MINUTES OF THE BOARD OF DIRECTORS
ALAMEDA COUNTY FLOOD CONTROL AND WATER CONSERVATION DISTRICT
SPECIAL BOARD MEETING
February 6, 2019
The following were present:
DIRECTORS: DENNIS GAMBS
ANGELA RAMIREZ HOLMES
DIRECTORS ABSENT: SANDS FIGUERS
ZONE 7 STAFF: VALERIE PRYOR, GENERAL MANAGER
OSBORN SOLITEI, TREASURER/ASSISTANT GENERAL MANAGER, FINANCE
JARNAIL CHAHAL, ENGINEERING MANAGER
CAROL MAHONEY, INTEGRATED WATER RESOURCES MANAGER
COLTER ANDERSEN, PRODUCTION MANAGER
RHETT ALZONA, PRINCIPAL ENGINEER, FACILITIES ENGINEERING SECTION
MONA OLMSTED, ASSOCIATE CIVIL ENGINEER, FACILITIES ENGINEERING
ALEXANDRA BRADLEY, COMMUNICATIONS SPECIALIST
LIRA WALTER, ACTING EXECUTIVE ASSISTANT
COUNSEL: DAVID ALADJEM, DOWNEY BRAND
Item 1 -
CALL ZONE 7 WATER AGENCY MEETING TO ORDER
President Ramirez Holmes called the meeting to order at 6:32 p.m. and the Board went into Closed Session immediately.
Item 2 - Closed Session
(a) Conference with Legal Counsel - Potential litigation pursuant to Gov't Code section 54956.9(d) (2)-2 cases.
Item 3 -
OPEN SESSION AND PLEDGE OF ALLEGIANCE
President Ramirez Holmes called the meeting back into session at 7:01 p.m. and led the Salute to the Flag.
Item 4 -
REPORT OUT OF CLOSED SESSION
President Ramirez Holmes reported that the Board met in Closed Session on the items on the agenda and no reportable actions were taken.
President Ramirez Holmes also introduced Jersey Andersen, daughter of Colter Andersen, Production Manager, who was present to observe the meeting. Ms. Andersen is a sixteen-year-old high school student who is interested in becoming a marine biologist. President Ramirez Holmes thanked her for attending the meeting.
Item 5 -
There were no public comments.
Item 6 -
AWARD OF CONSTRUCTION CONTRACTS FOR THE PPWTP UPGRADES AND OZONATION PROJECT
Valerie Pryor, General Manager, introduced Mona Olmsted, Associate Civil Engineer, Facilities Engineering, who gave a presentation on the Patterson Pass Water Treatment Plant (PPWTP) Upgrades and Ozonation Project. She provided an overview of the project objectives, scope, and benefits. She also discussed the major facilities, project schedule, costs and funding sources.
Ms. Olmsted explained that the project would improve treated water quality, plant reliability, treatment plant capacity, and treated water storage capacity and upgrading major plant components nearing the end of their use life. The new facilities would include an ozone generation building, and ozone contactor structure, a chlorine contact basin to provide backup for the ozone process, filters, chemical storage and feed facilities, a new clear well or treated water storage tank, and a treated water pump station. The Demolition and modifications would include: ultra-filtration (UF) facilities, clarifiers, wash water recovery basins, some chemical facilities and the entrance to the plant. The project is expected to be mobilized next month, and will be completed in approximately three years.
The total cost for planning, design, and construction is estimated at $110M, funded by a combination of water rates, new connection fees, along with $19M in bonds. A projected net increase of about $800,000 annually will be a result of ozone treatment; however, increased energy and chemical costs will be offset by savings in the anticipated reduction of chemicals currently being used.
The addition of ozone is expected to be a more effective disinfection process than chlorine, and will reduce the formation of harmful disinfection by-products (DBP). Other agencies have also found that ozone enhances other steps in the water treatment process. As shown in many studies, ozone is the most effective treatment method for treating contaminants of emerging concern (CECs) and improving taste and odor causing compounds.
Ms. Olmsted provided visuals of the PPWTP site to display where the new construction would take place, an explanation of the ozonation process and examples of future additional facilities. She displayed the project schedule for its entirety from the beginning stages of planning, design, bid and award, to project completion by early 2022. Ms. Olmsted also explained the importance of coordinating treatment plant shutdowns between the Del Valle and Patterson Pass facilities during construction.
The project was classified as two separate projects under the Capital Improvements Plan (CIP), but combined for implementation purposes. The PPWTP upgrades are estimated at $65M, while the ozonation component is projected at approximately $45M. Construction for both will be funded by Fund 120, the Water Enterprise Capital Renewal Replacement and System-Wide Improvements Fund, and Fund 130, the Water Enterprise Capital Expansion Fund. The upgrades are 100% funded by available fund balances, while the ozonation project is partially funded by Zone 7 issued bonds designated for both Del Valle and Patterson Pass Water Treatment Plant projects. Upon PPWTP's project completion, Staff expects balances in both Fund 120 and Fund 130 to remain in compliance with the Board approved Reserve Policy.
The construction phase will require a team to support Zone 7 for a successful project completion. C. Overaa & Co. provided the lowest responsible and responsive bidder, and will perform the project construction at about $76M plus a 10% contingency for potential change orders. Covello has been supporting the project during its design stages by providing constructability review as well as in the construction phase. Covello will also take on a much greater role as an extension of staff to provide construction management services estimated at $6.9M which includes a 10% contingency. CDM Smith Inc. will provide engineering support services during construction for approximately $7.5M which also includes a 10% contingency. Environmental Science Associates (ESA) prepared the initial study in the mitigated negative declaration for compliance with CEQA, and their role is to provide construction surveys and biological monitoring that will also provide construction worker training throughout the construction phase to ensure compliance with the Mitigation, Monitoring and Reporting Program included in the CEQA document.
Staff recommended that the Board approve four resolutions for the PPWTP Upgrades and Ozonation Project:
Resolution No. 1: a) Approve plans, specifications, appendices, and addenda; b) Accept the bid and award a contract to C. Overaa & Co. as the lowest responsive and responsible bidder for the bid amount of $76,139,000; c) Authorize the General Manager to negotiate and execute the contract with C. Overaa & Co. in an amount not-to-exceed $76,139,000; d) Authorize the General Manager to issue change orders as and when needed in an amount not-to-exceed $7,613,900 (10% of contract amount); and e) 6 Appropriate $19,078,361 in the FY 2018-19 budget for this project from Fund 120 ($4,425,796) and Fund 130 ($14,652,565).
Resolution No. 2: Authorize the General Manager to negotiate and execute an amendment to the contract with CDM Smith Inc. for engineering support services in an amount not-to-exceed $7,515,000 (includes 10% contingency).
Resolution No. 3: Authorize the General Manager to negotiate and execute an amendment to the contract with Covello, A Psomas Company, for construction management services in an amount not-to-exceed $6,895,000 (includes 10% contingency).
Resolution No. 4: Authorize the General Manager to negotiate and execute an amendment to the contract with ESA for environmental support services in an amount not-to-exceed $225,000 (includes 10% contingency).
Ms. Olmsted welcomed questions and comments from the Board.
Director Palmer asked which contractor would be accountable for taking the lead on the project. Ms. Olmsted indicated that Zone 7, as the owner, would ultimately be making all the decisions. Covello will act as an extension of staff as the construction manager, while CDM Smith Co. has a distinct role as the design consultant.
Director Stevens inquired whether PPWTP's filtration system was conventional or UF. Ms. Olmsted explained that the pant currently has two parallel treatment trains, one being the UF and the other being conventional. Director Stevens then asked how much of the 24 million gallons will be expected to run through a UF or conventional system. Ms. Pryor responded that the UF method will no longer be used, as it will be replaced with a traditional ozone system. Director Gambs asked whether the cost that will be paid for by rate payers was due to the restoration of the capacity that would have been available with the UF system. Ms. Pryor confirmed.
Director Sanwong asked about the alternative of not moving forward with the project. Ms. Pryor responded by explaining that not moving forward with the project would mean not having the more modern water treatment methodology, and Zone 7 would also be susceptible to taste and odor complaints. Many areas of the plant are fairly old and need replacement, so high level maintenance would still be necessary. The expansion and extra clear well storage are essential to Zone 7's ability to meet future growth demands and add increased reliability to the system. Rhett Alzona, Principal Engineer, Facilities Engineering Section emphasized that the UF system is deteriorating and the cost to replace it would be equal to this project. Membranes have also been modified due to technology advancement, and current dimensions no longer fit the existing rack. With this in mind, the whole system would need to be replaced, which is equivalent in cost to reverting to a conventional plant.
Director Quigley asked if there would be a way to track energy usage changes. Ms. Pryor indicated that there will be means of tracking the increase in energy use, changes in chemicals and a decrease in sludge disposal. He was also pleased to learn about the viable plan to coordinate plant shutdowns. Ms. Pryor mentioned that quarterly meetings would be held to plan for them. Director Quigley inquired about the future potential plans for solar. Ms. Pryor explained that the current main focus is on the project itself, but staff has been exploring grants for solar. Director Gambs added that the plant will need to operate for a reasonable length of time in order to assess energy needs for solar.
President Ramirez Holmes expressed her concerns with regard to the nearly $20M additional appropriations that would be needed. She inquired whether the funds would only be available in the fund balance if cuts were made to the Capital Improvement Program (CIP). President Ramirez Holmes also asked for clarification as to how the funds were listed in the budget, as she was under the impression that the funds were initially unavailable at the time of Board review. She asked if there would be projects that would be deferred as a result of moving forward with the project in the CIP. Osborn Solitei, Treasurer/Assistant General Manager, Finance, explained that the CIP program is funded mainly by Fund 130, which currently has a balance of $98.5M. It receives an ongoing amount of about $35M for future projects, and $81M currently supports the PPWTP project. Any potential impacts to it may take place by 2021 to 2023 when planning for additional major projects expected in the future. He added that Funds 120 and Fund 130 would have enough allocations for the project in the next two fiscal years, FY 2018-19 and FY 2019-20. Ms. Pryor added that the budget only reflected an estimated spending plan, but there was in fact a balance of undesignated funds. Other projects would not need to be deferred in the current CIP, but a future shortfall could be identified as it is updated in a few years. President Ramirez Holmes articulated her apprehension with a future shortfall that could impact water rates for the public in the near future. She was still concerned for future projects that would be dropped as a result of approving the addition appropriations for the PPWTP project. Mr. Solitei assured President Ramirez Holmes that there would be no reduction in the CIP as it stands, and water rates were not going to be increased in the next three to four years. The same AMP rate of about $12-13M per year still funded the existing R&R, and connection fees received roughly $35M. The decisions the Board would have to make will be for major future projects would take place in about four to five years. He reiterated that no projects would be dropped in the current CIP, and there was an available fund balance for the $110M. President Ramirez Holmes explained that she simply wanted to make the best decision in order to avoid potential reverberations down the line that could impact future projects, and citizens of the public. Ms. Pryor explained that it was noted through the last budget process that the CIP funds have been underspent over the years, which is why the undesignated funds were available. The CIP would eventually be updated to reassess the facilities' conditions, changes in demand based on new legislation, which will assist in making an informed decision. Currently, there would be no unexpected impact in the CIP, there are enough funds to complete near-term projects, and this would actually progress expenditures with budget levels.
President Ramirez Holmes asked Engineering if there were a list of items that caused the project to be more expensive than originally anticipated. Mr. Alzona addressed her question by explaining that the budget was established during the 60% design, which has since then been updated with the additions of scope items and contingencies that affected the plans for the plant for its entirety. Ms. Pryor indicated exact costs are not generally available until the 100% design has been completed and until a project has gone out to bid. Unfortunately, the PPWTP original designs were not well documented 50 years ago; so many modifications were made to correct some of the current findings.
Director Palmer stated that she was all in favor for spending $110M to gain an essentially new plant. She felt that it was a great investment for increased reliability and public safety.
President Ramirez Holmes welcomed comments from the public.
Linda Kelly, a Pleasanton resident, asked the Board to postpone the PPWTP Ozonation Project in order to allow more time for public outreach on changes in the project cost. She stated that it would be wise to wait until the Del Valle Water Treatment Plant Ozonation Project has gone online, since Zone 7 has already gone into considerable expenditure for its completion. She asked the Board to consider waiting to see how well DVWTP functions before moving forward with the project at PPWTP.
Director Stevens recapped that there were only two bidders. The cost of construction has increased by 40% in the last few years, and quality contractors are difficult to come by. Zone 7 would be fortunate to have the same team from DVWTP, as this coordination and prior knowledge would translate to a cost savings. He encouraged a "yes" vote on moving forward with the project.
Director Quigley concurred with Director Stevens' comments. He added that Zone 7 has been transparent at keeping the public informed by providing tours and held many meetings to give the public adequate information about ozone. It was a tried and proven technology by many other local agencies. The increase in energy usage could also be offset by exploring the potential for solar in the near future.
Director Gambs commented that delaying a decision would likely result in an increase in costs. The bid Zone 7 received was actually lower than the engineers' estimate. He stated that the UF needs to be replaced, and the five-million-gallon reservoir provides operational flexibility. Overall, the public will see a direct benefit from ozone, as it has the ability to improve the taste and odor component. Director Gambs felt strongly that it was something the public would appreciate.
Director Sanwong also believed that moving forward with the project was the best option. Delaying the process could also nullify the efforts and work that has been done for the project as things could change over time. She recognized the concern for impacts it could have on future projects; however, replacing aging infrastructure is extremely important.
President Ramirez Holmes stated that delaying the project would only create more problems. She reiterated her concerns of the costs and how it may still impact future projects. However, it was ultimately a good project to prevent unknown contaminants from affecting the water supply. President Ramirez Holmes would have liked to see additional comparison and analysis take place, but she expressed her support of moving forward with the project. She then asked for a motion.
Director Stevens stressed the importance of operating both DVWTP and PPWTP. He added that code designs are anticipated to change this year. Director Palmer agreed. She indicated that ozonation is needed for the cyanotoxins that are becoming more prevalent.
Director Gambs moved to approve the first resolution and Director Quigley seconded the motion. The resolution was passed with a roll call vote 6-0, with Director Figuers absent.
Resolution No. 19-09 Award of Construction Contract for the Patterson Pass Water Treatment Plant Upgrades and Ozonation Project
Director Gambs moved to approve the second resolution and Director Quigley seconded the motion. The resolution was passed with a roll call vote 6-0, with Director Figuers absent.
Resolution No. 19-10 Engineering Support Services Contract for the Patterson Pass Water Treatment Plant Upgrades and Ozonation Project
Director Gambs moved to approve the third resolution, and Director Quigley seconded the motion. The resolution was passed with a roll call vote 6-0, with Director Figuers absent.
Resolution No. 19-11 Construction Management Services Contract for the Patterson Pass Water Treatment Plant Upgrades and Ozonation Project
Director Gambs moved to approve the fourth resolution, and Director Quigley seconded the motion. The resolution was passed with a roll call vote 6-0, with Director Figuers absent.
Resolution No. 19-12 Environmental Support Services Contract for the Patterson Pass Water Treatment Plant Upgrades and Ozonation Project
Item 7 -
REQUEST FOR OUT-OF-STATE TRAVEL TO ATTEND UPCOMING ASSOCIATION OF CALIFORNIA WATER AGENCIES' DC CONFERENCE
Ms. Pryor explained that the Association of California Water Agencies' (ACWA) DC Conference helps to focus California water agencies on federal, legislative and regulatory strategies. Two directors have submitted a request to attend the conference at the estimated cost of $4,000 per person.
Director Sanwong inquired about what information directors have learned from attending the ACWA DC Conference in the past. Ms. Pryor explained that the purpose of the conference is to demonstrate the importance of national California water issues and to assist in gaining an understanding of federal, legislative and regulatory strategies. Meeting highlights include learning from congressional leaders who are head of committees that are important to water or California delegations, top officials at the Environmental Protection Agency, the Army Corps of Engineers, and the Bureau of Reclamation and to learn about what to expect in 2019.
Director Quigley stated that he would like to withdraw his interested in attending the conference. He did believe in the value of the one-on-one time with the congressmen, and meeting with senators to discuss important issues. He also stressed the importance of seeking funding and grants.
Linda Kelly expressed her support in Director Palmer attending the conference, as she has been very involved with ACWA.
President Ramirez Holmes asked that the request to attend this conference was brought to the Board during October meeting in order to allow time for planning and scheduling. She would like to implement a rotation for one director to attend, as she was not in support of two people attending the conference.
Director Palmer stated that it would be valuable for each director to attend on a rotating basis.
President Ramirez Holmes moved approval, and Director Stevens seconded the motion. The item was passed with a 6-0 voice vote, with Director Figuers absent.
Resolution No. 19-13 Authorization for Out-of-State Travel to Attend Upcoming Association of California Water Agencies' DC Conference
Item 8 -
President Ramirez Holmes adjourned the meeting at 8:07 p.m.