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Public Works Agency <br />www.santa-ana.org/public-works <br />Item # 12 <br />City of Santa Ana <br />20 Civic Center Plaza, Santa Ana, CA 92701 <br /> Staff Report <br />November 1, 2022 <br />TOPIC: Request for Escalation Adjustments by the Orange County Transportation <br />Authority to the Measure M2 Allocations for Regional Capacity Program Projects <br />AGENDA TITLE <br />Resolutions Authorizing Requests for Escalation Adjustments by the Orange County <br />Transportation Authority to the Measure M2 Allocations for the Bristol Street and Warner <br />Avenue Street Improvement Projects <br />RECOMMENDED ACTION <br />Adopt resolutions of the City Council authorizing Requests for Escalation Adjustments by <br />the Orange County Transportation Authority to the Measure M2 Allocations for the Bristol <br />Street and Warner Avenue Street Improvement Projects. <br />DISCUSSION <br />The City of Santa Ana’s Public Works Agency participated in the 2020 Call for Projects <br />under the Measure M2 Regional Capacity Program (RCP) and received M2 allocations <br />(Measure M2 Competitive ACE funds) in the amounts of $3,273,573 and $7,501,206 from <br />Orange County Transportation Authority (OCTA) to fund the Bristol Street Improvements <br />from Civic Center Drive to Washington Avenue and the Bristol Street Improvements from <br />Warner Avenue to Saint Andrew Place. In addition, the City received a M2 allocation in <br />the amount of $7,494,000 from OCTA to fund the Warner Avenue Improvements from <br />Oak to Standard Avenue. Both funding allocations required a minimum 25% commitment <br />in matching funds, in which many of these funds were previously budgeted in prior fiscal <br />years, and any new match required will be budgeted in upcoming Capital Improvement <br />Program (CIP) cycles. <br />Over the course of the design of these projects, the City of Santa Ana has experienced <br />increased construction costs due to material supply and labor inflation. Material cost and <br />demand has seen dramatic increases that have been unprecedented. Many of the recent <br />construction bids that are being received are double the amount of the engineer’s <br />estimate and overall budget for the advertised City project. <br />The City has also experienced increased right-of-way costs due to real estate inflation. <br />The COVID-19 pandemic and various new state and federal guidelines developed during <br />this challenging time contributed to a lot of uncertainties. Low interest rates, high cost of