Segment 7 Rail-with-Trail is too expensive, City delays project

DATE: 8/22/2018
Public Works            
SUBJECT: Monterey Bay Sanctuary Scenic Trail (Rail Trail) – Segment 7 (c401413) – Reject All Bids  (PW)  
RECOMMENDATION:  Motion rejecting all bids for the Monterey Bay Sanctuary Scenic Trail (Rail Trail) – Segment 7 Phase 1 (c401413), and authorizing staff to re-advertise project. The City Manager is hereby authorized and directed to execute the contract as authorized by Resolution No. NS-27,563.
BACKGROUND:  On November 24, 2014, Council authorized staff to advertise the Monterey Bay Sanctuary Scenic Trail Segment 7 (Natural Bridges to Pacific Avenue) Request for Qualifications for design and environmental review services and authorized the City Manager to execute a contract in a form acceptable to the City Attorney. The project services were awarded to RRM Design Group in the amount of $798,533.00 which is funded by a grant and a local match. RRM had completed the master plan and were the designer of the Arana Gulch Multi-Use Trail projects.
On January 28, 2016, staff and RRM presented the preliminary schematic plan at an open house event where over 100 people were shown the proposed alignment and they had an opportunity to express their views and comments on the project. The project team has met with stakeholder groups and impacted departments to evaluate and incorporate comments and ideas into the project design, with the main focus on two significant proposed alignment changes at New Leaf Community Market and La Barranca Park. 
On May 2, 2016, staff presented the La Barranca Park realignment option to the Parks and Recreation Commission. This option would have realigned a portion of the trail onto La Barranca Park to improve visibility, security, and emergency access to the trail. Commissioners and the public alike expressed concerns about impacts to the linear park users, the slope of the ramp between the park and rail being more difficult for riders and pedestrians, and the “no man’s land” that may happen to the remaining rail area when the public use is not provided for. In addition, redesign costs to study this alignment was $95,584.00. The La Barranca option was withdrawn and Fire and Police have concurred that the original alignment adjacent to the rail line can work with lighting, security cameras, and widening of the trail. 
On May 24, 2016, Contract Amendment No.1 with RRM was approved by Council in the amount of $54,420.00 for additional survey and alignment work to complete the project design, CEQA environmental review and construction documents. 
On September 19, 2016, staff presented the Final Schematic plan to the Transportation and Public Works Commission (TPWC). The Commissioners motion carried unanimously to recommend that the City Council approve the Final Schematic Plan and direct staff to complete construction documents based on the Final Schematic Plan. On November 1, 2016 Council approved the Final Schmatic Plan, Phasing Plan, Cooperative Agreement and Contract Amendment No.2 with RRM Design Group for additional design services in the amount of $77,750.   On October 5, 2017, the Planning Commission adopted the Mitigated Negative Declaration, Mitigation Monitoring and Reporting Program, Coastal Permit, Design Permit and the Heritage Removal permit for Phase 1 (from Natural Bridges to California). The permits were not appealed and were effective on October 16, 2017. There were many supporters of the project, including the Executive Director of Greenways, who spoke in favor of the project. Phase 2 (California to Pacific) approvals will be scheduled for the Planning Commission’s consideration in Fall 2018.
On January 23, 2018, Council approved the construction plans and specifications for Rail Trail Segment 7 Phase 1, Contract Amendment No. 3 with RRM in the amount of $199,070, and a budget adjustment.  The amendment encapsulated numerous changes from separating the project into Phases 1 and 2, additional geotechnical borings to refine the Phase 2 retaining wall design, adding trail lighting and security cameras in Phase 2, addressing soil investigation and characterization as required by County Environmental Health Services (CEHS), and additional NEPA requirements from Caltrans.  CEHS has required a greater amount of soil testing and study outside the trail areas disturbed by the trail construction. Caltrans is delegated federal environmental compliance by the Federal Highways Administration and has increased the study area and scope of work for the environmental consultant.  
On June 26, 2018 the City Council approved an acquisition agreement for easements at located at 320 Ingalls Street and 1101 Fair Avenue, both owned by Ingalls Street Partners LLC for the construction of the Monterey Bay Sanctuary Scenic Trail (Rail Trail) – Segment 7 – Phase 1 Project.   DISCUSSION:  The approved project plans and specifications were advertised for bids in July 2018, and bids were were publicly opened on August 2, 2018. Three bids were received and are as follows:
Granite Rock:           $6,330,047.19 Granite Construction: $6,943,036.10 Don Chapin:          $7,210,260.48
Engineers Estimate: $4,017,151.49
Staff has evaluated the bids and found them to be responsible and responsive, with Granite Rock as the apparent low bidder, though higher than available funding. As noted in the other large Public Works project, Riverside Avenue Utility Undergrounding and Streetscape project, the current bidding climate is not very competitive as contractors are fully engaged on funded
private and public projects. Construction staffing and materials are very much in demand and steel prices are volatile. Many projects locally and statewide are significantly exceeding cost estimates and there are fewer bids, even with outreach to contractors. 
Staff recommends rejecting all bids and re-advertising the project for construction. There is no guarantee that future costs will be lower however additional funding from the federal earmark and the SCCRTC Measure D allocation anticipated to be used for Segment 7- Phase 2 could be reallocated to Phase 1 with approval of the state. It is critical to encumber the federal earmark as soon as feasible as it may be rescinded by the federal government. The design team will also restructure some of the bid items to clarify the soils management items to clarify the County Environmental Health requirements which was an issue for bidders. Staff is confident that the project bid can be re-advertised in November 2018. Staff is applying for a new HSIP grant for Phase 2 and finalizing the environmental and permitting process so that phase is grant and “shovel ready.”
FISCAL IMPACT:  The project construction is funded in the current fiscal year. Funds include grants from Federal Earmark, State Transportation Improvement Program, Gas Tax, Measure D, local private and nonprofit donations including from a Coastal Conservancy Grant, Friends of the Rail &Trail (FORT) and Bike Santa Cruz County. 
Prepared by: Christophe J. Schneiter Assistant Public Works Director/City Engineer
Submitted by: Mark R. Dettle Director of Public Works
Approved by: Martin Bernal City Manager
      ATTACHMENTS:  None