Meeting_Body
CONSTRUCTION COMMITTEE
OCTOBER 23, 2024
Subject
SUBJECT: I-105 EXPRESSLANES CONSTRUCTION MANAGER/GENERAL CONTRACTOR SEGMENT 1 (IDENTIFIED WORKS PACKAGE 1) LIFE- OF-PROJECT BUDGET AND ROADSIDE TOLL COLLECTION SYSTEM LIFE-OF-PROJECT BUDGET
Action
ACTION: APPROVE RECOMMENDATION
Heading
RECOMMENDATION
Title
AUTHORIZE the Chief Executive Officer to:
A. ESTABLISH the I-105 ExpressLanes Project 475004 Life-of-Project (LOP) Budget by increasing the existing Preconstruction Budget and by establishing funding for the Segment 1 (Identified Work Package 1) construction, from Sepulveda Blvd. to Central Avenue on the I-105 Freeway. This action increases the existing Preconstruction Budget of $119,391,538 by $638,148,678 to a Life-of-Project Budget of $757,540,216 (Attachment A);
B. NEGOTIATE AND EXECUTE project-related agreements, including contract modifications, up to the authorized LOP;
C. ESTABLISH an LOP budget of $44,254,826 for the I-105 Express Lanes project segments 1, 2, and 3 Roadside Toll Collection System (RTCS) Project 275004; and
D. AMEND FY25 budget for Project 475004 by $47,234,197 from $126,112,511 to $173,346,708 and for Project 275004 by $3,824,193 from $2,129,990 to $5,954,183.
Issue
ISSUE
The I-105 Express Lanes project (Project) has been advanced using the Construction Manager/General Contractor (CM/GC) delivery method. Leveraging this delivery method, Metro staff worked with the general contractor and Caltrans, benefiting from contractor design input to advance a number of value engineering opportunities. The general contractor then provided a bid to construct the project, which in this case is IWP 1. Staff has concluded negotiations with the CM/GC contractor on IWP 1 and is now seeking Board approval to increase funding which will enable advancement of IWP 1. Awarding IWP 1 is necessary to comply with the Project’s state grant funding requirements, secure toll-backed financing, and ensure that construction progresses without delays to meet the opening of segment 1 of the Project prior to the 2028 Olympic and Paralympic games.
Establishing an LOP budget to execute contracts and modifications and pursue the completion of the RTCS contract is also necessary. Failure to approve these recommendations could lead to project delays, putting critical funding at risk and postponing the expected operational improvements and equity enhancements within the corridor.
Background
BACKGROUND
In 2016, the I-105 ExpressLanes Project was allocated $175 million as part of the approved expenditure plan in the Measure M ordinance. Since 2017, Caltrans District 7 and Metro have collaborated on the Project Approval/Environmental Document (PA/ED) and Plans, Specifications, and Estimates (PS&E) phases of the Project, which will improve operations along the I-105 corridor, enhance trip reliability and actively manage traffic flow from I-405 in Los Angeles to Studebaker Road in Norwalk. The Project is structured into three segments, each involving specific design review and permitting packages. Segment 1 is between I-405 and Central Avenue (seven miles), Segment 2 is between Central Avenue and I-710 (four miles), and Segment 3 is between I-710 and Studebaker Road (five miles).
The CMGC method, authorized by the federal "Moving Ahead for Progress in the 21st Century" (MAP-21) Act, allows for phased construction through multiple work packages. This phased approach requires Federal Highway Administration (FHWA) review and concurrence of IWP 1. Metro has been meeting regularly with FHWA and expects to obtain this concurrence prior to the start of construction. As a direct recipient of Federal funding, Metro is advancing Segment 1 as Identified Works Package 1(IWP 1) following FHWA CM/GC procedures. IWP 1 is the initial package to enable early construction for Segment 1 while Segments 2 and 3 are being developed.
Metro and Caltrans' collaboration ensures that all project phases meet federal standards, contributing to the project's overall success and compliance. The phased IWP approach is critical for the timely completion of the I-105 Express Lanes project, addressing key activities early to mitigate risk and accelerate the timeline.
The Environmental Impact Report/Environmental Assessment (EIR/EA) was completed in May 2021, establishing the environmental framework for the Project. Subsequently, in March 2024, a NEPA/CEQA Revalidation was approved, incorporating additional measures related to biological resources, air quality, cultural resources, and hazardous waste. There are no right-of-way acquisitions in Segment 1 of the Project.
Final design efforts commenced in June 2021. In June 2022, the Board approved a $119,391,538 preconstruction budget for the Project . In August 2022, the Board approved several key contracts essential for the Project's progress: a Construction Manager/General Contractor (CM/GC) contract with FMJV, a Program Management Support Services (PMSS) contract with HNTB, and the RTCS contract with Conduent State and Local Solutions, Inc. following the plan discussed in the previous Board Report, Metro staff has completed the work to finalize the design for Segment 1 and negotiated the construction cost to advance IWP 1 for construction.
An equity assessment for Segment 1 was initiated in September 2023 and completed in September 2024 to identify and prioritize potential projects that enhance mobility and equity in the corridor and could be funded with future net toll revenue.
Discussion
DISCUSSION
The Project is a collaborative effort between Metro and Caltrans, governed by cooperative agreements for design and construction phases. Metro is tasked with awarding and administering all contracts related to the Project, while Caltrans provides design approval and construction permits. Funding sources include Metro Local Measure M funding, State Solutions for Congested Corridors (SCCP) grant funding, and Toll Revenue Backed Loans, including TIFIA financing. The CM/GC process was selected to enable early contractor involvement, providing critical construction expertise that informs design decisions.
On August 25, 2022, a Preconstruction Budget of $119,391,538 was approved by the Board. This approved budget allowed Staff to finalize the design for Segment 1 and made significant progress on the design of Segment 2 and 3. The engineering development leveraged the partnership between the designer and the CM/GC to create an efficient design on elements such as retaining walls, pavement structure, and sign/toll systems structures and foundations. The CM/GC also collaborated with Metro staff to refine Metro’s contract requirements and remap some of the risks to seek additional construction cost savings. The current request seeks approval to establish the LOP for IWP 1, which covers Segment 1 construction costs, contingencies, and necessary support. Later, once the designs are sufficiently advanced and negotiation of construction costs are concluded, staff will return to the Board to amend the LOP budget for Segments 2 and 3.
The negotiated Opinion of Probable Construction Cost (OPCC) for Segment 1 was reported to the Board on March 11, 2024, with the design now undergoing Caltrans review. The prime contractor has completed the subcontracting procurement process, and the final price for Segment 1 construction has been determined, as shown in the table below:
|
Milestone |
Submittal |
OPCC |
ICE |
|
First OPCC Submittal |
6/16/2023 |
$548,020,093 |
$424,194,333 |
|
Revised Design, Negotiated Estimates and Risks Allocations |
12/7/2023 |
$412,049,422 |
$386,699,600 |
|
Final Price |
8/19/2024 |
$389,126,962 |
$364,221,853 |
On May 17, 2024, the California Transportation Commission allocated a $150,000,000 SCCP grant, secured by the Project in December 2020. The SCCP grant requires the Project’s construction contract to be awarded six months from the allocation date, which is November 2024. The SCCP grant provides Metro 36 months to complete the Project, which is November 2027. Construction of the Project is expected to begin in January 2025. Concurrently, the final design for Segments 2 and 3 is progressing.
With focus on addressing equity issues, an equity assessment was conducted alongside the preconstruction activities of the Project. This assessment aimed to create a prioritized list of potential projects that could enhance mobility and equity within the corridor, with the possibility of future funding from net toll revenues.
Potential projects were identified through a comprehensive analysis of corridor conditions, existing studies and plans, field visits, and input from Metro departments, local jurisdictions, and Community Based Organizations (CBOs). These projects must be within a three-mile radius of Segment 1 of the I-105 Express Lanes, in alignment with the I-10/I-110 Express Lanes' Net Toll Revenue Grant guidelines. The assessment also included data collection on socioeconomic and environmental conditions.
The projects were categorized into three main areas: active transportation, transit/system improvements, and roadway improvements. Based on a methodology developed explicitly for this project, projects were prioritized as high, medium, or low. This methodology evaluated projects across five categories: connecting people and places, creating community value, conserving resources, prioritizing Metro’s Equity Focused Communities (EFCs), and cost-effectiveness.
The equity assessment, project list, and prioritization methodology were developed with extensive input and participation from community members and sixteen CBOs. CBO participation included ten monthly roundtable meetings and a walk audit, while broader community input was gathered through four pop up events and two public meetings held in July 2024. The pop-up events were held in Watts at a food distribution event, Willowbrook at the Watts Willowbrook Farmers Market, Inglewood at New Mt. Pleasant Baptist Church, and in Lawndale/Torrance at El Camino College. The public meetings presented the equity assessment and solicited feedback on the project list. Additionally, two surveys were conducted: the first to understand travel behavior in the corridor and the second to gather public input on the project list. The travel behavior survey received 848 responses, while the project list survey garnered 140 responses. The public meetings and surveys were conducted in English and Spanish.
There were 143 projects identified in total. Of these, 63 were prioritized as high, 70 as medium, and ten as low, as shown in the table below. High-priority projects were characterized by area-wide or corridor-level impact, proximity to Metro rail stations, location within EFC populations, and a focus on sustainable mobility options. The complete list of projects is included in Attachment C, and the Executive Summary is included in Attachment D.
|
Priority |
Active Transportation |
Roadway |
Transit |
Total |
|
High |
31 |
13 |
19 |
63 |
|
Medium |
35 |
17 |
18 |
70 |
|
Low |
2 |
5 |
3 |
10 |
|
Total |
68 |
35 |
40 |
143 |
Two corridor enhancements have been identified that could be implemented as part of the Project. The first is improved lighting at freeway under-crossings that are being widened for the Project, and the second is wayfinding, signage, and state-of-good repair improvements at Harbor and Avalon C line stations.
Public Outreach
Metro Construction Relations will implement a comprehensive outreach program to notify the public in advance of construction starting. Metro Construction Relations will roll out a multi-channel outreach program that, among other tools, will utilize social media, earned and paid media, electronic newsletters. Metro will work closely with partner agencies including local cities, to notify the public. The outreach program will continue through all phases of the project. Project contact tools, information line, and e-mail, are available to address inquiries about the outreach program. Metro’s dedicated Construction Relations team will monitor these tools and coordinate accordingly.
Furthermore, the project’s website, https://www.metro.net/projects/i105-expresslanes/, will contain information on the status of the project, closure information, including relevant fact sheets, detour maps, presentations and additional resources. Information regarding project related closures will be made available through social media outlets, including WAZE and Google maps. The information will be updated with detour information when closures begin.
Additionally, the staff requests approval for the LOP budget for the RTCS. This LOP includes segments 1,2, and 3 and is distinct from the IWP because Metro will own the RTCS upon completion, while Caltrans will retain ownership of the civil improvements. The LOP includes the design/build portion of the DBOM contract with Conduent State and Local Solutions, Inc., support costs, agency labor costs, and contingency. Details of the RTCS LOP are provided in Attachment G.
Determination_Of_Safety_Impact
DETERMINATION OF SAFETY IMPACT
The Project is being planned and designed according to Caltrans Standard Specifications and Caltrans Standard Plans. Approval of the IWP 1 and RTCS LOPs for the Project will not impact safety.
Financial_Impact
FINANCIAL IMPACT
The project has secured $325 million in funding, with $175 million from Measure M and a $150 million grant from the State’s Solutions for Congested Corridors Program. Of the $175 million in Measure M funds, $119 million has been allocated for pre-construction activities and $10 million for RTCS project, leaving $46 million available for construction. As noted earlier, the Board approved preconstruction budget is $119 million. The budget for IWP 1 is $638 million, and the cost for the entire project is $1.4 to $1.5 billion. Toll-backed debt financing will be utilized to address the funding gap of $1.075 to $1.175 billion. The project’s toll revenue is projected to exceed $6.6 billion over the 40-year debt repayment period.
Impact to Budget
Board approval will have the following impacts on the FY25 budget:
FY25 budget for Project 475004 I-105 Express Lanes will increase from $126,112,511 to $173,346,708 (increase of $47,234,197) (Attachment A).
FY25 budget for Project 275004 Roadside Toll Collection System (RTCS) will increase from $2,129,990 to $5,954,183 (increase of $3,824,193) (Attachment G).
Funding for this action comes from Measure M Highway 17% and State grant, which are not eligible for bus and rail operations.
Equity_Platform
EQUITY PLATFORM
Along the I-105 corridor, 92% of census tracts within a three-mile radius are EFCs. Within a three-mile radius of segment 1, 72% of census tracts and 75% of the population are in an EFC.
As described earlier, equity has been incorporated through an equity assessment for Segment 1 that identified potential projects that could be funded with future net toll revenue.
The CM/GC Contractor, Flatiron-Myers, JV (FMJV) made a 12.40% Disadvantaged Business Enterprise (DBE) commitment on Phase 1 - Pre-Construction. The current level of DBE participation is 11.88%, representing a 0.52% shortfall. FMJV has a shortfall mitigation plan on file and contends that the shortfall is due to the timing of subcontractor work during the Pre-Construction phase. FMJV is projecting to achieve its DBE commitment by December 2024, for Phase 1. In addition, the segment 1 construction contract includes a DBE goal of 19%, with staff monitoring the construction contract to ensure compliance with the established goals. The Project Labor Agreement/Construction Careers Policy is applicable on the Phase 2-Construction portion of this contract Finally, the segment 2/3 equity assessment is expected to begin in early 2025.
Implementation_of_Strategic_Plan_Goals
IMPLEMENTATION OF STRATEGIC PLAN GOALS
The Project is consistent with the following Metro Vision 2028 Goals and Objectives:
• Goal 1: Provide high-quality mobility options that enable people to travel less by increasing regional highway capacity and offering travelers on the corridor a new, faster, more reliable, and more convenient travel mode alternative.
• Goal 2: Deliver outstanding trip experiences for all transportation system users by improving trip times and travel speeds for Express Lanes and general-purpose lanes.
• Goal 4: Transforming LA County through regional collaboration and national leadership by strengthening Metro’s relationships with Caltrans, the Federal Highway Administration, Los Angeles County, local cities/jurisdictions, and other agencies.
Alternatives_Considered
ALTERNATIVES CONSIDERED
One alternative is for the Board not to approve the recommended actions for the I-105 Express Lanes CM/GC Project. However, staff does not recommend this alternative for several critical reasons.
First, failing to establish the IWP1 LOP and authorize the related project agreements would significantly delay the Project's timeline. Such delays would jeopardize the $150,000,000 in funding awarded under the Solutions for Congested Corridors Program (SCCP), which is crucial for the Project's financial viability.
Second, choosing not to proceed with the CM/GC contract would forfeit the key benefits of early contractor involvement. This involvement is essential for managing costs and ensuring the timely implementation of toll collection infrastructure. Without it, the Project may experience delays in generating anticipated toll revenue and achieving the expected operational improvements.
If the financial close of the TIFIA loan and toll-backed debt financing is not achieved by December 2025, it may become necessary to utilize I-110 Express Lanes toll revenue for interim funding. This would ensure that Segment 1 construction continues without interruption until the debt financing is finalized. Once the TIFIA or toll-backed financing is secured, funds from the I-110 toll revenues will be reimbursed. This action, if warranted, will require Metro Board consideration and approval before implementation.
Next_Steps
NEXT STEPS
Upon approval by the Board, staff will complete executing the Segment 1 IWP 1 contract modification and proceed with CM/GC construction for Segment 1. Staff will also continue developing Segments 2 and 3 and return to the Board to amend the LOP budget in Fall 2025. In addition, the Segment 2 and 3 equity assessment will begin in early 2025.
Attachments
ATTACHMENTS
Attachment A - IWP Funding and Expenditure Table
Attachment B - Procurement Summary
Attachment C - Equity Assessment Prioritized List of Projects
Attachment D - I-105 Express Lanes Segment 1 Equity Assessment Executive Summary
Attachment E - Contract Modification/Change Order Log
Attachment F - DEOD Summary (CM/GC Contract)
Attachment G - RTCS LOP
Prepared_by
Prepared by:
Manuel Gurrola, Director, Program Management (213) 922-8889
James Wei, Executive Officer, Program Management (213) 922-7528
Philbert Wong, Senior Director, Shared Mobility (213) 418-3137
Mat Antonelli. Deputy Chief Program Management Officer, (213) 893-7114
Mark Linsenmayer, Executive Officer, Shared Mobility (213) 922-5569
Shahrzad Amiri, Deputy Chief Operations Officer, Shared Mobility (213) 922-3061
Carolina Coppolo, Interim Deputy Chief Vendor/Contract Management Officer (213) 922-4471
Reviewed_By
Reviewed by:
Timothy Lindholm, Chief Program Management Officer (213) 922-7297
Conan Cheung, Chief Operations Officer (213) 418-3034
