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HomeMy WebLinkAbout08. Authorize agreement for sludge hauling and disposal services Page 1 of 5 Item 8. CENTRAL SAN BOARD OF DIRECTORS POSITION PAPER MEETING DATE: AUGUST 20, 2020 SUBJECT: AUTHORIZE THE GENERAL MANAGER TO EXECUTE A FIVE-YEAR AGREEMENT IN AN AMOUNT NOT TO EXCEED $ 180,000 WITH DENALI WATER SOLUTIONS, LLC, FOR MAINTENANCE SOLIDS HAULING, TREATMENT, AND DISPOSAL SERVICES; INCLUDE AN ADDITIONAL $500,000 COST CEILING FOR AS-NEEDED EMERGENCY SERVICES; AND FIND THAT THE AGREEMENT IS EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITYACT (CEQA) SUBMITTED BY: INITIATING DEPARTMENT: NATHAN HODGES, SENIOR ENGINEER ENGINEERING AND TECHNICAL SERVICES- CAPITAL PROJECTS REVIEWED BY: EDGAR J. LOPEZ, CAPITAL PROJECTS DIVISION MANAGER JEAN-MARC PETIT, DIRECTOR OF ENGINEERING AND TECHNICAL SERVICES Roger S. Bailey General Manager ISSUE Board of Directors' (Board) authorization is required for the General Manager to execute an agreement in an amount greater than $200,000. BACKGROUND Solids are generated at several processes at Central San's wastewater treatment plant and handled at the Solids Conditioning Building (SCB). At Central San, the term "solids" refers to a mix of primary and thickened waste activated sludge that is treated, dewatered, incinerated to ash, and hauled off-site. Central San owns and operates two incinerators in the SCB. These incinerators are on a one-year operating cycle and require up to 30 days to shut down and start up. Due to preventive maintenance reasons, the offline incinerator is typically inspected and worked on during the off-cycle year. In the event August 20, 2020 Regular Board Meeting Agenda Packet- Page 58 of 200 Page 2 of 5 of a potential active incinerator failure, Central San can use the Emergency Sludge Loadout Facility (ESLF), recently upgraded and tested, to load and haul off dewatered sludge to an offsite treatment/disposal facility. The ESLF is equipped with three vertical silos that can store a maximum total of 388 wet tons (WT)of dewatered sludge to load into trucks. The ESLF upgrades were successfully tested between June 23-25, 2020. This included monitoring performance of the new odor control system and, most significantly, running dewatered sludge through the storage silos and conveyors for discharge into trucks.Approximately 206 WT of sludge was hauled off- site to Lystek International, Inc. (Lystek) located at the Fairfield Suisun Sewer District where they process the solids into a fertilizer product for agricultural use. Staff informed the Board of the sludge hauling pilot contract with Lystek at its meeting on June 20, 2019. The testing confirmed that the ESLF upgrades improved odor control inside the facility and in compliance with the Bay Area Air Quality Management District permit and gave Operations much better control of sludge discharge into trucks. With the ESLF improved and operational, staff has determined that the facility must be tested up to three times per year for maintenance and operator training purposes. Being familiar with the ESLF and its loading capabilities, including staff and truck driver experience, is a key factor to successfully using the facility. Another critical reason why the ESLF was upgraded is for reliability since Central San is near design completion of the Solids Handling Facility Improvements, District Project 7348 (Solids Project), which is expected in late fall of 2020. Construction is slated to begin in spring of 2021 with a completion date in January 2024. The scope of the Solids Project includes rehabilitation of the incinerators, replacement of sludge storage and blending systems, centrifuges and cake pumps, air pollution control equipment, ash handling equipment, major electrical and controls replacement, as well as incinerator and significant seismic building upgrades. Staff is working with the Solids Project design and construction management consultants to appropriately manage the risks of the extensive work in and around the SCB. By having the ESLF upgrades complete prior to the Solids Project ensures that in the event of a solids handling disruption, the ESLF would be adequately equipped and functional until regular solids handling operations could be restored. Staff considers the ESLF ready for extended outages and is also considering the possibilities of limited or longer planned incinerator outages under the Solids Project, if cost effective. Based on the need for an ESLF maintenance and emergency hauler and disposal company, and the possibility of the same service needed during the Solids Project, staff issued a Request for Proposal (RFP) in May 2020 for these critical services. Qualifications for the RFP included reliable and experienced solids hauling and listing of suitable disposal sites. The RFP also included requirements for multiple disposal sites and asked for disposal options with beneficial environmental uses.An important disposal criterion was the available capacity—the ability for a given disposal site to accept up to the total annual dewatered solid production (80,000 WT per year). The RFP requested that pricing be given for several different hauling and disposal scenarios that could be anticipated during the five-year term and with the Solids Project, as shown below: • Emergency disposal due to an unplanned disruption to solids processing • Maintenance disposal for regularly scheduled testing of the ESLF • Planned disposal due to a scheduled shutdown of solids handling equipment during the Solids Project Four proposals were received on June 25, 2020, from the following companies: • ACTenviro • Bernardini Enterprises, Inc. • Denali Water Solutions, LLC (Denali) August 20, 2020 Regular Board Meeting Agenda Packet- Page 59 of 200 Page 3 of 5 • Synagro-WWT, Inc. (Synagro) Selecting the top proposer included ranking and scoring each proposal based on seven main categories: 1. Safety documents (Emergency/Spill Response Plan, COVI D-19 safe practices, and more) 2. 1 nsurance 3. Firm background, qualifications, experience, and understanding of the scope of work 4. Ability to include landfill disposal with services 5. Organization and Management Plan for contract services 6. Innovative treatment or use of sludge 7. Pricing, which was weighted the highest compared to the other categories After reviewing the proposals and conducting an interview with the top two ranking companies (Denali and Synagro), Denali ranked highest and is considered the best fit for the services to be performed. Staff is evaluating the scheduled shutdown of solids handling equipment during construction of the Solids Project. If a shutdown is found to be advantageous, a revision to this agreement will be brought to the Board for approval at the time of the Solids Project construction contract award. CEQA Staff has evaluated this action and concluded that it is exempt from CEQA under Central San's CEQA Guidelines Section 15301, since it involves the operation of existing public facilities involving negligible or no expansion of use. Approval of this action will establish the Board's independent finding that this agreement is exempt from CEQA. ALTERNATIVES/CONSIDERATIONS The Board could consider the following alternatives or provide other direction: 1. The Board may choose to not authorize this agreement for solids hauling and disposal services at this time, which would result in staff having to procure these services annually or under emergency conditions. This is not recommended since a five-year contract allows for consistency and reliable emergency sludge disposal now and through the duration of the Solids Project. This agreement will have an immediate improvement to treatment plant resiliency. 2. The Board could request that staff enter into a second or backup agreement for the services. Staff is currently discussing this possibility with Synagro and, if agreed to, would be done under a lower agreement value within the delegated authority of the General Manager. Also, the current disposal option is Keller Canyon Landfill, which has not been used to receive the quantities of solids that would be produced under maintenance or emergency operation. All of the disposal sites listed in the RFP responses did not include Keller Canyon Landfill as an option. If long term hauling is necessary during the Solids Project, a second agreement will be negotiated and set in place. 3. The Board could request that staff reserve capacity at the disposal sites to guarantee they are made available during the length of this agreement. Staff inquired about obtaining capacity at the three facilities, and in order to maintain up to an 80,000 WT per year capacity, while only receiving the minimum required for maintenance, the cost would be between $5,000-$10,000 a month for each facility. Based on this information, the costs for full capacity guarantees will not be included in the agreement. August 20, 2020 Regular Board Meeting Agenda Packet- Page 60 of 200 Page 4 of 5 FINANCIAL IMPACTS The agreement will result in a cost up to $180,000 and will be paid under the Operating budget, unless the services are performed or related to the Solids Project. An additional cost ceiling of$500,000 will be included for emergency disposal. The emergency disposal estimate represents enough budget for one month of sludge disposal at the Potrero Hills Landfill site; however, other sites may be utilized. One month provides staff enough time to assess whether additional emergency services are needed and to execute any agreement extension or revision for approval. Emergency hauling and disposal would only be implemented upon written direction by Central San. The table below summarizes the costs submitted from Denali (shown in dollars per WT) and the three listed disposal sites: 1) Potrero Hills Landfill, 2) Liberty Composting, and 3)the Lystek facility. Potrero Hills Liberty Landfill Composting Lystek Denali Water Solutions, LLC $81.33 $87.03 $128.21 As a comparison to other proposal costs, the average disposal costs per WT are: Landfill Composting Other Others $104.62 $108.92 $124.18 1 n order to maintain all sites as potential disposal options, it has been agreed to that the solids would be sent to each site during the year. Maintenance hauling and disposal is based on hauling up to 100 WT of sludge three times a year, totaling 300 WT per year. 100 WT of sludge will be taken to each of the three disposal sites. This will allow for testing of each ES LF silo and associated gates once a year. The five-year cost ceiling for maintenance hauling and disposal is $180,000, which includes $30,000 a year in hauling and disposal costs, annual Consumer Price Index increases (not to exceed three-percent), and a 20-percent contingency. COMMITTEE RECOMMENDATION The Engineering and Operations Committee reviewed this subject at its meeting on August 4, 2020, and recommended Board approval. RECOMMENDED BOARD ACTION Staff recommends the following: 1. Find that the agreement is exempt from CEQA; 2. Authorize the General Manager to execute a five-year agreement with Denali Water Solutions, LLC, in an amount not to exceed $180,000 for solids hauling, treatment, and disposal services; and 3. Include an additional $500,000 cost ceiling for as-needed emergency services. Strategic Plan Tie-In GOAL TWO:Environmental Stewardship Strategy 1—Achieve 100%compliance in all regulations August 20, 2020 Regular Board Meeting Agenda Packet- Page 61 of 200 Page 5 of 5 GOAL FIVE:Infrastructure Reliability Strategy 3—Protect personnel and assets from threats and emergencies GOAL SEVEN:Agility andAdaptability Strategy 2—Plan ahead for scenarios of direct adverse impacts August 20, 2020 Regular Board Meeting Agenda Packet- Page 62 of 200