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Finance Committee

Meeting Date:	11/28/2017
FROM:	Bill Gallardo

Subject:

Resolution for the Submittal of a Grant Application for the Construction of the SR-57 and Lambert Road Interchange Improvements, Phase 1, Project 7251, to the Orange County Transportation Authority for Funding Under the Comprehensive Transportation Funding Program

RECOMMENDATION

Adopt Resolution Approving Application Submittal

BACKGROUND/DISCUSSION

The SR-57 and Lambert Road Interchange Improvement, Project 7251 (“Project”) has been programmed within the Capital Improvement Program ("CIP") for over ten years. The Project Approval and Environmental Document ("PA&ED") Phase was completed in the Fall of 2015 with a preferred design alternative selected as Alternative 7A. The 7A Project will add a northbound loop on-ramp and realign northbound off-ramp; widen southbound ramps and bridge by the railroad; convert southbound exit ramp to a two (2) lane exit and widen Lambert Road from west State College.

The Project is currently in the design and right-of-way acquisition phases. The scope of work within the Design Professional Services Agreement with Parsons required completion of Plans, Specifications, and Estimates ("PS&E") for the overall Project. Parsons completed the 65% PS&E documents for the overall Project in December 2016. However, due to cost increases in construction from the PA&ED planning estimate and funding constraints for the overall project construction costs, a phasing plan concept was proposed to Caltrans in the Spring of 2016. Caltrans and Orange County Transportation Authority (“OCTA”) staff accepted this phased approach in an effort to keep the Project moving forward. The proposed phasing allows the City and Caltrans to effectively secure grant funds for each phase and deliver much needed operational improvements to the interchange while waiting to secure 100% construction funds for the overall Project.

The phasing plan proposes four (4) phases for this Project. The first phase ("Phase 1") will improve the east side of the SR-57 Freeway Interchange by constructing the northbound loop on-ramp, realign the northbound off-ramp, and improve the existing northbound on-ramp. The succeeding phases 2-4 will be reprogrammed within the CIP pursuant to available grant funds from the State Transportation Improvement Program ("STIP") and OCTA in Fiscal Years 2018-19 thru 2022-23 respectively. The PS&E for Phases 2-4 will be completed from the current 65% level to 100% upon securing the necessary additional grant funds for these subsequent phases.

Currently, the PS&E for the Phase 1 Project is nearing 100% completion, pursuant to the decision to phase the Project. The design for the remaining phases has been shelved at the 65% level until additional grant funds are secured, which is anticipated to be by Fiscal Years 2018-19 and 2019-20. In 2016, the City secured funding from OCTA in the amount of $5.9 million with reprogrammed grant funds from the STIP for Right-of-Way (“ROW”) acquisition in the amount of $9 million for a total of $14.9 million. The ROW phase is completely funded and started with the anticipation of being complete by the third quarter of 2018. Since 2016, staff has been working on securing the necessary funds to complete the construction of the Phase 1 Project.

In October 2016, staff submitted a grant application for Construction funding for the Phase 1 Project to OCTA. The funding request was in the amount of $12.4 million. However, due to limited funding in the program with many competing projects from other cities, OCTA was only going to fund approximately $4 million of the $12.4 million request, which would not have fully funded the Phase 1 construction. Therefore, staff decided to wait for the 2018 grant cycle to re-apply for the full funding amount for Phase 1 construction.

In August 2017, OCTA issued the 2018 Comprehensive Transportation Funding Program (“CTFP”) Call for Projects for Measure M2 funding under the Regional Capacity Program (“RCP”) and Project P Regional Traffic Signal Synchronization Program (“RTSSP”). These competitive Call for Projects are designed to supplement funding for streets and roads projects within Orange County.

On October 20, 2017, staff submitted an application for Construction funding for the Phase 1 Project to OCTA. The funding request is in the amount of $12.8 million through the Freeway Arterial/Street Transition (FAST) program under the RCP. A draft Resolution was included as part of the OCTA application. However, in order for OCTA to consider the City’s application complete, the attached final Resolution must be approved by the City Council. If successful, the construction funding would be programmed starting in FY 2018-19 at the earliest, or in FY 2019-20 pursuant to securing the ROW for the Phase 1 Project.

Additionally, staff has been working with OCTA and Caltrans to secure funding from the United States Department of Transportation's Infrastructure for Rebuilding America ("INFRA") competitive grant program, the United States Department of Transportation's Investment Generating Economic Recovery 2017 ("TIGER 2017") competitive grant program, and Caltrans State Highway Operations and Protection Program ("SHOPP") for the entire Project. If successful, the complete Project construction for all phases would be fully funded in FY 2018-19.

SUMMARY/FISCAL IMPACT

The amount budgeted for the overall Construction of the Project, including contingency, construction management, and inspection costs (soft costs), in the adopted FY 2017-18 Seven-Year CIP is approximately $52.9 million. This number was based on the 65% PS&E cost estimate. The current 2017 cost estimate for the overall Project construction in FY 2018-19 is approximately $71.5 million. The main cost increases from the 65% PS&E were due to added costs associated with extending the existing bridge over Lambert Road; lowering Lambert Road; the south off-ramp retaining wall, including the Phase 4 truck climbing lane interchange improvements; added sound walls at El Torrito and along the south On and north Off ramps; and other roadway work not included in the 2016 65% PS&E estimate that are required by Caltrans. Therefore, the updated cost increases in the overall Project construction coupled with the current funding constraints in the State and OCTA, necessitated the collective Caltrans, OCTA, and City staff to propose phasing the Project and looking to other grant and Caltrans funding opportunities with INFRA, TIGER 2017, and SHOPP.

The current Phase 1 construction cost is estimated at approximately $21.5 million inclusive of contingency and soft costs, which has been increased from the 2017 CIP budget of $19.8 as shown in FY 2018/2019. This represents an 8% increase due to construction cost escalations and other improvements not identified in the 65% PS&E Phase 1 estimate. The estimated construction costs for the remaining phases 2, 3, and 4 is approximately $53 million. The summary for Phase 1 Construction funding is as follows, which is also included in the OCTA Grant application:

Funding Sources	Amount
OCTA Grant (2018 Requested)	$12,800,000
City Match (Fund 540)	$8,700,000
Total	$21,500,000

In October 2017, staff applied for Construction (Phase 1) funds for the Project as part of the OCTA’s CTFP grant program. Given the limited availability of grant funding, staff requested $12.8 million in construction funds with $8.7 million matching funds coming from Traffic Impact Fees (Fund 540). If successful, the funds would be programmed and available as early as FY 2018-19. Staff will update the CIP Project Budget as part of the 2018 Annual CIP Update to reflect the approved OCTA grant funds, other grant funds secured, and increased Traffic Impact Fees (Fund 540) match. There will be no General Funds used for this Project and as such, there will be no General Fund Impact. Therefore, in order for OCTA to deem the City’s application complete and potentially receive the grant funds, staff recommends the City Council adopt the attached Resolution.

RESPECTFULLY SUBMITTED

William Gallardo, City Manager
Prepared by: Warren Coleman, Senior Management Analyst
Concurrence: Steve Kooyman, P.E., City Engineer and
Tony Olmos, P.E., Public Works Director

Attachments
Resolution