Memorandum. Date: RE: Plans and Programs Committee
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1 Memorandum Date: RE: Plans and Programs Committee September 22, 2009 To: From: Through: Subject: Plans and Programs Committee: Commissioners Chu (Chair), Campos (Vice Chair), Chiu, Elsbernd, Maxwell and Dufty (Ex Officio) Anna LaForte Deputy Director for Policy and Programming José Luis Moscovich Executive Director ACTION Recommend Amendment of the Authority s American Recovery and Reinvestment Act of 2009 Local Streets and Roads System Preservation Funds Project List to Reprogram a Total of $3,036,922 in Cost Savings to Three Department of Public Works Projects Summary On February 17, 2009, President Obama signed into law the American Recovery and Reinvestment Act of 2009 (ARRA). Among its other provisions, the ARRA specifies $48 billion for the Federal Department of Transportation and suballocates a portion of the transportation funds to be programmed directly by regional transportation planning agencies such as the Bay Area s Metropolitan Transportation Commission (MTC). To date, MTC has programmed a total of $660.9 million in ARRA funds to Bay Area transportation projects, a portion of which was made available to county Congestion Management Agencies (CMAs) to program to local streets and roads system preservation projects. As the CMA for San Francisco, the Authority programmed a total of $13.54 million in ARRA funds through Resolutions (February 2009) and (May 2009) to seven Department of Public Works () projects. Due to the current favorable construction bid climate, the realized 22% to 33% in cost savings compared to the original engineer s estimate upon awarding the first five ARRA contracts, resulting in over $3 million in ARRA savings now available to reprogram to other eligible local streets and roads projects. In August, the Authority solicited project proposals for the ARRA cost savings and received 11 proposals totaling $11.14 million. Consistent with MTC s guidance on how to program ARRA cost savings, and based upon our review of the submitted projects for eligibility and ability to meet the strict November 30, 2009 fund obligation deadline, we recommend programming the ARRA cost savings to the s Bush Street project, which is currently funded by a combination of ARRA and local funds, and two new projects: Williams Avenue and Curb Ramp Construction Phase 2 (See Attachment 3). As a condition of approval of the Bush project, the has agreed to apply the local funds freed up from the Bush project to another street resurfacing project. We are seeking a recommendation to amend the Authority s ARRA local streets and roads system preservation project list to reprogram a total of $3,036,922 in cost savings to three projects. BACKGROUND On February 17, 2009, President Obama signed into law the American Recovery and Reinvestment Act (ARRA), which enacted a $787 billion economic recovery package calling for significant new spending as well as tax cuts. ARRA specifies $48 billion for the Federal Department of Transportation, including $27.5 billion in Federal Highway Administration (FHWA) funds and $8.4 billion in Federal Transit Administration (FTA) funds. ARRA sub-allocates a portion of the transportation funds to be programmed directly by state and regional transportation planning agencies. As appropriate for an economic stimulus bill, all ARRA funds have very stringent use-it-or-lose-it timely use of funds provisions, making project readiness paramount when prioritizing projects. As the Congestion Management Agency (CMA) for San Francisco, the Authority was responsible for selecting local projects to receive San Francisco s formula share of ARRA local streets and roads system J:\2009\Memos\09 - September 2009\ARRA LS&R Cost Savings.doc Page 1 of 5
2 preservation funds, subject to approval by the MTC. In its guidance for these funds, MTC required that all recommended projects be able to meet the ARRA delivery requirements and be located on federal aid-eligible roads. MTC further specified that pavement renovation projects should be given priority in the project selection process, but that CMAs may consider programming a portion of the ARRA funds to address other local streets needs such as signal upgrades, bicycle facilities, and pedestrian safety improvements. In February 2009, the Authority approved Resolution which recommended programming $11.35 million in ARRA local streets and roads system preservation funds to five Department of Public Works () pavement renovation projects which emerged as the top candidates after a competitive call for projects. In May 2009, after the MTC increased the amount of ARRA funds available to program to local streets and roads targets, the Authority approved Resolution which programmed an additional $2.19 million in ARRA funds to two new projects that had scored highly in the initial project prioritization process. San Francisco s current ARRA local streets and roads system preservation project list, as adopted by the Authority and approved by MTC, is shown in Attachment 1. Due to the current favorable construction bid climate, the, along with other construction project sponsors across the region and the state, realized significant cost savings upon awarding contracts for the first round of ARRA projects approved in February Figure 1 shows the cost savings realized for each of the s five ARRA pavement renovation projects awarded to date, ranging from 22% to 33% of the original engineer s estimate and totaling $3,036,922. Figure 1. Cost Savings Realized for Five Awarded ARRA Projects Project Cost Estimate Contract Award Jones Street Turk Street Divisadero Street 7th Avenue and Laguna Honda Boulevard Geary Boulevard Intersections Paving Cost Savings % of Estimate $2,066,000 $1,410,277 $655,723 32% $1,549,000 $1,195,042 $353,958 23% $3,227,000 $2,395,830 $831,170 26% $3,840,000 $2,787,467 $1,052,533 33% $668,000 $524,462 $143,538 22% Total $11,350,000 $8,313,078 $3,036,922 27% These cost savings must be reprogrammed within the existing regional and state ARRA timely use of funds deadlines, which are November 30, 2009 for fund obligation and December 31, 2009 for contract award. The state and regional deadlines precede the federal deadlines in order to allow the California Department of Transportation (Caltrans) and MTC the opportunity to identify delivery issues ahead of time, reprogram any unobligated funds in advance of the federal deadlines, and retain funds within the state and region. If San Francisco is unable to reprogram the cost savings prior to the November 30 fund obligation deadline, the cost savings will not be available for reprogramming until March 2010 due to a statewide freeze on ARRA obligations. The purpose of this memorandum is to propose an amendment to the Authority s adopted ARRA local streets and roads system preservation project list to reprogram in the ARRA cost savings to eligible J:\2009\Memos\09 - September 2009\ARRA LS&R Cost Savings.doc Page 2 of 5
3 projects that can meet the November 30, 2009 obligation deadline. DISCUSSION In July 2009, MTC released its guidance about how to program cost savings from ARRA local streets and roads system preservation projects. In order of priority, MTC recommended the following actions: 1. Lower the ratio of local funds to federal funds on an existing ARRA-funded project, i.e. deobligate local funds from the project in the amount of the cost savings. This would require a commitment that the de-obligated local funds be expended on another local streets and roads system preservation project. 2. If additional scope elements were environmentally cleared but not funded as part of the ARRA grant, use cost savings to increase the scope of the project. 3. De-obligate ARRA funds and re-obligate them to a new eligible project that can obligate funds prior to November 30, Wait until March 2010 to de-obligate and re-obligate the cost savings. MTC cautioned that Caltrans and FHWA, the agencies which review and obligate the ARRA funds, have limited capacity to review new local ARRA projects and advised that counties minimize the number of new projects for which they are seeking obligation before the November 30 deadline. However, by re-obligating the ARRA cost savings prior to November 30, 2009, rather than waiting until March 2010, the funds would be put to work stimulating the economy more quickly, and better position San Francisco and the region to receive any redistributed ARRA funds from across the state. On August 19, 2009, we surveyed the Authority s Technical Working Group for additional eligible ARRA local streets and roads system preservation project proposals. By late August, we received seven proposals totaling $11.14 million, which are summarized in Attachment 2. Recommended Strategy to Reprogram San Francisco s ARRA Cost Savings: After screening projects for eligibility and likeliness of meeting the timely use of funds deadlines, we developed the staff recommendation, shown in Attachment 3, for how to revise the ARRA local streets and roads system preservation project list. Recommended actions would include: De-obligate a total of $3,036,922 in realized cost savings from the five awarded ARRA local streets and roads system preservation projects. Re-obligate $885,000 in ARRA funds to the existing Bush Street project, reducing the ratio of local funds for the project. This is San Francisco s only ARRA-funded local streets and roads system preservation project with local funds remaining in its funding plan. As a condition of approval and consistent with MTC guidance, the has committed to applying the freed up local funds to another street resurfacing project. Re-obligate the remaining $2,151,922 in cost savings to two new projects: Williams Avenue, and Curb Ramp Construction Phase 2. We are proposing to fund the two new projects because they are most likely to meet the November 30, 2009 obligation deadline since they are fully or nearly fully designed and the is ready to submit environmental clearance requests to Caltrans immediately. Both projects have very similar scopes to projects that have either already received an ARRA obligation or are far along in the obligation process without issue. Further, neither project has obvious eligibility issues (e.g. city forces J:\2009\Memos\09 - September 2009\ARRA LS&R Cost Savings.doc Page 3 of 5
4 performing work, located outside of federal aid-eligible road) that must be resolved prior to obligation. Next Steps: Once the Authority Board adopts an amended project list for the ARRA local streets and roads system preservation funds, the will immediately revise the Bush Street project obligation request and resubmit it to Caltrans, and will submit environmental clearance and obligation requests for the two new projects. If the is for any reason unable to obligate the funds by November 30, 2009, it will not fully de-obligate the cost savings, and will instead wait until March 2010 to again seek re-obligation to the recommended list of projects. Any additional cost savings realized through the award of additional ARRA project contracts would be prioritized for cost overruns or scope expansions of the recommended list of projects, or if those options are unavailable, would be considered for the Municipal Transportation Agency s (MTA s) Pedestrian Signal Upgrade or Traffic Calming projects if they are determined eligible and ready to obligate. If it is not feasible to pursue any of those options, we would issue a supplemental call for projects for the additional ARRA cost savings. Update on ARRA Transportation Enhancements (TE) Projects: In April 2009 the Authority approved Resolution which programmed $932,297 in ARRA TE funds to two MTA projects: the Inner Sunset Traffic Calming Project and the Pedestrian Signal Upgrade Project. The grant for the Inner Sunset Traffic Calming project was obligated in mid-september, but the Pedestrian Signal Upgrade Project has not yet been obligated due to eligibility issues around force account work. We are actively working with MTA, MTC, and Caltrans to resolve the outstanding issues and ensure the outstanding ARRA TE funds are obligated as soon as possible. We are seeking a recommendation to amend the Authority s ARRA local streets and roads system preservation project list to reprogram a total of $3,036,922 in cost savings to three projects, as shown in Attachment 3. ALTERNATIVES 1. Recommend amendment of the Authority s ARRA local streets and roads system preservation funds project list to reprogram a total of $3,036,922 in cost savings to three projects as shown in Attachment 3, as requested. 2. Recommend amendment of the Authority s ARRA local streets and roads system preservation funds project list to reprogram a total of $3,036,922 in cost savings to projects as shown in Attachment 3, with modifications. 3. Defer action, pending additional information or further staff analysis. CAC POSITION The CAC was briefed on this item at its September 9, 2009 meeting, and unanimously adopted a motion of support for the staff recommendation. FINANCIAL IMPACTS There would be no financial impacts on the Authority s budget resulting from the proposed action. RECOMMENDATION Recommend amendment of the Authority s ARRA local streets and roads system preservation funds project list to reprogram a total of $3,036,922 in cost savings to three projects. J:\2009\Memos\09 - September 2009\ARRA LS&R Cost Savings.doc Page 4 of 5
5 Attachments: 1. Adopted San Francisco ARRA Local Streets and Roads System Preservation Project List 2. Project Proposals Received August Amended San Francisco s ARRA Local Streets and Roads System Preservation Project List J:\2009\Memos\09 - September 2009\ARRA LS&R Cost Savings.doc Page 5 of 5
6 Attachment 1 SFCTA Adopted San Francisco ARRA Local Streets and Roads System Preservation Project List (Resolution 09-46, adopted February 24, 2009; Resolution 09-67, adopted May 19, 2009) Lead Agency Project Title Project Description ARRA Funds Awarded (Resolutions and 09-67) Total Project Cost Sup. District Jones Street Renovate pavement on Jones Street from Market Street to California Street. Project scope includes paving, planing, base repairs, curb ramps, and pavement markings. $2,066,000 $2,066,000 3 and 6 Turk Street Renovate pavement on Turk Street from Market Street to Van Ness Avenue. Project scope includes paving, planing, base repairs, and curb ramps. $1,549,000 $1,549,000 6 Divisadero Street Renovate pavement on Divisadero Street between Waller Street and Geary Boulevard. Project scope includes paving, planing, base repairs, curb ramps, and pavement markings. $3,227,000 $3,227, th Avenue and Laguna Honda Boulevard Renovate pavement on 7th Avenue from Hugo Street to Judah Street, and from Kirkham Street to Laguna Honda Boulevard. Renovate pavement on Laguna Honda Boulevard from 7th Avenue to Dewey Boulevard. Project scope includes paving, planing, base repairs, curb ramps, and pavement markings. $3,840,000 $3,840,000 7 Geary Boulevard Intersections Paving Renovate pavement at intersections on Geary Boulevard at 19th, 20th, 21st, 22nd, and 23rd Avenues. Project scope includes paving, planing, base repairs, curb ramps, and pavement markings. $668,000 $668,000 1 J:\2009\Memos\09 - September 2009\ARRA LS&R Cost Savings - ATT 1-3 Page 1 of 7
7 Attachment 1 SFCTA Adopted San Francisco ARRA Local Streets and Roads System Preservation Project List (Resolution 09-46, adopted February 24, 2009; Resolution 09-67, adopted May 19, 2009) Lead Agency Project Title Project Description ARRA Funds Awarded (Resolutions and 09-67) Total Project Cost Sup. District Bush Street Renovate pavement on Bush Street from Van Ness Avenue to Presidio Avenue and on Euclid Avenue from Presidio Avenue to Masonic Avenue. Project scope includes curb ramp construction. Project also funded with $1,685,000 in Proposition 42 local streets and roads formula funds. $1,115,000 $2,800,000 2 and 5 Curb Ramp Construction - Phase 1 Construct an estimated 119 curb ramps and returns at the following locations in compliance with the Americans with Disabilities Act: -Teresita at Bellavista -Broad at San Jose -Hayes at Clayton -Greenwich at Divisadero and at Scott -Webster at Pixley -Octavia at McAllister -9th Avenue at Irving -Clement at Arguello, at 2nd, 3rd, 4th, 6th, 7th, 9th, 10th, 11th, and 12th Avenues, and at Funston $1,075,000 $1,075,000 various Total ARRA Recommended $13,540,000 $15,225,000 Total ARRA Available $13,540,000 Difference $0 J:\2009\Memos\09 - September 2009\ARRA LS&R Cost Savings - ATT 1-3 Page 2 of 7
8 Attachment 2 San Francisco County Transportation Authority Project Proposals Received - August 2009 Sponsor 1 Project Title Project Description New ARRA Funds Requested Total Project Cost Project Status Est Obligation Est Award Eligibility Screening Notes Bush Street Williams Avenue Existing ARRA Renovate pavement on Bush Street from Van Ness Avenue to Presidio Avenue and on Euclid Avenue from Presidio Avenue to Masonic Avenue. Project scope includes curb ramp construction. $885,000 Project. Design 100% complete, environmentally cleared, obligation $2,800,000 request pending. 11/30/2009 4/30/2010 Renovate pavement on Williams Avenue from 3rd Street to Phelps Street. Project scope includes paving, planing, base repairs, curb ramps, and pavement markings. $1,500,000 $1,500,000 Design 100% complete, ready to submit environmental clearance request. 11/30/2009 5/31/2010 Likely to meet obligation deadline. Would require extension of MTC award deadline. Meets MTC's highest priority to reprogram cost savings to existing ARRAfunded projects by reducing local funds committed to the project. Likely to meet obligation deadline. Would require extension of MTC award deadline. Curb Ramp Construction - Phase 2 Construct an estimated 64 curb ramps and returns at the following locations in compliance with the Americans with Disabilities Act: -Clement at 5th and 8th Avenues -Anza at Almaden Court -California at Buchanan -Webster at Golden Gate -Stanford at Brannan -Howard at Mary -Minna at 8th Street -Camp at Albion -Oakwood at 19th Street -Bryant at 20th Street -23rd Street at Kansas and Utah $640,000 Design 95% complete, ready to submit environmental $640,000 clearance request. 11/30/2009 5/31/2010 Likely to meet obligation deadline. Would require extension of MTC award deadline. The Authority awarded ARRA local streets and roads funds to Curb Ramp Construction - Phase 1 project in May 2009, and it is currently pending obligation. MTA Accessible Pedestrian Signals Procure and install pedestrian countdown signals and controllers/cabinets at the intersections of Larkin at North Point, Fremont at Harrison, and Harrison at Spear. Procure and install replacement cabinets at Bay at Powell and Stockton. $185,000 Design 100% complete, project environmentally $784,295 cleared. At risk - see note. n/a Ineligible for ARRA funds as currently scoped. Installation will be performed by city forces. Earlier SFCTA programmed ARRA Transportation Enhancement (TE) funds to this project, but FHWA recently determined that work performed by city forces, as opposed to through a contract, is ineligible for ARRA funds. MTA is currently working with Caltrans and FHWA to find a solution to this issue. J:\2009\Memos\09 - September 2009\ARRA LS&R Cost Savings - ATT 1-3 Page 3 of 7
9 Attachment 2 San Francisco County Transportation Authority Project Proposals Received - August 2009 Sponsor 1 Project Title Project Description New ARRA Funds Requested Total Project Cost Project Status Est Obligation Est Award Eligibility Screening Notes MTA Traffic Calming Central Richmond Pedestrian Islands Ready to submit Implementation of 22 pedestrian islands in approved areawide Traffic Calming project (Central Richmond District). $330,000 environmental clearance request $330,000 by 9/30/ /28/2010 n/a Ineligible for ARRA funds as currently scoped - MTA indicates construction will be performed by city forces. Will not meet obligation deadline. SFRA Local streets included in this project include (in Hillside Development) Navy and Oakdale Roads, and (in Hilltop) Donahue, Coleman, Friedell, and Hudson Streets; Kirkwood, Jerrold, Galvez and Hunters Point Innes Avenues. Project scope includes road base Shipyard Phase 1 and surface, curbs/gutters, pedestrian Roadway connections and sidewalks serving both the Improvements Hillside and Hilltop developments. Up to $3,600,000 Not fully designed or federally Up to environmentally $3,600,000 cleared. after 11/30/2009 n/a Not likely to meet obligation deadline. Project could be segmented into $1.1 - $1.4 million subprojects. SFRA Hunters Point Transit and Open Access Project Repair four existing pedestrian stairways and repair and construct sidewalks in the India Basin area of Hunters Point neighborhood in San Francisco. The scope includes shoring, leveling the slope of stair landings to meet the new established gradings, repair rise and run of tread sizes to conform to the San Francisco Building Code, installation of new handrails and replacement of slab-on-grade stairways that have washed away. The project also includes sidewalk repair for eastside of Innes from Griffith to Arelious Walker. Up to $4,000,000 Total ARRA funds requested: $11,140,000 Not fully designed or federally Up to environmentally $4,000,000 cleared. after 11/30/2009 n/a Not likely to meet obligation deadline. Project could be segmented into $300,000 - $1.4 million subprojects. If these are historic stairways, may require extra historical preservation process, which would delay the fund obligation date. 1 Acronyms include Department of Public Works (), Municipal Transportation Agency (MTA), and San Francisco Redevelopment Agency (SFRA). J:\2009\Memos\09 - September 2009\ARRA LS&R Cost Savings - ATT 1-3 Page 4 of 7
10 Attachment 3 San Francisco County Transportation Authority Proposed Amended San Francisco ARRA Local Streets and Roads System Preservation Project List Lead Agency Project Title Project Description Project Status Recommended ARRA Funds 1 Total Project Cost 1 Sup. District Jones Street Renovate pavement on Jones Street from Market Street to California Street. Project scope includes paving, planing, base repairs, curb ramps, and pavement markings. Contract awarded with 32% in cost savings. $655,723 in obligated ARRA funds available for deobligation and reprogramming. $2,066,000 $1,410,277 (awarded) $2,066,000 $1,410,277 3 and 6 Turk Street Renovate pavement on Turk Street from Market Street to Van Ness Avenue. Project scope includes paving, planing, base repairs, and curb ramps. Contract awarded with 23% in cost savings. $353,958 in obligated ARRA funds available for deobligation and reprogramming. $1,549,000 $1,195,042 (awarded) $1,549,000 $1,195,042 6 Divisadero Street Renovate pavement on Divisadero Street between Waller Street and Geary Boulevard. Project scope includes paving, planing, base repairs, curb ramps, and pavement markings. Contract awarded with 26% in cost savings. $831,170 in obligated ARRA funds available for deobligation and reprogramming. $3,227,000 $2,395,830 (awarded) $3,227,000 $2,395, th Avenue and Laguna Honda Boulevard Renovate pavement on 7th Avenue from Hugo Street to Judah Street, and from Kirkham Street to Laguna Honda Boulevard. Renovate pavement on Laguna Honda Boulevard from 7th Avenue to Dewey Boulevard. Project scope includes paving, planing, base repairs, curb ramps, and pavement markings. Contract awarded with 33% in cost savings. $1,052,533 in obligated ARRA funds available for deobligation and reprogramming. $3,840,000 $2,787,467 (awarded) $3,840,000 $2,787,467 7 J:\2009\Memos\09 - September 2009\ARRA LS&R Cost Savings - ATT 1-3 Page 5 of 7
11 Attachment 3 San Francisco County Transportation Authority Proposed Amended San Francisco ARRA Local Streets and Roads System Preservation Project List Lead Agency Project Title Project Description Project Status Recommended ARRA Funds 1 Total Project Cost 1 Sup. District Renovate pavement at intersections on Geary Geary Boulevard Boulevard at 19th, 20th, 21st, 22nd, and 23rd Intersections Paving Avenues. Project scope includes paving, planing, base repairs, curb ramps, and pavement markings. Contract awarded with 22% in cost savings. $143,538 in obligated ARRA funds available for deobligation and reprogramming. $668,000 $524,462 (awarded) $668,000 $524,462 1 Bush Street Renovate pavement on Bush Street from Van Ness Avenue to Presidio Avenue and on Euclid Avenue from Presidio Avenue to Masonic Avenue. Project scope includes curb ramp construction. Obligation request pending. $1,115,000 $2,000,000 (estimated award) $2,800,000 $2,901,550 2 and 5 Curb Ramp Construction - Phase 1 Construct an estimated 119 curb ramps and returns at the following locations in compliance with the Americans with Disabilities Act: -Teresita at Bellavista -Broad at San Jose -Hayes at Clayton -Greenwich at Divisadero and at Scott -Webster at Pixley -Octavia at McAllister -9th Avenue at Irving -Clement at Arguello, at 2nd, 3rd, 4th, 6th, 7th, 9th, 10th, 11th, and 12th Avenues, and at Funston Obligation request pending. Cost savings, if any, to be determined after receipt of bid. $1,075,000 $1,075,000 various J:\2009\Memos\09 - September 2009\ARRA LS&R Cost Savings - ATT 1-3 Page 6 of 7
12 Attachment 3 San Francisco County Transportation Authority Proposed Amended San Francisco ARRA Local Streets and Roads System Preservation Project List Lead Agency Project Title Project Description Project Status Recommended ARRA Funds 1 Total Project Cost 1 Sup. District Williams Avenue Curb Ramp Construction - Phase 2 Renovate pavement on Williams Avenue from 3rd Street to Phelps Street. Project scope includes paving, planing, base repairs, curb ramps, and pavement markings. Construct an estimated 64 curb ramps and returns at the following locations in compliance with the Americans with Disabilities Act: -Clement at 5th and 8th Avenues -Anza at Almaden Court -California at Buchanan -Webster at Golden Gate -Stanford at Brannan -Howard at Mary -Minna at 8th Street -Camp at Albion -Oakwood at 19th Street -Bryant at 20th Street -23rd Street at Kansas and Utah -24th Street at Vermont New project. Design 100% complete, ready to submit environmental clearance request. New project. Design 95% complete, ready to submit environmental clearance request. $1,500,000 $1,500, $651,922 $651,922 various Total ARRA Recommended $13,540,000 $14,429,628 Total ARRA Available $13,540,000 Difference $0 1 Strike-through amounts indicate the original approved ARRA award and project cost estimate. See Attachment 1 for more detail. J:\2009\Memos\09 - September 2009\ARRA LS&R Cost Savings - ATT 1-3 Page 7 of 7
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