HomeMy WebLinkAboutStaff Report 2411-3777CITY OF PALO ALTO
CITY COUNCIL
Special Meeting
Monday, February 03, 2025
Council Chambers & Hybrid
5:30 PM
Agenda Item
5.Authorize the City Manager or their Designee to Execute an Assistance Agreement with
the United States Department of Transportation Pipeline and Hazardous Materials Safety
Administration (PHMSA) in the amount of $16,519,879 through January 31, 2030; CEQA
Status – Not a project.
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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Utilities
Meeting Date: February 3, 2025
Staff Report #:2411-3777
TITLE
Authorize the City Manager or their Designee to Execute an Assistance Agreement with the
United States Department of Transportation Pipeline and Hazardous Materials Safety
Administration (PHMSA) in the amount of $16,519,879 through January 31, 2030; CEQA Status
– Not a project.
RECOMMENDATION
Staff recommends that the City Council authorize the City Manager or their designee to:
1. Execute an Assistance Agreement with the United States Department of Transportation (DOT)
Pipeline and Hazardous Materials Safety Administration (PHMSA) accepting $16,519,879 in
federal grant funding for the replacement of PVC and steel natural gas pipelines, including the
purchase of new greenhouse gas reducing equipment through January 31, 2030, subject to the
PHMSA Grant Terms and Conditions; and
2. Complete all other documents required to comply with the Grant Terms and Conditions through
Project completion, including assurances, audits, reports, and any needed changes to the
Project scope, schedule or budget.
BACKGROUND
On November 15, 2021 President Biden signed the Bipartisan Infrastructure Law (Public Law
117-58-Nov. 15, 2021), which includes PHMSA’s first ever Natural Gas Distribution
Infrastructure Safety and Modernization (NGDISM) grant program. The legislation designated
$200 million a year in grant funding with a total of $1 billion in grant funding over the
subsequent five years. The grant funding is to be made available to municipality- or community-
owned utilities (excluding for-profit entities) to repair, rehabilitate, or replace its natural gas
distribution pipeline systems or portions thereof or to acquire equipment to reduce incidents
and fatalities and avoid economic losses.
In August 2023, Staff submitted an application for three projects, the replacement of 2.5 miles
of polyvinyl chloride (PVC) main in the Midtown and Palo Verde neighborhoods, the
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replacement of 2.3 miles of leak-prone steel main in the Community Center and Leland Manor
neighborhoods, and the purchase of new leak detection equipment to assist Staff in detecting
leaks and reducing greenhouse gas emissions. In May 2024, the City received notice from
PHMSA that all three projects were selected for grant funding. The total grant funding for the
three projects is $16,519,879, awarded on a cost-reimbursement basis. The construction
sections of the projects will be completed under the Gas Main Replacement Project 25 (GS-
15000 project). The grant structure requires the City to pay for all project costs and submit for
reimbursement for eligible grant expenses. The City will have 5 years to complete all three
projects before the funding expires. Any costs deemed not eligible for reimbursement by
PHMSA or that exceed the total grant amount will be the City’s financial responsibility.
ANALYSIS
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over time and during earth movements. The City of Palo Alto applied for NGDISM federal grant
funding to carry out three priority projects as described in the table below.
Table #1: Natural Gas Distribution Infrastructure Safety Modernization Grant (NGDISM) Award Details
Project #Project Title Project Description Funds
Requested
Total # of
Miles
Priority
Ranking
1.Replacement of
steel pipe
This project is to replace 2.3 miles of leak-
prone 2” and 3” diameter coated steel main
and services, installed in 1939 and 1950, in
the Leland Manor and Community Center
neighborhoods of Palo Alto.
$7,844,084 2.3 Highest
2.Replacement of
PVC pipe
This project is to replace 2.5 miles of 2” and
4” diameter PVC gas mains, installed in 1971,
in the Midtown and Palo Verde
neighborhoods of Palo Alto.
$8,630,331 2.5 Second
Highest
3.Equipment
Purchase
This project is to purchase new leak survey
equipment to be used by municipal staff
when inspecting and surveying lines.
$45,463 N/A Lowest
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FISCAL/RESOURCE IMPACT
STAKEHOLDER ENGAGEMENT
ENVIRONMENTAL REVIEW
ATTACHMENTS
APPROVED BY: