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APPROVE MEASURE K RENEWAL FINANCING AGREEMENT BETWEEN CITY OF STOCKTON AND SAN JOAQUIN COUNCIL OF GOVERNMENTS, AND APPROVE AMENDMENT TO PROFESSIONAL SERVICES MASTER CONTRACT WITH STANTEC FOR THE THORNTON ROAD WIDENING PROJECT (PW1428)
recommended action
RECOMMENDATION
It is recommended that the City Council adopt a resolution authorizing the City Manager to execute a Measure K Renewal Financing Agreement in the amount of $14,500,000 with the San Joaquin Council of Governments (SJCOG) for the Thornton Road Widening project (PW1428).
It is also recommended that the City Council approve a motion authorizing the City Manager to execute an Amendment to Professional Services Master Contract with Stantec, of Walnut Creek, CA, in the amount of $149,836, to update plans and specifications, estimates, environmental documents, and permit requirements for the Thornton Road Widening project (PW1428).
It is further recommended that the resolution and motion authorize the City Manager to take appropriate actions to carry out the purpose and intent of this resolution and motion.
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Summary
The City is the lead agency for delivering the Thornton Road Widening (PW1428) regional arterial improvement project. The adopted Thornton Road Specific Plan identified Thornton Road to be widened to six lanes from Pershing Avenue to Bear Creek; this project will widen the City section from Mosher Slough to Bear Creek. Funding is now available for the project from SJCOG's sale of Measure K Renewal bonds. The California Environmental Quality Act (CEQA) documents for the project are six years old and need to be updated and recertified. Additionally, some design work is necessary to update the plans, and permits will need to be verified, updated or acquired. Staff has negotiated an Amendment to the Professional Services Master Contract with Stantec, the original project consultant, in the amount of $149,836 to complete the final design and update the CEQA documents.
The project will be funded by SJCOG's Measure K Renewal bond sale proceeds backed by the Measure K Renewal program. Per the Measure K Renewal Financing Agreement, the current proposed annual interest rate is 3.365 percent, plus a 0.0045 percent administrative fee. Interest accrual will begin after the date of the Notice to Proceed and based on actual reimbursements for project costs. Payment of principal and interest will be made from future Measure K Regional Arterial revenue, and will not affect any other funding sources or programs. Payments will begin after the project is completed, and are amortized over a 10-year period. In order to secure the funding, a Measure K Renewal Cooperative Agreement and a Financing Agreement with SJCOG are required. The accompanying funding estimate was approved by Council as part of the FY 2014-15 Annual Budget and CIP and was amended on March 10, 2015, by Council approval of the Measure K Renewal Cooperative Agreement with SJCOG.
Staff recommends Council adopt a resolution authorizing the City Manager to execute a Measure K Renewal Financing Agreement with SJCOG, in the amount of $14,500,000, and approve a motion authorizing the City Manager to execute an Amendment to Professional Services Master Contract with the initial project consultant, Stantec, of Walnut Creek, CA, in the amount of $149,836, to update plans and specifications, estimates, environmental documents, permit requirements, and provide design support services during construction for the Thornton Road Widening project (PW1428).
DISCUSSION
Background
Thornton Road is an important arterial within the City of Stockton providing north-south access from Eight Mile Road to Hammer Lane. The City is the lead agency for delivering the Thornton Road Widening project (PW1428).
In 1991, the City initiated the Stockton Streets Improvement Project to study nine major street corridors throughout the City. The goal was to determine viable roadway improvement alternatives to accommodate future traffic volumes and maintain acceptable traffic operations along nine critical street corridors. As a result of this process, Council certified a Programmatic Environmental Impact Report, and adopted nine specific plans in October 1994. The Thornton Road Specific Plan was one of the nine adopted specific plans.
The specific plan for the Thornton Road corridor identified the roadway to be widened to six lanes from Pershing Avenue to Bear Creek; this project will widen the City section from Mosher Slough to Bear Creek (Attachment A). On September 11, 2007, Council adopted Resolution No. 07-0382, which approved the Initial Study/Mitigated Negative Declaration (IS7-06) and adopted the Findings and Mitigation Monitoring/Reporting Program CEQA documents. Council also adopted Resolution No. 07-0393, which authorized an Amendment to the Professional Services Master Contract with Stantec for final design of the project. In 2009, Stantec completed the design. All utilities have been relocated and right of way cleared for the project.
The Thornton Road Widening project construction was originally anticipated to receive Measure K Congestion Relief Regional Arterial funding for construction in 2011. However, as construction approached, the economy went into recession, which severely impacted Measure K sales tax projections, available funding, and the Measure K program as a whole. As a result, funds for construction were not available. As an alternate delivery strategy, SJCOG and the City obligated federal Regional Surface Transportation Program funds to the project to amend the environmental documents to obtain federal environmental clearance, in order to make the project eligible for federal grants. However, before any substantial work was done in this federalization process, SJCOG proposed the sale of bonds backed by the Measure K program as a funding mechanism to deliver the project. This proposal would restore Measure K Regional Arterial Congestion Relief funding to the project, eliminating the need for federal funding and a federal environmental clearance and thereby avoiding the associated increased costs.
Without the bond funds, SJCOG projects the soonest Measure K funding would be available for this project would be sometime after 2021. Given that the construction cost in 2021 dollars for the Thornton Road project are projected to be significantly higher, SJCOG and City staff concur that utilizing current bond funding to expedite delivery will result in a lower overall cost to the Measure K program.
On March 10, 2015, by Resolution No. 2015-03-10-1201, Council adopted the City/SJCOG Cooperative Agreement for the Thornton Road Widening project (PW1428), which provided up to $14,500,000 in Measure K Renewal funding. At the same time, federal funds were de-obligated from the project.
Present Situation
Staff reviewed the project plans, specifications, environmental/permitting documentation that was completed in 2009 by the original project designer (Stantec) to determine if updates or revisions were necessary. The CEQA documents for the project are nearly six years old and need to be updated and recertified. Additionally, some design work will be necessary to update the plans, and permits will need to be verified, updated or acquired. As the original engineer of record, Stantec has the background, surveys, technical data, AutoCAD drawings, and specifications for the project. Stantec is therefore able to complete the updates in a more timely and cost effective manner than a consultant that is not familiar with the project details. Staff has negotiated an Amendment to the Professional Services Master Contract with Stantec, in the amount of $149,836, to complete the final design and update the CEQA documents.
The project will be funded by SJCOG's Measure K Renewal bond sale proceeds backed by the Measure K Renewal program. The current proposed annual interest rate is 3.365 percent, plus a 0.0045 percent administrative fee. Under the current expenditure and interest assumptions, interest accrual will begin after the date of the Notice to Proceed based upon the actual reimbursements for project costs. Payment of principal and interest will be made from future Measure K Congestion Relief Regional Arterial (RA) revenue receipts. Payments will begin after the project is completed and will be amortized over a 10-year period. Should RA receipts not be sufficient to fund all principal and interest costs within this period, the amortization term will be extended. In order to secure the funding, a Measure K Renewal Cooperative Agreement and a Financing Agreement with SJCOG are required. On March 10, 2015, Council approved the Measure K Renewal Cooperative Agreement with SJCOG.
SJCOG has prepared a Measure K Renewal Financing Agreement (Attachment B), which provides further details to the terms as summarized above. Staff recommends Council adopt a resolution authorizing the City Manager to execute a Measure K Renewal Financing Agreement with SJCOG, in the amount of $14,500,000, and approve a motion authorizing the City Manager to execute an Amendment to Professional Services Master Contract with Stantec, of Walnut Creek, CA, in the amount of $149,836, to update plans and specifications, estimates, environmental documents, and permit requirements for the Thornton Road Widening project (PW1428) (Attachment C).
FINANCIAL SUMMARY
The budget for these Measure K Renewal projects was estimated and approved by Council as part of the FY 2014-15 Annual Budget and CIP. The budget was amended on March 10, 2015, by Council approval of the Measure K Renewal Cooperative Agreement with SJCOG. Sufficient funding for the Thornton Road Widening project (PW1428) is available through this budget in the capital portion of the Measure K Renewal Fund 080.
The interest cost and repayment will be allocated from Measure K Congestion Relief Regional Arterial directly by SJCOG to the loan repayment. This project is listed in the Measure K Congestion Relief Regional Arterial program, and will not affect any other funding sources or programs.
There is no impact to the City's General Fund or to any other unrestricted fund as a result of taking the recommended actions.
Attachment A - Vicinity Map - Thornton Road Widening
Attachment B - Measure K Renewal Financing Agreement
Attachment C - Amendment to Professional Services Master Contract with Stantec