HomeMy WebLinkAboutItem 6f. Approve Amendment No. 1 to the Funding Agreement with the County of SLO for the Prado Road Interchage Project Item 6f
Department: Public Works
Cost Center: 5010
For Agenda of: 8/16/2022
Placement: Consent
Estimated Time: N/A
FROM: Matt Horn, Public Works Director
Prepared By: Emily Jackson, CIP Process Improvement Manager
SUBJECT: APPROVE AN AMENDMENT TO THE FUNDING AGREEMENT WITH
THE COUNTY OF SAN LUIS OBISPO FOR THE PRADO ROAD
INTERCHANGE
RECOMMENDATION
Approve Amendment No. 1 to the Funding Agreement with the County of San Luis Obispo
for its contribution of $1,435,260 towards construction of the Prado Road Interchange to
extend the term of the Agreement and authorize the City Manager to execute the
Amendment.
POLICY CONTEXT
As part of the City’s Circulation Element Program 9.2.2 and Table 5, the Prado Road
Interchange is listed as a critical infrastructure improvement to support multimodal traffic
generated by the City’s planned development and development outside the City. The San
Luis Ranch Specific Plan Chapter 7 and Environmental Impact Report (EIR) revalidated
these findings, established fair share proportionality, and determined when the
interchange was needed in relationship to San Luis Ranch’s development progress.
Table 6 of the San Luis Ranch Development agreement establishes the funding plan for
both phases of the interchange.
In June 2018, a Supplemental EIR was approved by City Council, separating the Prado
Interchange project as a schedule constraint upon San Luis Ranch’s development
progress, but confirming the funding plan.
DISCUSSION
Background
On September 3, 2019, the City Council authorized the City Manager to execute a funding
agreement (“Agreement”) with the County of San Luis Obispo which obligated the County
to contribute $1,435,260 towards construction of the Prado Road Interchange Overpa ss.
The contribution from the County represents a portion of the regional share of cost for the
project, based upon interchange traffic forecasts for traffic with origins or destinations
outside of the City.
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Item 6f
The County’s share supplements $6 million of funding from the San Luis Obispo Council
of Governments (SLOCOG) which was programmed as part of the Regional
Transportation Improvement Program (RTIP). The $1,435,260 contribution from the
County is to be made upon notice that the City is ready to initiate the Plans, Specifications,
and Estimates (PSE) and Right-of-Way (R/W) phases of the project. The County Board
of Supervisors approved the Agreement on December 17, 2019.
The original Agreement had a term of 30 months which began on September 1, 2019 and
included an option to extend for an additional 12 months. The 30 -month term expired on
March 1, 2022, and due to project delays, City staff initiated discussions with the County
to amend the Agreement to extend the term beyond the additional 12 -month extension.
At the time the Agreement was executed, it was expected that the City would initiate PSE
and R/W in May 2020. It is currently estimated that those phases will begin in January
2024.
The recommended amendment (Attachment A) to the Agreement ties the County’s
contribution to the initiation of the PSE and R/W phases of the project. The amendment
also provides that if the City does not begin those phases by June 30, 2027 (42 months
beyond the current estimate), the County reserves the right to terminate the Agreement
and release the designated $1,435,260 back to its General Fund, following an opportunity
for the City to meet and confer with the County and consideration of a written request for
additional extension by the City, if necessary.
Previous Council or Advisory Body Action
The City Council previously approved the original Agreement on September 3, 2019 (Staff
Report, Minutes).
Public Engagement
Extensive Public Engagement regarding the Prado Road Interchange was conducted as
part of the San Luis Ranch Environmental Impact Report, which was certified by Council
on July 18, 2017, and Development Agreement which was adopted by Council on August
21, 2018.
CONCURRENCE
The City Attorney has reviewed the amendment for legal form and effect. The County of
San Luis Obispo concurs with the recommended amendment, and it is expected that the
Board of Supervisors will authorize extension of the Agreement at a meeting following the
City Council’s approval of the amendment.
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Item 6f
ENVIRONMENTAL REVIEW
The California Environmental Quality Act does not apply to the Agreement as it does not
constitute a “Project” under CEQA Guidelines Sec. 15378.
FISCAL IMPACT
Budgeted: No Budget Year: 2023-24
Funding Identified: Yes
Fiscal Analysis:
Funding Sources
Total
Budget
Available*
Current
Funding
Request
Remaining
Balance
Annual
Ongoing
Cost
General Fund $2,410,000 $0 $0 $0
Other: Transportation
Impact Fee
$1,685,520 $0 $0 $0
Other: Airport Area Impact
Fee
$130,000
Other: County
Contribution
$1,435,260 $0 $0 $0
Total $5,660,780 $0 $0 $0
* Total budget available for the General Fund, Traffic Impact Fees, San Luis Ranch contribution and Airport
Area Impact Fees reflects what has been appropriated to the project for PSE and R/W , not total balances
of each funding source or total cost for the overall project.
The County’s contribution will be made upon initiation of the PSE and R/W phases of the
project and will be appropriated to the project budget at that time. As of the writing of this
report, the City has appropriated $4,225,520 for those two phases of the project for a total
funding of $5,660,780. Based on current Engineer’s estimates, this should be sufficient
funding to cover the cost for PSE and R/W. However, due to cost escalation and the
possibility of unanticipated project delays, additional funding may be needed. Staff will
continue to monitor the budget for these phases of the project and will consider whether
additional funding is needed with development of the 2023-25 Financial Plan.
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Item 6f
ALTERNATIVES
Do not authorize the City Manager to execute Amendment 1 to the Agreement. The
Council may choose not to authorize the City Manager to execute the amendment to the
Agreement. Staff does not recommend this alternative as the term of the original
Agreement has expired and the option to extend does not provide enough time for the
City to initiate the PSE and R/W phases, which are currently anticipated to begin in
January 2024. Without a funding agreement in place, the County will no longer be
obligated to contribute $1,435,260 toward construction of the overpass for the Prado
Road/Hwy 101 Interchange, which will increase the funding deficit for this critical project
and require the City either to obtain additional grant funding, which is uncertain, or
subsidize the project with general fund money.
ATTACHMENTS
A – Prado Interchange Funding Agreement Amendment No. 1
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Page 1 of 3
AMENDMENT NO. 1 TO HIGHWAY 101/PRADO ROAD INTERCHANGE FUNDING AGREEMENT
AGREEMENT BETWEEN THE COUNTY OF SAN LUIS OBISPO
AND THE CITY OF SAN LUIS OBISPO
This Amendment No. 1 to the Agreement Between the County of San Luis Obispo and the City of
San Luis Obispo (“Amendment No. 1”) is made this ____ day of ____________, 2022 (the “Effective Date”),
by and between the County of San Luis Obispo (“County”) and the City of San Luis Obispo (“City”).
WHEREAS, on December 19, 2019, the County and the City entered into an agreement (the “Original
Agreement”) wherein the County agreed to contribute $1,435,260 towards the construction of the
Highway 101/Prado Road Interchange Overpass (“Project”);
WHEREAS, the Original Agreement has a term of thirty months beginning September 19, 2019, with a 12
month extension for a total of 42 months;
WHEREAS, the City intends to initiate the Plans, Specifications and Estimates (PSE) and Right of Way (R/W)
phases of the Project on or about January 1, 2024, instead of May 1, 2020 as per the Original Agreement,
due to delays in the Project;
WHEREAS, the City has therefore requested an amendment to the Original Agreement to tie funding to
project phases, to accommodate any potential future project delays;
WHEREAS, the City finds that it is in its best interests to agree to extend the agreement to contribute to
the building of this infrastructure;
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the City and County agree as follows:
1. Recitals. The above recitals are true and correct and incorporated herein by this reference.
2. Amendment to Original Agreement. Section 3 of the Original Agreement is hereby amended as
follows:
TERM OF AGREEMENT
The term of this Agreement shall automatically terminate upon the County’s contribution
of its share of cost ($1,435,260) to the City. County funding is tied to Plans, Specifications
and Estimates (PSE) and right of Way (R/W) phases of the project, which the City currently
anticipates to begin in January 2024. If the City does not begin the PSE and R/W phases
of the project by June 30, 2027, the County reserves the right to terminate this Agreement
and release the designated $1,435,260 back to the General Fund for the County’s use,
following an opportunity for the City to meet and confer with the County and
consideration of a written request for extension by the City should such an extension
become necessary due to project contingencies.
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Amendment No. 1 to Highway 101/Prado Road Interchange Funding Agreement
Page 2 of 3
3. Original Agreement. Except as amended in this Amendment No. 1, all terms and conditions in the
Original Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 1 by their duly authorized
officers as of the Effective Date.
COUNTY OF SAN LUIS OBISPO
BY: _________________________________
Bruce Gibson, Board Chair
AUTHORIZED BY BOARD ACTION
________________________, 2022
ATTEST
WADE HORTON
Ex-Officio Clerk of the Board of Supervisors
By: __________________________________
Annette Ramirez, Deputy Clerk
APPROVED AS TO FORM AND LEGAL EFFECT
RITA L. NEAL
County Counsel
By: ___________________________________
Jon Ansolabehere, Assistant County Counsel
Date: ________________________
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Amendment No. 1 to Highway 101/Prado Road Interchange Funding Agreement
Page 3 of 3
CITY OF SAN LUIS OBISPO
By: _____________________________
Derek Johnson, City Manager
Date: _______________________
APPROVED AS TO FORM AND LEGAL EFFECT
J. CHRISTINE DIETRICK
City Attorney
By: __________________________
J. Christine Dietrick, City Attorney
Date: _______________________
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