HomeMy WebLinkAboutStaff Report 431-08’
Alto
TO:HONORABLE CITY COUNCIL
FROM:CITY MANAGER DEPARTMENT: UTILITIES
DATE:
REPORT TYPE:
SUBJECT:
NOVEMBER 10, 2008 CMR: 431:08
CONSENT
Adoption of a Water Fund Budget Amendment Ordinance in the
Amount of $35,000 and Approval of Amendment No. 2 to Contract
C07120333 with RMC Water & Environment, Inc. in the Amount of
$35,000 for a Total Not to Exceed amount of $302,700 for Completion
of a Recycled Water Facility Plan and Preparation of Environmental
Documents for Capital Improvement Program Project WS-070Ol,
(Recycled Water Distribution System Extension)
RECOMMENDATION
Staff recommends that Council:
Adopt a Budget Amendment Ordinance (BAO) in the amount of $35,000, transferring
$35,000 from the Water Fund Rate Stabilization Reserve to existing Capital Improvement
Project (CIP) WS-07001, (Recycled Water Distributi~on System Extension); and
Approve and authorize the City Manager or designee to execute a second amendment to
the existing contract with RMC Water & Enviro~maent, Inc. (Attachment A) for a not-to-
exceed amount of $35,000 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 $302,700.
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
Program Project WS-07001 (CMR:191:07). 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 focused primarily on preparation of a Recycled Water Facility Plan
and associated environmental documents that would position the project to compete 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.
CMR: 431:08 Page 1 of 3
On June 2, 2008, the City Council approved the first amendment to the existing contract. The
Amendment added an additional $25,000 to the original contract to complete various unforeseen
activities that were largely driven by external state requirements for both the Facility Plan and
the Administrative Draft Mitigated Negative Declaration (CMR 255:08).
DISCUSSION
This additional project cost increase can be attributed to a variety of factors that were not
contemplated in the original budget or in the first Contract Amendment. The primary drivers for
this request include:
Financial Planning: The State Water Resources Control Board (SWRCB) recently provided
comments on the Draft Facility Plan requesting the City prepare an in-depth financial cash
flow analysis for the recycled water project. While a cash flow analysis is common for grant
funding applications to the SWRCB, the SWRCB request is unusual at this stage in the
process. However, staff believes completion of this activity now could result in beneficial
cost and time savings in the long term. This task is expected to cost an additional $3,200.
Revisions to the Administrative Draft Initial Study/Mitigated Negative Declaration
(IS/MND) document: The original scope of the project contemplated providing one
administrative draft to the City, followed by a public draft and a final document. To date
there have been two administrative draft documents provided to the City’s Planning
Department. A third review of the administrative draft is now deemed necessary. In
addition, two issues related to the potential impacts of recycled water use on existing
landscape and greenhouse gas emissions have required additional time and resources that was
not foreseen in the original Scope of Work. This task is expected to cost an additional
$20,000.
Preparation of Reports: The current scope of work ~contemplated a limited amount of
document preparation for the Facility Plan and the MND. Based on previous reviews of the
Administrative Draft MND and Draft Facility Plan, staff is anticipating the current budget is
inadequate to meet the need for additional copies. This task is expected to cost an additional
$1,480.
Project Management: The original project schedule has been delayed to address the
aforementioned issues. Further extensions of the schedule require additional project
management time and effort by the consultant. This task is expected to cost an additional
$2,400.
Completion of the additional work will require an expenditm-e of approximately $27,080. To
ensure that there will be sufficient budget to complete all tasks, staff requests an additional
$7,920 for a total not to exceed amount of $35,000.
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 will then be submitted to the
Council for consideration.
CMR: 431:08 Page 2 of 3
RESOURCE IMPACT
A BAO is required in the amount of $35,000 to add funds to the existing recycled water CIP
(WS-07001). With the additio.n of the $35,000, the amended budget for the project of $280,000
increases to $315,000, with $302,700 for the RMC contract and $12,300 for staff costs. To fund
this amendment, $35,000 will be transferred from the Water Rate Stabilization Reserve (WRSR).
The FY 08-09 WRSR Adopted Budget is $6,918,000, well within the minimum and maximum
guidelines of $5,321,000 and $13,303,000. The requested contract amendment will have no
material impact on budgeted reserve levels.
The FY 07-08 Budget contained an expected grant from the SWRCB for this project of $75,000.
Due.to the extensive project delay, the grant disbursement is not anticipated until the middle of
the current fiscal year. The grant will result in a net project cost of $240,000. This project has
no impact on 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
Council direction to seek to reduce imported water supplies and limit or reduce diversions from
the Tuolumne River.
ENVIRONMENTAL REVIEW
As part of this project, RMC is preparing an Initial Study and Mitigated Negative Declaration for
this project.
ATTACHMENTS
A: BAO
B: Amendment No. Two to Contract No. C07120333
C: RMC Cost estimate for Amendment No. Two
PREPARED BY:
REVIEWED BY:
DEPARTMENT APPROVAL:
CITY MANAGER APPROVAL:
NICOLAS PROCOS
Senior Resource Planner "
JANE O. RATCHYE
Assistant Director,
~~S~a@erEN~~/~
Management
CMR: 431:08 Page 3 of 3
ATTACHMENT
ORDINANCE NO,
ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO
AMENDING THE BUDGET FOR THE FISCAL YEAR 2008-09 TO
PROVIDE AN ADDITIONAL APPROPRIATION OF $35,000 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 follows:
A, Pursuant to the provisions of Section 12 of Article III of
the Charter of the City of Palo Alto, the Council on June 9, 2008
did adopt a budget for fiscal year 2008-09; and
B, In fiscal year 2006-07, the City Council appropriated
S250,000 for cIP Project WS-07001, Recycled Water Distribution
System Extension (Project], and in fiscal year 2007-08 City
Council increased the appropriation by $30,000 bringing the total
appropriation to $280,000; and
C, In April 2007, the City Council awarded a contract to RMC
Water Environment, Inc, (RMC) to prepare a recycled water facility
plan and the associated environmental documents for the Project,
and in June 2008, the City Council approved the first amendment to
the contract as discussed in CMR:255:08; and
D, Since the approval of the origina~ scope of work of RMC in
April 2007 and the changes in the scope of work in June 2008, the
scope of work had expanded due to various factors discussed in
CMR:431:08; and
E, An additional appropriation of $35,000 will be needed to
provide the necessary resources for the additional scope of work
The Water Fund Rate Stabilization Reserve will provide the funds
and
F, The appropriation of funds for CIP 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 2008-09
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-Five Thousand Dollars ($35,000)
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-Five Thousand Dollars ($35,000) to Six Million
Eight Hundred Eighty Eight Thousand Dollars ($6,883,000).
SECTION 4, The transactions above will have no impact on the
General 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 ?. The Project is currently undergoing an
environmental review consisting of an Initial Study and Mitigated
Negative Declaration, 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
RECYCLED WATER DISTRIBUTION SYSTEM
EXTENSION (WSo0700’[)
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 before June 30,
2009.
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 proj ect 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.
ClP FACTS:
¯Project Status: Continuing
¯Timeline: FY 2008-2012
¯ 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.
¯ Board/Commission Review: PTC, UAC
IMPACT ANALYSIS:
¯ Environmental: Project will require environ-
mental review.
¯ 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 10/21/2008
$280,000
$273,035
Pre-Design Costs
Design Costs
Construction Costs
Other
Total Budget Request
$35,000 $35,000
$35,000 $35,000
Revenues:
Source of Funds:Water Rate Stabilization Reserve
Consistent with the Water Integrated Resource Plan Guidelines, adopted by Council inCouncil Policy Direction:December 2003.
2008~09 Budget
AMENDMENT NO. TWO TO CONTRACT NO. C07120333
BETWEEN THE CITY OF PALO ALTO A~ND
RMC WATER AND ENVIRONMENT, INC.
This Amendment No. Two to Contract No. C07120333
("Contract") is entered into November I0, 2008, by and between the
CITY OF PALO ALTO, a charter city and a municipal corporation of
the State of California (~CITY"), and RMC Water and Environment,
Inc., a California corporation, located at 2290 North First Street
Suite 212, San Jose, CA 95131("CONSULTANT") .
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 the compensation by an additional$35,000 for provision of
financial planning, revisions to the environmental reports,
preparation of environmental reports, and project management;
NOW, THEREFORE, in consideration of the covenants, terms,
conditions, and provisions of this Amendment, the parties agree:
SECTION i.
to read as follows:
Section 2 entitled "TERM" is hereby~ amended
"TERM". The services and/or materials furnished under
the Agreement shall commence on April 17, 2007 and shall be
completed before June I, 2009.
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 professional services and
reimbursable expenses, shall not exceed Two Hundred Seventy Two
Thousand Seven Hundred Eighty Dollars ($272,780). In the event
Additional Services are authorized, the total compensation for
services and reimbursable expenses shall not exceed Twenty Nine
Thousand Nine Hundred Twenty dollars ($29,920). The applicable
rates and schedule of payment are set out in Exhibit "C", entitled
~COMPENSATION," which is attached to and made a part of this
agreement.
Additional Services, if any, shall be authorized in
accordance with and subject to the provisions of Exhibit "C".
CONSULTANT shal! not receive any compensation for Additional
Services performed without the prior written authorization of CITY.
Additional Services shall mean any work that is determined by CITY
to be necessary for the proper completion of the Project, but which
is not included within the Scope of Services described in Exhibit
~a".
SECTION 3. Exhibit ~A" to the Agreement is hereby amended
to include additional work required for financial planning,
revisions to the mitigated negative declaration, preparation of
reports, and project management.
SECTION 4. Except as herein modified, all other
provisions of the Agreement, including any exhibits and subsequent
amendments thereto, shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have by their d~ly
authorized representatives executed this Amendment on the date first
above written.
CITY OF PALO ALTO:
Deputy City Manager
APPROVED AS TO FORM:
Senior Asst. City Attorney
RMC WATER AND ENVIRONMENT, INC.
By ~
Name:,,
Director of Administrative
Services
Attachments:
Exhibit A - Scope of Services
Exhibit B - Project Schedule
Exhibit C - Compensation
08]029 srn 010
Scope of Services Exhibit A
The additional scope and cost increase can be attributed to a variety of factors that were
not contemplated in tile original budget or in Amendment Number One. The additional
scope includes;
Financial Planning: The State Water Resources Control Board (SWRCB) recently
provided comments on the Draft Facility Plan requesting the City prepare an in-depth
financial cash flow analysis for the recycled water project. While a cash flow
analysis is cormnon for grant funding applications to the SWRCB, the SWRCB
request is unusual at this stage in the process. However, staff believes completion of
this activity at this time could result in beneficial cost and time savings in the long
term. This task is expected to cost an additional $3,200.
Revisions to the Administrative Draft Initial Study/Mitigated Negative Declaration
(IS/MND) document: The original scope of the project contemplated providing one
administrative draft to the City, followed by a public draft and a final document. To
date there have been two administrative draft documents provided to the City’s
Planning Department. A third review of the administrative draft is now deemed
necessary. In addition, two issues related to the potential impacts of recycled water
use on existing landscape and greenhouse gas emissidns have required additional time
and resources that was not foreseen in the original Scope of Work. This task is
expected to cost an additional $20,000.
Preparation of Reports: The current Scope of Work contemplated a limited amount of
document preparation for the Facility Plan and the MND. Based on previous reviews
of the Administrative Draft MND and Draft Facility Plan, staff is anticipating the
current budget is inadequate to meet the need for additional copies. This Task is
expected to cost an additional $1,480.
®Project Management: The original project schedule has been delayed to address the
aforementioned issues. Further extensions of the schedule are requiring additional
project management time and effort by the consultant. This Task is expected to cost
an additional $2,400.-
Project Schedule Exhibit B
The term of the contract is extended to June 1, 2009
Compensation Exhibit C
Amendment 2
Task I - Financial Planning $ 3,200
Task 2 - IS/MND Documentation $20,000
Task 3 -Preparation of Reports $ 1,480
Task 4 - Project Management $ 2,400
Total $27,080
Additional Services $ 7,920
Total $35,000
ATTACHMENT C