Meeting_Body
CONSTRUCTION COMMITTEE
MAY 20, 2026
Subject
SUBJECT: EAST SAN FERNANDO VALLEY LIGHT RAIL TRANSIT PROJECT
Action
ACTION: APPROVE RECOMMENDATION
Heading
RECOMMENDATION
Title
AUTHORIZE the Chief Executive Officer to:
A. ESTABLISH a Life-of-Project (LOP) budget in the amount of $3,998,675,309 for the East San Fernando Valley Light Rail Transit Project (Project);
B. AMEND the Progressive Design-Build Contract No. PS89616000 with San Fernando Transit Constructors (SFTC), a Joint Venture (JV) of Skanska USA Civil West California District, Inc. (Skanska) and Stacy and Witbeck, Inc., to implement the Phase 2 Supplement of the Project in the amount of $1,988,038,124 increasing the total contract value from $442,916,240 to $2,430,954,364; and
C. AWARD and EXECUTE all project-related agreements and modifications to existing contracts within the authorized LOP Budget.
Issue
ISSUE
Staff is seeking the Board’s approval for two items: (1) establishing a LOP budget in the amount of $3,998,675,309 for the Project; and (2) to execute a modification to implement the Phase 2 Supplement of the Progressive Design-Build Contract PS89616000 to SFTC. The LOP budget is inclusive of all previously awarded contracts, expenses incurred to date, and activities to be performed by the contractor and professional services contracts for the Project.
Background
BACKGROUND
The Project extends north from the Van Nuys Metro G-Line station to San Fernando Road, a total of 6.7 miles of dual track light rail transit (LRT) system with 11 at-grade center platform stations. The Board certified the Final Environmental Impact Statement/ Environmental Impact Report (EIS/EIR) in December 2020, and the Federal Transit Administration (FTA) signed a Record of Decision in January 2021 for the project. Included in the Final EIS/EIR, the Project was defined as the Initial Operating Segment (IOS). An additional extension of the LRT system 2.5 miles to the north on share rail right of way also was included in the Final EIS/EIR. Per the Board's request, additional studies (ESFV Shared ROW Study) were conducted to address concerns raised by local cities and Metrolink regarding traffic and safety. In December 2025, the Board directed staff to select and move forward with a new environmental clearance effort for new crossing gates along the Metrolink system and a new Pacoima Metrolink Station with a mobility hub in lieu of extending the light rail 2.5 miles. This 2.5 mile segment is not the subject of this Board action.
The Project provides a dual track street running light rail transit system along the middle of Van Nuys Boulevard from Oxnard Street to San Fernando Road. This includes 11 at-grade center platform stations, 10 traction power substations, and a maintenance and storage facility (MSF) for LRT vehicles. This Project is the subject of this board action.
On May 10, 2022, the FTA issued Metro a Letter of Intent (LOI) to obligate funding for the Project under the Expedited Project Delivery (EPD) Pilot Program. Metro and the FTA signed the Full Funding Grant Agreement (FFGA) on the Project alignment on September 6, 2024. The FFGA was executed on September 13, 2024, for a total Award Budget of $3,573,279,911 with a Federal assistance amount of $893,319,978.
Through the Preliminary Engineering (PE) phase of the Project, design refinements resulted in updates to the project description. In October 2023, the Metro Board approved an Addendum to the EIR assessing design refinements and updated Project elements developed during Preliminary Engineering. In July 2023, a letter regarding the Environmental Determination for East San Fernando Valley Transit Corridor Reevaluation was received from the Federal Transit Administration in compliance with NEPA and no further studies would be required.
On February 23, 2023, the Board approved the award of a Progressive Design-Build (PDB) contract to San Fernando Transit Constructors (SFTC), a joint venture of Skanska USA Civil West California District, Inc., and Stacy and Witbeck Inc., for Phase 1 Preconstruction Services in the amount of $30,979,750. Phase 2 of the PDB contract includes Design, Construction, Testing and Commissioning of the Project. A Preconstruction Phase-of-Project Budget (Preconstruction Budget) in the amount of $496,856,000 was also established at the February 23, 2023, Board meeting.
On April 14, 2023, Notice to Proceed (NTP) was issued to SFTC for Phase 1 work which includes validation of base design, value engineering, and a framework for negotiating and reaching a Phase 2 Contract Price. The implementation of Early Works Packages (EWPs) concurrently with Phase 1 work advanced design efforts and utility adjustment work from the Phase 2 scope of work to support contract price negotiations and project schedule.
In July 2024, the Board approved an increase to the Preconstruction Budget to $879,731,000. Budget items included awarded phases of construction contracts, EWP’s, priority Real Estate acquisition and relocation, third party agreements, Metro labor, and encumbered and forecasted costs for professional services.
In February 2025, the Board approved a second increase to the Preconstruction Budget to $1,487,826,000 to continue supporting Real Estate acquisitions and relocation activities, utility relocation work, and project support costs.
Discussion
DISCUSSION
Since the execution of the Phase 1 of the PDB Contract in early 2023, Metro has been working with the PDB Contractor on defining scope, managing risk, and establishing cost and schedule certainty to support the submittal of a firm fixed price proposal for Phase 2 from the contractor.
Development of Opinion of Probable Cost (OPC) estimates identified construction costs trending higher than the initial project costs included in the FFGA budget, specifically in the areas of complex utility relocations, traffic control plans, and the MSF. During the EWP negotiations, the team also identified market conditions as a risk and cost driver that resulted in higher costs among all work items.
Utilizing the collaboration of the PDB delivery model, the contractor and Metro teams worked together to evaluate Value Engineering concepts that lead to design refinements, resizing of MSF, and more efficient phasing of construction in coordination with site access constraints. In addition, Metro agreements with third parties including LADWP and LADOT will support further schedule savings and reduction of overall project risk. While the final negotiated contract value has resulted in an increased budget beyond the original forecast, the efforts listed above were able to drive the contractor’s cost down by over $150M during final negotiations.
During this time, several EWPs were executed to advance Phase 2 PDB activities, such as final design, early material procurement, utility relocations, and real estate activities critical to meet construction schedules.
At this time, both Metro and the PDB contractor have agreed to a final fixed firm price to implement Phase 2 of the PDB contract, bringing the total Project cost to $3,998,675,309. This includes the previously approved Preconstruction Budget of $1,487,826,000.
This LOP encompasses all project costs, including costs which are not eligible for Federal reimbursement. A funding source separate from the ESFV Project funding plan, Measure M inflation funding, has been identified to support these non-eligible costs and included in Attachment A - Funding and Expenditure Plan.
Determination of Safety Impact
DETERMINATION OF SAFETY IMPACT
This Board action will not have any negative impact on established safety standards.
Financial_Impact
FINANCIAL IMPACT
Upon Board approval, budget will be added to the existing LOP Budget for Project 865521- East San Fernando Valley Light Rail Transit Corridor, in Cost Center 8510 - Construction Project Management.
As this is a multi-year capital project, the Chief Program Management Officer and the Project Manager will be responsible for budgeting costs for future years.
Impact to Budget
The sources of funding for the Project include local Measure R and Measure M, federal and state grants as shown in Attachment A - Funding and Expenditure Plan. These funds are not eligible for bus and rail operations.
Multiyear Impact
The Project has $3,574,773,281 of capital funding programmed in the Metro financial forecast based on the federal EPD Award Budget (the Metro programmed funding differs from the Award Budget as it excludes federally eligible finance charges and includes non-federally eligible expenses incurred prior to the EPD grant award), which is comprised of Measure M and Measure R designated for the Project, Measure R and Proposition C transferred to the Project per a Metro Board action in October 2023 (#2023-0558), additional Proposition A and Proposition C, and a local agency contribution by the City of Los Angeles. Additional programmed funding includes awarded state Transit and Intercity Rail Capital Program (TIRCP), Traffic Congestion Relief Program Funds (TCRP), Regional Improvement Program Funds (RIP), and Local Partnership Program grants, and the federal EPD grant.
The proposed LOP is a $423,902,028 cost increase in comparison to the EPD Award Budget and is subject to the Metro Uniform Cost Management Policy (Policy). The Policy requires that funding shortfalls are addressed through: 1. Scope reductions; 2. New local agency funding resources; 3. Value Engineering; 4. Other cost reductions within the same transit or highway corridor; 5. Other cost reductions within the same subregion; and finally, 6. Countywide transit or highway cost reductions or other funds will be sought using pre-established priorities.
The Policy analysis (Attachment E) has found that the cost increase must be addressed from other or additional countywide funding resources. The Project cost increase is proposed to be funded from the Measure M 35% Contingency Subfund for eligible inflation adjustments and Proposition C 25%, pursuant to the Uniform Cost Management Policy. Funding from Measure R 35% Capital Project Contingency for eligible inflation adjustments was also evaluated as part of the Uniform Cost Management Policy analysis but is not recommended due to limited Measure R funding capacity.
The recommended funding sources are not eligible for Metro transit operations funding.
Equity_Platform
EQUITY PLATFORM
The additional funding will support continued community and small business engagement efforts led by Metro Community Relations (CR) staff in conjunction with the implementation of construction activities:
• Elected Representatives and City Representatives: To date, Metro CR staff have met with representatives from the City of Los Angeles Neighborhood Councils and Council District Offices, on upcoming construction, mitigation plans/efforts, and outreach efforts to the local community. Metro has held several quarterly community construction update meetings, presented at various community and school meetings, tabled at various special events, and presented at various business association meetings. The Construction Relations team is currently conducting bilingual door-to-door outreach of small businesses along the Project alignment.
• Community Members: The Project has established a Construction Relations and Mitigation Program that includes a Community Leadership Council (CLC), a volunteer stakeholder council. The CLC meets regularly with the Project team and has been instrumental in providing direct feedback and community advocacy over the past two years. Some highlights of its work include advocacy for expansion of the BIF program to the ESFV LRT Project, planting more native trees on the project alignment, shared right-of-way alternatives, a refreshed parking study, numerous partnerships with Metro CRMP to host workshops and community events. The Project also plans to implement a Community Based Organization (CBO) Partnership program during Phase 2 of the Project that aligns with Metro’s CBO Partnering Strategy.
• Small Businesses: Metro CR staff visited, informed and provided the small businesses along the alignment bilingual project information along with small business mitigation programs available to businesses along the Project corridor: Eat Shop Play (ESP), Business Interruption Fund (BIF), and Business Solution Center (BSC). The BIF formally launched on this Project first quarter of 2024 and ESP launched in October 2024. The BSC program is being re-imagined targeting specific business support services to meet the needs of the business community and is anticipated to launch Summer 2026.
• Cultural Competency Plan (CCP): The CCP includes a comprehensive strategy for engagement with the local community utilizing a multi-layered approach focused on a career academy, small business opportunities, and project internal culture and training. Training will encompass the entire team, including vendors and subcontractors. The CCP supports an accountability framework to track the progress of each task and goal through the utilization of technology in order to develop the highest standards of resources and programs for the community. The CCP was developed by the contractor in collaboration with Metro. The CCP will be implemented and maintained by the contractor and representatives from Program Management, and Community Relations assigned to the ESFV project will oversee the implementation of the plan.
Through the implementation of construction mitigation programs and continued outreach efforts, assistance to small businesses during construction will be achieved and the phasing of construction will be developed to minimize impacts to adjacent businesses and residents. Engaging the community through the CCP will increase cultural awareness of communities throughout the limits of construction along Van Nuys Boulevard, supporting mobility needs and business and employment opportunities.
While SFTC made a 19.33% Disadvantaged Business Enterprise (DBE) commitment on Phase 1 - Pre-Construction of the project, the U.S. Department of Transportation (USDOT) has issued an Interim Final Rule (IFR) that makes changes to the DBE Program, including suspension of goals, counting of participation, and enforcement, effective October 3, 2025. As such, the DBE commitment is not a factor in the staff recommendation.
The Diversity & Economic Opportunity Department (DEOD) has established a zero percent (0%)DBE goal for the Phase 2 Supplement of this project. The USDOT has issued an Interim Final Rule (IFR) that makes changes to the DBE Program, including suspension of goals, counting of participation, and enforcement, effective October 3, 2025. SFTC submitted a voluntary Small Business Enterprise (SBE) participation plan listing 15% SBE (11% Metro Certified, 4% State Certified) involvement in the Phase 2 Work. This is noteworthy, as small businesses play a critical role in the economy by driving job creation, fostering innovation, and strengthening local communities.
The construction of the Project includes a 40% Targeted Worker goal, 20% Apprentice Worker goal, and 10% Disadvantaged Worker goal consistent with Metro’s Project Labor Agreement/Construction Careers Policy (PLA/CCP). These goals are intended to expand access to employment opportunities for residents of economically disadvantaged communities and ensure that the economic benefits of Metro’s investments reach local workers.
Vehicle_Miles_Traveled_Outcome
VEHICLE MILES TRAVELED OUTCOME
VMT and VMT per capita in Los Angeles County are lower than national averages, the lowest in the SCAG region, and on the lower end of VMT per capita statewide, with these declining VMT trends due in part to Metro’s significant investment in rail and bus transit.* Metro’s Board-adopted VMT reduction targets align with California’s statewide climate goals, including achieving carbon neutrality by 2045. To ensure continued progress, all Board items are assessed for their potential impact on VMT.
The Final Environmental Impact Statement/Final Environmental Impact Report for the East San Fernando Valley Transit Corridor Project was certified by the Board in December 2020 and a Record of Decision issued by the Federal Transit Administration in January 2021. VMT for the project has already been analyzed for this item through the East San Fernando Valley Transit Corridor, DEIS/DEIR. The Final Environmental Impact Statement/Final Environmental Impact Report for the East San Fernando Valley Transit Corridor Project was certified by the Board in December 2020 and a Record of Decision issued by the Federal Transit Administration in January 2021. VMT summary can be found in Appendix G Transportation Impacts Report published in 2020. VMT was forecasted with Metros Travel Demand Model using traffic counts collected in 2011, 2012, and 2013. Year 2040 was chosen for definition of future baseline conditions. The result of this analysis was that the number of transit trips would reduce the number of trips by auto in general due to mode Preference changes by commuters. A VMT reduction of 54,207 was calculated for the project.
*Based on population estimates from the United States Census and VMT estimates from Caltrans’ Highway Performance Monitoring System (HPMS) data between 2001-2019.
Implementation_of_Strategic_Plan_Goals
IMPLEMENTATION OF STRATEGIC PLAN GOALS
The Project supports the following strategic goals:
Strategic Goal 1: Provide high-quality mobility options that enable people to spend less time traveling.
The purpose of the Project is to provide high-capacity transit service in the San Fernando Valley.
Strategic Goal 2: Deliver outstanding trip experiences for all users of the transportation system.
The at-grade light rail system will attract bus ridership and improve the trip experience for users of the transportation system.
Strategic Goal 3: Enhance communities and lives through mobility and access to opportunity.
With 11 stations, including connections to Metro G-Line and Metrolink, the ESFV enhances mobility to the community.
Strategic Goal 4: Transform LA County through regional collaboration and national leadership.
Collaboration with the elected officials, citizens, and Metro patrons of San Fernando Valley continues to positively impact the Project.
Alternatives_Considered
ALTERNATIVES CONSIDERED
The Board may choose not to move forward with establishing a Life of Project Budget and/or Phase 2 of the Progressive Design-Build Contract. This is not recommended as Metro will incur undesirable schedule delays and cost increases if this action does not move forward. Furthermore, delays to the Project will have detrimental effects on the available Federal and State Grant funding dollars.
Next_Steps
NEXT STEPS
Upon Board approval, Metro staff will amend the contract to implement the Phase 2 Supplement of Contract No. PS89616000 with SFTC to begin the remaining Phase 2 work.
Attachments
ATTACHMENTS
Attachment A - Funding and Expenditure Plan
Attachment B - Procurement Summary
Attachment C - Contract Modification / Change Order Log
Attachment D - DEOD Summary
Attachment E - Measure R and Measure M Unified Cost Management Policy Analysis
Prepared_by
Prepared by:
Greg Gastelum, Senior Executive Officer, Program Management, 213-218-8479
Kevin Grady, Deputy Executive Officer, Project Controls, 213-294-1439
Mat Antonelli, Deputy Chief Program Management Officer, 213-893-7114
Carolina Coppolo, Deputy Chief Vendor/Contract Management Officer, 213-922-4471
Reviewed_By
Reviewed by:
Tim Lindholm, Chief Program Management Officer, 213-922-2797
