HomeMy WebLinkAbout2003-08-11 City Council (2)City of Palo Alto
City Manager’s Report
TO:HONORABLE CITY COUNCIL
FROM: CITY MANAGER DEPARTMENT: PUBLIC WORKS
DATE:
SUBJECT:
AUGUST 11, 2003
FUNDING STATUS OF LOAN FROM THE
BUDGET STABILIZA~ON RESERVE FOR
CALTRAIN UNDERCROSSING, CAP~AL
PROGRAM PROJECT 10121
CMR:399:03
GENERAL FUND
HOMER AVENUE
IMPROVEMENT
This is an informational report and no Council action is required.
BACKGROUND
On July 14, 2003, Council approved staff’s recommendation to award a construction
contract and approval of a deduction of certain contract items, allowing the City to
proceed with the construction phase of the Homer Avenue Undercrossing Project within
the available and expected project funding (CMR 218:03). At this meeting, Council also
approved a Budget Amendment Ordinance to commit funds for the reimbursable grant
funding in the amount of $2,556,510 and to provide a loan from the General Fund Budget
Stabilization Reserve (BSR) in the amount of $3,011,500. The $3 million loan amount
included federal grant funding of $2.7 million and $300,000 in State Transportation
Improvement Program Funds (ST[P), which were not available until a date uncertain.
Staff had anticipated the $3 million loan would be reimbursed no later than December
2004, causing a temporary reduction to the BSR and costing the City approximately
$120,000 in interest that would have accrued in the BSR depending when the federal and
state funds were made available. Staff also anticipated that the STIP funds might not
become available and applied for $300,000 in Transportation Development Act (TDA)
Funds as a contingency (CMR:283:03). Council’s approval of the project, along with a
deduct change order, provided enough cost reductions in the total construction contract
to fully fund the project using outside funding sources.
DISCUSSION
On August 5, 2003, the City received a letter from the California Department of
Transportation (Caltrans) indicating that Caltrans will release $170 million in obligation
authority (OA) for local projects given first priority throughout the State (Attachment A).
The Homer Undercrossing Project is listed by Caltrans as a priority project and Caltrans
indicated in the letter it intends to obligate $2.7 million in federal ftmds for the Homer
Undercrossing project no later than August 15, 2003. This OA will allow the City to
enter into a program supplement agreement with the State, allowing the City to be
reimbursed on a monthly basis as soon as September 2003. In addition, the Metropolitan
CMR.’XXX~3 Page 1 of 2
Transportation Commission allocated TDA funds in the event STIP funds do not become
available. Staff will continue to work with Caltrans to obligate the STIP funds for the
project. Consequently, the $3 million will be provided without delay and the loan from the
BSR will not be necessary. .~
ATTACHMENT
Attachment A: California Department of Transportation letter dated August 5, 2003
PREPARED BY:
DEPARTMENT HEAD:
ELIZABETH AMES
Senior Engineer
GL
Director of Public Works
CITY MANAGER APPROVAL:
EMILY HARRISON
Assistant City Manager
CMt~399:03 Page 2 of 2
ATTACHMENT A
STATE OF CALIFORNIA--BUSINESS, TRANSPORTATION AND HOUSING AGENCY
DEPARTMENT OF TRANSPORTATION
DIVISION OF LOCAL ASSISTANCE, M,S 1
1120 N STREET
P. O. BOX 942874
SACRAMENTO, CA 94274-0001
PHONE (916) 653-1776FAX (916) 654-2409
GRAY DAVIS, Governor
Flex y~ur powerl
Be energy efficie!t!
August 5, 2003
Regional Transportation Planning Agencies
Metropolitan Planning Organizations
Public Works Departments of cities and Counties
Dear Executive Director:
The passage of the State budget will improve, although not fully resolve cash flow in the
State Highway Account (SHA) as stated at the July 22, 2003 California Transportation
Commission meeting. We .will need to monitor the cash flow and continue to implement
actions,as appropriate. In response, the California Department of Transportation
(Department) proposes to begin releasing some of the unused obligation authority (OA)
for local projects.
There is approximately $370 million of unused local OA for the remainder of the federal
fiscal year 2003. For cash flow purposes, we will still need to borrow $200 million. In
the past week the Department has been working with Regions and local agencies to
identify projects that should be given first consideration for the balance of the unused
local OA. The identified projects exceed the OA currently available. The Department
has had the difficult task of further refining the list based on factors such as safety,
seismic, air quality conformity, federal urban area requirements, maintaining critical
operation, and potential loss of funds.
At this time the Department is able to release $170 million of local OA. Attachment 1
shows the projects that will be given first priority for use of available OA. Attachment 2
shows projects that were identified by the regions and local agencies as needing OA that
cannot be obligated at this time.
The Department intends to obligate projects from Attachmem 1 until August 15t~ or until
the first increment of local OA is exhausted. If OA is available after August 15t~ the
Department will include projects from Attachment 2 to utilize the remaining OA.
The Department appreciates the spirit of cooperation shown by local agencies during this
difficult and unusual time. We expect that the local OA will be repaid soon after the
passage of the Federal Budget for federal fiscal year 2004. We are committed to return
the balance of the OA by the end of the State fiscal year as soon as the SHA cash balance
permits.
"’Caltrans improves mobiliO, across Califoraia ""
Regional Transportation Planning Agencies, et al
August 5, 2003
Page 2
If you have any questions you may contact me at (916) 653-1776 or your District Local
Assistance Engineer.
~cerely,
TERRY L. ABBOTT
Chief
Division of Local Assistance
Attachments
District Directors
Deputy Directors
John Ferrera
Diane Eidam
"’Caltrans improves mobili~ across California"
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