HomeMy WebLinkAboutItem 10 - DISINFECTION BYPRODUCT REDUCTION AND PIPE GALLERY IMPROVEMENTS PROJECT SPECIFICATION NO 1000044 CONSTRUCTION CONTINGENCY
Department Name: Utilities
Cost Center: 6001
For Agenda of: March 17, 2020
Placement: Consent
Estimated Time: N/A
FROM: Aaron Floyd, Utilities Director
Prepared By: Mychal Boerman, Utilities Deputy Director – Water
Jennifer Metz, Utilities Projects Manager
SUBJECT: DISINFECTION BYPRODUCT REDUCTION AND PIPE GALLERY
IMPROVEMENTS PROJECT, SPECIFICATION NO. 1000044,
CONSTRUCTION CONTINGENCY
RECOMMENDATION
Approve a Resolution (Attachment A) authorizing the use of $250,000 from Water Fund
Unreserved Working Capital to increase the available construction contingency for the
completion of the Disinfection Byproduct Reduction and Pipe Gallery Improvements Project,
Specification No. 1000044.
DISCUSSION
Background – Existing Approved Water Quality Project
To enable the City of San Luis Obispo (City) to maintain water quality regulatory compliance
related to disinfection byproduct levels and address the corrosion issues within the pipe gallery,
the City Council approved advertisement of the Disinfection Byproduct Reduction (DBR) and
Water Treatment Plant (WTP) Pipe Gallery Improvements Project (Project) on October 22, 2019
(Attachment B). The Engineer’s Estimate for the project was $1,817,000. The Project
contingency was budgeted at 25 percent due to the complexity of the proposed pipe gallery
improvements and consequence of failure. Total Project costs were $2,674,250 which included
$516,750 for construction and construction management contingencies.
The award of the Project was approved by the City Manager Report (Attachment C) on
November 18, 2019 with a construction contract totaling $1,990,700. Because the bid exceeded
the Engineer’s Estimate, $173,700 of available project contingencies were utilized to make up
the difference.
Project Site Challenges and Need for Increased Contingencies
Construction began on December 7, 2019. Since then, the Project has encountered unforeseen
changed site conditions (unexpected rock and concrete removal) and other operational challenges
resulting in the construction of a treated water flow bypass required to sustain prolonged WTP
shutdowns. To ensure adequate funding is available for the completion of the Project, staff is
recommending the City Council approve an increase to the Project construction contingency in the
amount of $250,000 from Water Fund, Unreserved Working Capital (Attachment D).
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Previous Council or Advisory Body Actions
The City Council approved advertisement of the Project on October 22, 2019. Consistent with
Council direction, the award of the Project was approved by the City Manager Report on
November 18, 2019.
Policy Context
The U.S. Environmental Protection Agency and the State Water Resources Control Board
prescribe regulations that limit certain contaminants in water provided by public water systems,
including disinfection byproducts, specifically total trihalomethanes, or TTHMs.
Consistent with the General Plan, Water and Wastewater Management Element, Policy A2.2.1,
the City utilizes multiple water resources to meet its water supply needs. Operationally, this
means the City uses a blend of water sources to meet the community’s water needs – from
Salinas, Whale Rock, and Nacimiento Reservoirs.
Public Engagement
The City posts its Water Quality Consumer Confidence Report (Water Quality Report) annually on
the City’s webpage and mails a printed copy to all customers. Public water systems are required by
state and federal law to notify users of any exceedance of any water quality standard and any other
noncompliance events affecting their water system.
CONCURRENCE
Public Works staff concurs with this request.
ENVIRONMENTAL REVIEW
This project is exempt from the California Environmental Quality Act (CEQA) per categorical
exemption 15301(b), Existing Facilities. The Community Development Department issued a
Notice of Exemption on September 9, 2019.
FISCAL IMPACT
Budgeted: Yes Budget Year: FY 19-20
Funding Identified: Yes
Fiscal Analysis:
Funding Sources Current FY
Available Budget
Annualized
On-going Cost Total Project Cost
General Fund
State
Federal
Fees
Other: Water Fund $2,674,250 0 $2,924,250
Total $2,674,250 0 $2,924,250
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Staff recommends increasing the construction contingencies for the Project in the amount of
$250,000, thereby increasing the total project budget from $2,674,250 to $2,924,250. Water Fund
Unreserved Working Capital has an available balance of over $14 million to accommodate the
recommendation.
ALTERNATIVE
Do not approve the Resolution. The Council may elect not to approve the Resolution
authorizing additional contingency; however, staff does not recommend this alternative as
limited contingency is available for project completion.
Attachments:
a - Draft Resolution
b - Council Agenda Report from October 22, 2019
c - Council Agenda Report from November 15, 2019
d - Budget Amendment Request Form
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R ______
RESOLUTION NO. _____ (2020 SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, AUTHORIZING USE OF WATER FUND
UNRESERVED WORKING CAPITAL TO INCREASE CONSTRUCTION
CONTINGENCIES FOR THE DISINFECTION BYPRODUCT
REDUCTION AND WATER TREATMENT PLANT PIPE GALLERY
IMPROVEMENTS PROJECT, SPECIFICATION NO. 1000044
WHEREAS, to ensure that water is safe to drink, the U.S. Environmental Protection
Agency and the State Water Resources Control Board prescribe regulations that limit certain
contaminants in water provided by public water systems, including total trihalomethanes, or
TTHMs; and
WHEREAS, the City’s 2015 Potable Water Distribution System Operations Master Plan
was approved by the City Council in 2016. The Master Plan discussed the challenges in meeting
Stage 2 disinfection byproducts water quality regulations associated with tank turnover and water
age; and
WHEREAS, on March 19, 2019, the City Council approved a budget of $1,850,000 for
the Water Treatment Plant (WTP) and Water Distribution System Disinfection Byproduct
Reduction Project (Project); and
WHEREAS, in June 2019, the City Council approved 2019-21 Financial Plan, Capital
Improvement Program, identified a total Project budget of $1,850,000; and
WHEREAS, on July 8, 2019, the City Manager approved an amendment to the design
scope of the Project to include improvements to the WTP pipe gallery in response to severe pipe
corrosion and the high consequence of failure; and
WHEREAS, on October 22, 2019, the City Council approved a total Project budget of
$2,674,250 for Project construction; and
WHEREAS, on November 18, 2019 the City Manager approved the award of the Project
with a construction contract totaling $1,990,700 utilizing 173,700 of available contingencies; and
WHEREAS, to ensure adequate funding is available for completion of the Project, staff is
recommending the City Council approve use of $250,000 from Water Fund, Unreserved Working
Capital; and
WHEREAS, a balance of approximately $14 million is available from Water Fund,
Unreserved Working Capital to fund the Project.
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo
as follows:
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Resolution No. _____ (2020 Series) Page 2
R ______
SECTION 1. The City Council authorizes staff to transfer $250,000 from the Water Fund,
Unreserved Working Capital to the Disinfection Byproduct Reduction and Water Treatment Plant
Pipe Gallery Improvements Project, Specification No. 1000044, as it is a high priority City project
as shown in the attached Budget Amendment Request (Exhibit A).
SECTION 2. Environmental Review. Construction of this project is exempt from the
California Environmental Quality Act (CEQA) per categorical exemption 15301(b), Existing
Facilities. The Community Development Department issued a Notice of Exemption on September
9, 2019
Upon motion of _______________________, seconded by _______________________,
and on the following roll call vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was adopted this _____ day of _____________________ 2020.
____________________________________
Mayor Heidi Harmon
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, this __________ day of ____________________________, 2020.
____________________________________
Teresa Purrington
City Clerk
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Department Name: Utilities
Cost Center: 6001
For Agenda of: October 22, 2019
Placement: Consent
Estimated Time: N/A
FROM: Aaron Floyd, Utilities Director
Prepared By: Mychal Boerman, Deputy Director Utilities/Water
Jennifer Metz, Utilities Project Manager
SUBJECT: AUTHORIZE ADVERTISEMENT OF DISINFECTION BYPRODUCT
REDUCTION AND WATER TREATMENT PLANT PIPE GALLERY
IMPROVEMENTS PROJECT, SPECIFICATION NO. 1000044
RECOMMENDATION
1. Approve the plans (Attachment A) and specifications (Council Reading File, Attachment B)
for the Disinfection Byproduct Reduction and Water Treatment Plant Pipe Gallery
Improvements Project (Project), Specification No. 1000044; and
2. Authorize staff to advertise the Project for bids; and
3. Authorize the City Manager to award the construction contract for the Project if the lowest
responsible bid is within available project funding; and
4. Approve a Resolution (Attachment C) authorizing a budget transfer of $1,042,174, from Water
Fund, Unreserved Working Capital account to the Project account.
DISCUSSION
Background
Disinfection Byproduct Reduction
The City’s Water Treatment Plant (WTP) meets the community’s daily water demands using a
combination of surface water sources that include Whale Rock, Salinas (Santa Margarita Lake),
and Nacimiento Reservoirs. Following the initial treatment processes, chlorine is added to the
water before distribution to the community to prevent any harmful microbial regrowth from
occurring. Water systems that use chlorine for this type of disinfection are required by federal and
state law to sample for disinfection byproducts on a regular basis at specific locations. Total
Trihalomethanes (TTHMs) are a group of substances known as disinfection byproducts which
form when chlorine reacts with naturally occurring organic material in water. The highest levels
of TTHMs typically occur where water age is the greatest, such as in water tanks with poor mixing.
United States Environmental Protection Agency (EPA) regulatory requirements for maximum
TTHM contaminant levels became more stringent in 2013 due to elevated concerns that there may
be associated health risks with prolonged ingestion.
Following the more stringent EPA regulations, the City’s water sample results for the 2nd quarter
of 2015 showed TTHMs at levels of 82.1 parts per billion (ppb) which was above the maximum
contaminant level (MCL) of 80 ppb. When routine monitoring indicated that TTHM levels were
above regulatory standards, the City issued a notice to customers to keep them informed about
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water quality. Since that time, WTP staff has been blending water from the various surface water
reservoirs to reduce naturally occurring organics and to optimize treatment performance along with
making operational adjustments to reduce water age within the City’s water distribution system to
minimize TTHM formation. WTP staff also pilot tested different chemicals aimed at reducing
TTHM levels without success. The City’s Water Distribution staff also implemented a flushing
program to help move the aging water throughout the system. Over the last few years, the City’s
third quarter (late summer) TTHM readings are nearing the MCL exceedance levels. This upward
trend in TTHMs is exacerbated by the warmer water temperatures in the source water supplies
during summer, water conservation which results in longer contact time with chlorine, and the
City’s water resiliency supply strategy that requires using minimal water from Whale Rock
Reservoir, even though it is the lowest in organic material. In order to permanently address the
issue of high TTHMs, mixing, aeration, and ventilation equipment is needed at two of the City’s
water storage tanks.
Water Treatment Plant Pipe Gallery
The City’s existing WTP was constructed at its current Stenner Canyon location in 1963, with
major facility upgrades in 1994 and 2009. Upon inspection in early 2019, staff identified portions
of the WTP pipe gallery (installed as part of the 1994 upgrade) that exhibited severe corrosion.
Specifically, a section of the 30‐inch filter effluent line that delivers treated water to the clearwell
tanks where it is stored prior to entering the water distribution system. At this location, chemical
treatment is required for fluoride and chlorine addition and pH adjustment. It is assumed that this
chemical addition, combined with the presence of standing groundwater, contributed to the severe
corrosion of the pipe. Due to the high consequence of failure of the pipeline, staff is recommending
the urgent replacement of the corroded piping.
Project
To enable the City to maintain regulatory compliance related to disinfection byproduct levels and
address the corrosion issues at the pipe gallery, staff is recommending the City Council approve
the Disinfection Byproduct Reduction (DBR) and WTP Pipe Gallery Improvements Project
(Project) and authorize advertisement of the project.
The Project includes two components: WTP pipe gallery improvements and disinfection byproduct
reduction equipment installation at the WTP (Clearwell 2) and at Edna Saddle Tank. The City
completed plans and specifications (Attachments A and B) for the Project and recommends the
City Council authorize advertisement of the project for construction. Combining the two
components allows the City to achieve construction efficiencies to expedite project completion
and minimizes the duration of construction impacts on WTP operations.
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The Project includes modifications at two potable
water storage tanks (Clearwell #2 at the WTP and
Edna Saddle Tank) for the installation of specialty
equipment (mixers, aerators, and ventilators) to
effectively reduce disinfection byproducts to meet
regulatory requirements. As part of the approval on
March 19, 2019 (Attachment D), Council
authorized the inclusion of the sole-sourced
equipment in the Project’s bid documents (PAX
Trihalomethane Reduction System by PSI Water
Technologies, Inc.).
The Project also includes replacement of corroded pipe within the pipe gallery at the WTP,
installation of a new effluent line and additional valving to provide a means for improved
maintenance flexibility within the pipe gallery, and the abandonment of a portion of the existing
buried 30-inch pipeline. This construction will be complex as the existing WTP must continue to
operate and serve the community’s water needs, allowing only short duration shutdowns to not
interrupt water service. The project requires significant excavation work to enable the new pipeline
installation, and space is limited.
The Project contingency for construction, construction management, and inspection services is
budgeted at 25 percent due to the complexity of the proposed pipe gallery improvements and
consequence of failure. Construction management and inspection services will be provided by
consultants from the City’s on-call service contracts, Capital Plan Construction Management
Services, Specification No. 50410.2018CM and Water and Wastewater Engineering Services,
Specification No. 91537.
Policy Context
The U.S. Environmental Protection Agency and the State Water Resources Control Board
prescribe regulations that limit certain contaminants in water provided by public water systems,
including disinfection byproducts, specifically total trihalomethanes, or TTHMs.
Consistent with the General Plan, Water and Wastewater Management Element, Policy A2.2.1,
the City utilizes multiple water resources to meet its water supply needs. Operationally, this means
the City uses a blend of water sources to meet the community’s water needs – from Salinas, Whale
Rock, and Nacimiento Reservoirs.
Previous Council Action
On March 19, 2019, the City Council approved the budget for the Water Treatment Plant and
Water Distribution System DBR project (Attachment D). The City Manager approved an
amendment to the design scope of the Project on July 8, 2019 to include improvements to the WTP
pipe gallery in response to severe pipe corrosion and the high consequence of failure that could
occur from a leak in this pipeline (Attachment E).
The City’s 2015 Potable Water Distribution System Operations Master Plan was approved by the
City Council in 2016. The Master Plan discussed the challenges in meeting Stage 2 disinfection
byproducts water quality regulations associated with tank turnover and water age that this Project
City of San Luis Obispo, Stenner Canyon
Water Treatment Plant, Clearwell #2.
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will address. The Master Plan is available on the Utilities Department’s website at
https://www.slocity.org/home/showdocument?id=6439.
Public Engagement
The City posts its Water Quality Consumer Confidence Report (Water Quality Report) annually
on the City’s webpage and mails a printed copy to all customers. Public water systems are required
by state and federal law to notify users of any exceedance of any water quality standard and any
other noncompliance events affecting their water system. In 2015, when a violation occurred, the
City sent out a Public Notice of Violation. The City has not had a violation since the occurrence
in 2015.
CONCURRENCES
Utilities and Public Works Department staff (City Engineer and Construction Manager) met to
review delivery options for the Project. Public Works staff concurs with this request.
ENVIRONMENTAL REVIEW
This project is exempt from the California Environmental Quality Act (CEQA) per categorical
exemption 15301(b), Existing Facilities. The Community Development Department issued a
Notice of Exemption on September 9, 2019 (Attachment F).
FISCAL IMPACT
Budgeted: No Budget Year: 2019-20
Funding Identified: Yes
The DBR improvements were described in the 2019-21 Financial Plan, Capital Improvement
Program, on page 397, with a total project budget of $1,850,000. The severity of the corrosion at
the WTP pipe gallery was unknown at the time projects were prioritized for the Capital
Improvement Program. Of the available budget for the Project, $217,924 was expended for design
services (Attachments D and E), and $1,632,076 is remaining for construction, contingencies, and
construction management/inspection services. Contingencies are included at 25 percent of the
construction and construction management/inspection budget to address potential changes in scope
that may arise during construction. This is a higher rate of contingency to typical pipeline
replacement capital projects due to the complexity of the pipe gallery construction within the WTP.
The construction cost estimate for the project is $1,842,000, including the shop drawing cost from
PSI Water Technologies. Other project costs are outlined in the table below for a total project cost
of $2,674,250. As described in the Resolution (Attachment C), a budget transfer of $1,042,174 is
proposed from Water Fund, Unreserved Working Capital which is approximately $20 million
(unaudited financials). Since sufficient unreserved working capital is available to support this
project, staff does not recommend modifications to the approved 2019-21 capital project program.
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Disinfection Byproduct Reduction and Water Treatment Plant
Pipe Gallery Improvements Project (Specification #1000044)
Estimated Costs
Construction Cost Estimate $1,817,000
Construction Management (CM)/Inspection $250,000
Specialized Coatings Inspection $20,000
Engineering Construction Phase Support $40,000
Shop Drawings $25,000
Materials Testing and Printing $5,500
Construction and CM/Inspection Contingency (25%) $516,750
Total Project Cost1 $2,674,250
Project Funding
Total Funding Available $1,632,076
Funding from Water Fund, Unreserved Working Capital $1,042,174
Available Project Funding $2,674,250
Fiscal Analysis:
Funding Sources Current FY Cost Annualized
On-going Cost Total Project Cost
General Fund
State
Federal
Fees
Other: Water Fund $2,674,250 $130,000 $2,804,250
Total
$2,804,250
Ongoing annual costs are estimated at $130,000 for the operation of the DBR equipment. Funding
for the Project’s on-going operational costs was approved as part of the 2019-2021 Financial Plan
in the WTP operating budget.
ALTERNATIVES
Deny or defer approval to advertise. The City Council may choose to deny or defer the approval
to advertise this project. Staff does not recommend this alternative as the City is required to remain
in regulatory compliance of the Disinfection Byproduct Rule. Should this be denied or deferred,
the existing WTP pipe gallery pipeline will also continue to deteriorate, increasing the likelihood of
failure.
1 Excludes operating costs.
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City of San Luis Obispo, City Manager Report
Final City Manager Approval Approver Name Date Approved
ACM – Community Services Shelly 11/18/19
Reviewer Routing List Reviewer Name Date Reviewed
City Attorney JCD 11/15/19
City Engineer MH 11/18/19
Finance NH (finance)
November 15, 2019
FROM: Aaron Floyd, Utilities Director AF 11/14/19
PREPARED BY: Mychal Boerman, Deputy Director – Water
Jennifer Metz, Utilities Project Manager
SUBJECT: Award of Disinfection Byproduct Reduction and Water Treatment Plant Pipe
Gallery Improvements Project, Specification No. 1000044
RECOMMENDATION
Award a contract to Cushman Contracting Corporation. the amount of $1,990,700 for the construction
of the Disinfection Byproduct Reduction and Water Treatment Plant Pipe Gallery Improvements
Project, Specification No. 1000044 (Project).
DISCUSSION
On October 22, 2019, the City Council approved plans and specifications, authorized staff to advertise
for bids, and authorized the City Manager to award the construction contract if the lowest
responsible bid is within available Project funding (Attachment 1). The construction cost estimate
was $1,817,000 and contingency of $516,750 was identified for a total available budget of
$2,333,750.
On October 30, staff held a mandatory pre-bid meeting for the Project that was attended by six
contractors. Bids were opened on November 14, 2019 and Cushman Contracting Corporation was the
low bidder with a proposal of $1,990,700 which is lower than the total available budget of $2,333,750.
It is recommended that the Project be awarded to Cushman Contracting, Inc. The Contractor’s
references, license and registration with the Department of Industrial Relations have been verified. A
bid summary is provided in Attachment 2.
CONCURRENCES
The Public Works Department concurs with the recommended action.
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Award of Disinfection Byproduct Reduction and Water Treatment Plant
Pipe Gallery Improvements Project, Specification No. 1000044 Page 2
FISCAL IMPACT
The proposed budget is shown below. After completion, the budget savings will be moved to the
Water Fund’s Completed Projects account.
Fiscal Impact Summary
Costs By Type
Item Current Proposed Change
Construction Contract N/A 1,990,700$ 1,990,700$
Funding By Source
Item Current Proposed Change
Available Project Budget, including
approved contingency 2,333,750.00$ $343,050.00 $1,990,700.00
Total 2,333,750.00$ 343,050.00$ 1,990,700.00$
ALTERNATIVES
Deny award of the contract. The City Manager may choose to not award the contract and reject
all bids. Staff does not recommend this alternative. Delay of improvements could result in the
Water Treatment Plant being offline for unplanned repairs.
ATTACHMENTS
1. Council Agenda Report, October 22, 2019
2. Bid Summary
3. Contract Agreement, Cushman Contracting Corporation
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Department
Utilities
Fiscal Officer Date
Kelley Mattos
Department Head Date
Aaron Floyd
Cost Center and Account Title Fund Cost Center Account Amount
-
Cost Center and Account Title Fund Cost Center Account Amount
-
Project Title Award Project Task Amount
TTHM Byproduct Reduction Project 1016 1000044 2 250,000.00
250,000.00
Account Title Fund Cost Center Account Amount
Water Fund, Unreserved Working Capital 601 0000 32001 (250,000.00)
(250,000.00)
Accounting Date
Budget Manager or Finance Director Date
Posted By Process ID Date Period
BUDGET AMENDMENT REQUEST
CHANGE TO FUND BALANCE, WORKING CAPITAL OR DESIGNATION
PROJECTS AND AWARDS
EXPENDITURES AND TRANSFERS OUT
REVENUES AND TRANSFERS IN
PURPOSE
Use of unreserved working capital to increase construction contingencies for the disinfection byproduce reduction and water treatment plant
pipe gallery improvements project, specification no. 10000444.
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