Council directs staff to prepare termination notice on undergrounding contract amid expired FEMA timelines

City staff told the council the Eastfield Drive utility undergrounding project, funded in part by roughly $2.6 million in FEMA grant funds, cannot proceed under current budget authority because a Cal OES/FEMA budget-modification request was not approved and the FEMA period of performance expired Jan. 6.

Staff explained the contract with Doty Brothers included a funding-contingency clause and a June 30 contractual deadline tied to required notices. Staff said the firm had held pricing for about 13 months but that, without a confirmed grant extension or approval, the city cannot responsibly reengineer the project or rely on the earlier bid numbers. The city attorney and staff recommended sending a termination letter to Doty Brothers if no viable extension or funding is received.

Council discussed whether to delay sending the notice to allow one more check with FEMA and whether bids would need to be re-solicited if funding were restored. Staff warned that even with an extension, the city would need updated cost-benefit analyses and likely a new bid process because prices and conditions have changed since the original bid.

After short public comment from residents who said the outcome would be disappointing for those who have advocated for the project, the council authorized the city manager to send the termination notice at the latest reasonable date to ensure contractual notice requirements are met before the June 30 deadline.