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Council authorizes notice to contractor as FEMA grant uncertainties imperil Eastfield undergrounding project
Summary
Facing an expired period of performance and unresolved FEMA budget modification, the council authorized the city manager to send a termination notice to Dodie Brothers for the Eastfield Drive undergrounding contract. Staff said the city's bid award exceeded the FEMA grant and that re-engineering or rebidding would be required if FEMA extends funding.
The Rolling Hills Estates City Council authorized staff to send a notice of termination to Dodie Brothers for the Eastfield Drive undergrounding contract after staff described persistent funding uncertainty from FEMA and CalOES.
Staff told the council the city obtained a roughly $2.6 million FEMA grant for the Eastfield Drive utility undergrounding project but the lowest responsible bidder's price exceeded the awarded grant. The city had already incurred design and engineering costs (staff estimated prior expenditures in the $1.2 million to $1.4 million range). Staff reported months of attempts to secure a CalOES/FEMA budget modification and a period-of-performance extension; the period of performance for the disaster award expired on Jan. 6 of the same year and staff said the contract included a contingency clause giving the city until June 30 to determine whether to proceed.
Staff explained that even if FEMA were to agree to an extension, reworking the project now would require an updated benefit-cost analysis and likely a new bid process because 13 months have passed since Dodie Brothers provided pricing. Council members asked whether the city could delay sending a termination to wait for FEMA; staff and the city attorney said the contractor must receive timely written notice (10 days is the contractual notice window) to meet deadlines and protect the city's contractual position. Given the uncertainty and the contractor's inability to guarantee pricing beyond June 30, staff recommended sending the termination notice at the latest reasonable date to meet the deadline.
Members of the public expressed disappointment that the project may not go forward as presently configured. Judith of 31 Eastfield asked whether the action meant an end to the undergrounding effort; staff said it did not foreclose future projects but that any resumption would require new approvals, updated engineering and likely rebidding.
The council approved a motion authorizing the city manager to send the notice of termination; staff said they will send the letter by certified mail and noted they would return to council if FEMA provides new direction.
