The Chula Vista City Council voted unanimously to reject a single bid for the Third Avenue Streetscape improvement project.
The bid was rejected by the city becasue of uncertain redevelopment funding.
"We're rejecting the bid because there's not enough funding," city principal civil engineer Kirk Ammerman said.
On Aug. 10, Public Works Director Rick Hopkins received a single bid from 3-D Enterprises in the amount of $4,997,000, which was to be used in addition to $2.5 million in redevelopment funds for the project.
However, staff was later told that the $2.5 million is now uncertain as a result of legal challenges at the state level currently pending in the State Supreme Court.
Executive director of Third Avenue Street Association Greg Mattson said he has supported the revitalization of Third Avenue throughout the process.
"In one sense, we're disappointed because we want to move forward with the allocations," he said. "But we support the city's recommendation - they are critical in keeping this intact."
Staff directed council to apply for a Community Development Block Grant and capital improvement grants totaling $750,000, and appropriate $400,000 from the balance of the traffic signal fund. This money would allow for improvements from H to F streets, but with significant revisions to phase one of the project.
"We're scaling down the project as far as distance and scope of work," City Manager Jim Sandoval said. "We don't want to scale down the quality."
The phase one improvements would have been completed next month and included shorter crossings and improved pedestrian and multi-modal accessibility, more open sidewalks for outdoor dining, energy efficient pedestrian lighting, street trees and new seating.
"The village community is eager to have the construction start as soon as possible," Mattson said. "The more we wait, the more issues arise."
Councilman Steve Castaneda said he's adamantly opposed to diverting money from the traffic fund.
"If we're taking $750,000 out of the general fund, what is the guarantee that the government will rejuvenate that fund?" he asked city staff.
Assistant City Manager Gary Halbert said there's no guarantee.
Castaneda said there are many accidents that occur on Second Avenue and E Street.
"I hear from people all the time about problems with intersections in west Chula Vista," he said. "If we have money to improve flagrant safety problems, why aren't we doing it?"
Ammerman said that traffic signal funds come from developers and are intended for capacity improvements and to leverage federal safety funds.
Hopkins said it will be revised so contractors will only have to do 30 percent.
The bid will go back out mid-October and staff will come back to council sometime in December when they get ready to award a contract.
Staff expects to begin construction on the project in January, pending a ruling from the State Supreme Court Jan. 15. Once issued, the ruling could either result in funds of between $1.2 million and $2.5 million or nothing at all.