A Santa Ana streetcar project, already controversial because of its bidding process, is now several hundred thousand dollars in the hole because a major consultant submitted inadequate environmental reports.
The project’s lead consultant, Los Angeles-based Cordoba Corp., is negotiating with another firm to replace San Francisco-based URS Corp., which didn’t complete the reports within budget, said Santa Ana Public Works Director Raul Godinez.
The envisioned streetcar system, which would transport riders on a fixed track between the city’s train station and downtown, is still in an early planning phase that includes an extensive environmental review.
In 2009, the City Council was harshly criticized by the county grand jury and the city public works director at the time for awarding the $4.8-million contract to Cordoba, which contributed thousands of dollars to Mayor Miguel Pulido’s election campaign, even though it was ranked as the lowest qualified bidder for the project by a city review panel.
The replacement firm will have to resume the work to complete the environmental reports. Because of the additional staff time, the environmental phase of the project went over budget. The Orange County Transportation Authority lent the city nearly $500,000 to complete the work, a loan that must be paid back within a year to 18 months, Godinez said.
According to Godinez, URS asserts that the problems regarding the reports stem from the company not being informed that federal grants, which require extra paperwork, would be a part of the project’s funding. The company also argues that Orange County doesn’t have much experience with transit projects, leading those involved to need greater assurance on the quality of the work, Godinez said.
“They [environmental reports] required a lot more review than we had hoped for. And because of additional reviews, you start to miss your schedule, milestones and what not,” Godinez said.
Ironically, Cordoba was originally paired with URS to strengthen the lead consultant’s bid, according to Jim Ross, who was public works director at the time Cordoba was awarded the streetcar planning contract.
In a city memo, Ross criticized the awarding of the contract to Cordoba. He resigned shortly thereafter.
URS and Cordoba officials did not return phone calls seeking comment.
Cordoba and URS are now locked in a dispute over how much Cordoba owes to URS. According to Godinez, URS didn’t submit an invoice for three months. “They certainly haven’t been paid everything they feel they are entitled to,” he said.
Despite the setback and additional costs, city officials remain confident that the project will move forward. Godinez argues that unexpected costs with construction projects are normal and that red flags shouldn’t go up until the overages exceed 25 percent of the project’s total cost. As it stands now, the changes amount to under 10 percent of the streetcar project’s total cost, he said.
“It’s still a terrific project that will really increase the mobility in the central part of the county,” Godinez said.
The project is divided into phases, each with its own budget. Because of the issues with URS, the current phase is running $488,000 over budget, according to a city staff report.
The funding for the environmental review phase of the project comes from a countywide half-cent sales tax for transportation improvements. Most of the funding for the next planning phase is expected to come from federal grant funds that have yet to be awarded.
City officials asked the Orange County Transportation Authority to advance money dedicated to the next project phase in order to close the budget gap for the current phase.
The advanced money must be paid back to the Transportation Authority by or during the 2013-14 fiscal year, and it remains unclear how the city plans to find the funds, Godinez acknowledged. It’s no secret that the city, which has largely spent through its unrestricted fund balance and only recently pulled itself out of a $30-million budget hole, is short on cash.
City officials are now projecting a $2.3-million general fund deficit for that fiscal year.
The OCTA board of directors and the board’s transit committee both approved the advance last month, board minutes show. While an OCTA staff report states that “quality control issues” caused the shortfall, it does not specifically mention that URS is being replaced.
The transit committee approved the payment advance without discussion, the meeting minutes show.
Anaheim Councilwoman Lorri Galloway, also a member of the transit committee, said that had she known about the problems with URS, she would have had pointed questions about the cash advance. “And I think other [committee] members would have wanted to find out more about what actually went on,” Galloway said.
Pulido, the transit committee member who, according to meeting minutes, moved for approval of the cash advance, refused comment. Committee chairwoman Janet Nguyen, also an Orange County supervisor, did not return a phone call seeking comment.
Nor did Santa Ana council members Vincent Sarmiento, David Benavides and Michele Martinez. Council members Claudia Alvarez and Carlos Bustamante did not respond to requests for comment made through the city’s public information officer, Jose Gonzalez.
Santa Ana Councilman Sal Tinajero said he needed to review the matter further before he would comment.