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HomeMy WebLinkAboutStaff Report 14996 (2) City of Palo Alto (ID # 14496) City Council Staff Report Meeting Date: 8/1/2022 Report Type: Consent Calendar City of Palo Alto Page 1 Title: Approval of a Memorandum of Agreement with Suez Water Technologies and Solutions (Suez) to Assign Suez' Membrane Aerated Biofilm Reactor (MABR) Equipment and Services to the Future General Contractor for Construction of the Secondary Treatment Upgrades Capital Improvement Project (WQ-19001) at the Regional Water Quality Control Plant From: City Manager Lead Department: Public Works Recommendation Staff recommends that Council approve and authorize the City Manager or their designee to execute the Memorandum of Agreement (MOA) with Suez Water Technologies and Solutions (Suez), to provide Suez’ patented Membrane Aerated Biofilm Reactor (MABR) equipment to the future general construction contractor as part of the Secondary Treatment Upgrades (STU) capital project (WQ-19001) at the Regional Water Quality Control Plant (RWQCP). Background Process modeling was performed by the STU design engineering firm, Brown and Caldwell (BC), for Membrane Aerated Biofilm Reactor (MABR) equipment. BC determined that biological treatment could be achieved through 2054 without the need to construct an expensive fifth aeration basin, thereby saving considerable design and construction costs. Due to the efficient oxygen transfer mechanism of the MABR equipment, this process improvement is anticipated to consume less blower air and result in approximately 13% less electrical energy consumption compared to the energy use associated with the operation of a complex and large fifth aeration basin. Most importantly, MABR equipment is modular, allowing for a phasing of future capital capacity upgrades after about 2044; a modular addition of future MABR equipment would only be necessary based on pollutant demands, thereby saving the City capital expenses if pollutant loads do not increase as anticipated. BC’s evaluation of the MABR intensification process technology and the decision to proceed with MABR for the STU project are further described in a December 7, 2020 staff report (SR #11155). Staff engineers and the RWQCP’s capital program manager, Woodard & Curran, evaluated the scope of work and the cost-effectiveness of the MABR process equipment by conducting a review of the Feasibility Assessment and the revised Treatment Process Basis of Design Technical Memorandum that was developed by BC. While MABR contributes to an increased City of Palo Alto Page 2 design and construction cost in the near term, staff recommends the reliable treatment performance, reduced energy consumption, and lower life cycle cost for the project with MABR. Discussion The MOA Attachment A creates a binding commitment for Suez Water Technologies and Solutions (Suez) to supply MABR equipment to a City-selected contractor who will install the equipment and appurtenant facilities. If the City does not proceed with the STU Project, for any reason, Suez is entitled to compensation for engineering services completed up to the date of termination limited to $150,000. The MOA: • Establishes the total equipment cost of the MABR system ($4,650,000); • Requires Suez to provide identical bid prices to bidders on the STU Project construction contract; and • Requires Suez to manufacture and deliver MABR equipment to the future general contractor awarded the construction contract. The MABR equipment is proprietary, made by Suez, a company with a proven track record in developing new technology to improve wastewater treatment. Suez currently holds a patent as the only supplier to provide MABR equipment technology for intensification of biological wastewater treatment in the North American market. Staff reviewed performance reports for new MABR facilities and visited a pilot unit at the Hayward Water Pollution Control Plant, both of which had good performance results. The selection of Suez was completed prior to construction bidding and allows the City to avoid significant extra design costs associated with a fifth aeration basin. The State Water Resources Control Board approved the State Revolving Fund loan and the selection of Suez is consistent with the state funding requirements for the project’s low-interest loan. Suez will manufacture and deliver to the future construction contractor a ZeeLung MABR system consisting of 52 cassettes and ancillary equipment, integrated aluminum platforms, analytical and process instrumentation, a master control panel, and field control panels. Suez will also coordinate the final design as well as furnish submittals, system documentation, a patent agreement, training, start-up and performance test services, and a one-year system monitoring contract. Timeline The project is in the construction bid phase. A project timeline is below. • Bid Construction Project July – September 2022 • Award Construction Project December 2022 • Construction Start January 2023 • Construction Complete November 2027 City of Palo Alto Page 3 Resource Impact The MABR equipment will be procured through a construction contract which will include the equipment committed by Suez in this MOA at a price of $4.65 million. If this MOA is not approved, the costs of MABR during construction may increase. Funds for the overall STU Project have been budgeted in the Fiscal Year 2023 Adopted Budget in the Wastewater Treatment Fund Secondary Treatment Upgrades capital project (WQ-19001) in the amount of $145 million, which includes construction, design, construction management, and program management. The total project is now budgeted at $150 million with all funding provided by a State Water Resources Control Board low-interest loan executed in May 2022. If needed, staff will request a change in the capital budget amount after receiving bids later in 2022. Policy Implications This recommendation does not represent any change to existing City policies and supports the Comprehensive Plan Policy N.4-16. Stakeholder Engagement This project is part of the RWQCP’s major capital improvement program funded by Palo Alto and the five partner agencies who use the RWQCP for wastewater treatment. The five partner agencies are regularly updated on both the need for and the progress of wastewater treatment capital work. Updates are provided each year at an annual meeting and at other periodic meetings established to inform partner agency staff about the major capital improvement program. With respect to Palo Alto itself, the open meetings on the budget process serve as the main vehicle for engaging the community on both new projects such as this and associated rate impacts. Environmental Review Approval of this MOA is a part of administrative governmental activities that will not cause a direct or indirect physical change in the environment and therefore, does not require a CEQA review. The construction of this project has been determined to be exempt from CEQA under CEQA Guidelines Section 15301, subsections (b) and (e)(1), Existing Facilities, as it involves the repair and maintenance of an existing publicly owned utility used to provide sewerage treatment services with a minor addition to an existing building and no or negligible expansion of use.