HomeMy WebLinkAbout06-02-2015 C9 WRRF Energy Project
City of San Luis Obispo, Council Agenda Report, Meeting Date, Item Number
FROM: Carrie Mattingly, Utilities Director
Prepared By: David Hix, Deputy Director Utilities – Wastewater
SUBJECT: WATER RESOURCE RECOVERY FACILITY (WRRF) ENERGY
EFFICIENCY PROJECT BUDGET AMENDMENT
1. Approve a budget amendment for the WRRF Energy Project in the amount $285,000; and
2. Approve the transfer of $285,000 from the WRRF completed projects account to the
WRRF Energy Project CIP account.
DISCUSSION
Background
On May 7, 2013, City Council approved the Energy Efficiency Project for the construction and
installation of nine energy conservation measures at the WRRF. Total project cost of $9,479,000
was approved by Council on October 1, 2013. The project employs the triple bottom line as a
guide for the replacement and design of inefficient equipment, and utilizes design/build
contracting that expedites construction, controls costs, ensures on-schedule completion and
guarantees systems are performing as specified. To date, the project has proceeded smoothly
with construction on schedule, excellent workmanship, and energy and operational savings that
have met or exceeded original estimates. The project is approximately 85% complete. The
Supervisory Control and Data Acquisition (SCADA) portion of the project is set to begin in June
with completion scheduled for late August 2015.
Design Change
During the 100% design meeting in April of 2014, it was discovered that several pieces of
equipment would not be adequate and required changing. It was also realized that some redesign
would be required along with construction changes. The specialized nature of this project and the
related equipment required purchase orders be placed well ahead of the beginning of
construction to guarantee prices and timely installation. The equipment, redesign and related
construction was for the co-generation unit, the headworks (bar screens and grit separator), solids
de-watering and the return activated sludge (RAS) pumps.
At the design meeting with PG&E and its subcontractor AECOM Engineers, it became clear that
there was a miscommunication by all the parties regarding these specific equipment components
and design. Despite the project team’s best work, some project components had been overlooked
which would result in some processes not being optimal; they would not meet the WRRF’s
requirements. Specifically, the designed headworks equipment was not adequate for removing
the inert solids that enter the plant, lacked redundancy and was close to the existing capacity,
while solids de-watering lacked a necessary thickening tank and required more maintenance than
originally estimated. Also, the co-generation unit and RAS pumps did not offer the level of
controls necessary for optimized operations and required some redesign of electrical, gas and
structural elements.
June 2, 2015
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WRRF Energy Project Budget Amendment Page 2
After identifying the needed equipment changes and redesign, all members of the project team
(AECOM, PG&E and the City) took responsibility and worked closely together to ascertain costs
and compromise fittingly to preserve the project’s original intent. The team negotiated the best
costs with equipment vendors, and then performed a value engineering analysis on the
construction that reduced the cost by an additional $66,890. Redesign was performed by
AECOM within the existing contract. This change was estimated to cost $285,000 (Attachment
1).
After the project team had secured the lowest possible cost and after careful analysis of the
benefits of the redesign at this critical juncture, City staff decided to move forward with the
changes to equipment and necessary associated construction improvements by utilizing the
project’s contingency of $300,000 and any savings in the project to pay for the difference in cost.
This decision was based wholly within the scope of the approved project and its intent to meet
the triple bottom line. The replacement of the badly failing equipment with the appropriate
replacements, process and operational optimization, additional reduced maintenance and to
realize the efficiency savings with the energy project were the driving factors. Installation of the
originally specified equipment would have resulted in operations and control problems, no
redundancy for grit removal, higher maintenance requirements and inefficiencies. Deferring the
additional work or equipment to a later date would have resulted in much higher costs.
The project team has reviewed this issue and worked painstakingly to continue to reduce costs.
During construction of the project, several justified unforeseen conditions were encountered that
have resulted in the majority of the contingencies being expended. Due to misunderstanding
related to the accounting for project contingency spending, staff did not realize the contingency
funds were being expended on these other items and thought the necessary equipment changes
and related construction costs noted above were covered under the contingency. Unfortunately,
staff must return to Council to request a project budget amendment to amend the project budget
to cover the additional cost of this equipment and construction that has been completed.
Typically, City projects of this nature have a 10% contingency; this project had a very low
contingency of slightly less than 3% because of the extensive planning and work done prior to
100% design. The project team had worked hard to dial in costs so it seemed possible to keep
under this very low contingency. Because of the complicated nature of this project the project
team now realizes that a larger contingency would have been more appropriate for this project.
No additional budget amendments will be requested for this project.
Additional Realized Operational Savings and Benefits
The WRRF energy project is already exceeding its original estimated annual operational savings
of $168,000. Specifically, the changes related to the budget amendment have resulted in
additional savings and benefits. Below is a brief synopsis:
1. Additional saving for hauling costs. Grit, rags and other debris being removed by the
redesigned headworks are dryer and more compact than estimated, hauling costs have
been further reduced by $12,000 annually.
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WRRF Energy Project Budget Amendment Page 3
2. Grinder maintenance. The headworks redesign resulted in the reduction of two grinders
and the further removal of inert and abrasive material. The removal of two grinders and
reducing the overhaul frequency of the remaining grinders will save $25,300 annually.
This saving would not have been achieved without this redesign.
3. Extending digester cleaning intervals. The improved removal efficiencies of rags and grit
by the redesigned headworks equipment have reduced the material collecting in the
digesters. This unanticipated benefit will allow for extended digester cleaning intervals
from five years to seven, possibly ten year intervals. Digester cleaning projects cost
$250,000 each and a conservative simple amortized savings for the three digesters has
been estimated at $42,500 annually.
4. Operational Control. Enhanced and optimized control for the RAS and Co-Gen will result
in more efficient operations of the aeration basins and maximum generation of electricity
respectively. Presently the aeration basins consume a large portion of the WRRF’s
electrical costs and this redesign allows for smoother operations of the basins resulting in
better effluent quality and electrical savings. The original proposed controls for these
processes were unacceptable and offered little improvement over existing.
5. Significant reduction in odor and flies. The new equipment produces drier, more compact
material and covers previously open processes which have resulted in markedly reduced
odors and flies.
Since the short period of time since the start-up of eight of the nine energy conservation
measures, as expected, staff has seen noticeable operational savings. Savings are also being
experienced for the filter media replacement, solids de-watering and lighting. Process
optimization continues and will be enhanced with the installation of the SCADA system which
will offer comprehensive control of related processes and equipment. After commissioning is
complete, and the project finalized, applications for incentives and rebates will be submitted.
Staff is optimistic that rebates will exceed original estimates given the performance of the
project.
FISCAL IMPACT
This budget amendment will cost $285,000 and represents a three percent increase in the total
project budget. This project was brought to Council as a fixed price contract with no change
orders. Unfortunately contingencies were unable to cover necessary changes and staff is
returning to request a budget amendment to increase project funding to cover the costs.
There is adequate funding for this request in the sewer fund completed projects account. Any
remaining contingencies or cost saving at the end of the project may be applied to future debt
service or returned to the wastewater fund’s working capital.
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WRRF Energy Project Budget Amendment Page 4
Fiscal Impact Summary
Costs by Type
Total Budget $9,519,000
Proposed Budget Amendment $285,000
Total $9,804,000
ALTERNATIVES
Do not amend project budget. Council could choose not to amend the budget. This would result
in project funding not meeting projects costs and result in unknown future consequences. The
equipment is installed and the City is receiving the benefit of the efficiencies.
ATTACHMENTS
1. Cost Estimate
T:\Council Agenda Reports\2015\2015-06-02\WRRF Energy Project Budget Amendment
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Attachment 1
ECM Equipment ManufacturerProposal Contractor Adds Proposal
1 150 kW cogen 2G 389,762.00$ 2G 391,206.00$ 1,444.00$
1 Install Adds 20,529.00$
4,350.00$
2,000.00$
24,827.00$
2 Bar Screen JWC 355,800.00$ HUBER 324,104.00$ (31,696.00)$
2 Install Adds 11,360.00$
27,400.00$
2 Grit Hydro int 236,800.00$ HUBER 221,720.00$ (15,080.00)$
2 Install Adds 1,825.00$
15,840.00$
54,100.00$
3,340.00$
4 Solids Dewater sys HUBER 409,000.00$ FKC 482,200.00$ 73,200.00$
4 install Adds 36,510.00$
35,327.00$
39,399.00$
25,064.00$
5 RAS pumping 2,175.00$
19,970.00$
351,884.00$
(7,390.00)$
(26,000.00)$
(3,000.00)$
(4,000.00)$
(1,500.00)$
(25,000.00)$
284,994.00$
Subtotal
Total
City of SLO SST WWRF 100% design /VE meeting (4/20/14)
Potential VE items
Consolidate Grit to a single controller
Conduit 3/4 min relaxed from 1" where appropriate
Remove Glass lines Pipe ingrit process
Eliminate curb -Solids bldg
IGA Equipment /Final Numbers Post IGA 100% Design
Cost Delta
Upgrade manhole to Halliday Hatch
Electrical increases-final vault relocated/meter upgrades
1W water based on location in Screen Bldg
Potential No Trench and use exist conduit
Demo/ add new purpose built pad
Bury DG lines and temp flare
Add Access Ramp from containment road
Electrical adds- controller/infrastructure upgrades
Dumpster ramp/ light relocation
Electrical adds Coupled with Grit expantion
Structural need for new equipment (rebar and concrete)
Mechanical work for new equip
Electrical adds
Site Earthwork drainage/containment upgrade
Added Demo / earth work /trenching
Double pad size w/ contain curbs
Additional mechanical piping
Equipment installation Extra Piece of equipment
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