The road to improvement

When it comes to government, most things take time, and some things take over a decade. 

Take a look at the giant hole in the ground next to city hall that was supposed to be apartments. Because of the pandemic and financial issues of those looking to develop the site, it’s still a big pit. 

Design and cost fluctuations will always dictate how and when a job gets finished. The Studebaker Road overhaul in East Long Beach is becoming the latest example of that. The idea of the project has spanned multiple council members’ terms in office, and as costs continue to increase across the board, it might continue to be delayed.

The council got an update on the project Tuesday after being updated on it about six months ago when I correctly reported apparently incorrect information that the project was going to cost $18.5 million. 

That was chalked up to a clerical error that led to the wrong number being left in a staff report to the City Council. We learned Tuesday that the actual cost is closer to $38 million to rebuild the road, add bike lanes, fiber optics and a slew of other improvements. 

Or is it? 

If you notice in the presentation given to the council Tuesday night, there are a lot of numbers. There is a “38″ but there is also a “45” and a “49″ next to the words “fully loaded.” I’m choosing to interpret that to mean the city is adding guac, and guac always costs extra. 

The number “90” is also important because that’s how much of the project has been engineered, which means 10% of project has yet to be fleshed out. And Public Works Director Eric Lopez said Tuesday that part of the reason for the large jump in price is due to when crews started really looking at the street they discovered unforeseen and expensive issues.

For instance, the portion of Studebaker that runs between Second Street and Loynes Drive needs to be built in a way to ensure that storm runoff doesn’t flow into the neighboring wetlands area. 

The area is currently home to oil rigs and is supposed to be restored by the oil operator sometime in the next 35 years. 

I was told that the council was briefed on the project and the cost relayed to members was closer to $52 million, which makes the “fully loaded” price look more realistic given the current rate of inflation. 

The city has about half ($24.7 million) of the money set aside, and where the additional funding might come from is even more complex.

The city has a $5 million request out to the federal government through the appropriations process, but optimism about how much money cities should expect from this particular Congress has been waning as Republicans have said they’d like to give out less and even reclaim some funds already sent out to municipalities. 

The city is also looking at shifting $6.5 million from a $13 million settlement it reached with the Orange County Transportation Agency over its widening of the 405 Freeway south of Long Beach in 2017. 

The funds were intended to pay for improvements on surface streets like Bellflower Boulevard and Los Coyotes Diagonal that could see extra traffic as people tried to avoid the bottleneck created by the OCTA. 

Is that legal? Could the OCTA claim it should it get back all its settlement money from the city if it doesn’t appear to need it to upgrade affected streets? Those are some questions being asked right now, with no clear answers.

One thing is for certain: The project isn’t breaking ground this year as was originally hoped. Will it break ground in 2024, the new estimated start date? 

We’ll keep our ear to the ground. 

WHAT YOU SHOULD KNOW THIS WEEK:

I’ve said that the Utilities Commission was eyeing a rate increase for water in the coming fiscal year and it appears that the most likely figure will either be 9% or 10%. Commissioners are trying to avoid the optics of having a double-digit rate increase, something that is being recommended by staff, and last week requested the 9% scenario be examined. A 10% increase would amount to a $5.69 monthly increase to the average customer’s bill while a 9% increase would add about $5.13, according to the department. There are smaller increase scenarios for the coming year but those would require even larger increases in the next few years. The commission didn’t tip its hand Thursday, but if I had to guess, I’d say it will settle on 9% when it votes to set rates at its June 22 meeting. 

PAY ATTENTION TO THIS NEXT WEEK:

The city’s budget continues to outpace original expectations. Earlier this year city officials said that the projected $40+ million budget shortfall it was projecting for next year had shrunk to about $6 million because of property taxes, sales tax and other revenue streams over-performing. Next week, the council will get an update on the current fiscal year that ends in September, which is now expected to end the year with a $20.5 million surplus when it had began the year with a roughly $20 million deficit. This is good news for projects that needed additional funding because the city will likely use most of this to fill one-time costs. However, the city is still projecting deficits in the future, which could require cuts if future budgets do not over perform like this year’s has.