REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
April 23, 2024
FROM
NOEL CASTILLO, Director, Department of Public Works - Transportation
SUBJECT
Title
Agreement for Preliminary Engineering Services with BNSF Railway Company for Darghty Road Grade Crossing and Jordan Road in the Helendale Area
End
RECOMMENDATION(S)
Recommendation
Approve Preliminary Engineering Services Agreement with BNSF Railway Company, which includes non-standard terms, for initial project design up to 10% of full roadway design, with an indefinite contract term, and for design work and preliminary engineering costs to be performed by and paid for by BNSF Railway Company, in an amount not to exceed $75,000.
(Presenter: Noel Castillo, Director, 387-7906)
Body
COUNTY AND CHIEF EXECUTIVE OFFICER GOALS & OBJECTIVES
Ensure Development of a Well-Planned, Balanced, and Sustainable County.
Provide for the Safety, Health and Social Service Needs of County Residents.
FINANCIAL IMPACT
Approval of this item will not result in the use of Discretionary General Funding (Net County Cost). Pursuant to the proposed agreement, the BNSF Railway Company (BNSF) will provide preliminary engineering services for a project that would allow alternative access to crossings other than the Vista Road, westerly of National Trails Highway, in the Helendale Area. The BNSF agrees to fund the initial preliminary engineering evaluation for all actual costs and expenses that BNSF incurs in performing the work, with BNSF’s contribution not exceeding $75,000 for the preliminary engineering. The Department of Public Works (Department) estimates less than $2,500 in overhead costs to coordinate the project scope and engineering with the BNSF, which will be funded with Gas Tax revenue. Sufficient appropriation and revenue are included in the Department’s 2023-24 budget and will be included in future recommended budgets as needed.
BACKGROUND INFORMATION
The railroad grade crossing at Vista Road, westerly of National Trails Highway in the Helendale Area, experiences train crossings several times per day. Presently, Vista Road is the primary paved access into and out of the Silver Lakes residential community. While train crossings occur only a few times per day, they can impede traffic for up to 30 minutes. BNSF has offered to partner with the County to provide an alternative access to enhance traffic flow and relieve backup congestion.
The Preliminary Engineering Services Agreement (Agreement) provides for BNSF to conduct preliminary roadway engineering, for initial design up to 10% of the project, which would include roadway alignments on BNSF, County Maintained Road System, public, and potentially private rights of way. The Agreement is BNSF standard preliminary engineering service agreement, which contains terms that differ from the standard County contract and omits certain County standard language. The non-standard and missing terms include the following:
1. The Agreement is silent as to the applicable governing law.
• The County standard contract requires California governing law.
• Potential Impact: The Agreement is silent on governing law. This results in uncertainty over which state's laws will govern the interpretation of the Agreement, and leads to ambiguity in interpretation of the contract terms. BNSF is a Delaware corporation. The Agreement could be interpreted under any state law depending on where the claim is brought, including Delaware or California. Any questions, issues or claims arising under this contract could require the County to hire outside counsel competent to advise on the applicable state law, which may result in fees that exceed the total contract amount.
2. The Agreement does not require BNSF to indemnify the County.
• The County standard contract general indemnity provision requires the Contractor to indemnify, defend, and hold County harmless from third party claims arising out of the acts, errors or omissions of any person.
• Potential Impact: BNSF is not required to defend, indemnify or hold the County harmless from any claims, including indemnification for claims arising from BNSF’s negligent or intentional acts. If the County is sued for any claim, in connection with BNSF and the Agreement, the County may be solely liable for the costs of defense and damages, which could exceed the total contract amount. County Counsel cannot advise on whether and to what extent Delaware law may allow the County to require BNSF to defend or indemnify it absent an express provision in the contract.
3. The County is required to waive any claims against BNSF for, and shall release BNSF from, any and all claims, which may or could result from the work performed under the Agreement.
• The County standard contract does not include a waiver, release, or limitation of liability.
• Potential Impact: The Agreement requires County to waive, release, and limit liability to the County for all claims arising from or which may arise from work performed under the Agreement. Claims could exceed the waiver, release, and liability cap and the contract amount leaving the County financially liable for the excess. In addition, the County's liability under the Agreement is not similarly limited. County Counsel cannot advise on, whether and to what extent, Delaware law may limit or expand the exclusion of limits to the extent prohibited by applicable law.
4. The County is required to indemnify BNSF against any third-party claims, which may or could result from the work performed under the Agreement.
• The County standard contract does not include any indemnification or defense by the County of a Contractor.
• Potential Impact: By agreeing to indemnify BNSF, the County could be contractually waiving the protection of sovereign immunity. Claims that may otherwise be barred against the County, time limited, or expense limited could be brought against BNSF without such limitations and the County would be responsible to defend and reimburse BNSF for costs, expenses, and damages, which could exceed the total contract amount. County Counsel cannot advise on, whether and to what extent, Delaware law may limit or expand this contract term.
5. The Agreement does not require BNSF to meet the County insurance standards.
• The County standard contract requires contractors to carry appropriate insurance at limits and under conditions determined by the County's Risk Management Department.
• Potential Impact: The Agreement does not include County standard insurance requirements. This means that the County has no assurance that BNSF will be financially responsible for claims that may arise from the County's use of the preliminary engineering design, which could result in expenses to the County that exceed the total contract amount.
6. The Agreement disclaims all warranties of any kind, including that BNSF gives no warranty, express or implied, as to the accuracy, quality, merchantability, fitness for any particular purpose, or any other matter, of or for the work performed pursuant to the Agreement or any report or other deliverable which BNSF may furnish pursuant to the Agreement. BNSF further disclaims any responsibility for any reliance, interpretation, or use of the work under the Agreement.
• The County standard contract provides that a contracting party fully warrants its services and deliverables they provide to the County.
• Potential Impact: The County’s use of the services, deliverables, and work under the Agreement is solely at its own risk. Under California law, sellers are not required to provide any warranty.
7. The Agreement is silent upon the County’s ability to terminate the Agreement for convenience.
• The County standard contract gives the County the right to terminate the contract, for any reason, with a thirty (30) day written notice of termination without any obligation other than to pay amounts for services rendered and expenses reasonably incurred prior to the effective date of termination.
• Potential Impact: There is no termination for convenience provision. Upon any termination by either party regardless of cause, the County may be required to pay for the work under the Agreement, which could result in payment liability where no funds are available due to lack of allocation or loss of funding.
8. The term of the Agreement is indefinite.
• County Policy 11-04 does not permit an indefinite term or automatically renewing contracts unless approved by the Board.
• Potential Impact: There is no end term to the contract and the County is indefinitely bound to the terms and conditions of the Agreement.
The Department recommends approval of the Agreement with BNSF, including the non-standard terms, in order for BNSF to proceed with the preliminary roadway engineering design, which would identify feasibility of potential roadway alignments, more specific project scope alternatives, and engineers estimates for the possible alternatives.
PROCUREMENT
Not Applicable.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (Aaron Gest, Deputy County Counsel, 387-5455) on March 28, 2024; Finance (Jessica Trillo, Administrative Analyst, 387-4222) on April 5, 2024; County Finance and Administration (Paloma Hernandez-Barker, Deputy Executive Officer, 387-5423) on April 8, 2024.