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Home My WebLink About04.a. Review draft Position Paper to authorize the General Manager to execute a construction contract change order in the amount of $419,500 with Mountain Cascade, Inc. to include Tier 4 emissions control equipment for the Pump Station Upgrades, Phase 1, Page 1 of 7 Item 4.a. CENTRAL SAN BOARD OF DIRECTORS . , , . POSITION PAPER . , DRAFT MEETING DATE: APRIL 20, 2021 SUBJECT: REVIEW DRAFT POSITION PAPER TO AUTHORIZE THE GENERAL MANAGER TO EXECUTE A CONSTRUCTION CONTRACT CHANGE ORDER IN THE AMOUNT OF $419,500 WITH MOUNTAIN CASCADE, INC. TO INCLUDE TIER 4 EMISSIONS CONTROL EQUIPMENT FOR THE PUMP STATION UPGRADES, PHASE 1, DISTRICT PROJECT 8436; AND AUTHORIZE A BUDGET TRANSFER I N THE AMOUNT OF $420,000 FROM THE CAPITAL IMPROVEMENT BUDGET CONTINGENCY SUBMITTED BY: INITIATING DEPARTMENT: EDGAR J. LOPEZ, CAPITAL PROJECTS ENGINEERING AND TECHNICAL SERVICES- DIVISION MANAGER CAPITAL PROJECTS REVIEWED BY: JEAN-MARC PETIT, DIRECTOR OF ENGINEERING AND TECHNICAL SERVICES ISSUE Authorization from the Board of Directors (Board) is required to execute a construction contract change order and to transfer funds in an amount greater than $200,000. BACKGROUND On November 7, 2019, the Board awarded a$25.6 million construction contract to Mountain Cascade, I nc. (MCI)for the Pump Station Upgrades, Phase 1, District Project 8436 (Project). This project includes major electrical, mechanical, and instrumentation renovation and improvements at three pumping stations (Moraga, Orinda Crossroads, and Flushkleen). Major elements of the Project include: Moraga and Orinda Crossroads: • Replacement of the wet weather engines with electric motors. • Replacement of all dry weather pumps (six total)with dry pit submersible pumps. • New PG&E service, arc-flash resistant switchgear, and electrical upgrades. • New grinder structure and equipment at Moraga. • Piping header replacement, valves, coatings, controls, and instrumentation improvements. • Generator upgrades. FlushKleen: Similar renovation of the entire station. April 20, 2021 EOPS Regular Committee Meeting Agenda Packet- Page 4 of 46 *Amended Agenda, including meeting tin Page 2 of 7 Construction of the Project commenced in May 2020 and is scheduled to be completed by December of this year. To date, the renovation work at Moraga and Orinda are proceeding as planned, which includes the replacement of the new dry and wet weather pumps to be installed this summer with a new generator operational by November of this year. Standby generators are critical for the reliability of the pumping stations in case of power failures or PG&E's Public Safety Power Shutoff (PSPS) events, especially for the new re-configuration at Moraga and Orinda since the generators have been upgraded to operate the entire facility and be ready by this year. The new standby engines and generator are regulated locally by the Bay Area Air Quality Management District (BAAQMD)jurisdiction. The generators were specified to be Tier 2 engines equipped with a particulate filter, which make them meet Tier 3. Permit timeline: • August 24, 2020: Authority to Construct (ATC) applications submitted for the two standby generators (Moraga and Orinda Crossroads). • September 18, 2020: Permit fees paid. • November 3, 2020: Both applications deemed complete. • December 17, 2020: Staff checked-in on the ATC by email. • January 4, 2021: Received response where BAAQMD informed the District that both projects will be subject to the Tier 4 emissions standards. These guidelines came out on December 22, 2020, and apply to all projects with applications deemed complete back to January 1, 2020 (one year back). As reported at the March 23, 2021 Engineering and Operations Committee, a recent change and enforcement requires the addition of Tier 4 emissions control equipment for engines sized over 1,000 horsepower, which impacts the Moraga and Orinda generators. This change requires the addition of the Selective Catalytic Reduction (SCR) system which is now required as an advanced exhaust after- treatment system to reduce nitrogen oxide (NOx)to limit it within the permissible value. Although staff is actively pursuing a quick resolution with BAAQMD and possible legal action, time is of the essence since the construction is ongoing. Therefore, due to the time required to receive the generators and Tier 4 equipment and the deadline to complete the work, staff is recommending to proceed and purchase the necessary equipment for Tier 4 compliance. ALTERNATIVES/CONSIDERATIONS Staff considered several alternatives and does not recommend any of the following: Alternative 1 — Continue to install the generators without the Tier 4 equipment and possibly install it later. The generators have already been built, and changes are custom and its highly recommended for the new system to be fitted and tested at the manufacturer's facility. While technically feasible to field install the equipment at the pumping station, this would require major coordination between several parties and a very costly option. Alternative 2 — Delay the generator purchase and reconfigure the project construction sequence to include work for the following year. Due to the amount of electrical gear replacement and the challenges associated with the work sequence, this alternative would be costly, and the contractor would be delayed for over a year. To date, all other major equipment has arrived, and the contractor is ready to proceed this summer. Alternative 3 — Stop all construction activities until a resolution with BAAQMD is achieved. The notice to proceed with the work this summer has been issued by the District, and this is no longer an option. If the April 20, 2021 EOPS Regular Committee Meeting Agenda Packet- Page 5 of 46 *Amended Agenda, including meeting tin Page 3 of 7 new generator with the Tier 4 equipment is not delivered on time, the District's backup plan is to provide a rental generator. The action being recommended by staff is the most economical solution and lowers the risk of potential major delays incurred for the Project. FINANCIAL IMPACTS The total price for both Tier 4 generator upgrades is $419,500, which includes vendor engineering, structural upgrades to the enclosure to support the added weight (over a ton), controls, equipment, shipping, testing, taxes, and allowable contractor markups. The construction contract contingency budget at the time of award was $1,821,449 and, to date, staff has issued $51,895 in change orders. However, several proposed change orders are currently under review. Staff recommends increasing the construction contract contingency budget by$420,000 to cover the purchase of the Tier 4 equipment, which would result in a new contract contingency budget of$2,241,449 (approximately 8.8 percent of the original contract amount).Adequate funds are available within the Fiscal Year(FY) 2020-21 Capital Improvement Budget Contingency; therefore, upon Board approval, a budget transfer in the amount of$420,000 would be completed to fund this additional scope of work. Extra costs are anticipated due to the generator upgrade relating to seismic, electrical for the control panel, and mechanical for the tank system. The project designer continues to evaluate the modifications and code requirements needed for the installation. Staff is not requesting any additional budget to cover these costs at this time and plans to use the existing project budget. COMMUNITY OUTREACH Staff was concerned about the height of the proposed Tier 4 equipment since it might raise the height of the generator package and conflict with any restrictions with the Town of Moraga or City of Orinda permits. However, staff has confirmed that the generator package is within the height restrictions for the Project and permits issued. COMMITTEE RECOMMENDATION The Engineering and Operations Committee reviewed this matter at its April 20, 2021 meeting and recommended RECOMMENDED BOARD ACTION Staff recommends the following: 1. Authorize the General Manager to execute a construction contract change order in the amount of $419,500 with Mountain Cascade, I nc. to include Tier 4 emissions control equipment for the Pump Station Upgrades, Phase 1, District Project 8436; and 2. Authorize a budget transfer in the amount of$420,000 from the FY 2020-21 Capital Improvement Budget Contingency to fund the Project. April 20, 2021 EOPS Regular Committee Meeting Agenda Packet- Page 6 of 46 *Amended Agenda, including meeting tin Page 4 of 7 Strategic Plan Tie-In GOAL TWO:Environmental Stewardship Strategy 1—Achieve 100%compliance in all regulations, Strategy 2—Anticipate and prepare for potential regulatory changes GOAL FIVE:Infrastructure Reliability Strategy 1—Manage assets optimally to prolong their useful life, Strategy 2—Execute long-term capital renewal and replacement program, Strategy 3—Protect personnel and assets from threats and emergencies GOAL SEVEN:Agility and Adaptability Strategy 2—Plan ahead for scenarios of direct adverse impacts ATTACHMENTS: 1. Presentation April 20, 2021 EOPS Regular Committee Meeting Agenda Packet- Page 7 of 46 *Amended Agenda, including meeting tin Page 5 of 7 TIER 4 IMPACTS PUMP STATION UPGRADES, PHASE 1 - DISTRICT PROJECT 8436 Engineering & Operations Meeting April 20, 2021 Edgar J. Lopez, P.E. Capital Projects Division Manager PERMIT TIMELINE August 24, 2020: Authority to Construct (ATC) applications submitted. Two standby generators (Moraga and Orinda Crossroads Pump Stations). September 18, 2020: Permit fees paid. November 3, 2020: Both applications deemed complete. December 17, 2020: Staff checked-in on the ATC by email. January 4, 2021: Received response where Bay Area Air Quality Management District (BAAQMD) informed Central San that both projects will be subject to the Tier 4 emissions standards. These guidelines came out on December 22, 2020 and apply to all projects with applications deemed complete back to January 1, 2020 (one year back). CENTRALSAN 1 April 20, 2021 EOPS Regular Committee Meeting Agenda Packet- Page 8 of 46 *Amended Agenda, including meeting tin Page 6 of 7 PROJECT IMPACTS • Delayed delivery of the generators. • Additional equipment installed on the generators to meet requirement, re-sized enclosure, and related modifications. Additional electrical, etc. • Difficult to fit Tier 4 generator package at Orinda Crossroads Pump Station, will require civil and structural changes. • Additional design changes and engineering. • Addition costs to the Project. • Risks to the construction schedule. Of CENTRALSAN STATUS • As reported at the March 23, 2021 Engineering and Operations Committee, a recent change and enforcement requires the addition of Tier 4 emissions control equipment for engines sized over 1,000 horsepower, which impacts the Moraga and Orinda generators. This change requires the addition of the Selective Catalytic Reduction (SCR) system which is now required as an advanced exhaust after-treatment system to reduce nitrogen oxide (Nox)to limit it within the permissible value. • Although staff is actively pursing quick resolution with BAAQMD and possible legal action, time is of the essence since the construction is ongoing. Therefore, due to the time required to receive the generators and Tier 4 equipment and the deadline to complete the work, staff is recommending to proceed and purchase the necessary equipment for Tier 4 compliance. r 4 CENTRAL SAN 2 April 20, 2021 EOPS Regular Committee Meeting Agenda Packet- Page 9 of 46 *Amended Agenda, including meeting tin Page 7 of 7 RECOMMENDED BOARD ACTION • Authorize the General Manager to execute a construction contract change order in the amount of$419,500 with Mountain Cascade, Inc. to include Tier 4 emissions control equipment for the Pump Station Upgrades, Phase 1, District Project 8436. • Authorize a transfer of$420,000 from the Capital Improvement Budget contingency account to the Project. l 6 - - CENTRALSAN QUESTIONS? 6 CENTRALSAN 3 April 20, 2021 EOPS Regular Committee Meeting Agenda Packet- Page 10 of 46 *Amended Agenda, including meeting ti