12 Disadvantaged Bus. Program
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CUPEIQ1NO
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City Hall
10300 Torre Avenue
Cupertino, CA 95014-3255
(408) 777-3354
FAX (408) 777-3333
PUBLIC WORKS DEPARTMENT
SUMMARY
AGENDA ITEM
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AGENDA DATE Februarv 7,2006
SUBJECT AND ISSUE
Adoption of Resolution No. 06- 03.3 : Adopting a Disadvantaged Business Enterprises Program
for Federally Funded Projects and Establishing a Disadvantaged Business Enterprise
Participation Goal of 18.8% for the Federal Fiscal Year 2005/06.
BACKGROUND
The Proposed DBE Goal and Its Purpose
On February 5, 2001, the City adopted a Disadvantaged Business Enterprise (DBE) program in
compliance with new requirements of Title 49 of the Code of Federal Regulations (CFR), Part
26. This action was necessary for the City to remain eligible for U.S. Department of
Transportation (DOT) funds for federal-aid transportation projects and other federal-aid projects.
The DBE program adopted by the California Department of Transportation (Caltrans), which
established the compliance procedures for agencies within California, requires that the
participating agencies establish a DBE participation goal and re-evaluate it annually. A
participating agency need not perform the annual re-evaluation for years in which it has no
federal-aid projects authorized.
The City has specific federal-aid project funding programmed for fiscal year 2005-06. The
recent reauthorization of the Federal Transportation Equity Act for the 21 st Century (TEA-2l) as
the Safe, Accountable, Flexible, and Efficient Transportation Equity Act: A Legacy for Users, or
SAFETEA-LU, has released federal transportation funds that will be available to the City of
Cupertino during that period. The City has also received commitments for other federal-aid
monies in the form of a Hazard Elimination Safety Program (HES) grant and a California Office
of Traffic Safety (OTS) grant. For that reason, the City needs to have a current DBE
participation goal in place.
The core aims of the DBE program are to increase the level of DBE participation in all federal-
aid contracts and to assist in the development of firms that can compete successfully in the
marketplace outside the DBE program. The DBE participation goal is established at a level that
corresponds with the proportion of DBEs in a local market area doing the particular kinds of
work called for in anticipated federal-aid projects relative to the total pool of businesses in a
local market area doing those particular kinds of work. Contractors bidding for federal-aid
Printed on Recycled Paper
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contracts in jurisdictions with adopted DBE participation goals are required to make and
document good faith efforts to achieve the goals in assembling the work teams proposed in their
bids.
In accordance with DOT regulations, 49 CFR Part 26, Staff calculated a DBE goal of 18.8 % for
federally funded projects for the 2005/06 federal fiscal year. This overall goal is broken down
into 18.8 % race-conscious and 0% race-neutral components. The race-conscious component is
an overall goal component that focuses on assisting only DBEs. The use of contract goals is the
primary example of a race-conscious measure in the DBE program. Race-neutral DBE
participation includes any time a DBE obtains a prime contract through customary competitive
procurement procedures, is awarded a subcontract on a prime contract that does not carry a DBE
goal, or even if there is a DBE goal, obtains a subcontract from a prime contractor that did not
consider its DBE status in making the award.
This proposed goal, together with the methodology used to calculate the goal, and the breakout
of estimated race-neutral and race-conscious participation was submitted to Caltrans for review
and comment. On September 19, 2005, Caltrans responded with comments. Noting that
historical rates of DBE participation in Cupertino federal-aid projects had fallen below previous
goals, Caltrans indicated that the historical rates should not be used to adjust the base DBE
participation goal for fiscal year 2005/06. These comments have been incorporated into the DBE
Program.
Notice ofIntent Adopted and Public Review and Comment Period Complete
At its meeting of November 1, 2005, Council approved Resolution No. 05-182, adopting the
Notice of Intent to Adopt the DBE Program for Federally Funded Projects and establishing a
DBE participation goal of 18.8 % for the Federal fiscal year 2005/06.
The 18.8 % DBE participation goal refers to the allocation of up to 18.8 % of the total dollar
value of the contract for work to be performed by DBE or subcontractors. As noted above, the
goal requires that the contractor either meet or exceed the goal or demonstrate a good-faith effort
to meet it for federally funded projects.
As required, the City of Cupertino published a notice of the proposed overall goal, informing the
public that the proposed goal and its rationale were available for inspection during normal
business hours at the City's principal office for 30 days following the date of the notice, and
informing the public that City of Cupertino comments would be accepted on the goal for 45 days
following the date of the notice. No comments were received.
If adopted by Council, the DBE goal will be resubmitted to Caltrans with a statement that no
public comments were received during the public participation process. Once Caltrans receives
and formally approves the DBE goal, the City may use the overall goal for projects with federal
funding originating in federal fiscal year 2005-06.
FISCAL IMPACT
Adoption of a Disadvantaged Business Enterprise Program on an annual basis is a prerequisite to
obtaining federal funds for transportation improvement projects. Adopting the goal will make at
least the following federal funds available to Cupertino for infrastructure maintenance and
construction projects in fiscal year 2005-06:
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Project
Wolfe, Stelling, McClellan,
Stevens Canyon Roads, and
Tantau Pavement
Rehabilitation
Stevens Creek Blvd/SR 85
On Ramp In Pavement
Crosswalk Lights and Ped
in Crosswalk Sign
Collins Elementary School
Advance Flashing Beacons
and In-Roadway Lighting
Source of Federal Funds
Amount of Funds
SAFETEA-LU Surface
Transportation Program
(STP)
$469,000.00
Hazard Elimination Safety
(HES)
67,500.00
Office of Traffic Safety
Traffic Safety Funds
44,100.00
Total
$580,600.00
The $469,000.00 in STP funds will supplement the City's annual commitment of $750,000.00 in
City funds to Pavement Rehabilitation in 2005-2006, allowing the City to overlay or otherwise
rehabilitate more than 60% more City street miles with fiscal year 2005-2006 funding.
STAFF RECOMMENDATION
Staff recommends that the City Council adopt Resolution No. 06-ill, Adopting a
Disadvantaged Business Enterprises Program for Federally Funded Projects and Establishing a
Disadvantaged Business Enterprise Participation Goal of 18.8% for the Federal Fiscal Year
2005/06.
Submitted by: Approved for submission:
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Fc$.Ralph A. Qualls, Jr. David W. Knapp r:¡-
Director of Public Works ~ City Manager
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RESOLUTION NO. 06-033
DRAFT
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CUPERTINO
ADOPTING A DISADV ANT AGED BUSINESS ENTERPRISES PROGRAM FOR
FEDERALLY FUNDED PROJECTS AND ESTABLISHING A DISADVANTAGED
BUSINESS ENTERPRISE PARTICIPATION GOAL OF 18.8% FOR THE
FEDERAL FISCAL YEAR 2005-06
WHEREAS, on November 1, 2005, the City of Cupertino adopted Resolution No. 05-
182, Approving a Notice of Intent to Adopt a Disadvantaged Business Enterprises Program for
Federally funded projects; and
WHEREAS, the DBE Program is described in Exhibit "A" and made a part hereof by
reference; and
WHEREAS, all notices required for public notification and comment were published in
accordance with requirements ofthe law; and
WHEREAS, no public comments were received,
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Cupertino
hereby adopts the Disadvantaged Business Enterprises Program and establishes a DBE
participation goal of 18.8% for the Federal fiscal year 2005-06.
PASSED AND ADOPTED at a regular meeting of the City Council of the City of
Cupertino this 7th day of February 2006, by the following vote:
Vote Members of the Citv Council
AYES:
NOES:
ABSENT:
ABSTAIN:
ATTEST:
APPROVED:
City Clerk
Mayor, City of Cupertino
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Exhibit A
City Hall
10300 Torre Avenue
Cupertino, CA 95014-3255
(408) 777-3354
FAX (408) 777-3333
CUPERJINO
ANNUAL OVERALL GOAL INFORMATION
TO: CAL TRANS DISTRICT 4
Art Duffy, Local Assistance Engineer, DBE Program
P.O. Box 23660
Oakland, CA 94623-0660
The amount of overall goal, methodology, breakout of estimated race-neutral and race-conscious
participation, and any DBE program updates are presented herein in accordance with Title 49 of
the Code of Federal Regulations, Part 26, and as described in the Local Assistance Procedures
Manual.
The City of Cupertino submits our annual overall goal information (and any needed updates of
our DBE program) for your review and comment. We propose an annual overall DBE goal of
18.8% for the Federal Fiscal Year 2005/2006 beginning on October 1.2005. and endiRl! on
September 30. 2006.
Methodology
The City will have three Federal-aid projects programmed for fiscal year 2005-2006. The
projects are the Wolfe, Stelling, McClellan, Stevens Canyon Roads, and Tantau Avenue
Pavement Rehabilitation Project, the Stevens Creek Boulevard at SR 85 NB On-Ramp In-
Pavement Crosswalk Lights and Electric Ped In Crosswalk Sign, and the Collins Elementary
Installation of Advance School Flashing Beacons and In-Roadway Warning Lighting System
Project. A major component of the funding for the first project is the Federal Surface
Transportation Program (STP) for Local Streets and Road Rehabilitation. A major part of
funding for the second project is in the form of Federal Hazard Elimination Safety (HES) funds.
The State Office of Traffic Safety is providing funds with a federal component for equipment for
the third proj ect.
Staff evaluated the projects, involving rehabilitation and maintenance of federal-aid urban (F AU)
arterial roads in the City, and elimination of traffic hazards on an arterial/freeway connection and
in a City school zone, in order to determine the types of work involved and the availability of
Disadvantaged Business Enterprise (DBE) contractors performing those types of work in the
Cupertino market area, taken as the nine San Francisco Bay Area counties (Alameda, Contra
Costa, Marin, Sonoma, San Francisco, San Mateo, Santa Clara, Solano, and Sonoma).
To determine the availability ofDBE contractors, the staff referred to the to the U.S. Census
Bureau's North American Industry Classification System (NAICS) database to acquire the
NAICS codes for the types of work involved in the assumed project. With those codes, staff
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entered the Census Bureau's business database to find the total number of contractors in the
Cupertino market area performing the types of work involved. Using the same codes, staff
entered Caltrans' Certified DBE database to find the total number ofDBE contractors
performing the types of work involved in the same market area.
The number ofDBE contractors available to perform each type of work was divided by the total
number of contractors available to perform same type of work to yield the percentage of each
type of work that would be an appropriate DBE goal. The DBE percentage of each type of work
was then multiplied by the estimated amount of the total funding of the assumed project that type
of work would receive. The sum ofthose products was divided by the total assumed project
funding to arrive at a composite DBE percentage of the total project, taken as the base DBE goal
figure.
An adjustment to the base figure based on historical DBE participation in recent Cupertino
Federal-aid projects was deleted per Caltrans' comment, so that the base figure is the final
overall goal.
Breakout of Estimated Race-Neutral and Race-Conscious Participation
The City of Cupertino's overall goal is 18.8%. The overall goal is segregated into 18.8%
race-conscious and 0% race-neutral components.
The methodology and proposed goal have been reviewed by Caltrans, and this goal information
reflects Caltrans' comments.
DBE Program Updates
1. Adoption of method to be used in federal-aid contracts to ensure prompt and full payment
of any retainage kept by the prime contractor or subcontractor to any subcontractor, per
49 CFR 26.29 and Chapter 9 of California DOT LAPM.
On November 1, 2005, the Cupertino City Council adopted method number 3:
Hold retainage from prime contractors and provide for prompt and regular incremental
acceptance of portions of the prime contract, pay retainage to prime contractors based
on these acceptances, and require a contract clause obligating the prime contractor to
pay all retainage owed to the subcontractor for satisfactory completion of the accepted
work within 30 days after your payment to the prime contractor.
2. Appointment ofDBE Liaison Officer.
On November 1,2005, City Council authorized the City Manager to appoint the City's
DBE Liaison Officer.
OIS
Glenn Goepfert.
Assistant Director of Public Works
9/9/05
Date
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RESULTANT GOAL
Ste 1:
Base Fi ure
18.8%
Ste 2:
Historical DBE Partici ation
5.7% *
*No modification of the Base Fi ure with the Historical DBE Partici ation is made.
Resultant Goal
18.8%
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