BOARD AGENDA MEMORANDUM
Government Code § 84308 Applies: Yes ☐ No ☒
(If “YES” Complete Attachment A - Gov. Code § 84308)
SUBJECT:
Title
Approve the Budget Adjustment in the Amount of $15,000,000 to the Fiscal Year 2026 Budget for the Upper Llagas Creek Flood Protection Project, Phase 2B, Project No. 26174055 (Morgan Hill, District 1).
End
RECOMMENDATION:
Recommendation
Approve the budget adjustment in the amount of $15,000,000 to the Fiscal Year 2026 Budget for the Upper Llagas Creek Flood Protection Project, Phase 2B.
Body
SUMMARY:
Project Background
Santa Clara Valley Water District (Valley Water) is undertaking the Upper Llagas Creek Flood Protection Project (Project), in partnership with the U.S. Army Corps of Engineers (USACE), the State of California, Natural Resources Conservation Service (NRCS) and the City of Morgan Hill (City) to plan, design, and construct improvements along 13.9 miles of creek channels. The Project extends from Buena Vista Avenue to Llagas Road, including West Little Llagas Creek in downtown Morgan Hill and is part of the voter-approved Safe, Clean Water and Natural Flood Protection Program
The Project is being constructed in three phases (Phase 1, Phase 2A, and Phase 2B) and flood protection will only be realized after all phases are completed. Phase 1 and Phase 2A have been completed. This board agenda item relates to Phase 2B, the final phase of construction.
Phase 2B involves construction of Reach 6 (Highway 101 upstream to Monterey Road), Reach 7B (Watsonville Road to Ciolino Avenue), the remaining portion of Reach 8 (approximately West Main Avenue to Llagas Road), and Reach 14 (confluence with Reach 4 upstream to Sycamore Avenue). Phase 2B construction consists of approximately 1,900 linear feet of twin reinforced concrete box culverts, creek modifications and excavation by widening and deepening, installation of culverts at various street crossings, construction of an inlet basin weir split-flow structure, bridge underpinning work, installation of instream complexities, removal of plantings and non-native plantings, habitat enhancements, revegetation, utility relocations and coordination, outfall modifications, aggregate base maintenance roads, access ramps, traffic controls/detours, fencing, soil testing as required for off-site disposal, concrete and other miscellaneous work, community outreach and coordination. Construction is anticipated to take approximately three years to complete, followed by a three-year plant establishment period.
Phase 2B flood protection improvements require the replacement of Hale Avenue post-construction and the City and Valley Water have agreed to include City improvements with the restoration of Hale Avenue. This coordination between the City and Valley Water will result in savings and a reduction of public impacts to the community. City improvements include, undergrounding of utilities along the west side of Hale Avenue in coordination and in cooperation with PG&E, AT&T, Frontier, and others, installation of new streetlights, new curbs, gutters, sidewalks, and a new soundwall along a portion of the east side of Hale Avenue between West Main Avenue and Wright Avenue.
The Board awarded a construction contract to build the Upper Llagas Creek Flood Protection Project, Phase 2B, Project No. 26174055, to Granite Rock Company (Contractor) on August 13, 2024, in the amount of $129,274,180. Phase 2B is approximately 70 percent complete and is scheduled for completion in March 2027, which does not include the 3-year native revegetation maintenance establishment period.
Current Project Schedule
Currently, the timeline for constructing Phase 2B is progressing faster than anticipated primarily due to the lack of winter rains allowing the Contractor to continue construction activities into the winter months. The Contractor has completed the in-channel improvements within Reach 6 and Reach 14 during this past year’s regulatory permit-restricted window of May 1st to October 15th. Installation of top-of-bank aggregate maintenance roads and permanent site fencing is currently underway within these two reaches, including the installation of approximately 30,000 native plantings. Construction of additional box culvert undercrossings at Edes Court and Cosmo Avenue has been completed. Approximately 1,700 linear feet of the 2,100 linear feet (80%±) of the two 10-foot-wide by 9-foot-high culverts have been completed, ultimately replacing West Little Llagas Creek along the eastern side of Hale Avenue to safely carry stormwater away from the surrounding neighborhoods.
On May 1, 2026, widening and deepening of West Little Llagas Creek will begin from Watsonville Road to Ciolino Avenue (Reach 7B) and construction of additional box culvert undercrossings at Spring Avenue. The last remaining 400 linear feet of two 10-foot-wide by 9-foot-high culverts at the intersection of Hale Avenue and Wright Avenue in downtown Morgan Hill will be completed during the summer of 2026.
Budget Adjustment Recommendation
In order to continue to fund the Contractor’s construction contract proceeding faster than anticipated, staff recommends a budget adjustment as detailed in Financial Impact below.
ENVIRONMENTAL JUSTICE IMPACT:
There are no Environmental Justice impacts associated with this item.
FINANCIAL IMPACT:
In order to fund the Contractor’s work during these winter and spring months of FY 2026, originally scheduled for FY 2027, staff recommends a budget adjustment in the amount of $15,000,000 to increase the FY 2026 budget for the Upper Llagas Creek Flood Protection Phase, 2B Project (26174055) to accommodate the increase to FY 2026 planned expenditures. Funds previously budgeted for FY 2027 would then be reduced, resulting in the total project cost remaining unchanged.
The Upper Llagas Creek Flood Protection Phase, 2B Project (Project No. 26174055) is included in the Capital Improvement Program (CIP) Fiscal Year (FY) 2026-30 Five-Year Plan and in the FY 2026-27 Adopted Budget. As stated, the recommended budget adjustment does not change the overall total project cost reflected in the CIP’s Draft FY 2027-31 Five-Year Plan. The Project is funded by the Safe, Clean Water Fund (Fund 26).
CEQA:
On June 10, 2014, the Board adopted Resolution No. 14-67 certifying the Environmental Impact Report for the Upper Llagas Creek Project and adopted. The recommended action to approve a budget adjustment does not involve any changes to the approved project, and thus no further CEQA review would be required.
ATTACHMENTS:
None.
UNCLASSIFIED MANAGER:
Manager
Bhavani Yerraptou, 408-630-2735