Title
Recommendation to Authorize the City Manager to Remit Payment in the Amounts of $910,525 and $655,752 to the East Bay Municipal Utility District (EBMUD) for Alameda Point’s Adaptive Reuse Areas Phase 1 and Phase 2 Water Main Extensions, Respectively. (Public Works 31041520)
Body
To: Honorable Mayor and Members of the City Council
EXECUTIVE SUMMARY
Backbone infrastructure will be renewed in Alameda Point’s Adaptive Reuse Area (Adaptive Reuse Area) through the City of Alameda’s (City) Capital Improvement Program with funding from the sale of buildings in the Naval Air Station Alameda Historic District (Historic District). In late 2017, per a Ten-Year Water Infrastructure Agreement with EBMUD, the design to extend the East Bay Municipal Utility District’s (EBMUD) water facilities and abandon portions of the outdated Navy installed water system the City maintains began. Design to extend EBMUD’s water facilities into Phase 1 and Phase 2 of the Adaptive Reuse Area has been completed. EBMUD issued Balance Due Letters in the amounts of $910,525 and $655,752 for costs associated with their design, inspection, and materials in Phase 1 and Phase 2, respectively. The City has one month to pay the amounts due. Once EBMUD receives payment, and other requirements are satisfied, EBMUD will release completed water main extension design drawings. The City will then have three months to obtain bids to construct the new water facilities. Available funding from previous buildings’ sales allows the advancement of all backbone infrastructure, not just water, in Phase 1 only. This infrastructure includes sewer, storm, joint trench, new complete streets, lighting, and landscaping. Funding for all backbone infrastructure in Phase 2 was not available, so this project phase includes water only. Staff estimates that in late 2021, the City Council will consider awarding the construction contract for Phase 1, including all backbone infrastructure, and for Phase 2, (water only).
BACKGROUND
On February 4, 2014, upon acquisition of major portions of Alameda Point from the Navy, the City Council approved the necessary planning documents for redevelopment of Alameda Point, including the Master Infrastructure Plan (MIP). The approved MIP provides the master plan for the phased replacement of all of the Navy’s outdated and substandard utility infrastructure, including water, sewer, storm drain, electrical, gas, telecommunications, and surface street improvements at Alameda Point. Pursuant to the MIP, new infrastructure will be implemented differently in the Adaptive Reuse Area than in the Development Areas, as depicted in Exhibit 1, to address the specific infrastructure requirements needed to preserve the Historic District in the Adaptive Reuse Area. Due to the fact that the Adaptive Reuse Area is comprised of the Historic District that constrains the new development process, the buildings within the Adaptive Reuse Area are planned to be sold and reused incrementally to private property owners on a parcel-by-parcel basis. Upon receipt of funds from the sale of the properties within the Adaptive Reuse Area, the City will oversee the logical implementation of the new infrastructure in the Adaptive Reuse Area.
Currently, the City owns the water distribution facilities at Alameda Point, which connect to EBMUD’s system at four master meters. The Navy installed the water facilities, and the majority of the system is more than 60 years old. On May 2, 1997, the City first entered into a Joint Exercise of Powers Agreement (JEPA) with EBMUD for the operation and maintenance of the water distribution facilities at Alameda Point. The parties amended the JEPA five times, most recently in 2010, and it expired March 31, 2017. On April 18, 2017, the City Council approved a six-month, short term Maintenance Agreement with EBMUD to provide continued services while the City and EBMUD negotiated the terms of a Water Infrastructure Agreement that addressed the incremental development and phased infrastructure implementation in the Adaptive Reuse Area.
On June 6, 2017, the City Council approved, and on June 14, 2017 EBMUD signed, a Ten-Year Water Infrastructure Agreement with the City (Agreement) (Exhibit 2). Per EBMUD Regulations Governing Water Service to Customers (Regulations), private property owners within their potable water service area must be EBMUD customers with direct access to EBMUD water infrastructure. This Agreement allows the City to sell parcels in the Adaptive Reuse Area to private property owners consistent 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 Adaptive Reuse Area in phases, as shown in Exhibit C of the Agreement, and in accordance with the conditions and milestones contained in the Agreement.
Properties sold in Phases 1 and 2 of the Adaptive Reuse Area: Per the Agreement, the City submitted EBMUD Mainline Extension Applications including all fire flow requirements, site improvement plans, tentative parcel maps, and other materials. On June 18, 2019, the City Council authorized the City Manager to enter into Water Main Extension Agreements with EBMUD and to pay the estimated 10% of EBMUD design and construction costs for Phase 1 and Phase 2, $212,072 and $153,885, respectively. The Water Main Extension Agreements are included in Exhibit 3.
DISCUSSION
The City and EBMUD completed the design for extending EBMUD’s water facilities into Phase 1 and Phase 2 of the Adaptive Reuse Area. EBMUD issued Balance Due Letters (Exhibit 4) in the amounts of $910,525 and $655,752 for costs associated with their design, inspection, and materials in Phase 1 and Phase 2, respectively. Per the Agreement, the City has one month to pay the amounts due. Once EBMUD receives payment and other requirements are satisfied, EBMUD will release the completed water main extension design drawings. Within three months of receipt of EBMUD’s final design, the City is to obtain bids to construct the new water facilities.
Since 2017, Buildings 9, 91, 8, and 23 have sold, which allows the City to advance the design of all backbone infrastructure in Phase 1. Phase 2 remains water-only due to currently available funding. All backbone infrastructure in Phase 1 includes the following: water, sewer, storm, joint trench, new complete streets, lighting, and landscaping. Staff will incorporate EBMUD’s design into the larger construction project and bid the project within the timeline specified in the Agreement. Staff estimates that the City Council will consider award of the construction contract in late 2021.
ALTERNATIVES
• Authorize remittance of payment to EBMUD for the balances due on the Applicant Installed Water Main Extension Agreements, as recommended by staff.
• Do not authorize payment to EBMUD. If the City does not proceed in paying the balances due, the City will be in noncompliance with the Agreement and subject to enforcement by EBMUD.
FINANCIAL IMPACT
Capital Improvement Project 91890311, was established in 2017 to receive building sale proceeds from the Adaptive Reuse Area to fund design and construction of the backbone improvements. Funding is available for the balances due to EBMUD. There is no impact to the General Fund as a result of this action.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
This action is consistent with the Alameda Municipal Code.
ENVIRONMENTAL REVIEW
On February 4, 2014, the City certified the Alameda Point 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 Alameda Point consistent with the Alameda Point Zoning Ordinance and MIP, which included the Adaptive Reuse Area.
CLIMATE IMPACTS
There are no identifiable climate impacts or climate action opportunities associated with the subject of this report.
RECOMMENDATION
Authorize the City Manager to remit payment in the amounts of $910,525 and $655,752 to the East Bay Municipal Utility District for Alameda Point’s adaptive reuse areas phase 1 and phase 2 water main extensions, respectively.
CITY MANAGER RECOMMENDATION
The City Manager requests authorization to remit payment in the amounts of $910,525 and $655,752 to East Bay Municipal Utility District for Alameda Point’s adaptive reuse areas phase 1 and phase 2 water main extensions.
Respectfully submitted,
Erin Smith, Public Works Director
Financial Impact section reviewed,
Annie To, Finance Director
Exhibits:
1. Reuse and Development Areas
2. Water Infrastructure Agreement with EBMUD
3. Applicant Installed Water Main Extension Agreements for Phase 1 and Phase 2
4. Balance Due Letters for Phase 1 and Phase 2
cc: Eric Levitt, City Manager
Gerry Beaudin, Assistant City Manager