Item 6-N

City Council Meeting: 02-23-99 Santa Monica, California

TO: Mayor and City Council

FROM: City Staff

SUBJECT: Recommendation to Award a Construction Contract for the Dry Weather Runoff Reclamation Facility to Pacific Mechanical Corporation, Authorize the City Manager to Negotiate and Execute a Contract with Black & Veatch for Construction Management, Accept a State Revolving Fund Loan from the State Water Resources Control Board, Authorize the City Manager to Negotiate and Execute an Agreement for Cost-Sharing with the City of Los Angeles, and Authorize the City Manager to Negotiate and Execute a Contract with the Metropolitan Water District for Recycled Water Credits for the Dry Weather Runoff Reclamation Facility

Introduction

This report recommends that the City Council award a contract to Pacific Mechanical Corporation in the amount of $5,663,000 for construction of the Dry Weather Runoff Reclamation Facility (DWRRF) - Phase 1. Phase 1 consists of construction of the treatment facility. Phase 2 will consist of construction of the recycled water distribution system. Staff will return to Council at a later date to award the Phase 2 contract.

In concert with this award, staff recommends that the City Council authorize the City Manager to negotiate and execute a professional services contract with Black & Veatch in an amount not to exceed $458,380 for construction management; accept a State Revolving Fund (SRF) loan from the State Water Resources Control Board; authorize the City Manager to negotiate and execute an agreement for cost-sharing with the City of Los Angeles; and, authorize the City Manager to negotiate and execute a contract with the Metropolitan Water District for recycled water credits for the project.

Background

Since 1987, the City has conducted several feasibility studies on constructing a facility for the treatment of dry weather flows from the Pico-Kenter and Santa Monica Pier storm drains. It has been determined from these studies that dry weather runoff caused by irrigation, spills, and paved area wash downs carries with it sufficient run-off pollution (oil and grease, heavy metals, pathogens) to warrant the construction of a permanent dry weather runoff reclamation facility (DWRRF).

The primary function of the proposed facility will be to treat water from the Pico-Kenter and Santa Monica Pier storm drains for reuse. As a state-of-the-art facility, the DWRRF will provide environmental, educational, and health benefits. The treatment facility will filter and disinfect the storm drain water so that it may be reused for various applications including irrigation and dual plumbing. City irrigation sites will include Woodlawn Cemetery, the Olympic Boulevard median, Memorial Park, the Civic Center, and Palisades Park. Caltrans has also expressed interest in using the water for the Santa Monica Freeway landscaping.

The proposed location for the facility is adjacent to the Moss Avenue Sewage Pumping Station located at Appian Way and Moss Avenue just south of the Pier Bridge. The facility will include educational exhibits to raise awareness of runoff pollution and present pollution prevention options. On July 14, 1998, the City Council approved the final design of the facility. The Arts Commission, Architectural Review Board, and Coastal Commission have also approved the DWRRF plans.

Discussion

Construction Contract

A Notice Inviting Bids for the construction of the DWRRF project was published in the Argonaut on November 19 and 26, 1998. The Notice Inviting Bids, along with the plans and specifications, was also submitted to eight construction Journals, and was sent to six women/minority business enterprise (WMBE) associations. Bid packages were requested by 36 contractors. The City Clerk's Office received four sealed bids which were publicly opened and read aloud on December 30, 1998 by the Deputy City Clerk. The bid results were as follows:

The low bidder, Pacific Mechanical Corporation, supplied the City with several references and all similar projects reported that the contractor's work was satisfactory. In addition, staff called two projects not supplied by the contractor as references and those projects reported that the contractor's work was satisfactory. These referenced projects include: $12,000,000 wastewater treatment plants in El Dorado Hills, CA and Cameron Park, CA, and a $4,000,000 wastewater treatment plant in Palm Desert, CA. Pacific Mechanical Corporation performed satisfactorily on a previous project for the City, the construction of the Moss Avenue Pump Station Structural Shell. The State Contractors' License Board verified that the contractor's license and all listed subcontractors are current, active, and in good standing. Staff has also verified that the contractor and listed subcontractors are not listed in the current book of federally debarred contractors. Staff anticipates that construction of the DWRRF (Phase I) will begin in March 1999 and will be completed in 12 months. Construction of Phase II is expected to begin approximately in July 1999 and continue for 6 months. Phase II consists of the installation of the recycled water distribution system.

Construction Management

City staff issued a Request for Proposal (RFP) for construction management services for the DWRRF construction on October 20, 1998. Staff received responses from three firms. A staff committee consisting of representatives from Engineering, Utilities, and Administration divisions of the Environmental and Public Works Management Department reviewed the responses and interviewed the three firms. Selection criteria included an understanding of the work and other impacted projects, the proposed approach, experience with similar work, qualifications of staff, public relations plan, and billing rates.

The review committee recommends the firm of Black & Veatch for the construction management of the DWRRF project. Black & Veatch has managed several City projects including the Moss Avenue Pump Station Structural Shell, the B.I.G. project, and peer review for the Coastal Interceptor, all with excellent reviews. The majority of the tasks associated with the DWRRF include overseeing the contractor during construction to ensure that the contractor conforms with plans and specifications, monitoring traffic control and detour plans, reviewing change order requests, and providing information to the contractor on an as-needed basis.

SRF Loan

In January 1998, the City Council adopted a resolution authorizing City staff to apply for a State Revolving Fund (SRF) loan from the State Water Resources Control Board. The SRF loans funds authorized under the Federal Clean Water Act to municipalities for construction of wastewater treatment plants. These loans are used to upgrade antiquated systems or build new treatment plants. Staff submitted a proposal to the State Water Resources Control Board for DWRRF construction funding and was awarded a $5,000,000 loan. The terms of the loan are 20 years at 2.5% interest rate. The amortized repayment cost of the loan is $320,000 per year. This cost, as with the cost of operations and maintenance of the DWRRF, will be partially offset by the sale of the recycled water and the Metropolitan Water Districts' credits. In order to qualify for the SRF loan, construction of the treatment facility must commence by May 1999.

Cost Sharing with the City of Los Angeles

In 1998, representatives from the City of Los Angeles Board of Public Works committed to becoming a full partner in the construction and operation of the DWRRF subject to final confirmation by the Los Angeles City Council. Full partnership will include sharing the costs of design, construction, and operation and maintenance of the plant and repayment of the SRF loan. City staff have been negotiating the final terms of the agreement with Los Angeles for the past few months. Staff anticipates that a final agreement will be approved by the Los Angeles City Council and signed by both cities by June 1999.

Metropolitan Water District Agreement

Through its Local Resources Program (LRP), the Metropolitan Water District (MWD) makes available funds to encourage water recycling projects. The proposed agreement with the MWD involves a $150 per acre foot rebate on all recycled water sold from the DWRRF. Staff submitted the DWRRF for participation and was selected to participate in the LRP. In order to proceed as part of the LRP, City Council authorization to allow the City Manager to negotiate and execute a contract with the MWD is necessary. Once the DWRRF is operational, the rebate will appear as a credit on the City's water bill from the MWD. This rebate will be transferred to the Stormwater Management Fund to offset on-going and annual costs associated with the DWRRF.

Budget/Financial Impact

The following are the sources and uses of funds associated with Phase I construction and project management for the total Dry Weather Runoff Reclamation Facility (DWRRF).

FUNDING SOURCES

$5,000,000 - Loan from the State Revolving Fund of the State Water Resources Control Board.

$ 440,000 - Reimbursement from the City of Los Angeles for 50% of the design costs already incurred.

$1,000,000 - Proposition A grant from the Los Angeles County Parks and Open Space District. (20-760-661-20098-8900-99395)

$ 238,941 - Wastewater CIP budgeted for stormwater system improvements prior to separation of the Stormwater Management Fund from the Wastewater Fund. (31-760-661-24990-89000-99209)

$ 54,577 - Wastewater CIP budgeted for stormwater system improvements prior to separation of the Stormwater Management Fund from the Wastewater Fund. (31-760-661-20093-8900-99208)

$6,733,518 - Total

FUNDING USES

The SWRCB loan and Proposition A grant will be periodically drawndown following actual expenditures by the Stormwater Fund. To provide adequate cash flow during the project, it will be necessary for the Water Fund to loan the Stormwater Fund $1,500,000. Upon completion of the project, the loan will be repaid with interest at the interest rate actually earned by City funds during the construction period.

To award the construction and project management contracts, the following budget actions are necessary to award this project:

1. Appropriate $5,440,000 from the Stormwater Management Fund balance to CIP account # 34-760-661-20099-8900-99395. The $1,000,000 Proposition A grant has already been appropriated at CIP account #20-760-661-20098-8900-99395.

2. Budget revenue at the following account numbers:

$ 440,000 at 34-500-661-00000-0273-10000.

$1,000,000 at 20-500-661-00000-0625-10000.

Recommendation

Staff recommends that the City Council:

1. Award a contract to Pacific Mechanical Corporation, the lowest responsible bidder, in the amount of $ 5,663,000;

2. Award a contract to Black & Veatch for construction management services in the amount of $ 458,380;

3. Authorize the City Engineer to issue any necessary change orders to complete additional work within budget authority;

4. Approve above outlined budget actions including the loan from the Water Fund;

5. Accept a $5,000,000 SRF loan from the State Water Resources Control Board;

6. Authorize the City Manager to negotiate and execute an agreement for with the City of Los Angeles for a 50% cost-sharing partnership on the project, and;

7. Authorize the City Manager to negotiate and execute a contract with the Metropolitan Water District for recycled water credits for the DWRRF.

Prepared by:

Craig Perkins, Director, Environmental & Public Works Management

Anthony Antich, P.E., City Engineer

Greg de Vinck, P.E., Civil Engineer

Roger Gorke, Stormwater Management Coordinator