Administration and Projects Committee STAFF REPORT February 5, 2015 Page 2 of 3 prior to the construction advertisement. Attachments A. Draft Utility

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1 Administration and Projects Committee STAFF REPORT Meeting Date: February 5, 2015 Subject State Route 4 (SR4)/Balfour Road Interchange (Project 5005) Authorization to Execute Utility Agreement No. 420 with SFPP, L.P. (Kinder Morgan) for Relocation Services Summary of Issues Several utility relocations are required prior to construction of the SR4/Balfour Road Interchange (Project 5005). At this time, staff seeks approval to enter into Utility Agreement No. 420 with Kinder Morgan for the construction and relocation of a petroleum pump station and 10-inch pipeline. The Authority and Kinder Morgan have previously executed Agreement No. 369, in the amount of $3,530,000 for engineering activities and the purchase of long lead materials. This proposed Agreement would provide for construction of the relocated facilities in an amount not to exceed $3,200,000. The aggregate amount between the two Agreements would be $6,730,000. Recommendations Staff seeks authorization for the Chair to execute Utility Agreement No. 420 with Kinder Morgan in the estimated amount of $3,200,000 to provide construction and relocation of a petroleum pump station and 10-inch pipeline, allowing the Executive Director to make any nonsubstantive changes to the language. Financial Implications Although there are sufficient funds for the proposed Agreement to be funded by the East Contra Costa Regional Fee and Financing Authority (ECCRFFA) and Measure J, the overall construction phase is currently facing a significant funding shortfall. Staff is working to quantify the final utility and construction costs and will seek additional funding prior to advertisement of the Construction Agreement. Options The Authority could elect not to approve this Amendment and place the project on hold until further funding is identified. However, there is a need to keep the project on schedule and proceed with utility relocation

2 Administration and Projects Committee STAFF REPORT February 5, 2015 Page 2 of 3 prior to the construction advertisement. Attachments A. Draft Utility Agreement No. 420 with Kinder Morgan Changes from Committee Background Kinder Morgan owns and operates an oil booster station located in the northwest corner of the existing SR4/Balfour Road at-grade intersection. The booster station provides operating pressure for the 10-inch, high pressure oil line which runs along the north side of Balfour Road. It is anticipated that this line would be relocated eight feet to the north within the proposed sidewalk as part of this project. The proposed interchange improvements require the relocation of the existing pump station outside the proposed Caltrans access-controlled right-of-way (ROW). Previously, the Authority executed Agreement No. 389 with Kinder Morgan, including Amendments No. 1 and No. 2, to allow Kinder Morgan the ability to evaluate design options to relocate the project and to order long lead materials when the relocation option was to relocate the entire pump plant to a site more west on Balfour Road, but adjacent to the proposed interchange. However, another more cost effective option has been identified, which would relocate the functions of the existing pump plant in the interchange area to two other existing Kinder Morgan locations, both outside the interchange area. Kinder Morgan owns the parcel where the pump station is currently located and there is known contamination in the soil and groundwater. Kinder Morgan is addressing the contamination remediation and those costs are not included in the agreement. A highway easement for the State s use will be recorded over an area inclusive of the pump station and contaminated ground water plume within the SR4BPA ROW and will remain in effect until remediation has been completed. Once the Regional Water Quality Control Board (RWQCB) accepts closure of the site, the underlying fee would be transferred to the state from the SR4BPA. System modifications will occur at the Concord Pump Station on property owned by Kinder Morgan, along with system modifications at the Brentwood Boulevard Junction Station (located near Brentwood Boulevard and Sellers Avenue), on property that is leased by Kinder Morgan from the East Contra Costa Irrigation District

3 Administration and Projects Committee STAFF REPORT February 5, 2015 Page 3 of 3 Financial liability for the required relocation is determined as 100% project. Staff recommends entering into Utility Agreement No. 420 to reimburse Kinder Morgan for actual relocation costs. Work that will be sub-contracted by Kinder Morgan is subject to fluctuate due to the competitive bid process and is estimated at $3,200,000. The Agreement language allows the Authority to pay the actual costs, up to 125% of the estimated cost. If the final bill exceeds 125% of the estimated cost, an Amendment to the Agreement would be necessary

4 CONTRA COSTA TRANSPORTATION AUTHORITY UTILITY AGREEMENT Page 1 of 6 UTILITY PIPELINE /FACILITY RELOCATION AND MODIFICATION AGREEMENT NO: (CCTA Agreement No. 420) BETWEEN CONTRA COSTA TRANSPORTATION AUTHORITY AND SFPP, L.P., a Delaware limited partnership ( SFPP, LP ), DATE: February 18, 2015 The Contra Costa Transportation Authority, hereinafter called "AUTHORITY, in partnership with the State of California, acting by and through the Department of Transportation, hereinafter called "STATE," proposes to construct operational and safety improvements on State Route 4 (SR-4) between 1.1 miles north of Balfour Road and 0.6 miles south of Balfour Road in the City of Brentwood, California in accordance with AUTHORITY Project No. 5005, hereinafter referred to as PROJECT. SFPP, L.P., a Delaware limited partnership ( SFPP, LP ), doing business as Kinder Morgan, hereinafter called OWNER, owns and maintains existing facilities consisting of the Brentwood Booster Station on Balfour Road in the City of Brentwood, a 10-inch pipeline from Concord Station to Brentwood Booster Station, its Drag Reducing Additive ( DRA ) injection package, and its associated cathodic protection system, electrical installations, and pumping facilities. These facilities require relocations to avoid conflicts with the PROJECT. This will additionally require modifications to the existing Concord Station, to improve voltage restrictions, and modifications at the Brentwood Boulevard Junction Structure, to add DRA facilities. All of the aforementioned are referred to as FACILITY, which require relocation and modification to accommodate the PROJECT. AUTHORITY and OWNER have previously entered into a separate Agreement No. 369, along with Amendment No. 1 and Amendment No. 2 to Agreement No. 369, for the OWNER to initiate preliminary work and procurement of the major equipment associated with relocation, and modification of the FACILITY. This Agreement No. 420 will provide for the relocation, construction and construction support needed to relocate FACILITY operations at the Brentwood Booster Station on Balfour Road, and modifications at the Concord Station and the Brentwood Boulevard Junction. Agreement No. 369 and this Agreement No. 420 will together in aggregate not exceed $6,730,000 for design, equipment procurement, construction and demolition as it relates to the relocation of the FACILITY

5 UTILITY AGREEMENT Page 2 of 6 Now, it is hereby mutually agreed that: I. WORK TO BE DONE In accordance with Notice to Owner No dated February 2015, OWNER shall provide all the resources needed for completion of the modification and relocation of FACILITY to accommodate the construction of the PROJECT. OWNER shall provide all the necessary resources and secure all the permits required to relocate the FACILTY DRA system from the Brentwood Booster Station location on Balfour Road to the Brentwood Boulevard Junction, relocate the 10-inch pipeline along Balfour Road, relocate the cathodic protection system at the Brentwood Booster Station, modify the electrical facilities at Concord Station, modify the pumps at the Concord Station and at the Brentwood Boulevard Junction Station, and demolish the Brentwood Booster station. The required soil and groundwater remediation work at the Brentwood Booster Station, as outlined in the Central Valley Water Quality Control Board Letter to Kinder Morgan Energy Partners dated November 19, 2014, shall be the sole responsibility of OWNER. Exhibit 1 includes the preliminary drawings and specifications of the work to be performed under this Agreement No Any deviations from the OWNER s plan described above initiated by either the AUTHORITY or the OWNER, shall be agreed upon by both parties hereto under a Revised Notice to Owner. Such Revised Notices to Owner, approved by the AUTHORITY and acknowledged by the OWNER, will constitute an approved revision of the OWNER s plan described above and are hereby made a part hereof. No work under said deviation shall commence prior to receipt by the OWNER of the Revised Notice to Owner. Changes in the scope of the work will require an amendment to this Agreement and subject to both parties approval in addition to a revised Notice to Owner. II. LIABILITY FOR WORK The costs associated with relocation and modification of the FACILITY will all be at 100% AUTHORITY expense and 0% OWNER expense: Total Estimated cost for Relocation, Construction & Construction Support Work $ 3,200,000 AUTHORITY s Estimated Liability at 100% $ 3,200,000 The above estimate includes the total cost of the construction activities associated with the FACILITY relocation and modification, and is subject to the assumptions listed in Exhibit-2, Estimate. Under the previous Agreement No. 369, preliminary and final design work and material procurement are included. The cost of OWNER s right-of-way will be the subject of a subsequent, separate agreement. III. PERFORMANCE OF WORK OWNER agrees to perform the relocation construction with its own forces or to cause the herein described work to be performed by the OWNER's contractor, employed by written contract on a continuing basis to perform work of this type, and to provide and furnish all necessary labor, materials, tools, and equipment required therefore; and to prosecute said work diligently to completion. Pursuant to Public Works Case No determination by the California Department of Industrial Relations dated October 25, 2002, work performed by OWNER s contractor is a public work under the definition of Labor Code section 1720(a) and is therefore subject to prevailing wage

6 UTILITY AGREEMENT Page 3 of 6 requirements. OWNER shall include this requirement as an express condition of its written contract with the contractor performing the FACILITY relocation and modification. Use of out-of-state personnel (or personnel requiring lodging and meal per diem expenses) will not be allowed without prior written authorization by AUTHORITY s representative. Requests for such authorization must be contained in OWNER s estimate of actual and necessary costs. Accounting Form FA-1301 is to be completed and explanation why local employee or contract labor is not considered adequate for the relocation work proposed. Per Diem expenses shall not exceed the per diem expense amounts allowed under the STATE s Department of Personnel Administration travel expense guidelines. IV. PAYMENT FOR WORK The AUTHORITY shall pay its share of all actual and necessary cost of the relocation and modification of the FACILITY within 30 days after receipt of OWNER s itemized bill in quintuplicate, signed by a responsible official of OWNER s organization and prepared on OWNER s letterhead, compiled on the basis of the actual and necessary cost and expense incurred and charged or allocated to said work in accordance with the uniform systems of accounts prescribed for OWNER by the Federal Energy Regulatory Commission. OWNER s invoices will include all costs incurred including but not limited to OWNER s labor, contract labor, cost of procurement of equipment, material and services, insurance, permitting, consultants, as well as OWNER labor and management (including 42% for labor additives), and 19.4% OWNER s cost of General Overhead and Administration expenses. It is understood and agreed that the AUTHORITY will not pay for betterment of the FACILITY, beyond the scope outlined in Section-1 above, and that the AUTHORITY will not pay for any remediation or removal work to cleanup, eliminate or reduce the presence of hazardous substance. Not more frequently than once a month, but at least quarterly, OWNER will prepare and submit progress bills for costs incurred not to exceed OWNER's recorded costs as of the billing date less estimated credits applicable to completed work. Payment of progress bills not to exceed the 125% of the estimated amount of total OWNER s cost as shown in Section II above may be made under the terms of this Agreement after receipt and approval by AUTHORITY of documentation supporting the cost increase. Payment of progress bills, the aggregate sum of which exceed 125% of the estimated amount of AUTHORITY s liability described in Section II above, may be made after receipt and approval by AUTHORITY of documentation supporting the cost increase and after an Amendment to this Agreement has been executed by the parties to this Agreement. The OWNER shall submit a final bill to the AUTHORITY within 180 days after the completion of the work described in Section I above. If the AUTHORITY has not received a final bill within 180 days after notification of completion of OWNER s work described in Section I of this Agreement, and AUTHORITY has delivered to OWNER fully executed Director's Deeds, Consents to Common Use or Joint Use Agreements as required for OWNER s facilities; AUTHORITY will provide written notification to OWNER of its intent to close its file within 30 days and OWNER hereby acknowledges, to the extent allowed by law that all remaining costs will be deemed to have been abandoned. If the AUTHORITY receives a final bill for payment from OWNER more than 180 days after notification of completion of OWNER s work, payment of the late bill may be subject to allocation and/or approval by the AUTHORITY. The final billing shall be in the form of an itemized statement of the total costs charged to the project, and less any amounts covered by progress billings. However, the AUTHORITY shall not

7 UTILITY AGREEMENT Page 4 of 6 pay final bills, which exceed AUTHORITY s estimated liability described in Section II above without documentation of the reason for the increase of said cost from the OWNER. If the final bill exceeds the AUTHORITY s estimated liability described in Section II above solely as the result of a revised Notice to Owner as provided for in Section I, a copy of said revised Notice to Owner shall suffice as documentation. In either case, payment of the amount over the estimated cost of this Agreement may be subject to allocation and/or approval by the AUTHORITY. In any event if the final bill exceeds 125% of the AUTHORITY S estimated liability described in Section II above, an amended Agreement shall be executed by the parties to this Agreement prior to the payment of the OWNER s final bill. Any and all increases in costs that are the direct result of deviations from the work described in Section I of this Agreement shall have the prior concurrence of the AUTHORITY and STATE. Detailed records from which the billing is compiled shall be retained by the OWNER for a period of three years from the date of the final payment and will be available for audit by AUTHORITY, STATE and/or Federal auditors. OWNER agrees to comply with Contract Cost Principles and Procedures as set forth in 48 CFR, Chapter 1, Part 31, et seq., 23 CFR, Chapter 1, Part 645, and/or 18 CFR, Chapter 1, Parts 101, 201, et al. If a subsequent AUTHORITY, STATE and/or Federal audit determines payments to be unallowable, OWNER agrees to reimburse AUTHORITY upon receipt of AUTHORITY billing. V. GENERAL CONDITIONS All obligations of the AUTHORITY under the terms of this Agreement are initiated per the provisions of the Cooperative Agreement between the AUTHORITY and the STATE (Caltrans Agreement No , Cooperative Agreement No ) dated February 18, All reasonable and necessary costs accrued by OWNER as a result of AUTHORITY's request to review, study and/or prepare relocation plans and estimates for the project associated with this Agreement may be billed pursuant to the terms and conditions of this Agreement. If the AUTHORITY s Project, which precipitated this Agreement, is canceled or modified so as to eliminate the necessity of work by OWNER, the AUTHORITY will notify OWNER in writing and the AUTHORITY reserves the right to terminate this Agreement by Amendment. The Amendment shall provide mutually acceptable terms and conditions for terminating the Agreement. OWNER shall submit a Notice of Completion to the AUTHORITY within 30 days of the completion of the work described in Section I above. The provisions hereof shall insure to the benefit and be binding upon the respective successors and assigns of the parties hereto

8 UTILITY AGREEMENT Page 5 of 6 THE ESTIMATED COST, AS OF THE SIGNATURE DATE OF THIS AGREEMENT, TO THE AUTHORITY FOR ITS TOTAL SHARE OF THE ABOVE DESCRIBED WORK (design, engineering, procurement, and construction costs) IS $6,730,000, which is captured in this Agreement No. 420 and in Agreement No IN WITNESS WHEREOF, the parties hereto have executed this Utility Agreement No (CCTA Agreement No. 420), the day and year first above written. CONTRA COSTA TRANSPORTATION AUTHORITY SFPP, LP. OWNER By Kevin Romick, Chair By Randell H. Iwasaki Executive Director By Mike Outlaw Vice President Engineering & Operations Agreement History Amount Scope Execution Date Agreement No 369 $75,000 Engineering 1/16/13 Agreement No. 369, Amendment No. 1 $665,000 Final Engineering 7/17/13 Agreement No. 369, Amendment No. 2 (Revised Total Amount) $3,530,000 Long-Lead Item Procurement Proposed Agreement No. 420 $3,200,000 Construction Activities to Complete Facility Relocation and Brentwood Booster Station Demolition 12/18/13 Proposed TOTAL AGGREGATE AGREEMENT AMOUNT $6,730,

9 UTILITY AGREEMENT Page 6 of 6 CONTRA COSTA TRANSPORTATION AUTHORITY NOTICE TO OWNER Dist 04 Co CC Rte 4 PM 34.9/36.6 EA 4H1600 Federal Project No: N/A Project No: 5005 SR4 Balfour Road Interchange Owner s File No.: FEDERAL PARTICIPATION: On the Project Yes No On the Utility Yes No To: Mr. Mark Sabeti PE, Senior Project Manager SFPP, L.P., a Delaware limited partnership ( SFPP, LP ), Kinder Morgan Energy Partners, L.P 1100 W Town and Country Road Orange, CA Because of the Interchange Construction: The State of California Department of Transportation (Caltrans) and the Contra Costa Transportation Authority (CCTA) jointly propose to widen State Route 4 (SR-4) from San Jose Avenue (PM 34.9) to approximately 3,400 feet south of Balfour Road (PM 36.6), and to construct an interchange at Balfour Road in the City of Brentwood in Contra Costa County. Which affects your: Existing facilities consisting of oil booster pump, cathodic protection, 10-inch diameter, transmission pipelines, and contaminated soil monitoring wells, as shown on the attached plans. You are hereby ordered to: Remove the existing oil booster pump station facilities, remove/relocate monitoring wells, and realign the 10-inch pipeline along Balfour Road by removing the existing voltage restriction at the Concord Pump Station and adding Drag Reducing Additive Injection at the Brentwood Boulevard Junction, as shown on the attached SFPP,LP s Plan Number: (6042, 510, 540A, 540C), dated 9/18/2014. Your work scheduled shall be complete prior to construction: The construction of the interchange project is scheduled to begin in the Fall SFPP,LP is hereby notified that all relocation work shall be completed prior to June 30, SFPP,LP will be allowed to inspect and maintain these facilities while the interchange construction is underway. Notify Ross Chittenden, Deputy Executive Director at, telephone (925) or rchittenden@ccta.net, for questions. Liability is 0% Utility Owner (SFPP,LP), per Agreement No (CCTA No. 420) By Ross Chittenden, P.E. Deputy Executive Director, Projects THIS NOTICE DOES NOT CONSTITUTE A PERMIT. OBTAIN AN ENCROACHMENT PERMIT BEFORE STARTING WORK. Distribution: 1) Owner, 2) Utility Coordinator File, 3) RE File 4) DLAE File, 5) District Utility Coordinator -File