HomeMy WebLinkAboutStaff Report 255-08City of Palo Alto
City Manager’s Report
TO:HONORABLE CITY COUNCIL
FROM:CITY MANAGER DEPARTMENT: UTILITIES
DATE:
SUBJECT:
JUNE 2, 2008 CMR: 255:08
ADOPTION OF A WATER FUND BUDGET AMENDMENT ORDINANCE
IN THE AMOUNT OF $30,000 AND APPROVAL OF AN AMENDMENT
TO CONTRACT C07120333 WITH RMC WATER & ENVIRONMENT,
INC. TO ADD $25,000 FOR COMPLETION OF A RECYCLED WATER
FACILITY PLAN AND PREPARATION OF ENVIRONMENTAL
DOCUMENTS FOR CAPITAL IMPROVEMENT PROGRAM PROJECT
WS-07001, (RECYCLED WATER DISTRIBUTION SYSTEM
EXTENSION) FOR A TOTAL NOT TO EXCEED AMOUNT OF $267,700
RECOMMENDATION
Staff recommends that Counci!:
Adopt a Budget Amendment Ordinance (BAO) in the amount of $30,000, transferring
$30,000 from the Water Fund Rate Stabilization Reserve to existing Capital Improvement
Project (CIP) WS-07001, (Recycled Water Distribution System Extension); and
Approve and authorize the City Manager or .designee to execute an amendment to the
existing contract with RMC Water & Environment, Inc. (Attachment A) for a not-to-
exceed amount of $25,000 for planning and engineering design services for the Recycled
Water Expansion Capital Improvement Program Project (WS-07001), bringing the total
not to exceed amount of the contract to $267,700.
BACKGROUND
On April 16, 2007. the City Council approved and authorized the City Manager to execute a
contract with RMC Water & Environment, Inc. (RMC) for preparation of a Recycled Water
Facility Plan and preparation of associated environmental documents for Capital Improvement
Pro~am Project WS-07001 (CMR:!9!:07). The original contract included $220,700 for
professional services and reimbursable expenses, plus a contingency of $22,000, for a total not to
exceed amount of $242,700.
The original Scope of Work (SOW) focused primarily on preparation of a Recycled Water
Facility Plan and associated environmental documents that would position the project to compete
CMR: 255:08 Page 1 of 3
for State and Federal grant funding and low interest loans. This generally included analyses of
all of the essential components of a potential expanded recycled water system to serve additional
users in the City of Palo Alto.
DISCUSSION
The project cost increase can be attributed to a variety of factors that were either beyond the
original SOW or required much more detailed work within the existing SOW. The primary
drivers for the request include:
The State Water Resources Control Board (SWRCB) administers various grant and loan
programs for projects of this nature. In order to apply for these projects, certain milestones
must be met. While the original SOW included a reasonable approximation of these
milestones, the SWRCB recently notified the City that it requires an additional cultural
resources study as part of the environmental document. The details of the additional study
are included in Appendix B. This task is expected to cost an additional $19,500.
As part of the Facility Plan and Enviromnental document preparation, RMC researched and
developed plant operations data and storage/pumping facility alternatives at the Regional
Water Quality Control Plant (RWQCP) that were beyond what was envisioned in the original
SOW. This was necessary to assess the ability of the RWQCP to meet current and future
recycled water deliveries. Potential onsite and offsite storage options were also reviewed as
another option to meet peak flow- demands. This task is expected to cost an additional
$17,500.
Considering the densely urban nature of the project route, RMC developed alternative
alignments that are included in the enviromnental documentation. While not required for a
Mitigated Negative Declaration, this approach gives some flexibility to choose the
appropriate route and may also be helpful towards satisfying federa! National Environmental
Policy Act requirements that will be required if the project were to seek any federal ~ants.
This task is expected to cost an additional $9,000.
RMC prepared an application to place the project on the State Revolving Fund (SRF) priority
list that was not included in the original SOW. SRF loans have interest rates on the order of
one half of the CA State General Obligation Bond Rate and can reduce project costs
significantly. This task is expected to cost an additional $1,000.
These additional tasks will require expenditure of the original $22,000 contract contingency as
well as an additional $25,000, for a total of $47,000.
RESOURCE IMPACT
A BAO is required in the amount of $30,000 to add funds to the existing recycled water CIP
(WS-07001). Of the $30,000 total, $25,000 will be allocated to the consultant contract with
RMC and $5,000 is for staff costs. With the addition of the $30,000, the original budget for this
project of $250,000 (comprised of contract and staff costs) increases to $280,000. To fund this
amendment, $30,000 will be transferred from the Water Rate Stabilization Reserve.
CMR: 255:08 Page 2 of 3
The FY 07-08 budget contains an expected grant credit from the SWRCB of $75,000. The grant
will result in a net project cost of $205,000. There will be no impact to the General Fund.
POLICY IMPLICATIONS
Amending the contract is consistent with Council policy. This project is consistent with the
Council-adopted Water Integrated Resource Plan Guideline 3: "Actively participate in
development of cost effective regional recycled water plans." The project is also consistent with
CounciI direction to seek to reduce imported water supplies and limit or reduce diversions from
the Tuolumne River.
ENVIRONMENTAL REVIEW
The City is currently preparing an Initial Study and Mitigated Negative Declaration for this
project.
NEXT STEPS
After the facility plan and environmental documents are complete, staff will pursue potential
grant funding opportunities and develop a recommendation on whether to proceed towards
construction of the required facilities.The recommendation wil! then be submitted to the
Council for consideration.
ATTACHMENTS
A: Amendment No. One to Contract No. C07120333
B: RMC Cost Estimate for Additional Cultural Work
C: Budget Amendment Ordinance
PREPARED BY:
Senior Resource Planner
R~VIEWED BY:
O. RATCHYE
istant Director, Resource Management
DEPARTMENT APPROVAL: (
Director of Utilities
CITY MANAGER APPROVAL:
STEVE
Deputy City Managers
MORARIU
CMR: 255:08 Page 3 of 3
ATTACHMENT A
AMENDMENT NO. ONE TO CONTRACT NO. C07120333
BETWEEN THE CITY OF PALO ALTO AND
RMC WATER AND ENVIRONMENT
This ~:men~ment No. One to Contract No. C07120333
("Contract") is entered into June 2, 2008, by and between the CITY
OF PALO ALTO, a California chartered municipal corporation
("CITY"), and RMC Water and Environment, a California corporation,
located at 2290 North First Street Suite 212,San Jose, CA
95!3!("CONTRACTOR").
RECITALS:
WHEREAS, the Contract was entered into between the
parties for the provision of Recycled Water Facility Plan and
Preparation of Environmental Documents; and
WHEREAS, the parties wish to amend the Agreement to
increase compensation by an additional $25,000 for provision of a
mitigated negative declaration report;
NOW, THEREFORE, in consideration of the covenants, terms,
conditions, and provisions of this ~_mendment, the parties agree:
SECTION !. Section 2 entitled "TERM" is hereby amended to
read as fol!ows:
"TERM". The services and/or materials furnished under
this Agreement shall commence on Apri! 17, 2007 and shall be
completed before December 31, 2008.
SECTION 2. Section 4 entitled "NOT
COMPENSATION" is hereby amended to read as follows:
TO EXCEED
"SECTION 4. NOT TO EXCEED COMPENSATION. The compensation to be
¯ paid to CONSULTANT for performance of the Services described in
Exhibit "’A", including both payment for professiona! services and
reimbursable expenses, shall not exceed Two Hundred Forty Five
Thousand Seven Hundred Dollars ($245,700). In the event Additional
Services are authorized, the total compensation for services and
reimbursable expenses shall not exceed Twenty Two Thousand Dollars
($22,000). The applicable rates and schedule of pa2~ent are set
out in Exhibit "C", entitled "COMPENSATION," which is attached to
and made a part of this Agreement.
Additiona! Services, if any, shal! be authorized in
accordance with and subject to the provisions of Exhibit "C".
CONSULTANT shall not receive any compensation for Additiona!
Services performed without the prior written authorization of CITY.
080506 sm 0!0
Additional Ser-~ices shal! mean any work that is determined by CITY
to be necessary for the proper ] ~’,comp_e~zon of the Project but which
is not included within the Scope of Services described in Exhibit
SECTION 3 Exhibit "~"..¯~. to the Agreement is hereby
amended to include =ee±~mon=l cultura! resources work required to
neg=~_~e declaration~final~z~mitigated -~i-
SECTION~.~ Except as herein modified, al! other
provisions of the Agreement, including any exhibits and subsequent
amendments thereto, shal! remain in full force and effect.
IN WITNESS WHEREOF, the par~_es have by their duly
authorized representatives executed ~h_s ~men~ment on the date
first above written.
CITY OF PALO ALTO:
Deputy City Manager
APPROVED AS TO FORM:
Senior Asst. City Attorney
Director of A~ministrative
Services
~MC WATER AND ENVIRONMENT
¯/
080506 sm 010
ATTACHMENT B
Z
o ~
ATTACHMENT C
ORDINANCE NO.
ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO
AMENDING THE BUDGET FOR THE FISCAL YEAR 2007-08 TO
PROVIDE AN ADDITIONAL APPROPRIAT!ON OF $30,000 TO
CAPITAL IMPROVEMENT PROGRAM (CIP)PROJECT WS-07001,
RECYCLED WATER DISTRIBUTION SYSTEM EXTENSION
The Council of the City of Palo Alto does ordain as follows:
SECTION i. The Council of the City of Palo Alto finds
and determines as fol!ows:
A. Pursuant to the provisions of Section 12 of Article IIi of
the Charter of the City of Palo Alto, the Counci! on June ii, 2007
did adopt a budget for fiscal year 2007-08; and
B. In fiscal year 2006-07, the City Council appropriated
$250,000 for CIP Project WS-07001, Recycled Water Distribution
System Extension (Project); and
C. In April 2007, the City Counci! awarded a contract to RMC
Water Environment, Inc. to prepare a recycled water facility plan
and the associated environmental documents for the Project; and
D. Since the approval of the original scope of work in April
2007, the scope of work had expanded due to various factors
discussed in C_WiR:255:08; and
E. An additiona! appropriation of $30,000 will be needed to
provide the necessary resources for the additiona! scope of work.
The Water Fund Rate Stabilization Reserve will provide the funds;
and
F. The appropriation of funds for C!P Project WS-07001,
Recycled Water Distribution System Extension, is a one-time event,
and in future years maintenance and replacement costs will be
included in the Water Fund budget; and
G. City Council authorization is needed to amend the 2007-08
budget to make available the funds required for the additional
scope of work of CIP Project WS-07001, Recycled Water Distribution
System Extension.
SECTION 2. The sum of Thirty Thousand Dollars ($30,000) is
hereby appropriated to CIP Project WS-07001, Recycled Water
Distribution System Extension.
SECTION 3. The Water Fund Rate Stabilization Reserve is hereby
reduced by Thirty Thousand Dollars ($30,000) to Nine Million Six
Hundred Ninety-Six Thousand Dollars ($9,696,000).
SECTION 4. The transactions above will have no impact on the
Genera! Fund Budget Stabilization Reserve.
SECTION 5. As specified in Section 2.28.080(a) of the Palo
Alto Municipal Code, a two-thirds vote of the City Council is
required to adopt this ordinance.
SECTION 6. As provided in Section 2.04.330 of the Palo Alto
Municipal Code, this ordinance shall become effective upon
adoption.
SECTION 7. The Project is currently undergoing an
environmental review as required by the California Environmental
Quality Act.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSTENTIONS:
ABSENT:
ATTEST:APPROVED:
City Clerk Mayor
APPROVED AS TO FORM:
City Manager
Deputy City Attorney Director of Utilities
Department
Director of Administrative
Services
CityWorks
Description: This project extends the existing recycled water distribution
system to serve customers in Palo Alto. The primary new infrastructure
will be a pipeline to deliver recycled water for irrigation and other
nonpotable uses such as for processes and cooling towers to City-owned
facilities and commercial customers. The target service area is the Stanford
Research Park and the project will serve City parks and other users along
the pipeline route.
Justification: Recycled water is a locally controlled water resource that
is available even in water shortages such as droughts. Water resources are
constrained in the Bay Area and there are ongoing pressures to maximize
the use of locally available supplies. There are adequate supplies of
recycled water produced at the Palo Alto Regional Water Quality Control
Plant to meet this project’s needs. In addition, the cost of imported water
supplies from San Francisco is projected to triple in the next 10 years.
Consultant Services Scope: Completion of a Recycled Water
Facilities Plan and preparation of environmental documents in 2007.
Supplemental Information: This project does not look financially
feasible if viewed only from the City of Palo Alto perspective. State grant
funds are available for recycled water projects. In addition, funds may be
available from the Santa Clara Valley Water District and the San Francisco
Public Utilities Commission. Since the project must receive outside funds
to be feasible, getting the project in the "ready to go" stage is vital. For
state grant funds, being "ready to go" means having completed a facilities
plan and environmental review.
CIP FACTS:
¯ Project Status: Continuing
o Timeline: FY 2008-2012
o Managing Department: Utiliites
° Comprehensive Plan: Supports Comprehen-
sive Plan Policy N-20 - Maximize the conserva-
tion and efficient use of water in and existing
residences, businesses, and industries.
o Board/Commission Review: PTC, UAC
IMPACT ANALYSIS:
¯ Environmental: Project will require environ-
mental review.
o Design Elements: Any above ground struc-
tures will go through the appropriate review pro-
cess.
¯ Operating: Project will increase utilities operat-
ing costs.
PY Budget
PY Actuals as of 05/22/2008
$250,000
$226,646
Pre-Design Costs
Design Costs
Construction Costs
Other
Total Budget Request
$30,000 $30,000
$30,000 $30,000
Revenues:
Source of Funds:Water Rate Stabilization Reserve
Consistent with the Water Integrated Resource Plan Guidelines, adopted by Council inCouncil Policy Direction:December 2003.
2007-09 Budqe~CiU q# Palo Aho 21