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Home My WebLink AboutStaff Report 9349 City of Palo Alto (ID # 9349) Policy and Services Committee Staff Report Report Type: Action Items Meeting Date: 6/21/2018 City of Palo Alto Page 1 Summary Title: Status Update of Audit Recommendations for Cross Bore Inspection Contract Audit Title: Staff Recommendation That the Policy and Services Committee Recommend the City Council Accept the Status Update on the Cross Bore Inspection Contract Audit From: City Manager Lead Department: Utilities Recommendation Staff recommends the Policy and Services Committee recommend that the City Council accept the attached Status of Audit Recommendations for the Cross Bore Inspection Contract Audit. Background The City Auditor’s Office previously issued an audit with objectives to determine whether Hydromax USA, LLC, (Hydromax) met its contract requirements for inspecting City sewer pipelines to rule out cross bores and whether the City exercised appropriate contract oversight. This will be the first update since the audit was presented to Council on June 1, 2017. (https://www.cityofpaloalto.org/civicax/filebank/documents/60898) Staff provided an update to the Utility Advisory Commission (UAC) on January 18, 2018. (https://www.cityofpaloalto.org/civicax/filebank/documents/62828) Based on lessons learned from the initial Hydromax investigation, staff recommends that subsequent inspections be phased, with the highest risk laterals inspected first. Staff intends to issue a request for proposal (RFP) for phase 2 of the Cross-Bore Safety Program by end of calendar year 2018 which will address high risk laterals that were not completed previously. The RFP will address the auditor’s recommendation to prioritize a list of sewer pipelines to inspect and incorporate applicable industry standard National Association of Sewer Service Companies (NASSCO) guidelines into the contract specifications. City of Palo Alto Page 2 Since the audit, two Operations staff members have been NASSCO certified for CCTV video inspection. The certification enables the operators to identify defects in a pipeline system with standardized codes and ratings. Staff has requested for additional budget of $1,000,000 in FY 2019 to fund the first year of the phase 2 contract. Attachments:  Cross Bore Inspection_June 2018 Final 5-31-18 STATUS OF AUDIT RECOMMENDATIONS UTILITIES DEPARTMENT: CROSS BORE INSPECTION CONTRACT AUDIT ISSUED 6/1/17 6055040 PAGE 1 The City Manager has agreed to take the following actions in response to the audit recommendations in this report. The City Manager will report progress on implementation six months after the Council accepts the audit report, and every six months thereafter until all recommendations have been implemented. Recommendation Responsible Department(s) Original Target Date and Response Current Status Implementation Update and Expected Completion Date Finding: 1. Hydromax inspected 10,791 (60 percent) of 18,028 laterals and could not complete nearly half of its attempted inspections because of adverse conditions in sewer lines. 1.1. Identify sewer pipelines that Hydromax did not fully inspect or attempt to inspect. Prioritize these sewer pipelines for inspection under a future contract(s). To the extent possible, based on past experience, predict potential inspection challenges, such as poor pipeline conditions, that may hinder future inspections. Disclose these challenges in future contract solicitations. Utilities Concurrence: Agree Target Date: Late 2018 Action Plan: Staff will review a previously generated prioritization list based on assessment of risk for property classifications, review inventory of parcels that do not have an associated lateral, and develop a final prioritization list and cost estimates based on experience and data from the original crossbore contract. Implementation of next phase will proceed based on available funding. In Progress June 2018 Management Update: Utilities Engineering performed a risk analysis of the laterals staff identified as not completed during the initial cross-bore project, to prioritize future inspection and predict potential inspection challenges. The prioritization was based on criteria such as occupancy rates, installation of safety devices, service material, age of service, and distance from gas service. Phase 2 priority categories include high occupancy properties, gas services without excess flow valves, separation distance between sanitary sewer lateral and gas service, and polyethylene (PE) material. Staff expects to issue the RFP for Phase 2 of the crossbore safety inspection program, which will include the risk analysis findings, in summer 2018. Staff has requested for additional budget of $1,000,000 in FY 2019 to fund the contract. Expected Completion Date: Q2 of FY 2019 Finding: 2. City oversight and NASSCO contracting guidelines can help ensure accurate, complete, and cost effective future inspections. 2.1. Identify missing data in its laterals database by comparing it with independent databases such as Hydromax inspection data. Update its Utilities Concurrence: Agree Target Date: Mid 2018 Action Plan: In Progress June 2018 Management Update: Staff is in the process of reconciling and updating the lateral information in the GIS database, to STATUS OF AUDIT RECOMMENDATIONS UTILITIES DEPARTMENT: CROSS BORE INSPECTION CONTRACT AUDIT ISSUED 6/1/17 6055040 PAGE 2 Recommendation Responsible Department(s) Original Target Date and Response Current Status Implementation Update and Expected Completion Date laterals database to ensure it can effectively serve to track inspection progress. Staff will utilize existing data to review and update the City’s GIS to reflect missing active City-owned laterals. This will be done in conjunction with the inventory of parcels referenced in Finding 1.1. identify missing laterals. The lateral database will be updated prior to issuance of the RFP for Phase 2 of the project. Common sewer laterals are shared by more than one parcel, thus there is not a one to one ratio of laterals to premises. Staff has started a preliminary review of the various scenarios related to parcels without sanitary sewer laterals and has updated GIS with the two latest capital improvement projects. Staff is working on identifying a dedicated resource to complete the reconciliation process between City mapping data on GIS and Hydromax findings. Expected Completion Date: Q2 of FY 2019 2.2. Incorporate relevant and useful provisions from NASSCO’s contract template, such as linear foot pricing and prior verification of inspector certifications, in future sewer inspection contracts. Consult with the Administrative Services Department’s purchasing staff and the City Attorney’s Office to determine if City can enforce NASSCO template provisions that it plans to incorporate. Utilities Concurrence: Agree Target Date: Mid to Late 2018 Action Plan: Staff will review the NASSCO contract template and look for provisions to incorporate in a future City contract, as applicable. In Progress June 2018 Management Update: Utilities Engineering is in the process of reviewing and adopting applicable National Association of Sewer Service Companies (NASSCO) standards which are appropriate for the City. These include industry standards for the rehabilitation of underground pipelines and continued acceptance and growth of trenchless technologies. Staff has started reviewing the NASSCO contract templates and will incorporate applicable NASSCO standards that can be applied to a future contract. STATUS OF AUDIT RECOMMENDATIONS UTILITIES DEPARTMENT: CROSS BORE INSPECTION CONTRACT AUDIT ISSUED 6/1/17 6055040 PAGE 3 Recommendation Responsible Department(s) Original Target Date and Response Current Status Implementation Update and Expected Completion Date Expected Completion Date: Q2 of FY 2019 2.3. Identify gaps in staff expertise needed to monitor and facilitate field inspections and to review and track inspection data. Develop a training and certification plan for field staff who should have the expertise to help meet the City’s inspection goals and objectives. Utilities Concurrence: Agree Target Date: Late 2018 to Start of future contract Action Plan: Staff will continue to review staffing gaps for office and field personnel. If gaps are identified and are not resolved by training, additional expertise will be identified within the City or via contract. In Progress June 2018 Management Update: Currently two Operations Staff members are NASSCO certified for CCTV inspection. Staff is working on identifying a dedicated resource for the GIS and database analysis experience. Expected Completion Date: On-going