Title
Recommendation to Authorize the City Manager to Remit Payment in the Amount of $476,737 to Alameda Municipal Power (AMP) for Material and Labor Costs Related to Electric Utility Extension into Alameda Point’s Adaptive Reuse Areas, Phase 1. (Public Works 310)
Body
To: Honorable Mayor and Members of the City Council
EXECUTIVE SUMMARY
Pursuant to the Master Infrastructure Plan (MIP) for Alameda Point (AP), new infrastructure will be implemented differently in the AP’s adaptive reuse area (Reuse Area) than in the development areas to address the specific infrastructure requirements needed to preserve the Naval Air Station Alameda Historic District (Historic District) in the Reuse Area. Buildings within the Reuse Area are planned to be sold to private property owners on a parcel-by-parcel basis and reused incrementally. Upon receipt of funds from the sale of the properties, the City of Alameda (City) will oversee the logical implementation of the new infrastructure in the Reuse Area.
The City sold five buildings in the Reuse Area and is in the design process with the East Bay Municipal Utility District (EBMUD) to extend their water facilities, per the 2017 Ten-Year Water Infrastructure Agreement (Agreement) between EBMUD and the City regarding AP. Buildings in both Phase 1 and Phase 2 sold, as shown in the Agreement’s Phasing Plan. Therefore, the City executed water main extension agreements with EBMUD for both phases and is working through the design process. Revenue from building sales to date will allow the construction of the remaining backbone utilities (sewer, storm, electric, gas, communications and street improvements) for Phase 1 only. Alameda Municipal Power (AMP) requests certain fees related to the extension of electric utilities into Phase 1 of the Reuse Area in accordance with AMP’s Rules and Regulations.
BACKGROUND
On February 4, 2014, upon acquisition of major portions of AP from the Navy, the City Council approved the necessary planning documents for redevelopment of AP, including the MIP for AP. The approved MIP provides the master plan for the phased replacement of all of the Navy’s outdated and substandard utility infrastructure, including water, sewer, storm drain, electrical, gas, telecommunications, and surface street improvements. Until that replacement takes place, the City is responsible for the ongoing operation and maintenance of the outdated utilities at AP.
Pursuant to the MIP, new infrastructure will be implemented in the Reuse Area to address the specific infrastructure requirements needed to preserve the Historic District within the Reuse Area. The buildings within the Reuse Area are planned to be sold to private property owners on a parcel-by-parcel basis and reused incrementally. Upon receipt of funds from the sale of the properties within the Reuse Area, the City will oversee the logical implementation of the new infrastructure in the Reuse Area.
Per EBMUD Regulations Governing Water Service to Customers (Regulations), private property owners within their potable water service area must be an EBMUD customer with direct access to EBMUD water infrastructure. On June 6, 2017, the City Council approved, and on June 14, 2017, EBMUD signed, an Agreement (see Exhibit 1) that allows the City to sell parcels in the Reuse Area to private property owners, which is inconsistent with the Regulations, assuming the City remains in compliance with the terms of this Agreement. The Agreement requires the City to build out the water system replacements in the Reuse Area in phases, as shown in Exhibit C of the Agreement (Phasing Plan), and in accordance with the conditions and milestones contained in the Agreement.
Parcels have sold in Phases 1 and 2 and the City has met all deadlines in the Agreement to date, including entry into water main extension agreements with EBMUD and payment to EBMUD for the required design and estimated construction cost deposits.
Building sale proceeds over the last three years (buildings 9, 91, 8, 40 and 23) generated sufficient revenue for the design and construction of not only the EBMUD water main extensions into phases 1 and 2, but also construction of the sewer, storm, gas, electrical, communications and street improvements for Phase 1 only. The project - Phase 1 all utilities and Phase 2 water only - will be bid as a single project to save on mobilization and capitalize on economies of scale.
DISCUSSION
Design of the joint trench utilities for Phase 1 has progressed along with the water main extensions design. The Public Works Department, in implementing the capital improvement project to renew the backbone infrastructure in the Reuse Area, is acting as a developer or applicant would for the extension of the various utilities into the project area. AMP’s Rules and Regulations, Article X, requires the customer/developer to pay for all expenses related to the advanced engineering, inspection, construction materials and labor fees for the extension of electric utilities to support the development. On February 26, 2019, AMP estimated and requested $30,000 payment for advance engineering fees. Public Works made this payment from the approved capital improvement project budget.
Now that the design documents are final, AMP is requesting payment for materials, construction inspection, labor, and other costs associated with the construction of the electric utilities in the Reuse Area’s Phase 1. The April 1, 2020 letter from AMP provides detail on the fees and requests payment (Exhibit 2).
Fee requests from the other utilities - Pacific Gas & Electric, AT&T and Comcast - are anticipated soon. These are each estimated to be around $25,000, which will not require City Council authorization. When EBMUD completes their design of the water main extensions, they will issue a Balance Due Letter to the City. The City then has three months from the receipt of the completed design to obtain bids for construction and another six weeks to obtain City Council approval to award the construction contract.
It is critical that this payment is made to AMP to facilitate their procurement of the electrical materials necessary for this project, which they estimate will take 12 - 18 months. The project design, administration and material procurement for the non-water utilities in Phase 1 must keep pace and be ready to bid when EBMUD’s design is complete so the City can remain in compliance with the Agreement and successfully implement the construction of the replacement infrastructure.
ALTERNATIVES
• Approve payment to AMP for fees associated with electric utility extension into AP’s Reuse Area Phase 1.
• Not approve payment and give staff an alternative direction.
FINANCIAL IMPACT
The City established AP Capital Projects Fund to account for capital activities within the area. At the same time, Capital Improvement Project 91890311 was set up in 2017 to receive building sale proceeds from the Reuse Area to fund design and construction of the backbone improvements. Payments for utility renewal will be paid from AP Capital Projects Fund. There is no impact to the General Fund.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
This action does not affect the Alameda Municipal Code.
ENVIRONMENTAL REVIEW
On February 4, 2014, the City certified the AP Final Environmental Impact Report (EIR) in compliance with the California Environmental Quality Act (CEQA). The Final EIR evaluates the environmental impacts of redevelopment and reuse of the lands at AP consistent with the AP Zoning Ordinance and MIP, which included the Reuse Area.
CLIMATE IMPACTS
Construction will have greenhouse gas emission impacts; however, in conformance with the Green Building Standards, the City requires that 65% of all debris hauled from a project must be recycled by a certified Construction & Demolition Processor.
RECOMMENDATION
Authorize the City Manager to remit payment in the amount of $476,737 to Alameda Municipal Power for material and labor costs related to electric utility extension into Alameda Point’s Adaptive Reuse Areas Phase 1.
CITY MANAGER RECOMMENDATION
The City Manager recommends approval of the transfer of funds to the Alameda Municipal Power Fund.
Respectfully submitted,
Liam Garland, Public Works Director
By,
Erin Smith, Deputy Public Works Director
Financial Impact section reviewed,
Nancy Bronstein, Interim Finance Director
Exhibits:
1. Water Infrastructure Agreement
2. Fee Request from AMP
cc: Eric Levitt, City Manager