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Home My WebLink About03.e. Approve agreement with RMC Water and EnvironmentCentral Contra Costa Sanitary District e BOARD OF DIRECTORS 3 POSITION PAPER Board Meeting Date: July 11, 2013 Subject: AUTHORIZE THE GENERAL MANAGER TO EXECUTE A PROFESSIONAL ENGINEERING SERVICES AGREEMENT WITH RMC WATER AND ENVIRONMENT TO PREPARE A FEASIBILITY STUDY FOR THE REFINERY RECYCLED WATER PROJECT, DISTRICT PROJECT 7300 Submitted By: Initiating Dept. /Div.: Don Berger, Associate Engineer Engineering /Environmental Services REVIEWED AND RECOMMENDED FOR BOARD ACTION: D. Lawson - Senior Engineer D Gemmel) - Environmental Services Division Manager ev C. Swanson Provisional General Manager ISSUE: Board of Directors authorization is required for the General Manager to execute professional engineering services agreements for amounts greater than $100,000. RECOMMENDATION: Authorize the General Manager to execute a professional engineering services agreement with RMC Water and Environment (RMC) in the amount of $135,000 to prepare a Feasibility Study for the Refinery Recycled Water Project, District Project 7300. FINANCIAL IMPACTS: The total cost of preparing the Feasibility Study is estimated to be $240,000 including $135,000 for the agreement with RMC, $25,000 for CCCSD staff time, and approximately $80,000 in consultant services provided by the Contra Costa Water District (CCWD). The US Bureau of Reclamation (USBR) is providing grant funding to cover 50% of CCCSD's costs, or $80,000. Therefore, the total net cost to CCCSD to complete the Feasibility Study is estimated to be $80,000. ALTERNATIVES /CONSIDERATIONS: The Board could decide not to authorize preparation of a Feasibility Study at this time. However, this is not recommended because CCCSD would lose the opportunity to receive USBR grant funding for the study and because the USBR requires that a Feasibility Study be completed for a project to be eligible to receive Title XVI construction grant funds. BACKGROUND: The Shell and Tesoro refineries in Martinez provide an excellent opportunity to use large amounts of recycled water on a year -round basis. The proposed Refinery Recycled Water Project would provide up to 20 million gallons per day of recycled water to the refineries for use in cooling towers and as boiler feed water. Because recycled water supplied to the refineries would need to be treated for ammonia removal, the Refinery Project, if grant funding is received, could benefit CCCSD by reducing the costs of complying with potential future regulations to reduce nutrients discharged to Suisun Bay. In addition, revenue generated from the sale of C: \Users\danderson\AppData \Local \Microsoft \Windows \Temporary Internet Files \Content.Outlook \DVCG8C5G \PP RMC Agreement Refinery Feasibility Study 7 -11 -13 Final.docx Page 1 of 4 POSITION PAPER Board Meeting Date: July 11, 2013 Subject: AUTHORIZE THE GENERAL MANAGER TO EXECUTE A PROFESSIONAL ENGINEERING SERVICES AGREEMENT WITH RMC WATER AND ENVIRONMENT TO PREPARE A FEASIBILITY STUDY FOR THE REFINERY RECYCLED WATER PROJECT, DISTRICT PROJECT 7300 recycled water to the refineries could help offset operational costs, and possibly pay for any capital costs that are not grant funded. CCCSD is actively pursuing grant funding for the Refinery Project from a variety of potential sources including the federal Water Resources Development Act (WRDA), the federal Title XVI Program through the USBR, and State Proposition 84 which is providing $1,030,000 in grant funding for the Concord Landscape Project. In August 2011, CCCSD was awarded $180,000 for a USBR planning grant to fund 50% of the costs of preparing a Title XVI Feasibility Study and the initial environmental documentation for the Refinery Project. The Refinery Project would have water supply and water use efficiency benefits for the region. Therefore, CCCSD collaborated with CCWD, the region's water wholesaler and retailer to the refineries, to evaluate how to best characterize those water supply and water use efficiency benefits. The first phase was to conduct a Yield Study to evaluate the water supply benefits utilizing USBR and CCWD operational modeling information to quantify the amount of Delta drinking water supply that would be "freed up" by using recycled water at the refineries. The results of the Yield Study determined that the water supply yield for the refinery project is approximately 50 %, meaning that on average for every gallon of recycled water supplied to the refineries, a half - gallon of Delta water is made available for other uses, such as reducing the need for water transfers to CCWD or creating additional water that could be transferred to other users in the State. The reason for this reduced yield is that there are times during the year in the operation of the Delta that the water freed up by using recycled water at the refineries would not be able to be used by others because the Central Valley Project and the State Water Project are exporting as much water as possible given their water rights and infrastructure capacities. The Yield Study also found that the project would provide additional benefits including increased water storage in Los Vaqueros Reservoir; improved CCWD drinking water quality; and would help CCWD meet a State mandated 20% reduction in per capita water use by 2020 (Senate Bill X7 -7). As a result of the joint work of CCCSD and CCWD, it has become clear that the project could directly benefit both agencies, and consequently, CCWD is interested in continuing collaborative efforts to further evaluate the possible implementation of this project. The Yield Study was prepared by RMC at a cost of $67,000. Half of this cost ($33,500) was grant funded by the USBR. CCWD also participated in the Yield Study, provided C: \Users \danderson\AppData \Local \Microsoft \Windows \Temporary Internet Files \Content.Outlook \DVCG8C5G \PP RMC Agreement Refinery Feasibility Study 7 -11 -13 Final.docx Page 2 of 4 POSITION PAPER Board Meeting Date: July 11, 2013 Subject: AUTHORIZE THE GENERAL MANAGER TO EXECUTE A PROFESSIONAL ENGINEERING SERVICES AGREEMENT WITH RMC WATER AND ENVIRONMENT TO PREPARE A FEASIBILITY STUDY FOR THE REFINERY RECYCLED WATER PROJECT, DISTRICT PROJECT 7300 considerable in -kind modeling and analytical services, and reimbursed CCCSD for half of the local share of the costs (approximately $17,000). The next phase of the evaluation (Feasibility Study) will be prepared to comply with USBR guidelines and will evaluate various reuse opportunities at the refineries; analyze project alternatives from both a technical and economic standpoint; consider any environmental issues; and evaluate legal and institutional requirements. CCWD will provide consultants to perform technical analysis to help substantiate the economic and non - economic benefits of the Refinery Project as required to address USBR guidelines for completion of the Feasibility Study. The value of these CCWD provided services is approximately $80,000. The Feasibility Study is expected to be completed in one year including review and approval by USBR. Staff recommends that RMC prepare the Feasibility Study based on their performance on the Yield Study and their understanding of the project. RMC was initially selected to prepare the Yield Study with the potential to prepare the Title XVI Feasibility Study based on a formal consultant selection process completed in May 2012. Requests for proposals were sent to qualified engineering firms and RMC was selected after evaluating written proposals and conducting interviews. An agreement has been negotiated with RMC for $135,000 to prepare the Feasibility Study. The Refinery Recycled Water Project is included in the 2013/14 Capital Improvement Budget in the Recycled Water Program on page 3. There is adequate budget in the Recycled Water Program to fund preparation of the Feasibility Study. Staff has concluded that the proposed agreement with RMC is exempt from the California Environmental Quality Act (CEQA) under District CEQA Guidelines, §15262, since it involves planning tasks for possible future actions which CCCSD has not approved, adopted, or funded, and the outcome of these tasks will not have a legally binding effect on later activities. Approval of this agreement will establish the Board of Directors' independent finding that this agreement is exempt from CEQA. CCCSD will conduct an environmental evaluation of any capital project that is proposed in the future as a result of the Feasibility Study to determine the appropriate CEQA compliance documentation. COMMITTEE RECOMMENDATION: The Enterprise Committee reviewed this matter at its meeting on June 24, 2013 and recommended its approval. C: \Users \danderson\AppData \Local \Microsoft \Windows \Temporary Internet Files \Content.Outlook \DVCG8C5G \PP RMC Agreement Refinery Feasibility Study 7 -11 -13 Final.docx Page 3 of 4 POSITION PAPER Board Meeting Date: July 11, 2013 subject: AUTHORIZE THE GENERAL MANAGER TO EXECUTE A PROFESSIONAL ENGINEERING SERVICES AGREEMENT WITH RMC WATER AND ENVIRONMENT TO PREPARE A FEASIBILITY STUDY FOR THE REFINERY RECYCLED WATER PROJECT, DISTRICT PROJECT 7300 RECOMMENDED BOARD ACTION: Authorize the General Manager to execute a professional engineering services agreement with RMC Water and Environment in the amount of $135,000 to prepare a Feasibility Study for the Refinery Recycled Water Project, District Project 7300. C:\ Users \danderson\AppData \Local \Microsoft \Windows \Temporary Internet Files \Content.Outlook \DVCG8C5G \PP RMC Agreement Refinery Feasibility Study 7 -11 -13 Final.docx Page 4 of 4