HomeMy WebLinkAboutItem 6m. Authorize Funding for Emergency Maintenance at the WRRF (Spec. 2000607-10) Item 6m
Department: Utilities
Cost Center: 6104
For Agenda of: 4/2/2024
Placement: Consent
Estimated Time: N/A
FROM: Aaron Floyd, Utilities Director
Prepared By: Chris Lehman, Deputy Director of Wastewater
SUBJECT: AUTHORIZE FUNDING FOR EMERGENCY MAINTENANCE AT THE
WATER RESOURCE RECOVERY FACILITY (WRRF)
RECOMMENDATION
1. Approve a budget transfer of $1,498,364 from the Sewer Fund Undesignated Capital
Completed Projects Fund (602.9501.71501) to the WRRF Major Maintenance
(2000607-10); and
2. Adopt a Draft Resolution entitled, “A Resolution of the City Council of the City of San
Luis Obispo, California, authorizing use of Sewer Fund Undesignated Capital to
Support WRRF Emergency Maintenance.”
POLICY CONTEXT
The purchases related to WRRF Emergency Maintenance fall under Municipal Code
3.2.060 B and F, which state that purchasing and bid procedures are not required when:
(B) the lack of such equipment, supplies, or services would seriously
threaten the functioning of city government, the preservation of property, or
the health and safety of any person; and
(F) necessary for the preservation or protection of public peace, health,
safety, or welfare of persons or property.
Sewer Fund completed project accounts are funds that have been approved by Council
to be spent on Capital projects but are not designated to a specific project. This balance
increases when Sewer Funded projects are completed under budget. The policies rela ted
to managing completed projects were approved by Council via Resolution 8324 and are
contained in Section 565 of the Financial Management Manual.
DISCUSSION
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Item 6m
Background
Staff are requesting additional budget due to two emergency maintenance projects
related to the Water Resource Recovery Facility (WRRF).
The first issue was encountered during the demolition of a legacy wastewater treatment
system at the WRRF. The construction team encountered residual mercury historically
used in the wastewater facility to create a sealed bearing component of the treatment
system. Staff worked closely with the construction team and regulators to safely
remediate the site and properly dispose of the hazardous materials. The fiscal impact of
this work is $581,364, which is not covered by the WRRF upgrade budget.
The second issue stemmed from construction sequencing constraints that resulted in the
accumulation of solids beyond the WRRFs processing capacities. This also resulted in
additional odor generation which negatively impacted the community, and complicated
the underlying treatment processes required for regulatory compliance and protection of
the San Luis Obispo Creek. As of June of 2023, the plant has achieved compliance with new
discharge requirements to the San Luis Obispo Creek but has struggled to balance water quality
with the management of solids that are responsible for odor generation. The upgraded solids
treatment systems, which are necessary for full plant compliance and are currently under
construction, are not anticipated to be completed until spring 2024.
Staff utilized temporary operational measures to reduce odor and stabilize impacts on
discharge compliance. These solutions include portable dewatering skids, portable
oxygen delivery systems, chemical deodorants, and contracted storage and hauling
services to assist with removing an abundance of septic solids from the WRRF. These
systems will be utilized until permanent infrastructure related to solids handling is
completed in the spring of 2024. The fiscal impact of temporary operations around solids
processing and odor mitigation is $917,000, which is not covered by the WRRF upgrade
construction budget.
On January 23, 2024, Council received a presentation by staff providing an update on
odor mitigation efforts that were implemented to correct operational complications and as
a result of feedback from the public.
The itemized costs of these emergency maintenance activities are in the ta ble below.
Emergency Activity Amount
Solids Processing $ 917,000
Supplementary Biosolids Processing $ 908,129
Environmental Testing $ 8,871
Hazardous Material Handling $ 581,364
Mercury Remediation $ 426,305
Taxes for HAZMAT Disposal $ 155,059
Total $ 1,498,364
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Item 6m
Previous Council or Advisory Body Action
On February 6, 2024, Council received the 2023-24 Midyear Budget Review, whereby
staff forecasted the need for additional funding for emergency projects at the Water
Resource Recovery Facility. In the midyear report, staff indicated that additional budget
would likely need to be appropriated as part of the 2024 -25 Budget Supplement. Due to
the timing and magnitude of expenses, staff are requesting these additional funds sooner
than anticipated, which will allow payment for services already rendered.
Public Engagement
Utilities staff delivered a presentation to the City Council on January 23, 2024, which
covered odor mitigation efforts that were implemented to correct operational challenges.
CONCURRENCE
The Finance Department concurs with the recommendations in this report.
ENVIRONMENTAL REVIEW
A Final Environmental Impact Report (Final EIR) for the Water Resource Recovery
Facility Project (State Clearinghouse # 2015101044) was considered and certified by the
City Council on August 16, 2016. The Final EIR evaluated and addressed the potential
for the project to create a hazard involving the release of hazardous materials into the
environment during construction (Impact HAZ-2). This impact is identified as potentially
significant unless mitigated by measures HAZ-1(a) Hazardous Materials Management
and Spill Control Plan. As the hazardous materials were managed and remediated
consistent with the project’s hazardous materials management and spill control plans and
existing regulations to the satisfaction of regulatory agencies, including the County of San
Luis Obispo and the State Department of Toxic Substances Control (DTSC), the actions
associated with the funding request for hazardous materials handling are consistent with
the certified Final EIR. Furthermore, the actions required to remediate the hazardous
materials discovery were necessary to prevent and mitigate risk to public health, safety,
and welfare and constituted an emergency project, which is exempt from the
requirements of CEQA (CEQA Guidelines Section 15269(c)).
The existing facility continues to operate during construction of the upgrade project and
is subject to Regional Water Quality Control Board and San Luis Obispo Air Pollution
Control District permits. It was necessary for staff to implement an emergency project
consisting of the temporary modification of existing operational processes related to solids
management at the W RRF to achieve compliance with these permits and prevent a risk
to public health, safety, and welfare that could have potentially occurred as a result of
pollutant discharges into San Luis Obispo Creek. In addition, while W RRF operations
have historically resulted in occasional nuisance odors, and the facility upgrades include
improved odor management, the temporary modification of processes in response to the
emergency are also intended to minimize the potential for odors in the short -term. This
emergency project was required to prevent and mitigate risk to public health, safety, and
welfare, and is exempt from the requirements of CEQA (CEQA Guidelines Section
15269(c)).
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Item 6m
FISCAL IMPACT
Budgeted: No Budget Year: 2023-24
Funding Identified: Yes
Fiscal Analysis:
Funding
Sources
Total Budget
Available
Current
Funding
Request
Remaining
Balance
Annual
Ongoing
Cost
Completed
Projects
(602.9501.71501)
$1,906,695 $1,498,364 $408,331 $0
WRRF Major
Maintenance
(2000607)
$58,617 $0 $0 $0
Total $0 $0 $0 $0
Staff recommends moving $1,498,364 from the Sewer Fund’s Undesignated Capital
(Completed Projects) to the WRRF Emergency Maintenance project (2000607 -10). This
action is recommended as emergency expenses related to hazardous materials
remediation and solids processing are not eligible expenses for reimbursement under the
WRRF upgrade funding sources.
The Sewer Fund’s Undesignated Capital (Completed Projects) have been approved by
Council to be spent on Capital projects but are not designated to a specific project. This
balance increases when Sewer Funded projects are completed under budget. The Sewer
Fund’s Undesignated Capital (Completed Projects) balance is sufficient to cover these
expenses because staff were able to complete the Calle Joaquin Lift Station project
$1,800,000 under budget. The surplus lift station project contingency funds are available
due to management and budget control relating to several high-risk project elements such
as boring under Highway 101 and work in the San Luis Obispo Creek.
The following Fiscal Impacts to both accounts are as follows:
Completed Projects (602.9501.71501)
a) Beginning Balance $1,906,695
b) Fiscal Impact ($1,498,364)
Total Projected Available $408,331
WRRF Major Equipment Maintenance (2000607)
a) Beginning Balance $58,617
b) Fiscal Impact $1,498,364
Total Projected Available $1,5556,981
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Item 6m
ALTERNATIVES
1. Deny the use of Undesignated Capital (Completed Projects). Staff does not
recommend this option because critical services related to emergency maintenance
have been delivered and require payment.
2. Instruct staff to use budget from other programs or budgets. Staff does not
recommend this option because it would result in underfunding other critical se rvices.
ATTACHMENTS
A - Draft Resolution approving funding to support Water Resource Recovery Facility
Emergency Maintenance
Page 403 of 596
Page 404 of 596
R ______
RESOLUTION NO. _____ (2024 SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, AUTHORIZING USE OF SEWER FUND
UNDESIGNATED CAPITAL TO SUPPORT WATER RESOURCE
RECOVERY FACILITY (WRRF) EMERGENCY MAINTENANCE
WHEREAS, the City Council adopted policies and procedures related to the
management of completed CIP projects (Resolution 8324); and
WHEREAS, in accordance Municipal Code Section 3.24.060 purchasing policies
may be dispensed for WRRF Emergency Maintenance Purchases for emergency solids
processing and mercury remediation; and
WHEREAS, on January 23, 2024, Council received a presentation on the status
of the WRRF upgrade (2091219) and related solids processing complications; and
WHEREAS, on February 6, 2024, Council received a Fiscal 2023-24 Mid-year
Budget Review, whereby staff forecasted the need for add itional budget for emergency
solids processing and mercury remediation for WRRF Emergency Maintenance
(2000607-10); and
WHEREAS, the City Council acknowledges the necessity of authorizing additional
budget for the continued operations of the WRRF.
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Resolution No. _____ (2024 Series) Page 2
R ______
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis
Obispo that the 2023-24 budget is hereby amended to reallocate $1,498,364 from Sewer
Fund Undesignated Capital (Completed Projects) to WRRF Emergency Maintenance
(2000607-10) to ensure the continued and effective operation of the facility.
Upon motion of Council Member ___________, seconded by Council Member
___________, and on the following roll call vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was adopted this _____ day of __________ 2024.
___________________________
Mayor Erica A. Stewart
ATTEST:
______________________
Teresa Purrington
City Clerk
APPROVED AS TO FORM:
______________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the
City of San Luis Obispo, California, on ______________________.
___________________________
Teresa Purrington
City Clerk
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