The URL can be used to link to this page

Home My WebLink AboutTC Minutes 2015-11-04TOWN COUNCIL MINUTES CALL TO ORDER Mayor Doyle called the regular meeting of the Tiburon Town Council to order at 7:30 p.m. on Wednesday, November 4, 2015, in Town Council Chambers, 1505 Tiburon Boulevard, Tiburon, California. ROLL CALL PRESENT: COUNCILMEMBERS: Doyle, Fraser, Fredericks, O'Donnell, Tollini PRESENT: EX OFFICIO: Town Manager Curran, Town Attorney Stock, Director of Community Development Anderson, Director of Public Works/Town Engineer Barnes, Chief of Police Cronin, Town Clerk Crane Iacopi Prior to the regular meeting, the Council held a special meeting and met in closed session, beginning at 3 p.m. at the Caprice Restaurant, 2000 Paradise Drive, to discuss the following: CLOSED SESSION Public Employee Appointment (Cal. Gov. Code § 54957(b)) Title: Town Manager ANNOUNCEMENT OF ACTION TAKEN IN CLOSED SESSION, IF ANY Mayor Doyle said that no action was taken in closed session. ORAL COMMUNICATIONS None. CONSENT CALENDAR 1. Town Council Minutes — Adopt minutes of October 21, 2015 Regular meeting (Town Clerk Crane Iacopi) 2. 1 Benton Court — Adopt resolution denying appeal of Design Review Board approval of a request for site plan and architectural review to construct a swimming pool and fencing for an existing single-family dwelling (Community Development Department) Town Council Minutes #20 -2015 November 4, 2015 Page 1 Owner/Applicant: Morgan Properties, Inc. Appellants: Avery and Loretta Lieberman, Michael Roy and Gloria Horns Assessor Parcel No. 039-011-12 MOTION: To adopt the Consent Calendar, as written. Moved: Fredericks, seconded by Fraser Vote: AYES: Unanimous ACTION ITEMS 1. Tiburon Boulevard Rule 20B Undergrounding Project — Consider recommendation to amend budget and approve PG&E contract for Tiburon Boulevard Rule 20B Utility Undergrounding project (Director of Public Works/Town Engineer Barnes) Director Barnes briefly summarized the written staff report and recommended that the Council authorize a budget amendment in the amount of $89,000, and approve the contract with PG&E in the amount of $224,440.22, even though it was substantially higher than estimates provided to the Town, in order to complete Rule 20 B project along Tiburon Boulevard. Councilmember O'Donnell noted that this [discrepancy between estimate and contract price] had happened before in the Town's dealings with PG&E. He cited the example of the Del Mar undergrounding project. He opined that it could also happen again and asked what recourse the Town had in the matter. Town Manager Curran described how the PG&E price for the Del Mar undergrounding quadrupled while the project was on hold during several years of litigation, even though the district size shrank considerably as a result of the lawsuit. She said the only reason the Town ultimately prevailed with the lower cost was that the Town had previously paid PG&E for the work and the company retained the funds during the litigation. Director Barnes said that there was not yet a signed contract for this Rule 20 B project. He noted that he had checked with PG&E seven times during the process to see if the estimates were still valid, and that the Town was assured that this was the case. Director Barnes noted that because of the current situation under review, PG&E had assigned a new project manager for the nascent Hawthorne Terrace undergrounding project. O'Donnell went on to say that in business, the party at fault usually ends up paying, but that this did not appear to be the case with PG&E. He asked what the Town could do now — perhaps litigate -- but he also asked how to avoid a repeat of the situation in future. Town Manager Curran noted that the Town had pressed for a contract with PG&E so that it could know the complete cost of the project. Town Council Minutes #20 -2015 November 4, 2015 Page 2 Councilmember Fraser asked why the Town did not receive one. Director Barnes said staff was told the contract was "delayed" in engineering, so that eventually, the Town faced a choice of either proceeding with the work, or delaying the project for a year. Councilmember Fraser asked how high up the ladder the Town would have to go to resolve the discrepancy. Councilmember Fredericks asked whether PG&E had discovered additional information during the design and engineering phase which affected the project cost. Director Barnes said that the Town had been working on the estimate price since July of 2013, which it had confirmed seven times. He said there was a record of the confirmation. Councilmember Fredericks asked whether it might be appropriate to complain to the California Public Utilities Commission. Vice Mayor Tollini suggested hearing from the PG&E government representative who was present. Mayor Doyle opened the matter to public comment. Mark Van Gorder, PG&E representative for Government Relations, said he appreciated the Council's position and its duty and concern. He said that the Town staff report was accurate. He described his role as one of working with Town representatives, when needed. Van Gorder said that Dana Massuk, the Service Planning Supervisor who was also present at the meeting, was more knowledgeable of the situation and what had occurred inside the company. Mr. Van Gorder admitted that this was "not our finest moment" and that they had been working with Pat Barnes to bring down the contract price. Councilmember Fraser asked Mr. Van Gorder why the contract price had changed. Mr. Van Gorder asked for clarification, "up or down"? He reiterated that the price offered was an estimate and not a contact amount. Fraser said what about when Director Barnes asked and was assured that it was "the right number, or close to it"? Van Gorder said that the contract number is the one that the parties agree to, and that they had since worked it down by $94,000. Councilmember O'Donnell continued to ask for an explanation of why the amount had gone up so dramatically from the estimate. Dana Massuk, PG&E, said that the project manager did not clearly say to Pat that lie needed to get him "our actual costs"; that the cost was higher than the estimate because it had not gone through "construction review". Ms. Massuk said that Rule 20B projects are complex; that the projects are reviewed by ground crews who are asked "can you build it for this [estimated] amount". She said that the PG&E estimator had Town Council Minuses #20 -2015 November 4, 2015 Page 3 been asked whether there had been a construction review, and the answer was "no". Therefore, the amount went from $135,000 to $331,000. Massuk said that because of Director Barnes' efforts in working with CalTrans to lengthen the hours of construction and resolved traffic control issues, the price was able to be brought down. Town Manager Curran said "being off a bit [an estimate] is one thing", but she noted that the contract price had almost tripled. Councilmember Fraser said that the project manager should cover the difference because it was his mistake. Ms. Massuk said that under the tariff rules, the difference could not be borne by the ratepayers. Councilmember O'Donnell said that this was deceptive; that PG&E was an investor-owned utility, but it is also essentially a private company with a monopoly on the market. Mr. Van Gorder suggested that the Town could file a claim and make its case. He said that "we were acting in good faith," but that because the difference in cost was so surprising, "we worked to bring it down". He said he understood the argument the Council was making. Councilmember O'Donnell said that the issue was one of fairness, noting that the Town wants to be fair to its taxpayers, as well, so when a written estimate is not valid, it must receive an answer. Vice Mayor Tollini asked what the point of obtaining an estimate is — and in this instance, it was not just pointless, it was misleading. Councilmember Fraser said the Town was "up against the wall" with its timeline to complete the project; and that this is the second time a PG&E project manager had made a misstep. He said it was not the Town's fault that a PG&E manager had "messed up" and that it was a material misstep which the Town should not have to bear the burden of. He said PG&E should bear this burden, and honor its $130,000 original estimate that had been validated six or seven times over. The Council asked Mr. Van Gorder to describe the claims process. Vice Mayor Tollini encouraged the company to consider including more information earlier rather than later, in the estimating process. She said it would be helpful to clarify with its customers, upfront, the steps the estimate would have to go through before a final contract is obtained. Mr. Van Gorder noted the challenges of the estimating process but said that the point was well taken. He commented that maybe the way to go was just to issue contracts, not estimates. Vice Mayor Tollini agreed that the Town would rather not have an estimate like this. Town Council Minutes #20 -2015 November 4, 2015 Page 4 Mr. Van Gorder said that he could provide information on filing a claim and the contacts at PG&E. He said that he and his colleague had come to the meeting tonight to support Director Barnes. Councilmember Fraser asked how long the claim would take to be processed. Van Gorder could not answer the question but said he could put the Town in touch with the appropriate person. Councilmember O'Donnell asked whether the Town might make a deposit toward the contract and perform the work while the claim is being resolved. Van Gorder said the contract price was good for 90 days; O'Donnell said that it was not fair to ask the Town to make a decision under these circumstances. O'Donnell pointed out that the company "does projects like this all the time" and had just finished one in Town, earlier this year. He asked whether PG &E would provide a contract in advance of a project for its portion of the work. Ms. Massuk said that a formal estimate was required as part of the bid process; she also noted that the project estimates "always say" that the numbers could be plus or minus 50%. She said that they could not accept a partial contract. O'Donnell pointed out that the difference between the estimate and contract price was far greater than 50%. Councilmember Fraser asked who would "shepherd" the claim on behalf of the Town. Mr. Van Gorder said that Maria de Lucca was the person in charge of claims. He added that the Town could contact him, as well. Fraser said that he did not want to get caught up in the "assembly line" of the claims process and that someone should "own it". O'Donnell also said that it was common practice to receive cost estimates on which to craft a contract, such as a contract for building a house. He asked why PG&E couldn't do this. Mr. Van Gorder acknowledged that an incorrect or "too low" number was provided to the Town; that over a period of time, it was confirmed; but that was the process. Town Attorney Stock asked if "the disconnect" in this case was that it took two years to get an actual contract. Ms. Massuk said that PG&E did the electric design, then handed it off to the contractor, Ryan O'Kane, and then went back into estimating to cost out the trench work. She said this typically takes 3-6 months but that this time it took much longer. Councilmember O'Donnell said that the Town was contemplating much larger undergrounding projects; however, he said that the Town could not tell its constituents [proponents of Town Council Minutes #20 -2015 November 4, 2015 Page 5 undergrounding projects], in good conscience, to go forward with their projects. He suggested that the Town simply allow the poles to "stay up" as a result of this experience. Mr. Van Gorder said that "we're looking at improving communications" and suggested that the channels are "now open" between PG&E, staff and Town Council. He said "we're here to commit to future projects and get them done in an expeditious process [manner]". He said that they acknowledged the need to do better and would provide information to the Town about the claims process. Town Manager Curran asked whether he was able to "make a recommendation" pertaining to this claim. Van Gorder said he would provide the facts but may not be able to do more than that. Curran asked if he would be willing to "tell the story you told tonight". The Council continued to express its frustration that "in no way is PG&E taking any responsibility...and the Town is left holding the bag for its errors". When Mr. Van Gorder said they were taking responsibility by acknowledging they handled things badly, Vice Mayor Tollini clarified, "financial responsibility". Mr. Van Gorder said that CPUC rules govern what the utility should charge and that "we worked hard to reduce the contract number" by almost $95,000. Councilmember O'Donnell reiterated that the original estimate was $135,000 and the contract price came in at $318,000 — almost three times higher. That, he said, was not in line with the company's stated "plus or minus 50%" policy. Ms. Massuk said the project manager thought this project was $250 pre linear foot, noting that was a low estimate. Councilmember Fraser asked whether she could give one good reason why the discrepancy should be the Town's responsibility. Mr. Van Gorder said the Town's option was to not accept the contract, but that the current contract was the "best price" he could put on paper and still follow the rules mandated by the PUC. He said that question before the Council was whether it might further reduce the amount through the claims process, but that it is "our responsibility to recoup the right, fair and just amount" for the project. Councilmember O'Donnell said that the Council would have no choice, then, but to file a claim. Councilmember Fraser concurred. O'Donnell said that it might even have to litigate. Going forward, O'Donnell suggested that the Town obtain a contract price for Rule 20B projects before initiating work. Town Manager Curran said that would substantially slow the undergrounding process, based on experience. Town Council Minutes #20 -2015 November 4, 2015 Page 6 Director Barnes said that in Hawthorne Terrace [20A project], pursuant to Town policy, the proponents have a choice of using a preliminary design or obtaining a complete design before bidding. He said he was now uncertain that the project could get a PG&E contract based on a preliminary design. Councilmember O'Donnell said it would be worth looking into. Mayor Doyle concurred, stating that the Council could not make decisions or adopt budgets under the current practice. Mayor Doyle said he was surprised that staff even recommended approval of the Rule 20B contract, under these circumstances. Town Manager Curran said that the project has been built; that the contract is for the remaining work to take down the poles and pull the wires. Councilmember Fredericks said she would consider a vote to approve the contract, at this juncture. But she agreed that the process going forward was worth studying. She suggested that the Town "go the safer route in order to make it more dependable"; and to obtain a complete design first in its undergrounding projects. In this [Rule 20B] project, Director Barnes said the Town did obtain a complete design, in March, but by May there was still no contract; he said it would have taken a year to re -start and re -bid the proj ect. Councilmember Fraser said that he still had difficulty comprehending how a multi -billion dollar company could treat its customers so poorly. He said it was an embarrassment in the public utilities world. He said he would like to "go up the ladder" and find someone who could say, "our process is broken". Councilmember O'Donnell said that he would vote to approve the contract, as well as file a claim, and ask PG&E what they can do to change the process. Vice Mayor Tollini said the Town should make its concerns known to the CPUC. Fraser said "we should take it as far as we can, and not roll over." Attorney Stock said that Council could meet in closed session to evaluate its options. Councilmember Fredericks noted that the Council was not voting on whether or not to litigate, tonight. Councilmember O'Donnell also said that going forward, the Town's undergrounding policy "needs tweaking". He said that with regard to Hawthorne Terrace, the Town should "kick in" some money for the final design. Town Council Minutes #20 -2015 November 4, 2015 Page 7 Town Manager Curran said this suggestion ran contrary to current Town policy and puts Town funds at risk. O'Donnell agreed, but said the policy does not work. He said the portion of the policy about preliminary designs needs to be "tightened up". Fredericks asked whether the proponents had a say in the matter. Barnes said that they had two choices under Town policy — to fund a preliminary or a final design. Originally they had stated they preferred a complete design and bid but the coat was high and they had chosen the preliminary route despite its additional risk related to costs. He said, as a practical matter, staff would encourage them to build in extra funding as a contingency. Councilmember O'Donnell said that a reason to invest Town funds now is to avoid have to go back to the property owners later, to form a supplemental district. Mayor Doyle asked why the Town has to fully fund these kinds of projects "up front". Town Manager Curran said that a review of the Town's undergrounding policy could be taken up at a future Council meeting. MOTION: To approve the budget amendment and approve PG&E contract to complete the Rule 20B project work; at the same time, to direct staff to proceed with filing a claim against PG&E for its discrepancy between the estimate and actual contract costs. Moved: Fredericks, seconded by O'Donnell Vote: AYES: Unanimous TOWN COUNCIL REPORTS None. TOWN MANAGER REPORT None. WEEKLY DIGESTS • Town Council Weekly Digests — October 23 & 30, 2015 Accepted. Town Council Minutes 00 -2015 November 4, 2015 Page 8 ADJOURNMENT There being no further business before the Town Council of the Town of Tiburon, Mayor Doyle adjourned the meeting at 8:35 p.m. FRANK X. DOYLE, MAYOR ATTEST: DIANE CRANE IAGO<PI, TOWN CLERK Town Council Minutes #20 -2015 November 4, 2015 Page 9