Street Improvements from
Warner Avenue to Saint Andrew Place. In addition, the City received a M2 allocation in
the amount of $7,494,000 from OCTA to fund the Warner Avenue Improvements from
Oak to Standard Avenue. Both funding allocations required a minimum 25% commitment
in matching funds, in which many of these funds were previously budgeted in prior fiscal
years, and any new match required will be budgeted in upcoming Capital Improvement
Program (CIP) cycles.
Over the course of the design of these projects, the City of Santa Ana has experienced
increased construction costs due to material supply and labor inflation. Material cost and
demand has seen dramatic increases that have been unprecedented. Many of the recent
construction bids that are being received are double the amount of the engineer’s
estimate and overall budget for the advertised City project.
The City has also experienced increased right-of-way costs due to real estate inflation.
The COVID-19 pandemic and various new state and federal guidelines developed during
this challenging time contributed to a lot of uncertainties. Low interest rates, high cost of
M2 Escalation Adjustments for Regional Capacity Program Programs
November 1, 2022
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rent, and working remotely has helped intensify housing market demand, which has
escalated market values of over 25 percent in Orange County, and plummeted housing
inventory for sale and lease. These circumstances compounded have made it extremely
difficult to deliver and construct certain projects for the community.
OCTA recently approved a temporary policy change for eligible RCP projects that were
impacted by the extraordinary cost increases of inflation. This temporary policy for
inflation which would allow local agencies to request adjustments to eligible right-of-way
and construction allocations consistent with the Engineering News Record Construction
Cost Index, based on the actual 20-city average, for fiscal years 2020-21, 2021-22, and
2022-23.
The OCTA temporary policy change requires agencies to request authorization and
approve a Resolution (Exhibits 1 and 2) from their governing bodies to apply for each
escalation adjustment to the original M2 allocations.
ENVIRONMENTAL IMPACT
There is no environmental impact associated with this action.
FISCAL IMPACT
If the Recommended Action is approved, the City will be authorized to request escalation
adjustments in the amounts below:
RECOMMENDED
PROJECTS
ORIGINAL
GRANT
AWARD
(03217663)
ORIGINAL
MATCH
UPDATED
GRANT
AWARD
(03217663)
NEW CITY
MATCH
FUNDS
Bristol St. Improvements
from Civic Center Dr. to
Washington Ave.
$3,273,573 $1,091,191 $3,964,790 $230,406
Bristol St. Improvements
from Warner Ave. to St.
Andrew Pl.
$7,501,206 $2,500,402 $9,085,091 $527,962
Warner Ave.
Improvements from Oak
St. to Grand Ave.
$7,494,000 $2,498,000 $9,076,364 $527,455
Total: $18,268,779 $6,089,593 $22,126,245 $1,285,823
If approved by the OCTA Board of Directors, the above adjustments would result in
revised M2 allocations with updated City match requirements needed for completion of
the projects. Any additional City match requirements will be budgeted via State/Local
funds in future Capital Improvement Program cycles – to align with Escalation adjustment
consideration and award.
M2 Escalation Adjustments for Regional Capacity Program Programs
November 1, 2022
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EXHIBIT(S)
1. Resolution – Bristol Street Improvements Project Request for Escalation
Adjustment
2. Resolution – Warner Avenue Improvements Project Request for Escalation
Adjustment
Submitted By: Nabil Saba, P.E., Executive Director – Public Works Agency
Approved By: Kristine Ridge, City Manager
Resolution 2022-XXX
Page 1 of 2
RESOLUTION 2022-XXX
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
SANTA ANA AUTHORIZING A REQUEST FOR
ESCALATION ADJUSTMENT BY THE ORANGE COUNTY
TRANSPORTATION AUTHORITY TO THE MEASURE M2
ALLOCATION FOR THE BRISTOL STREET
IMPROVEMENTS PROJECT
WHEREAS, the Orange County Transportation Authority (OCTA) conducted the
2020 call for projects under the Measure M2 Regional Capacity Program (RCP); and
WHEREAS, the City of Santa Ana received an M2 allocation (Measure M2
Competitive ACE funds) in the amounts of $3,273,573 and $7,501,206 from OCTA to
fund the Bristol Street Improvements from Civic Center Drive to Washington Avenue and
the Bristol Street Improvements from Warner Avenue to Saint Andrew Place; and
WHEREAS, the City of Santa Ana committed to providing a minimum of 25% in
matching funds for the Bristol Street Improvements from Civic Center Drive to Washington
Avenue and the Bristol Street Improvements from Warner Avenue to Saint Andrew Place;
and
WHEREAS, the City of Santa Ana established fiscal year 2020/21 as the program
year to commence the construction phase of the above projects; and
WHEREAS, the City of Santa Ana has experienced construction increased cost
due to material supply and labor inflation. Material cost and demand has seen a dramatic
increase that has been unprecedented. Many of the recent construction bids that are
being received are two times the amount of the engineer’s estimate and budget for the
City’s projects. This has made it extremely difficult to deliver and construct projects for
the community; and
WHEREAS, OCTA approved a temporary policy change for eligible RCP and
RTSSP projects that were impacted by the extraordinary cost increases of inflation, which
would allow local agencies to request adjustments to eligible right-of-way and
construction allocations consistent with the Engineering News Record Construction Cost
Index, based on the actual 20-city average, for fiscal years 2020-21, 2021-22, and 2022-
23; and
WHEREAS, the OCTA temporary policy change requires agencies to request
authorization from their governing bodies to apply for an escalation adjustment to the
original M2 allocation.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Santa
Ana as follows:
Resolution 2022-XXX
Page 2 of 2
Section 1. The Executive Director of Public Works, or his or her designee, is
hereby authorized to request an escalation adjustment in the amount of $2,275,103 for
the Bristol Street Improvements Project, which if approved by the OCTA Board of
Directors, would result in a revised M2 allocation of $13,049,882. Said funds, if approved,
shall be matched by funds from the City at the same 25% level, resulting in an additional
City funding need of $758,368, which will be funded through State/Local Funds.
Section 2. This Resolution shall take effect immediately upon its adoption by
the City Council, and the Clerk of the Council shall attest to and certify the vote adopting
this Resolution
ADOPTED this ____ day of ______________, 2022.
___________________________
Vicente Sarmiento
Mayor
APPROVED AS TO FORM:
Sonia R. Carvalho, City Attorney
By: ________________________
John M. Funk
Chief Assistant City Attorney
AYES: Councilmembers
NOES: Councilmembers
ABSTAIN: Councilmembers
NOT PRESENT: Councilmembers
CERTIFICATE OF ATTESTATION AND ORIGINALITY
I, _________________, Clerk of the Council, do hereby attest to and certify the attached
Resolution No. 2022-___ to be the original Resolution adopted by the City Council of the
City of Santa Ana on _____________, 2022.
Date: ___________________ ____________________________
Clerk of the Council
City of Santa Ana
Resolution 2022-XXX
Page 1 of 2
RESOLUTION 2022-XXX
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
SANTA ANA AUTHORIZING A REQUEST FOR
ESCALATION ADJUSTMENT BY THE ORANGE COUNTY
TRANSPORTATION AUTHORITY TO THE MEASURE M2
ALLOCATION FOR THE WARNER AVENUE
IMPROVEMENTS PROJECT
WHEREAS, the Orange County Transportation Authority (OCTA) conducted the
2020 call for projects under the Measure M2 Regional Capacity Program (RCP); and
WHEREAS, the City of Santa Ana received an M2 allocation (Measure M2
Competitive ACE funds) in the amount of $7,494,000 from OCTA to fund the Warner
Avenue Improvements Project from Oak Street to Standard Avenue; and
WHEREAS, the City of Santa Ana committed to providing a minimum of 25% in
matching funds for the Warner Avenue Improvements Project from Oak Street to
Standard Avenue; and
WHEREAS, the City of Santa Ana established fiscal year 2018/19 as the program
year to commence the right-of-way phase for the above project; and
WHEREAS, the City of Santa Ana has experienced increase cost for right-of-way
acquisition due to real estate inflation. The COVID-19 pandemic and various new state
and federal guidelines developed during this challenging time (especially the eviction
moratorium from April 2020 to September 2021) have created many uncertainties. Low
interest rates, high rents, and working from home have helped intensify housing market
demand, escalate market value of over 25% in Orange County, and diminish housing
inventory for sale and lease.
WHEREAS, OCTA approved a temporary policy change for eligible RCP and
RTSSP projects that were impacted by the extraordinary cost increases of inflation, which
would allow local agencies to request adjustments to eligible right-of-way and
construction allocations consistent with the Engineering News Record Construction Cost
Index, based on the actual 20-city average, for fiscal years 2020-21, 2021-22, and 2022-
23.
WHEREAS, the OCTA temporary policy change requires agencies to request
authorization from their governing bodies to apply for an escalation adjustment to the
original M2 allocation.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Santa
Ana as follows:
Resolution 2022-XXX
Page 2 of 2
Section 1. The Executive Director of Public Works, or his or her designee, is
hereby authorized to request an escalation adjustment in the amount of $1,582,364 for
the Warner Avenue Improvements Project, which if approved by the OCTA Board of
Directors, would result in a revised M2 allocation of $9,076,364. Said funds, if approved,
shall be matched by funds from the City at the same 25% level, resulting in an additional
City funding need of $527,455 which will be funded through State/Local Funds.
Section 2. This Resolution shall take effect immediately upon its adoption by
the City Council, and the Clerk of the Council shall attest to and certify the vote adopting
this Resolution
ADOPTED this ____ day of ______________, 2022.
___________________________
Vicente Sarmiento
Mayor
APPROVED AS TO FORM:
Sonia R. Carvalho, City Attorney
By: ________________________
John M. Funk
Chief Assistant City Attorney
AYES: Councilmembers
NOES: Councilmembers
ABSTAIN: Councilmembers
NOT PRESENT: Councilmembers
CERTIFICATE OF ATTESTATION AND ORIGINALITY
I, _________________, Clerk of the Council, do hereby attest to and certify the attached
Resolution No. 2022-___ to be the original Resolution adopted by the City Council of the
City of Santa Ana on _____________, 2022.
Date: ___________________ ____________________________
Clerk of the Council
City of Santa Ana