TO: LINDA REICH, CITY MANAGER
FROM: HYE JIN LEE, PE, DIRECTOR OF PUBLIC WORKS
SUBJECT
title
Abatement Payment - California Department of Transportation (CalTrans) for the Pine Avenue Connector Project ST061.
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RECOMMENDATION
recommendation
1) Appropriate $985,421 to the Transportation Fund backfilled by General Fund; 2) approve the abatement payment to the California Department of Transportation (Caltrans) for the Pine Avenue Connector Project ST061 in the amount of $1,529,549; 3) establish a new Capital Improvement Project No. ST261 for the Pine Avenue Connector / Bridge Project, formally closing out Pine Avenue Connector Project ST061; and 4) authorize the City Manager to execute all necessary documents on behalf of the City.
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FISCAL IMPACT
This appropriation will reduce the available fund balance in the General Fund 100 by $985,421. There is sufficient available General Fund balance for this transaction. There is sufficient project budget in ST061 for the Fund 328 and Fund 260 expenses. This appropriation will not increase the project budget but replaces the funding source for expenditures that did not qualify for reimbursement from the SAFETEA-LU Grant.
The total abatement payment of $1,529,549 will be funded through the following allocations:
|
Fund |
Amount |
|
Measure I Arterial Fund (Fund 328) |
$ 328,000 |
|
Transportation Fund 320 backfilled with Preserve Circulation Development Impact Fees (Fund 260) |
$ 216,128 |
|
Transportation Fund 320 backfilled with General Fund (Fund 100) |
$ 985,421 |
|
Total |
$1,529,549 |
CITY OF CHINO MISSION / VISION / VALUES / STRATEGIC ISSUES
The recommendation detailed above furthers the City’s values and strategic issues that serve as key pillars on which identified priorities, goals, and action plans are built, by fostering:
• Financial Stability
• Responsible Long-Range Planning
|
Revenue: |
Expenditure: 3207100-ST061 & 3287103-ST061 |
|
Transfer In: 3201000-50000 |
Transfer Out:2601000-40001 |
BACKGROUND
Project Overview
The Pine Avenue Connector Project (Project) is included in the Federal Transportation Improvement Program (FTIP), which identifies transportation projects planned for implementation in alignment with regional transportation planning efforts / priorities and air quality standards. The Project consists of widening Pine Avenue from two to four lanes between Euclid Avenue and El Prado Road and constructing a new four-lane extension from El Prado Road to State Route 71 (SR-71). The Project has remained in the preliminary engineering and design phase for over a decade due to significant regulatory review challenges. Those challenges include but not limited to the following major issues.
1. The interchange improvements required at SR-71 and Pine Avenue which requires Caltrans and City of Chino Hills review and collaboration.
2. The initial design proposed a raised bridge approach with fill dirt as high as 60’. The United States Army Corps of Engineers (USACE) raised concerns with the amount of soil import required to raise the proposed road and the environmental impacts associated with creating a dam structure in a flood prone inundation area.
3. Concerns by Southern California Edison (SCE) associated with access to its distribution towers for maintenance.
4. Santa Ana Watershed Project Authority (SAWPA) having its brine line buried under the proposed earth filled structure.
5. Establishing consensus among multiple agencies on a safe design speed and posted speed necessary for a regionally critical mobility route.
To address these challenges, City staff has extensively collaborated with the City of Chino Hills, the San Bernardino County Transportation Authority (SBCTA), and Caltrans to develop a bridge concept that aligns with regional planning efforts and agency requirements. This preliminary concept has the support of the key stakeholders, allowing the City to advance to the next phases of preliminary design and environmental clearance.
In October 2024, Public Works presented a revised Project design to the Infrastructure Committee, proposing a bridge structure to minimize environmental impacts and provide a clear path forward. Due to this design pivot, a new Request for Proposals (RFP) is necessary to procure updated design services.
Staff is actively advancing the RFP process to align with the Project’s revised scope, which now includes the preparation of an Environmental Impact Report (EIR). The EIR will provide a comprehensive analysis of Project impacts and mitigation measures, ensure greater opportunities for community input, and establish a legally defensible environmental document. Under the California Environmental Quality Act (CEQA), challenges to the Project can only be pursued through litigation following the EIR’s certification.
Funding History
The Project was authorized in 2009 to utilize federal funding under the Safe, Accountable, Flexible, Efficient Transportation Equity Act (SAFETEA-LU), with a maximum allocation of $6.1 million and a federal reimbursement ratio covering 80% of eligible costs. To date, the City has utilized and earmarked over $5.0 million for preliminary engineering and design.
As part of the Project’s early development, in 2012, the City entered into a professional engineering services agreement with Huitt-Zollars, for preliminary engineering and design services. Over the years, the City submitted multiple requests to Caltrans to extend the Project timeline and secure additional SAFETEA-LU funding as the Project scope evolved under the Huitt-Zollars agreement. Each request required a review and audit by Caltrans to ensure compliance with federal funding requirements. In 2024, during one such review, Caltrans discovered that the agreement with Huitt-Zollars had expired due to multiple missed contract renewals by City staff since 2020. As a result, costs incurred under the contract during this period were deemed ineligible for reimbursement under SAFETEA-LU.
Following this discovery, City staff conducted a full reconciliation of all costs incurred under the Project. This review determined that the City must repay approximately $1,529,549 in SAFETEA-LU reimbursements received from January 2020 to 2024.
Additionally, the reconciliation process identified accounting discrepancies. Specifically, expenditures related to federal advocacy efforts and the Pine Avenue Repair Project were incorrectly charged to the Pine Avenue Connector Project between 2022 and 2024.
Given the Project’s reliance on specialized funding sources, staff has actively worked to resolve all discrepancies, develop a funding plan for the repayment, and ensure proper cost allocation moving forward.
ISSUES/ANALYSIS
Since the City is deviating from the original Project scope and proceeding with a bridge concept, a new RFP must be issued, and a full environmental review completed. Additionally, the abatement amount required a comprehensive review of invoicing from 2020 onward to identify salvageable costs that can be incorporated into the revised scope and offset through Development Impact Fees and Measure I Arterial funds.
Following this review, staff has determined that the abatement payment of $1,529,549 to Caltrans will be offset using the following funding sources:
• $985,421 - General Fund
• $216,128 - Preserve Circulation Development Impact Fees (DIF)
• $328,000 - Measure I Arterial Funds
Moving forward, a new Project number will be assigned to the Pine Avenue Connector/Bridge Project to ensure that all financial tracking aligns with the updated scope and funding structure. This will provide a fresh start once the funding plan is finalized.
In a related effort, the City Manager and staff met with Congresswoman Norma Torres and her team to seek an exemption from the repayment obligation. Due to the age of the grant, an exemption was deemed infeasible. However, at the City's request, Congresswoman Torres’ office has submitted an additional request to Caltrans to allow the repayment amount to be reinstated into the available SAFETEA-LU fund balance. This request is based on the fact that the issue arose from the extension process related to the agreement with Huitt-Zollars rather than financial mismanagement.
Caltrans is currently consulting with Headquarters to determine whether this adjustment is possible. The City remains optimistic that these efforts will yield a favorable outcome.
The Pine Avenue Connector / Bridge Project remains a critical infrastructure initiative for the City and the region, enhancing regional mobility, safety, and flood resilience. Despite past challenges and missed opportunities, current staff has taken proactive measures to address financial discrepancies, strengthen Project oversight, and secure continued regional stakeholder support. By implementing stronger contract management practices and aligning funding strategies with Project needs, the Public Works team is committed to successfully delivering this Project while maintaining transparency and fiscal responsibility. Staff will continue to provide updates to the Infrastructure Committee and City Council as progress is made, ensuring that this vital Project moves forward efficiently and effectively.
Therefore, it is staff’s recommendation that the City Council approve the abatement payment to Caltrans for the Pine Avenue Connector Project (ST061) in the amount of $1,529,549 and establish a new Capital Improvement Project No. ST261 for the Pine Avenue Connector / Bridge Project, formally closing out Project ST061 Pine Avenue Connector.