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HomeMy WebLinkAboutStaff Report 2305-139644.Update on the Capital Improvement Program and Long Range Facility Planning Update for the Regional Water Quality Control Plant 2 1 2 7 City Council Staff Report From: City Manager Report Type: INFORMATION REPORTS Lead Department: Public Works Meeting Date: June 19, 2023 Report #:2305-1396 TITLE Update on the Capital Improvement Program and Long Range Facility Planning Update for the Regional Water Quality Control Plant RECOMMENDATION This is an informational report and no Council action is required. EXECUTIVE SUMMARY The RWQCP is currently implementing projects listed in the 2012 Long Range Facility Plan; there are currently over eight projects that are in various design or construction phases with an estimated budget of over $400 million. The Long Range Facility Plan needs to be updated to help direct the future upgrades at the RWQCP and to assist with answering questions that have been raised by City Council. The updated Long Range Facilities Plan will include an update to the Biosolids Facility Plan in response to Council’s Measure E discussion, as well as an evaluation of cost allocation methodologies for debt service projects. In addition, staff is actively pursuing the opportunity to acquire property adjacent to the RWQCP to assist with future site planning and to future proof the site for new regulations. BACKGROUND The RWQCP, originally constructed in 1934, has undergone several expansions and upgrades. The RWQCP is now an advanced tertiary treatment facility that treats, recycles, and discharges wastewater for Palo Alto, Mountain View, Los Altos, Los Altos Hills, East Palo Alto Sanitary District, and Stanford University. The RWQCP has a capital improvement program (CIP) to re- invest in or replace aging infrastructure. The Wastewater Treatment Fund infrastructure is owned by Palo Alto and supported by its partner agencies. The Plant’s core infrastructure was built in 1972 with tanks, pumps, large pipes, industrial buildings, acquisition of additional land, and complex mechanical and electrical systems. The Plant has had ongoing capital improvements from major works to minor projects to protect the environment and public health. Capital improvements are driven by new regulations and guided by Long Range Facilities Plans in 1965 and in 2012. On minor capital work, staff has managed an ongoing $1.9 to $3.7 million annual CIP reinvestment in aging infrastructure funded on a recurring basis through the partner agreements; the recurring capital budget has been increased by an annual inflation index first 2 1 2 7 approved by partner agencies in 1998. Key projects are listed in Table 1 with major debt financed/grant funded projects in 1972, 1980, 1984, 1988, 1999, 2009, 2010, 2019, and 2023. Debt service for larger projects financed through loans or bonds is provided through amendments to the partner agreements. Typical useful life of Plant infrastructure is 30 years for mechanical and electrical gear, with portions of the Plant still at or beyond its useful life. The capital program is a critical commitment to replace and improve aging systems for reliable wastewater treatment. Table 1: Completed Capital Work 1972 – 2023 Project Funding Expense (million $) 1972 Regional Water Quality Control Plant Federal Grants/Bonds $11.2 1980 Advanced Wastewater Treatment Facility Federal Grants/Operating $10.3 1984 Dewatering and Cogeneration Project Utility Revenue Bond $1.1 1988 Capacity Expansion Project Utility Revenue Bond $9.7 1984 – 1998 Miscellaneous Projects (Notes 1, 2)Recurring Capital Budget $7.8 1999 – 2023 Miscellaneous Projects (Notes 1, 3)Recurring Capital Budget $53.4 1999 Sludge Incinerator Rehabilitation Utility Revenue Bond $7.5 2009 Recycled Water Pipeline California SRF Loan, Note 4 $19.4 2010 Ultraviolet Disinfection Facility California SRF Loan $8.6 2019 Sludge Dewatering/Truck Loadout Facility California SRF Loan $29.2 2023 Primary Tank Rehabilitation (Note 5)California SRF Loan $19.4 Subtotal $178 Note 1: Per audited financial statements Note 2: CIP could not exceed 2% of total capital investment of Plant 10/10/68 to 6/30/99 Note 3: Recurring CIP allowance of $1.9 million established in base year FY99; annual consumer price index (CPI) increase of recurring amount increased to $3.7 million in FY24 Note 4: State Water Resources Control Board Clean Water State Revolving Fund (SRF) Program Note 5: Completion scheduled for December 2023 DISCUSSSION Capital Improvement Updates The RWQCP’s 2012 Long Range Facilities Plan1 (LRFP) identifies projects that are needed to rebuild and revitalize the facility, with recommended projects expected to cost between $315 to $392 million (2015 dollars). The LRFP was accepted by the City Council on July 2, 2012 (SR# 29142), and staff have been working on implementing the CIP program. Implementation of the LRFP is 1 Carollo Engineers. Long Range Facilities Plan for the Regional Water Quality Control Plant. 2012. https://www.cityofpaloalto.org/files/assets/public/public-works/water-quality-control-plant/lrfp-final-report-08- 2012.pdf. Web. 5/1/2023 2 Palo Alto City Council, July 2, 2012; Agenda Item #7; SR# 2914, https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/reports/city-manager-reports- cmrs/year-archive/2012/id-2914.pdf 2 1 2 7 managed by a CIP team of staff engineers, support staff, and a program manager consultant (Woodard & Curran) (see SR# 116123 ). Table 2 provides a summary of projects currently in the planning, design, or construction phases. Table 2: Current Capital Work In-Progress Project Status Expected Funding Expense (million $) Primary Sedimentation Tanks Rehabilitation and Equipment Room Electrical Upgrade (WQ-14003) Construction SRF Loan $19.4 Secondary Treatment Upgrades (WQ-19001)Construction SRF Loan $193.0 Outfall Line Construction (WQ-19000) 100% Redesign/ Re-evaluation for Future Levee Height Debt financing $17.8 Advanced Water Purification System (WQ-19003)90% Design Valley Water $16M USBR $12.9M Grant SRF Loan - Mountain View / Palo Alto $55.9 72-Inch Joint Interceptor Sewer Rehabilitation – Phase 1 (WQ-24000) (Note 1) 90% Design Pay-as-you-go 100%$6.0 Horizontal Levee Pilot (WQ-22001)60% Design Grants with limited local matching funds from WWT Fund $2.1 Headworks Facility (WQ-16002) Consultant Proposal Evaluation SRF Loan $51.7 New Laboratory and Environmental Services Building (WQ-14002) Planning in LRFP Update Debt financing $47.4 Projects in Progress (WQ-19002)Varies Operating Capital Budget $12.5 Total $406 Long Range Facilities Plan (LRFP) Update An LRFP provides guidance on capital facility upgrades and includes load and flow projections, analysis of key issues related to capital improvements, project recommendations, priorities, schedules, preliminary cost estimates, and other long range advanced planning such as a 3 Palo Alto City Council, December 19, 2022; Agenda Item #9 (SR# 14887) & Agenda Item #15 (SR# 14685), https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas-minutes/city-council- agendas-minutes/2022/20221219/20221219pccsm-amendedtime.pdf 2 1 2 7 preliminary facilities plan for key unit processes that consider spatial needs and opportunities to meet treatment, operations, staff, and maintenance near- and long-term needs. Staff will issue a Request for Proposal and return to Council for approval of a professional services contract to perform the LRFP Update. The work is estimated to start in late 2023 and require 30 months for completion. The scope of work includes (a) work space planning advanced to a 10% design level, (b) an update to the 2014 Biosolids Facilities Plan4 and 2019 Biosolids Facilities Plan Update5 with expected completion in 2024, (c) an evaluation of regulatory and emerging contaminant issues as they relate to capital infrastructure, (d) development of a recommended capital program and update of capital costs and scopes from the 2012 LRFP, (e) a cost-of-service analysis, and (f) a capital cost sharing methodology evaluation and recommendation for debt-serviced projects. The 2012 LRFP’s key unfinished projects are listed below. These projects will be re-evaluated and re-prioritized based on the asset age and condition assessment, updated regulatory and emerging contaminant issues, and other appropriate factors. Their associated cost will be re- estimated. (a) Dual Media Filter Facility overhaul; (b) implement Phase 2 of the Joint Intercepting Sewer Rehabilitation project by relining the remaining 74% (i.e., 6,636 of the 8,964 linear feet) of the upstream sections of the 60-inch and 72-inch diameter joint intercepting sewer; (c) evaluation of large diameter plant piping and potential rehabilitation or replacement; (d) recycled water filters, storage, and distribution pump station overhaul; and (e) potential ozonation or other advanced facilities for advanced treatment of emerging pollutants of concerns. The site planning, the Biosolids Facilities Plan Update, and the development of the recommended capital improvement program tasks will all include site and workspace planning components to ensure that when future uses and needs are considered, the Plant has the available land to meet near- and long-term treatment, operations, staff, and maintenance requirements. The expense and impacts needed for future construction staging, laydown, and facility sequencing on a constrained site will be considered in a site planning analysis. In addition to considering the demolition, rehabilitation, and otherwise repurposing and optimization of existing facilities and spaces, the site planning components will also evaluate the need for real estate beyond the existing fence line. Staff is actively evaluating acquisition of adjacent real estate as a strategy to address the space needed to accommodate improvement sequencing and take advantage of current real estate market conditions. The timing of acquisition could involve some risk regarding 4 CH2MHill. Palo Alto Regional Water Quality Control Plant Biosolids Facility Plan. 2014. https://www.cityofpaloalto.org/files/assets/public/public-works/environmental-compliance/water-quality/2010- rwqcp-master-planning/parwqcp-biosolids-facility-plan-final.pdf. Web. 5/1/2023. 5 Woodard & Curran. Palo Alto Regional Water Quality Control Plant Biosolids Facility Plan Update. 2019. https://www.cityofpaloalto.org/files/assets/public/public-works/water-quality-control-plant/sludge-dewatering- building/finaldraft_palo_alto_bfp_update.pdf?t=47012.05. Web. 5/1/23. 2 1 2 7 potentially acquiring land in advance of completing the LRFP update; however, the timing of opportunities to acquire land from a willing seller adjacent to the RWQCP may justify immediate consideration. Opportunities beyond the Plant’s existing property boundaries include acquisition of property contiguous to the RWQCP as well as regional partnerships. Additionally, the Biosolids Facilities Plan update will evaluate the potential for environmental technology uses on part or all of the 10-acre site (“Measure E site”) adjacent to the Plant, consistent with Measure E, and per Council direction. At the April 3, 2023 Council meeting, staff was directed to report back to Council about scope and timeline on environmental technology and facilities on a portion of the Measure E site and/or other lands. The LRFP Update will include a biosolids facilities plan update to answer these questions (e.g., an alternative evaluation of pyrolysis, anaerobic digestion, offsite treatment, etc.), including locating the biosolids technology and facilities on the plant site, the Measure E site, and/or offsite. Staff in the Community Services and Public Works Departments are coordinating on a proposal to evaluate a minimum buffer size to support a wildlife corridor connecting Renzel Marsh to the Baylands Harbor marsh through the Measure E site. The LRFP Update will include a cost-of-service analysis, reviewing actual cost data and its relation to flow and wastewater pollutant load data (specifically, water quality; strength; or loading characteristics). As required by the USEPA, partners like Palo Alto, Mountain View, and Los Altos began using strength components in the cost of service by agreement on January 14, 1980 with an effective start date of July 1, 1980. This approach was formalized with EPASD in 1989 and Stanford and Los Altos Hills in 1986. The cost components are set at 34% flow, 22% ammonia (NH3), 22% total suspended solids (TSS), and 22% chemical oxygen demand (COD). The allocations may be altered “based upon actual cost data derived in accordance with generally accepted accounting principles and upon agreement of all parties hereto.” The City will use the results of this task to establish the cost data per generally accepted accounting principles to potentially change the allocation of total costs to be billed on an annual basis for each of the six agencies. Staff will work with partner agencies on proposed changes and return to Council for approval of any recommended changes. The partners agreed to fixed capacity share allocations for debt financed capital infrastructure in about April 1985 as shown below. The flow allocations (in million gallons per day) and potential new load allocations (e.g., pounds per day) will be assessed in the LRFP Update. Staff will return to Council for approval of any recommended changes. Table 3: Maximum Flow Capacity Rights Expressed in Annual Average Flow Million Gallons Per Day Los Altos Mountain View East Palo Alto Sanitary District Stanford University Los Altos Hills Palo Alto Total 3.80 15.10 3.06 2.11 0.63 15.30 40.00 2 1 2 7 Table 4: Fixed Capacity Share of Capital Assets for Debt Service Share Los Altos Mountain View East Palo Alto Sanitary District Stanford University Los Altos Hills Palo Alto Total 9.47%37.89%7.64%5.26%1.58%38.16%100% Total Wastewater Treatment Fund Forecast The RWQCP capital program requires both the recurring CIP funding as well as debt-financed instruments for larger projects. The 10-year financial forecast is shown in Figure 1 below. Significant new annual debt service (for the above listed projects) will commence at various times over the next ten years as new capital improvements are realized, resulting in debt service to operations ratios ranging from 5% in FY 2025 to 29% in FY 2031. Figure 1. RWQCP Total Estimated Expenses based on Projection and Planned CIP (Forecast Date 3/14/23) The City Council, on June 20, 2022, adopted the City’s Capital Budget (SR# 143526), which included the Wastewater Treatment Fund’s multi-year capital expenditure plan. Included in this plan were capital improvement projects consistent with the RWQCP’s LRFP. The projects include: 1) WQ-14002 New Laboratory and Environmental Services Building; 2) WQ-14003 Primary Sedimentation Tank Rehabilitation and Equipment Room Electrical Upgrades; 3) WQ-16002 Headworks Facility; 4) WQ-19000 New Outfall Line Construction; 5) WQ-19001 Secondary Treatment Upgrades; 6) WQ-19002 Plant Repair, Retrofit, and Equipment Replacement; 6 Palo Alto City Council, June 20, 2022; Agenda Item #28; SR# 14352. https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas-minutes/city-council- agendas-minutes/2022/20220620/20220620pccsm-amended-final-final.pdf 2 1 2 7 7) WQ-19003 Advanced Water Purification System; 8) WQ-22001 Horizontal Levee Pilot; and 9) WQ-24000 72-Inch Joint Intercepting Sewer Rehabilitation (Phase 1) Attachment A provides a brief summary of the status of each project. Capital Program Delivery Risks Programmatic risks impacting delivery of capital projects include technical, schedule and sequence, financial, staffing, and logistical issues. Technical risks include, for example, difficulties assessing and rehabilitating infrastructure that is in operation 24/7. Furthermore, project priorities sometimes change when systems are evaluated to be at a greater risk of failure. Cumulatively, the risks represent a significant undertaking requiring the management and support of a variety of City staff functions beyond the project team to ensure that human and financial resources are directed effectively with appropriate controls and contingencies addressed. This is an ongoing effort involving primarily Public Works, Administrative Services, Human Resources, the City Attorney’s Office, and City Manager’s Office who have monthly coordination meetings. Some projects require a greater level of coordination with internal and external stakeholders. Key capital delivery stakeholders include (a) regulators (e.g., Federal Aviation Administration, Bay Area Air Quality Management District, Regional Water Quality Control Board, US Army Corps of Engineers, etc.), (b) internal City departments (e.g. financial, legal, procurement, and planning, etc.), (c) partner agencies, and (d) RWQCP neighbors (e.g., Palo Alto Airport, landfill, Baylands Nature Preserve stewards and advocates, etc.). Financial risks and considerations to plan for include changing loan interest rates, cash flow needs and limitations to pay contractors prior to reimbursement from lenders, and the need to forecast expenses to help Palo Alto and partner agencies establish rate planning efforts. Planning for differences in costs between estimates, project budget, and bid results continue to impact the timing and financial consideration. Staff has worked to develop debt service and cashflow options for the Secondary Treatment Upgrades project (WQ-19001) and other high demands on the Wastewater Treatment Enterprise Fund cash balance which is expected to go negative at peak investment periods. Logistical issues include coordinating multiple onsite contractors. Staging and laydown areas at the RWQCP are very limited. Temporary bypass pumping operations and detailed construction sequencing at a 24/7 operation are significant challenges for designers and onsite staff that must plan a rebuild of an aging plant while continuing to safely treat and maintain existing wastewater treatment infrastructure during construction (e.g., during the five-year long construction of the Secondary Treatment Upgrades project). 2 1 2 7 Comparison to Neighboring Agencies The $406 million (2023 dollars) RWQCP capital program highlighted herein is similar to neighboring wastewater treatment capital programs. These programs are also using USEPA WIFIA, State SRF programs, and revenue bonds for financing. Some neighboring agencies are shown below with the size of their capital programs. Table 6: Comparison Agency CIP Programs Project CIP Program (million, $) Residential Population Served San Jose (10-year CIP for Regional Wastewater Treatment Facility)$1,400 1,400,000 Sunnyvale Clean Water Program $450 152,770 Silicon Valley Clean Water RESCU Program (Redwood City)$495 220,000 San Mateo Clean Water Program $991 140,000 Union Sanitary District Enhanced Treatment and Site Upgrade Program $482 356,000 Palo Alto Regional Water Quality Control Plant CIP $406 236,000 Resource Impact The Public Works Department is currently seeking funding for the projects planned in the Wastewater Treatment Fund Capital Improvement Program through four primary sources: 1. State SRF loans 2. USEPA WIFIA 3. Commercial market utility revenue bonds 4. Pay-as-you-go special financing Annual debt service payments associated with each project depend upon prevailing interest rates at the time of the loan approval and/or bond issuance, as well as the length of the repayment term. The annual debt service payments will be paid by all the Partners to the Palo Alto RWQCP and will be specified in amendments to their Agreements with Palo Alto; Palo Alto is responsible for its fixed capacity payment of 38.16% of debt financed instruments. These costs and the Palo Alto share have a direct impact on the City’s Wastewater Collection Fund forecasted rates Environmental Review This item is not a project as defined by the California Environmental Quality Act (CEQA) because the report is provided for informational purposes only with no action required by the Council. 2 1 2 7 Individual capital improvement projects are reviewed under CEQA prior to any project approval. All capital projects are designed to comply with the City’s Sea Level Rise Policy7. Projects, and current CEQA status, include the following: Table 7: RWQCP CEQA Status Project CEQA Status Primary Sedimentation Tanks Rehabilitation and Equipment Room Electrical Upgrade Project Categorically Exempt Outfall Line Construction Mitigated Negative Declaration Secondary Treatment Upgrades Categorically Exempt Advanced Water Purification System Environmental Impact Report Horizontal Levee Pilot Categorically Exempt Joint Intercepting Sewer Rehabilitation - Phase 1 TBD New Laboratory & Environmental Services Building TBD Headworks Facility Replacement TBD WQ-19002 Minor CIP Projects in Progress Varies, Typically Categorically Exempt ATTACHMENTS: Attachment A: Wastewater Treatment Fund CIP Update – Project Status APPROVED BY: Brad Eggleston, Director Public Works/City Engineer 7 City of Palo Alto. Sea Level Rise Adaptation Policy. 2019. https://www.cityofpaloalto.org/files/assets/public/sustainability/sea-level-rise/slr-adaptation- policy_web.pdf?t=71340.78. Web. 5/1/23. Attachment A Wastewater Treatment Fund CIP Update – Project Status WQ-14002 New Laboratory and Environmental Services Building The scope per the LRFP for this project was to relocate staff and equipment from existing RWQCP buildings and move them into a new Operations Center workspace for technical, lab, pretreatment, and operations staff. The project was estimated in the LRFP to cost $18M in 2015 dollars ($27M when escalated to 2026 dollars). An architect was hired in early 2019 to complete a full design for an Operations Center. However, in 2019, an early construction cost estimate for total project cost was $52 million (2026 dollars), much higher than anticipated in the LRFP. The ensuing design fee increase request from the architect and the substantially increased overall total project cost led staff to release the architect from the contract at a point where the work completed was still useful for later planning and design efforts. The need to restart efforts on Plant workspaces, while unfortunate, has enabled staff to strategize new opportunities before resoliciting for design services. The consensus strategy from staff is to have a consultant perform an advanced planning analysis and include alternative opportunities to a singular, new workspace building at the Plant, including: remodeling current operations and/or administration buildings; procurement possibilities for supplemental real estate; office lease options; and a full design for a new building including (a) a lab-only building, (b) a technical services building for lab, pretreatment, and technical staff, or (c) an operations center for lab, pretreatment, technical, and operational staff. Staff will include a workspace planning task in the upcoming Long Range Facilities Plan Update. WQ-14003 Primary Sedimentation Tank Rehabilitation & Equipment Room Electrical Upgrades The Project rehabilitates four concrete primary sedimentation tanks and their ancillary systems to extend their useful life for at least another 30 years. The scope of work includes the following for all four tanks: repair cracked and spalling concrete on the tank’s floors, walls, and covers; apply a new protective coating to the tank walls, ceilings, and covers; upgrade primary sedimentation tank area lighting with LED light fixtures; replace hatch and drainage covers on the tanks’ deck; install a flight and chain monitoring system for the primary sludge raking mechanisms; and replace and relocate aging motor control centers (i.e., electrical power distribution equipment) to a new pre-engineered building outside and adjacent to the sludge pump room. Construction is expected to be completed in December 2023. WQ-16002 Headworks Facility The new Headworks Facility will replace the existing influent junction box, and two raw sewage pump stations built in 1956 and 1972, respectively. The Headworks will consist of new preliminary treatment equipment (barscreens, grit removal, and odor control) coupled with a raw sewage lift pump station, discharging into a new pressurized pipe “force main” between the lift station and the primary sedimentation tanks influent channel. The existing primary influent channel will be repaired and recoated. The existing influent junction box and septage delivery Attachment A station will be upgraded or integrated into the new Headworks. All new equipment will be provided with new electrical power distribution, backup power, instrumentation, and controls. The project is on the list of major CIP projects outlined in the LRFP. Staff issued an RFP in April 2023 and will return to the City Council in fall 2023 for approval a professional design services contract. Staff will also apply for a state SRF loan to finance the design and construction costs of the project. WQ-19000 Outfall Line Construction The RWQCP has one 54-inch diameter outfall line to convey treated effluent from the RWQCP to the Bay, traversing the Palo Alto Airport property. The existing outfall pipe was installed in 1964. The LRFP identified the need for a new outfall due to insufficient capacity in the existing outfall due to sea level rise impacts, high level king tides, wet-weather events, and generally insufficient flow capacity in the existing pipe. A number of issues related to approvals from regulatory bodies (e.g., State Lands Commission and the Federal Aviation Administration) require significant redesign work for the outfall project. Kennedy Jenks completed design on the outfall pipeline in September 2020. All permits were obtained, except from the Federal Aviation Administration (FAA). In parallel with the Outfall Pipeline project design, Public Works Department staff had been working with regional and federal agencies on a new elevated flood protection levee, protecting low-lying areas including the airport and the RWQCP. Reconciliation of these issues requires redesign of the outfall. In addition, some project permit applications need to be re-filed. Design and re-permitting are anticipated to take an estimated two years, followed by construction. Construction of the Outfall project is estimated to be completed by December 31, 2027, with engineering services during construction scheduled to be completed by the same date. WQ-19001 Secondary Treatment Upgrades Upgrading the secondary treatment process (biological process) to a process that removes harmful nitrogen will be accomplished by creating anoxic and aerated zones in existing aeration basins. The project will improve final water quality, ensure the Plant continues to meet effluent discharge permit limits, and allow for ultimate decommissioning of the aging biotrickling filters and other aging equipment. The project includes new air blowers; air diffusers in aerobic zones; anoxic zone pulsed air equipment; membrane aerated biofilm reactor cassettes; slide and sluice gates and valves to isolate and throttle flows; instruments such as flowmeters and oxygen probes; power distribution equipment including a standby diesel generator and power transfer equipment; and return activated sludge piping and pumping. The $193 million project is the largest project for the Plant capital program. Construction by Anderson Pacific Engineering Contractors is ongoing, and completion is expected in December 2027. WQ-19002 Plant Repair, Retrofit, and Equipment Replacement Using ongoing, recurring funding from partner agencies, minor capital improvement projects are financed and constructed. They are reimbursed based on the annual operating share of the budget (about 35% for Palo Alto). These smaller projects are designed by consultants or in-house staff. Current projects include the design of Phase 1 of 72-Inch Joint Intercepting Sewer Attachment A Rehabilitation Project and construction of Phase 1 of the 12kV Medium Voltage Electrical Power Distribution Loop Rehabilitation Project (aka, 12kV Loop Rehabilitation). The phase 1 design of the 72-Inch Joint Intercepting Sewer Rehabilitation Project is scheduled to be completed in fall 2023. The 12kV Loop Rehabililtation Project will replace buried underground electrical cable, switches, and a primary metering cabinet inside the RWQCP. Construction of this project ($6.7 million) began in December 2022 and is scheduled to be completed in June 2025. The project requires specialized construction and inspection of medium voltage equipment. WQ-19003 Advanced Water Purification System (aka, Local Salt Removal Facility) The project improves the quality of the RWQCP’s recycled water used for irrigation and other purposes. The project is an advanced treatment system, initially sized for 1.125 million gallons per day, and potentially expandable to 2.25 million gallons per day of purified water. The improved water quality from the system will be blended with the recycled water on a one-to-one basis, providing a maximum capacity of 4.5 million gallons per day. In March 2021, Council approved the project’s design services contract with Black & Veatch (SR# 117821). Construction is expected to be completed in 2026. The cost estimate of the Local Salt Removal Facility at 90% design is $56 million, which is significantly higher than that of the preliminary design in 2017 ($22 million). Project funding is expected to come from several sources. External funding sources include the $16 million from the 2019 Agreement with Valley Water (SR# 106272 ). The City also applied for and has received confirmation of a federal $12.8 million US Bureau of Reclamation grant to cover a portion of the project’s design and construction costs above and beyond the $16 million Valley Water contribution. The remaining funding requirement of $27.4 million will be paid by a State SRF loan. Staff is preparing to return to Council to describe the financing of expenses associated with the Local Salt Removal Facility, the various funding sources available, and fiscal impacts. WQ-22001 Horizontal Levee Pilot The Horizontal Levee Pilot will construct a berm and horizontal levee along a portion of existing, poor-quality upland habitat adjacent to Harbor Road. The horizontal levee will be planted with various native plants to restore diverse transitional habitats including freshwater marsh, wet meadow, and riparian scrub. The vegetated horizontal levee will provide wave attenuation as well as sea level rise adaptation space for the adjacent marsh and refugia habitat for key species such as the Salt Marsh Harvest Mouse. The Project will install an underground pipeline to transport treated wastewater along Embarcadero and Harbor Roads to the horizontal levee for irrigation of the native plants. On-going monitoring and community science opportunities are currently being planned to ensure data obtained from this permanent pilot is available for use in the larger flood control levee projects for Palo Alto as well as regionally. Most project costs have 1 Palo Alto City Council, March 8, 2021; Agenda Item #3; SR# 11782. https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas-minutes/city- council-agendas-minutes/2021/03-08-21-ccm-agenda.pdf 2 Palo Alto Council, November 18, 2019, Agenda Item 17 https://www.cityofpaloalto.org/files/assets/public/agendas-minutes-reports/agendas-minutes/city-council- agendas-minutes/00-archive/2019/11-18-2019-ccm.pdf Attachment A been paid for by grants obtained by the San Francisco Estuary Partnership with a minimal match required from the Wastewater Treatment Enterprise Fund. Construction is currently planned for summer 2024 into early 2025. WQ-24000 72-Inch Joint Intercepting Sewer Rehabilitation (Phase 1) The 72-inch joint intercepting sewer measuring 8,964 linear feet was built in 1970 to convey flows from Mountain View, Los Altos, Los Altos Hills, and Palo Alto to the Plant. The 2,364 linear feet of pipeline nearest the Plant is 72-inch diameter reinforced concrete pipe, 25 feet below ground, severely corroded, and needs immediate rehabilitation. This section of the pipeline will be rehabilitated as part of Phase 1 of the 72-Inch Joint Intercepting Sewer Rehabilitation Project. The City’s engineering consultant performed alternative analysis on different pipeline rehabilitation methods. Cured in place pipe (CIPP) was determined to be the most cost-effective rehabilitation method to strengthen the sewer pipe structurally and minimize site disturbance, as there is no open cut trench with CIPP. The Utilities Department also uses CIPP lining on city sanitary sewers. This project will involve inspection, cleaning, CIPP lining, and bypass pumping. The project will require up to 5 months of field construction and up to 16 weeks of sewage bypassing. Staff have been coordinating with Community Services Department staff throughout design to minimize natural habitat disturbance and communicate with park visitors. The project construction cost is approximately $6 million and will be repaid by partner agencies on a pay-as- you-go agreement. Staff will return to Council in about fall 2023 for approval of the construction contract and an Addendum No. 12 with Mountain View and Los Altos settling on terms for project financing. Construction will be in spring and summer 2024 using a specialty contractor in large diameter CIPP lining.