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Home My WebLink About15. Award a construction contract and consultant agreements for Solids Handling Facility Improvements, DP 7348 Page 1 of 26 Item 15. CENTRAL SAN BOARD OF DIRECTORS POSITION PAPER MEETING DATE: SEPTEMBER 2, 2021 SUBJECT: AWARD A CONSTRUCTION CONTRACT IN THE AMOUNT OF $179,841,000 TO KIEWIT INFRASTRUCTURE WEST CO., THE LOWEST RESPONSIVE AND RESPONSIBLE BIDDER FOR THE SOLIDS HANDLING FACILITY IMPROVEMENTS, DISTRICT PROJECT 7348; AND • AUTHORIZE STAFF TO ENTER INTO CONTRACTUAL AGREEMENTS WITH THIRD-PARTY CONSULTANTS TO CONDUCT INDEPENDENT ASSESSMENTS OF SOLIDS HANDLING ALTERNATIVES; • AUTHORIZE THE GENERAL MANAGER TO: • EXECUTE FIVE PROFESSIONAL SERVICES AGREEMENTS WITH NOT TO EXCEED AMOUNTS AS NOTED FOR CONSTRUCTION MANAGEMENTAND ENGINEERING SUPPORT DURING CONSTRUCTION WITH: 1) MWH CONSTRUCTORS, INC. FOR $12 MILLION; 2) BLACK & VEATCH CORPORATION FOR $4 MILLION; 3)ARCSINE ENGINEERING FOR $1.5 MILLION; 4) HDR, INC. FOR $1 MILLION; AND 5) DEGENKOLB ENGINEERS FOR $650,000; AND • EXECUTE CONTRACT DOCUMENTS SUBJECT TO SRF FUNDING, SUBMITTAL REQUIREMENTS, VALUE ENGINEERING, AND INCLUDE UP TO A 15-PERCENT PROJECT CONTINGENCY 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 September 2, 2021 Regular Board Meeting Agenda Packet- Page 128 of 199 Page 2 of 26 ISSUE On June 16, 2021, three sealed bids were received and opened for the construction of the Solids Handling Facility Improvements, District Project(DP) 7348 (Solids Project). The Board of Directors (Board) must award the contract or reject all bids within 120 calendar days or by October 14, 2021. Authorization is also required to execute agreements or amendments greater than $200,000. BACKGROUND The Comprehensive Wastewater Master Plan (CWMP)finalized in 2017 identified many improvements to the solids and energy unit processes associated with the treatment plant(plant). The following approach for short-term and long-term improvements were outlined in the CWMP: The Fiscal Year(FY)2021-22 Ten-Year Capital Improvement Plan (CI P) includes: • Solids Handling Facility Improvements, DP 7348 (Solids Project): $183.9 M. • Steam Aeration & Blower Systems Renovations, DP 7349: $35.4 M. • Multiple Hearth Furnaces (MHFs) Replacement, DP 100009: $1 M. • Cogeneration (Co-Gen) Replacement (starting FY 2023-24): $25.1 M. • Other Solids Facility Improvements— Dissolved Air Flotation Thickener(DAFT) Tanks (starting FY 2028-29): $2.4 M The Long-term Planning Improvements (20-year), in present dollars, include: • Solids Handling, Phase 2:Add two anaerobic digesters and convert to biogas Co-Gen and consider adding high strength waste to increase "green" gas production at$126.8 M. • Solids Handling, Phase 3:Add two additional anaerobic digesters and replace the MHFs with fluidized bed incinerator at$175.4 M. The Solids Project was introduced to the CI P in FY 2017-18 to consolidate several projects already identified in the Treatment Plant Program since 2010. The project elements are all related to solids processing and handling within or around the Solids Conditioning Building (SCB). When the Solids Project was initiated, a detailed condition assessment was conducted, and new air pollution control equipment(wet scrubber)was pilot tested to confirm the design parameters. Critical equipment such as the centrifuges, cake pumps, and wet scrubbers were pre-selected and designed. Staff also coordinated with regulatory agencies, developed construction constraints, applied for a State Revolving Fund (SRF) loan, prequalified contractors, bid the project, and received bids on June 16, 2021. The following major elements are included in the Solids Project: • Replacement of the two wet scrubber systems with new air pollution control equipment to meet air regulations, including a new Venturi scrubber capable of handling waste heat bypass events. • Replacement and upgrades to sludge blending, storage, and mixing systems. • Replacement of the centrifuges and cake pumps. • Incinerator burner upgrades and new after-burners including modern controls. • Addition of a new Ash Handling Facility to modernize the conveyance and improve loading to reduce fugitive ash emissions and increase reliability. • Construction of major seismic modifications to the SCB and to the two existing incinerators to meet the current seismic standards. • Addition of a new electrical room and replacement of major electrical, instrumentation, and controls (E I&C)to accommodate the new systems and integrate with the remaining systems not in the Solids Project. • Requirement of significant constraints, including restrictions to shut down the incinerators, install temporary electrical facilities, and the off-haul and disposal of sludge. September 2, 2021 Regular Board Meeting Agenda Packet- Page 129 of 199 Page 3 of 26 • Demolition of the abandoned digester tank near the SCB. (Completed) • Construction of the SCB emergency stairway for the third-floor control room for safety egress. (Completed) • Construction modifications to the Emergency Sludge Loadout Facility(ESLF)to reliably operate and load sludge for extended durations. (Completed) A site location map is provided as Attachment 1. The Solids Project is the largest single renovation project that Central San has undertaken since the plant was expanded in the 1970's. As with all large or critical projects, staff has been updating the Board through Committee and Board meetings throughout the process. Since 2017, staff has discussed and received authorization from the Board on several occasions as outlined in Attachment 2. Bid Schedule: The Solids Project was advertised on February 22 and March 1, 2021. The original bid opening date,April 28, 2021, was extended on multiple occasions and was changed to June 16, 2021 due to requests from bidders and scope clarifications by addenda. Nine addenda were issued during the bid period. Staff facilitated over 20 bidder site visits and answered over 300 bid questions. The project documents, bid forms, and security included a 120-calendar day period in which bids cannot be withdrawn to accommodate for the SRF review, which is common practice for large SRF-financed projects. Bid Opening and Evaluation: On June 16, 2021, three bids were received and publicly opened, that ranged from $179,841,000 to $216,293,989.A summary of bids is shown in Attachment 3. The Engineer's estimate for construction was originally listed at$110 M when first advertised, and later amended up to $140 M to reflect changes in the evolving bid market and elements included in addenda. Capital Projects staff conducted a technical and commercial review of the bids and determined that Kiewit Infrastructure West Co. (Kiewit) is the lowest responsible and responsive bidder with a bid amount of $179,841,000. During the bid evaluation, staff found one minor discrepancy, which was clarified by Kiewit. The discrepancy was that Kiewit did not correctly list the name of the packaged electrical systems (motor control centers and variable frequency drives) as required by the specifications. This discrepancy is considered non-material by staff since it was clarified and met the specifications. The lowest bid is approximately$40 M above Central San's construction estimate. Staff's bid review included meetings with the three bidding general contractors, MW H Constructors, I nc. (MW H), and several other consultants.After discussions with the three bidders, it became clear that the cost of materials, vendors, and subcontractors were significantly higher than the estimate, which is the main factor for receiving higher pricing. The increases were due to uncertainty in local, U.S., and global market conditions engendered by the COVI D-19 pandemic. This was further compounded by several risk elements associated with the project, including vendor ability to receive materials or equipment on time to meet the milestones and timelines identified in the contract documents or the inability to receive guaranteed pricing for items that were already in high demand or becoming unavailable. These uncertainties and risks increased costs as suppliers or subcontractors attempted to predict the future pricing for commodities required for the contract. During the bid period, the Solids Project team evaluated the COVI D-19 impact and supply chain issues or delayed deliveries might have on the final bid price, including the rapidly escalating commodity pricing. For these reasons, staff raised the construction estimate from $110 M to a maximum of$140 M to accommodate material prices and reflect the changes in the electrical scope made via addenda. More recent, staff in the Treatment Plant Program are starting to report delays in major equipment, such as electrical, and significant cost escalation requests for steel or copper. It should be noted that staff had not seen or experienced significant cost escalation in past construction September 2, 2021 Regular Board Meeting Agenda Packet- Page 130 of 199 Page 4 of 26 projects during COVI D-19. The Board has awarded thirteen construction contracts since the pandemic first started in March 2020, in which only one project came over the Engineer's estimate. The Solids Project involves major upgrades and renovations to a one-of-a-kind industrial four-story facility, the center for Central San's solids handling, disposal, and energy production. There is no other similar facility in the western U.S., the closest being in the Midwest or found on the East Coast. Furthermore, even though the team spent considerable time during the design evaluating shutting down the SCB to facilitate and shorten construction, it became apparent that it would have been logistically and economically impractical. One outcome was to consider shutting down the MHFs for 12 months and up to 18 months. Another significant challenge is associated with the El&C systems for the existing systems to remain in the project. The El&C challenges have been throughout the design and continue even after the bid to be a major effort as Central San does not have complete or accurate wiring records for all systems. Although not yet defined in terms of costs, this has contributed to higher electrical pricing and fewer interested electrical subcontractors. I n October 2020, staff pre-qualified seven general contractors (GCs) and eight electrical subcontractors (ECs). During the bidding period, staff was informed that four GCs and six ECs would not be participating in the bid. Feedback for not bidding was based on the cost or the duration of the project, or due to pursuit of easier and smaller projects. The project duration is 1,460 days. Many bidders and potential bidders considered this duration as added risk. Staff's assessment is that the complexity of the Solids Project made it especially challenging for bidding since the project is not a typical public works, low bid job. Therefore, the limited competition contributed to the higher costs received at bid time. Only three GCs and two ECs provided bid prices. Mass Electric Construction Co., a Kiewit Corporation subsidiary, provided a labor quote only to Kiewit. The other EC, Blocka Construction, I nc., provided pricing of over$58 M to the other two GCs. Kiewit did have better pricing from their electrical subcontractor and plans to purchase all electrical materials and equipment, which was a significant reason for the difference between Kiewit's bid and the two other bidders. Central San is the only public agency in California still operating sewage incinerators. The incinerator work is specialized and there was only a single subcontractor that provided pricing. The Solids Project scope included 12 months of temporary sludge operations, including pumping, dewatering, odor control, conveyance, hauling, and disposal.Additional unit pricing was included for up to six months of temporary operations. Pricing received for the entire 18-month scope ranged between $15.1 M and $34.53 M, which is significant. This price range indicates the wide variability in the bid item and the cost impact and the difference between the bids. Finally, the overall operations and construction risks influenced pricing. Many risks have been identified, including the milestones and constraints, project duration, combined with challenging elements such as deferred design, electrical being a critical path, and timely receipt of materials and equipment resulted in contractors adding more value than taking on more risk than the Engineer anticipated. Construction Support: Staff will administer and have overall control of the construction and interaction with plant staff, engineering consultants, and safety for Central San employees. MW H will be the construction manager(CM) providing frontline or day-to-day management with the contractor, including general inspection, special inspections, coordination of construction activities, startup and commissioning services, recommending payments, schedule and cost review, file management, and various other support duties required to effectively manage the complexities of the Solids Project. MW H had been previously selected through a formal public solicitation and has been assisting staff with review of the bid documents, schedule analysis, and cost estimating. Staff negotiated the CM scope with MWH with a cost ceiling of $12.0 M. New agreements are proposed for all the Solids Project supporting consultants due to Central San's updated terms, insurance changes, and for the new enterprise resource planning (ERP) system. MW H's current agreement is valued at$1.1 M. If the CM services are fully utilized, the total fee September 2, 2021 Regular Board Meeting Agenda Packet- Page 131 of 199 Page 5 of 26 anticipated for MWH is $13.1 M. Black& Veatch Corporation (B&V), and sub-consultants HDR, Inc. (HDR) and Degenkolb Engineers (Degenkolb) are the Solids Project designers. These firms were selected and hired under two solicitations that consisted of planning and detailed design.All three firms will provide engineering support during construction (ESDC) services. Staff is recommending a pay for performance fee structure with B&V based on previous experiences. The ESDC services will be on an as-needed basis with a not to exceed cost ceiling of$4.0 M. The current agreement amount is approximately$9.6 M and will be closed. The total fees expected for B&V including the design agreement and for ESDC is expected to reach $13.6 M. HDR will provide structural and architectural ESDC services at a cost up to $1.0 M, while Degenkolb will provide seismic ESDC services for an amount not to exceed $650,000. Staff has elected to enter into agreements directly with each sub-consultant to better support the construction effort directly with Central San and MWH. During the bid phase, staff utilized Aresine Engineering (Aresine)to prepare additional drawings and specifications for the installation of temporary electrical and control systems related to existing systems that were not addressed by B&V's design. Staff intends to continue using Aresine due to their expertise and understanding of Central San's standards and existing electrical systems. The anticipated budget for the electrical services is estimated at$1.5 M and will be performed on an as-needed basis. Electrical is one of the most critical and complex elements to the success of the Solids Project and has been the most difficult trade to find experienced and qualified, local personnel to help staff or to hire.Additional electrical and field support to supplement or assist staff will be presented for approval at a future time. Hazardous materials testing and related services are essential for a safe worksite and project. Existing building materials have lead paint or primers, asbestos, and a significant amount of concrete demolition will take place inside the SCB.Additionally, excavation for exterior shear walls and installation of drilled piles are expected to encounter contaminated soil. Staff is in the process of selecting a consultant to provide hazardous material support for the project. The costs for these services is expected to reach $1.0 M; Board approval will be requested at a future time. Staff has also identified the need to include additional professional engineering services for third-party review, quality assurance and quality control (QA/QC), cost reduction alternatives, and recommendations that can assist in a cost-effective project and avoid schedule impacts. The scope of services will focus on industrial mechanical and electrical, incinerator retrofits, installation of new air pollution control equipment, ash handling, and other elements or consulting work. A Request for Qualifications (RFQ) has been publicly advertised and staff anticipates a budget of$2.5 M for the additional services. The RFQ includes the ability to hire multiple firms, if needed; therefore, staff will return to the Board once the RFQ process is finalized and fees have been negotiated. California Environmental Quality Act(CEQA) At its December 6, 2018 meeting, the Board independently found that the Solids Project is exempt from CEQA under Central San's CEQA Guidelines Section 15301, since it involves minor alterations to existing public facilities involving no expansion of use, and CEQA Guidelines Section 15302, since it involves replacement of existing public facilities at the same location and with the same purpose. ALTERNATIVES/CONSIDERATIONS CONSIDERATIONS: The following factors were considered by staff as several of the project alternatives are evaluated. As stated above, three sealed bids were received and opened for the construction of the Solids Project.At the next Board meeting on September 2, 2021, the Board will need to either award the contract or reject all bids within 120 calendar days or by October 14, 2021.Authorization will also be September 2, 2021 Regular Board Meeting Agenda Packet- Page 132 of 199 Page 6 of 26 requested from the Board to execute both new agreements and amendment for the several construction management and consulting engineering firms that will be required for this four-year construction project. Time - Rejecting all bids, proceeding with a project redesign, and rebidding the project is anticipated to result in as much as a 12-month delay to the start of construction. I n addition, delaying the project will also impact Operations and delay the installation of new equipment and facilities, such as the new scrubbers and centrifuges. Most of the equipment being replaced under this project is beyond its useful life and in need of replacement. Kiewit is a very qualified and experienced general contractor. They are planning to self-perform a lot of the project scope. Costs - Repackaging and rebidding the project (or project phases) may not reduce total project costs or could possibly result in increased costs.An important consideration is that repackaging the project is primarily intended to reduce the exposure to risks such as delay claims during construction.Any cost savings that might be developed as part of a redesign may likely be offset by other factors like inflation or continued supply issues. Air Permit Compliance - The existing MHFs air pollution controls are having difficulty achieving air permit compliance.A priority will be to address these regulatory issues in an efficient manner. Since Clean AirAct Section 129 regulations (129 rule)went into effect in March 2016, the Bay Area Air Quality Management District(BAAQMD) has issued to Central San several notices of violations (NOVs) related to the emergency bypass damper openings. Staff has been able to reduce the frequency of bypass events, but because of inherent limitations of the existing equipment, the bypass damper continues to periodically open, in violation of the 129 rule. The MHFs also cannot consistently meet the hydrochloric acid (HCI) emission limit in the 129 rule. Staff has been working closely with the United States Environmental Protection Agency(USEPA)to address these compliance challenges. Local regulation will also impact compliance. Data from an on-site pilot study conducted in 2018 indicated the new MHF air pollution control devices will significantly reduce the frequency of emergency bypass damper openings and reduce HCI and particulate matter(PM) emissions below their respective limits. BAAQMD Rule 6-1, which goes into effect in 2025, lowers the PM concentration limit on the MHFs, and the existing air pollution control devices are not sufficient to ensure compliance. Staff with a specialty consultant, GHD, is currently doing pre- design for future devices to reduce PM and carbon oxide (CO)to the new standards. This would require the addition of the wet electrostatic precipitators (W ESP)to meet PM 2.5 and adding a "zero" hearth on top of the MHFs to meet the lower CO limits. SCB Shutdowns - Shutting down most SCB processes, including temporary dewatering and hauling of sludge, will likely remain part of the scope of work; however, it may be significantly reduced if the project is repackaged or phased, as this turn out to be an expensive proposition. ALTERNATIVES: Staff evaluated several alternatives and options for solids handling and energy starting with the CW MP, during the predesign, design, bidding, and most recently following the bid opening prior to award. Three alternative paths are being considered and are described below and were further discussed during the August 26, 2021 Board workshop. Alternative 1: Award the Contract Staff recommends awarding the Solids Project to Kiewit, since Central San has a final design for the project, a qualified, experienced contractor ready and able to start construction of this complex project, and is expecting to receive the final draft agreement from the State of California Clean Water SRF Funding for a $173.1 M low interest loan. However, a multistep Notice to Proceed (NTP) path is being recommended since the construction contract is significantly over budget. Once awarded, staff and Kiewit will conduct a detailed analysis of the project sequencing, milestones, and evaluate other ways to reduce risks and potential costs for the project. This will include cost reduction value engineering (VE)with design assistance from Kiewit. The VE is expected to take four months to complete and is recommended since Central San has not executed the final SRF Agreement and needs up to $77.5 M to fund the total September 2, 2021 Regular Board Meeting Agenda Packet- Page 133 of 199 Page 7 of 26 estimated project cost. Staff has met with Kiewit and discussed the timing of funding, using provisions within the contract documents to initiate the contract, and possibly use the termination clause if there is not adequate funding or issues are discovered during the findings of the VE. An initial NTP would be issued to conduct a review as stated above and of such items as deferred design components (temporary seismic shoring and electrical), sludge hauling, and the detailed schedule of values for the contract. Kiewit has several in-house resources and experienced leadership in building industrial and complicated construction like the Solids Project within their local Fairfield office. A second NTP for construction will not be issued until Central San and Kiewit are comfortable and staff will update the Board and request authorization prior to moving forward. In the event a NTP is not issued, the contract will be terminated by Central San. Accordingly, Central San would be required to pay the cost incurred by Kiewit for the agreed amounts and rates for the VE process only. Staff explored the option of extending the time for award beyond the bonded 120 calendar days. This option was not pursued since Kiewit would be beyond the guaranteed pricing with all their vendors, suppliers, and subcontractors and likely result in additional costs. Alternative 2: Reject Bids The Board may elect to reject bids, which would result in staff having to regroup to determine the best solution moving forward. Several options exist; however, staff would have to continue evaluating and report back to the Board if one of the following options were selected. Alternative 2(a) Rebid the Solids Project: Staff would conform all the addenda with the contract documents, evaluate and incorporate more ways to reduce risks, and rebid within six to nine months. This option may mitigate some effects of the current market; however, other costs may increase which cannot be foreseen. Without significant changes to the scope of work, staff expects that the bidders may not participate in a re-bid. If this option is pursued, staff would remove the pre-qualification for contractors to get more interest. This is not recommended. Alternative 2(b) Rebid Solids Project within Approved Budget: Staff could repackage the project and rebid some of the project elements to stay within the current authorized budget of $183.9 M. This would require removing and delaying some of the scope to fit the budget and add future project(s)to complete the remainder of the scope. This is not recommended. Alternative 2(c) Consider Design-Build Project Delivery: Staff could evaluate a design-build delivery method. Under this approach, staff would be using the existing Solids Project's bid package as a basis. This would allow a contractor with a designer to work together to optimize the Solids Project while starting construction on critical path elements. Additional time would be required to prepare the front ends and specifications for alternate construction delivery and put the responsibility of the changes of the design and sequence onto the contractor to resolve. A design-build approach would likely attract more bidders than rebidding the Solids Project under option 2(a) as several design-build contractors were interested and did not participate during the pre-qualification process. However, staff expects that the bid price would increase compared to the Kiewit bid. The only advantage for this option would be that the design-build cost would be considered a maximum price while the contractor works to stay within the bid. This is not recommended. Alternative 2(d) Perform the Solids Project in Multiple Phases: Staff could separate and implement the Solids Project scope into multiple phases. This would include repackaging the work in various smaller projects which could be implemented in either two or up to six phases. The first phase(s) could prioritize the new wet scrubbers, followed by the new electrical room, seismic utility relocations, centrifuges and cake pumps, and low impact seismic renovations within the building. The subsequent phase(s)would continue seismic work, followed by sludge blending tanks, and a new ash facility. Final phase(s) may complete seismic work, complete electrical demolition, and finish some remaining project elements. One September 2, 2021 Regular Board Meeting Agenda Packet- Page 134 of 199 Page 8 of 26 advantage with multiple project phases is that by reducing the scope of work and duration on each phase, Central San likely has less exposure to cumulative delay change order claims and risks during construction. Central San would also incorporate the lessons learned and construction challenges into the future phases. Disadvantages with this option is increasing the overall Solids Project duration and extending the timeline before new equipment is placed into service.As for costs, staff believes that multiple phases or smaller projects will increase the bidder competition thus likely will lower the construction costs. However, the engineering costs and staff time to support a longer duration and multiple contracts, and inflation may offset some of the potential savings. While this Alternative 2(d) is technically feasible, there is no guarantee that the overall costs will be lower since staff estimates that an additional three to four years would be needed to complete all the scope identified in the Solids Project. This alternative could be further considered if other alternatives are not pursued. Alternative 3: Evaluate an Alternative Long-term Solids Handling Approach including Anaerobic Digestions Alternative 3(a) Evaluate an Alternative Long-term Solids Handling Approach including Anaerobic Digestions with all new Solids Facilities: Before issuing a final NTP for the Solids Project construction, staff will reconsider and evaluate the long-term solids handling based on furnaces, ash disposal and steam recovery to include or change to anaerobic digestions. This alternative could change the design and construction of the solids and energy facilities such as anaerobic digestions including new biogas cogeneration. This would include new facilities located north of the emergency sludge loading facility. The current SCB and MHFs could continue to operate as the sludge disposal method in the interim. Followed by ultimately, the abandonment of the SCB, MHF, steam, auxiliary boilers, and existing Co-Gen. This alternative could be delivered as atypical design-bid-build or design-build project. Biosolids disposal would be addressed either by continuing to use the existing MHFs for ten years or so, or using the newly renovated sludge loading building, or adding sludge dryers and pyrolizer. The project could also be phased, with phase one focusing on adding two new anaerobic digesters, followed by a phase for new biogas Co-Gen, and another phase adding two additional digesters and biosolids handling. Time would be required to select a new consultant team, prepare designs and specifications. This alternative, if fully implemented, would greatly simplify and modernize Central San's solids handling and energy facilities. This approach would likely attract more bidders than rebidding the Solids Project. The project could be constructed and not require the complex sequencing and temporary work required for the Solids Project. This would reduce risks and would be designed and constructed within the same time frame, four to five years. However, this would be a radical shift in Central San's process and would need to be carefully vetted and evaluated. Overall cost of this alternative may not be significantly less than the current approach but should be evaluated based on the bids received for the Solids Project. It would, however, reduce many risks associated with the current path. The main risk associated with this alternative is the biosolids disposal and the potential future per- and polyfluoroalkyl substances (PFAS) regulations associated with biosolids disposal. While staff does not recommend rejecting all bids, staff recommends pursuing a three to four-month evaluation of this Alternative 3(a) in more detail and compare the results with Alternative 1. This effort is planned to have the same timeline as Alternative 1 (90-120 days) so the two alternatives can be compared before making a long-term decision. This effort will be conducted by third-party engineering consultant firms. Alternative 3(b) Evaluate an Alternative Long-term Solids Handling Approach including Anaerobic Digestions with using a Private-Public-Partnership (P3) delivery for all new Solids Facilities: Currently,Anaergia has a lease option on about nine acres located on the Kiewit property to evaluate the feasibility of design-build-construct a private solid handling and biogas production facility consisting of anaerobic digesters, high strength waste receiving station, and pyrolysis. This evaluation could also include an option to build these same facilities north of the emergency loading facility under a P3.As with the other alternatives listed above, before issuing a final NTP for construction of the Solids Project, staff suggest reconsidering and evaluating the long-term solids handling operations. The current SCB and MHFs would be decommissioned under this Alternative 3(b). Staff could operate some or all September 2, 2021 Regular Board Meeting Agenda Packet- Page 135 of 199 Page 9 of 26 these facilities. The sludge disposal method would be pyrolysis producing a chart (like ash). Biosolids disposal initially based on tipping fees with the ability for Central San to buy out these facilities either in 20- years or sooner. This would require time to select a P3 concessionaire and to select a consultant team for technical, finance, and legal support. Also, continuing to purse on parallel schedule to other alternatives over the next three to four-month evaluation of this Alternative 3(b) in more detail and compare to Alternative 1. FINANCIAL IMPACTS The total estimated project cost is $261,373,000 which includes all prebid expenditures, design, bidding, bid price, CM, consultant costs, staff time, and contingency as detailed in Attachment 4. A detailed financial analysis with alternatives was presented at the August 26, 2021 Board workshop. The current budget for the Solids Project is shown on page 236 in the FY 2021-22 District Budget at$183,894,000. The total estimated project cost includes up to 15-percent Contingency or$27 M. At this time, staff is holding a high contingency until the project can be evaluated under the VE. The 15% Contingency, or$27 M, includes the following: • 5% or$9 M for standard allowance for change orders (COs). • 5% or$9 M due to major renovations and project complexity. • 5% or$9 M for regulatory changes based on: Maximum Achievable Control Technology (MACT) 50% rule ($5 M)to add WESP and zero hearth for carbon oxide. Additional staffing costs due to COs and MACT 50% rule or engineering costs to support the project ($4 M). Staff will re-evaluate the Contingency required prior to issuing the second NTP to Kiewit and request authorization if the project proceeds into construction. State of California Clean Water Revolving Fund (SRF) Central San has applied and requested a total of $173.1 M in funding from SRF and received approval. In December 2020, prior to advertising the Solids Project, staff submitted updated Solids Project documents in support of receiving the initial agreement. The Water Board informed staff in March 2021 that the initial agreement would be routed for Division of Financial Assistance (DFA) approvals, after which it would be sent to Central San for execution within the next several months. This initial agreement is currently being routed for Water Board officials' signatures and is expected to be issued to Central San within several weeks. Staff has recently spoken with the Water Board concerning the higher bids that was received and the need for additional funding. After the initial agreement is executed, the final project amount and supporting documents need to be submitted and will provide an opportunity for the Water Board to request additional funding for the budget gap that is necessary. Also, the Water Board indicated that if the Solids Project is rejected and split into more than two project phases, then it would be challenging to win approval for additional funding. Staff will consider SRF and other funding options as alternatives are evaluated. These were presented at the August 26, 2021 Board workshop for the Solids Project. Project Financing Approach As stated above, the total budget cost for the project listed for FY 2021-22 Budget is $183.9 M for the project. Staff has applied and is expected to receive the agreement from SRF for a loan of$173.1 M. The latest total estimated Project Cost is $261,373,000. The variance between the FY 2021-22 Budget of $183.9 M and the latest estimated project cost of $261,373,000 is a gap of approximately$77.5 M. Proposed Financing of Project Gap Staff brought the Solids Project contract approval to the August 17, 2021 Engineering & Operations (E&O) Committee for discussion at the August 26, 2021 Board workshop, and then for potential approval by the Board in September 2021. The need, merits, and technical approach of the project were subject to September 2, 2021 Regular Board Meeting Agenda Packet- Page 136 of 199 Page 10 of 26 discussion at the August 17, 2021 E&O Committee. The matter of the funding approach for the Solids Project, considering higher than anticipated costs, was discussed at the August 26, 2021 Board workshop. With the receipt of bids for the Solids Project, the overall cost of the project has been increased by$77.5 M. Recognizing that there are multiple approaches to addressing this funding gap, staff has explored and is recommending a multi-faceted approach, including $25 M ($5 M per year for 5 consecutive years) in reductions from other planned projects in the Ten-Year Cl P, approximately$2.5 M in savings based on updated financials and the balance coming from increased use of debt financing. While the funding shortfall would affect the latter years of the project (3-4 years from now), it would be possible to proceed with the Solids Project without immediately addressing this funding need, but staff recognizes that it is preferable to have a planning funding approach before proceeding with contract award. It should also be noted that the contract award to the recommended contractor has notable "off ramps" language in the specifications, including a VE phase after which Central San can elect not to proceed for convenience, after reimbursing the contractor for their time to conduct the VE phase only. Staff has identified several of possible financing options approaches to eliminate the $77.5 M funding gap. The updated financial assumptions provide approximately$2.5 M in cash funding. To reduce the funding gap, a $25 M cut to the Capital Program for all scenarios, is proposed consisting of five years of$5 M per year. The proposed reductions are as follows: $3 M from Collection System Sewer Renovation; $0.5 M from Vehicle Replacement Program; and $1.5 M from Contingency. The funding approaches for the remaining $50 M necessary for funding are summarized below. Financial Plan Scenarios The preferred approaches presented and discussed at the August 26, 2021 Board Workshop are listed below: Funding Option 1 -SRF Funding: Request additional SRF funds. Based on an update of the financial plan, a total of$50 M of additional SRF borrowing would be required. This could be accommodated without an increase in the scheduled rate increases foreseen prior to the SRF project cost increase. Funding Option 2 - Issue Bonds: (certificates of participation)within 12 months. Bonds could be issued to fund FY 2022-23 Capital Expenditures, freeing up cash that could be set aside for the Solids Project funding gap 3-4 years from now(in FY 2024-25 and FY 2025-26). Based on an update of the financial plan, a total of$53 M of additional bond borrowing would be required. Funding Option 3 - Future Issuance of Bonds: Under this option, a bond issuance for Solids Project funding would be needed in 3-4 years from now. This would require issuance of about$62 M of bonds when funding was needed for FY 2024-25 through project completion in FY 2025-26 due. Under this option, we are assuming higher interest rates. The following funding options were not recommended. Funding Option 4 - Explore Other Funding Sources: Staff has been monitoring the availability of funding from federal sources, including potentially in the pending $1 trillion infrastructure bill, or through the pre-existing Water I nfrastructure Finance and I nnovation Act (W I F IA). As to the latter, an assessment of the W I FIA program in 2018 led staff to conclude that the program did not hold value to Central San. Staff has inquired with our financial consultant PFM to determine whether the program has changed since then to make it more attractive. Funding Option 5 - Cash Funding: If no additional borrowing was available or viewed as acceptable, an increase in rates above those previously projected would be necessary to fund the increased costs. Funding Option 6: Defer an additional $50 M in the CI P over the next ten years. September 2, 2021 Regular Board Meeting Agenda Packet- Page 137 of 199 Page 11 of 26 COMMITTEE RECOMMENDATION The Engineering and Operations Committee reviewed this matter at its August 17, 2021 meeting. Staff did not anticipate a recommendation as further discussion was held with the Board of Directors on August 26, 2021 at a special workshop. RECOMMENDED BOARD ACTION Staff recommends the following Board actions: (A) Award a construction contract in the amount of$179,841,000 to Kiewit Infrastructure West Co., the lowest responsive and responsible bidder for the Solids Handling Facility Improvements, District Project 7348; (B) Authorize staff to enter into contractual agreements with third-party consultants to conduct independent assessments of Solids Handling Alternatives; (C) Authorize the General Manager to execute the following five new professional services agreements with: 1. MW H Constructors, I nc. in an amount not to exceed $12.0 million for construction management services. 2. Black& Veatch Corporation in an amount not to exceed $4.0 million for engineering support during construction. 3. Aresine Engineering in an amount not to exceed $1.5 million for electrical engineering support. 4. HDR, I nc. in an amount not to exceed $1 million for architectural and structural engineering support; and 5. Degenkolb Engineers in an amount not to exceed $650,000 for seismic engineering support. (D) Authorize the General Manager to execute Contract Documents subject to SRF funding, submittal requirements, value engineering, and include up to a 15-percent project contingency. Strategic Plan re-In GOAL ONE: Customer and Community Strategy 1—Deliver high-quality customer service GOAL TWO: Environmental Stewardship Strategy 1—Achieve 100% compliance in all regulations, Strategy 4- Reduce reliance on non-renewable energy GOAL THREE: Fiscal Responsibility Strategy 1—Maintain financial stability and sustainability GOAL FIVE: Infrastructure Reliability Strategy 1—Manage assets optimally to prolong their useful life, Strategy 2—Execute long-term capital renewal and replacement program September 2, 2021 Regular Board Meeting Agenda Packet- Page 138 of 199 Page 12 of 26 ATTACHMENTS: 1. Project Location Map 2. Prior Board Actions Summary 3. Summary of Bids 4. Post Bid / Preconstruction Estimate 5. Presentation September 2, 2021 Regular Board Meeting Agenda Packet- Page 139 of 199 Page 13 of 26 o � CD O r-p. CLEARWELL BASIN a CP pQ 0 NORTH 10 BASIN 3 C31.t E�3 o ° 3:3w �V1�0�' • ,I FILTER p DRAIN BACK PLANT CHANNEL N Q 0 0 400 800 FEET a PROJECT AREA CONSTRUCTION SOUTH ACCESS ROUTING NORTH BASIN O �O=� O CLARIFIERS� C?�V4U 0 AERATION SOLIDS CONTRACTOR TANKS �J STAGING AREA SOUTH o CLARIFIERS o �J SOLIDS BUILDING Q � O 1-5 ro O o v c 0 o PRIMARY TANKS a� I Attachment Y CENTRAL SAN SOLIDS HANDLING FACILITY IMPROVEMENTS N ' DISTRICT PROJECT 7348 1 Q Page 14 of 26 ATTACHMENT 2 HISTORICAL BOARD ACTION SUMMARY SOLIDS PROJECT, DISTRICT PROJECT 7348 Historical Board Action Summary: As with all large projects, staff has been continually updated during the development of the Solids Project. A list of prior Board actions are outlined below: • December 1, 2016 - Board approved combining projects, predesign funding, and a $2 million (M) Professional Engineering Services (PES) agreement with Black & Veatch (B&V) for the pre-design efforts; • December 15, 2016 - Board approved wet scrubber piloting work and contracts; • April 6, 2017 - Board approved air emissions testing consulting agreement to support wet scrubber piloting; • April 26, 2018 - Board approved amending the B&V agreement to include final design services for an amount not to exceed $5.9 M; • December 6, 2018 - Board approved resolution regarding funding eligibility for State Revolving Fund (SRF) funding; • December 20, 2018 - Board authorized the pre-selection and contracting for the centrifuge equipment, cake pump equipment, and new wet scrubber equipment; • June 20, 2019 - Board authorized a construction contract for the Emergency Sludge Loadout Facility Upgrades and amending the PES with B&V by $220,000; • December 19, 2019 - Board authorized a PES agreement with MWH Constructors, Inc. (MWH) for an amount not to exceed $400,000 for constructability review and pre-bid services; • August 6, 2020 - Board authorized the General Manager to submit an updated SRF loan application for additional funding and Board resolutions; • August 20, 2020 - Board authorized increasing the B&V agreement to $9,654,636 and the MWH agreement to $950,000; and • February 18, 2021 - Staff presented a project update and announced advertisement of project bidding. Additionally, the Board authorized the General Manager to amend the MWH PES to a ceiling of $1.1 M and amend the blanket agreement with Aresine Engineering to a ceiling of $975,000. September 2, 2021 Regular Board Meeting Agenda Packet- Page 141 of 199 Page 15 of 26 ATTACHMENT 3 SOLIDS HANDLING FACILITY IMPROVEMENTS DISTRICT PROJECT 7348 SUMMARY OF BIDS PROJECT NO.: 7348 NO. OF ADDENDA: 9 DATE/TIME: JUNE 16, 2021/12:00 PM PROJECT NAME: SOLIDS HANDLING FACILITY IMPROVEMENTS PROJECT MANAGER: NATHAN HODGES PROJECT LOCATION: 5019 IMHOFF PLACE, MARTINEZ, CALIFORNIA ENGINEER'S ESTIMATE: $130,000,000 - $140,000,000 NO. BIDDER BID PRICE Kiewit Infrastructure West Co. $179,841,000 Fairfield, California 2 W.M. Lyles Co. $206,856,000 Fresno, California 3 Flatiron West Inc. $216,293,989 Benicia, California BIDS OPENED BY /s/ Katie Young DATE: June 16, 2021 at 12:30 p.m. via livestream due to COVID-19 September 2, 2021 Regular Board Meeting Agenda Packet- Page 142 of 199 Page 16 of 26 ATTACHMENT 4 SOLIDS HANDLING FACILITY IMPROVEMENTS DISTRICT PROJECT 7348 POST-BID/PRECONSTRUCTION ESTIMATE No. Item Description Amounts %Construction Cost 1. CONSTRUCTION a. Construction Contract $179,841,000 b. Project Contingency at 15% (CM included) $27,000,000 c. Permits(Air Testing included) $1,000,000 d. Hazardous Compliance(Testing included) $700,000 e. ESLF Construction Completed(Not SRF Eligible) $2,866,000 SUBTOTAL-CONSTRUCTION $211,407,000 100% 2. CONSTRUCTION MANAGEMENT a. District Forces -Engineering staff(PM, RE, Safety,etc.) $6,000,000 -Operations Support, including Maintenance $5,000,000 b. Consultants -MWH: Construction Management Services $12,000,000 -Hazardous Material Consulting $300,000 -Existing Electrical Support(Aresine&Carollo) $2,000,000 -B&V(ESDC) $4,000,000 -HDR(ESDC) $1,000,000 -Degenkolb(ESDC) $650,000 -Furnace Support(TBD) $650,000 -As-needed Services, Third-Party Review, QA/QC,VE $2,500,000 SUBTOTAL-CONSTRUCTION MANAGEMENT $34,100,000 16.1% 3. PREBID EXPENDITURES a. Engineering -District Staff Time(Engr.And Operations) $3,900,000 -B&V $9,600,000 -MWH $1,100,000 -Other Consultants $720,000 -Equipment Selection Procurement $496,000 -Regulatory Permits $50,000 SUBTOTAL-PREBID EXPENDITURES $15,866,000 7.5% 4. TOTAL ESTIMATED PROJECT COST 1 $261,373,000 September 2, 2021 Regular Board Meeting Agenda Packet- Page 143 of 199 Page 17 of 26 Attachment 5 SOLIDS HANDLING FACILITY IMPROVEMENTS 11 DISTRICT PROJECT 7348 PROJECT AWARD Board Meeting September 2, 2021 Jean-Marc Petit, P.E. Director of Engineering and Technical Services s, Edgar J. Lopez, P.E. Capital Projects Division Manager ` 1 SOLIDS HANDLING FACILITY IMPROVEMENTS (SOLIDS PROJECT, PHASE 1 1 2 2 3 4 5 6 7 8 Completed related O •r eects Emergency Sludge Loadout • Emergency exterior stairways Digester demolition EXISTING SLUDGE MULTIPLE AIR POLLUTION ASH HANDLING ELECTRICAL CENTRIFUGE SOLIDS DIGESTER BLENDING/ HEARTH CONTROL AND LOADOUT SYSTEMS DEWATERING CONDITIONING DEMOLITION STORAGE FURNACES SYSTEM BUILDING (MHFs) SEISMIC Z RETROFIT 2 1 September 2, 2021 Regular Board Meeting Agenda Packet- Page 144 of 199 Page 18 of 26 SOLIDS PROJECT IS VERY COMPLEX AND RENOVATES AN OPERATING FACILITY WITH ALL THE SOLIDS AND POWER ELEMENTS OF THE TREATMENT PLANT ■ ■ i Ok 3 PRE-QUALIFIED GENERAL CONTRACTORS AND ELECTRICAL SUBCONTRACTORS General Contractors: Electrical Subcontractors: • Balfour Beatty Infrastructure, Inc. • Blocka Construction, Inc. • Flatiron West, Inc. • Con J. Franke Electric, Inc. • Kiewit Infrastructure West Co. • Contra Costa Electric, Inc. (Kiewit) • Helix Electric, Inc. • C. Overaa&Co. Mass Electric Construction Company • Shimmick Construction Company, . San Joaquin Electric, Inc. Inc. • Walsh Construction • Shimmick Construction Company, Inc. • W. M. Lyles Co. • Sprig Electric Co. Bidders 4 2 September 2, 2021 Regular Board Meeting Agenda Packet- Page 145 of 199 Page 19 of 26 BID SUMMARY Bid opening: June 16,2021,2:30 PM Engineer's Estimate: $130,000,000-$'140,000,000 No. Bidder Total Bid 1 Kiewit Infrastructure West Co. $779,841,000 2 W.M.Lyles Co. $206,856,000 3 Flatiron West Inc. $216,293,989 ` 5 CENTRAL SAN 5 REVIEW OF PROJECT COST ESTIMATE PROGRESSION AND INCREASES Fiscal Year(FY) CIB Budget Comments Construction Progression of Estimate Scope Elements Baseline—Scrubbers, $51.4 Million dewatering,seismic,ash, FY 17-18 $66,439,000 Master Plan M blending,etc. Scrubber pilot testing: more electrical,instrumentation FY 18-19 $82,100,000 30%Design $63.0 M and controls EI8 C identified. New ash building,smart motor control center(MCC)equipment, upgrades to Emergency Sludge Loadout Facility(ESLF)and other FY 19-20 $93,376,000 50%Design 1 $85.9 M side prolects. Pv zi-zz Long time to complete this Capital Design.Quality assurance and Improvement quality control(QA/QC)concerns Budget(CIB) on EI&C.Added constraints and Project FY 20-21 $128,234,000 90%Design $97.3 M sequencing. Approved Added more constraints,longer Budget project duration,and partial building shutdown for MHFs FY 21-22 $183,894,000 100%Estimate $110.0 M temporary ower. Sludge hauling 8,disposal, electrical work for existing Revised in bid systems,9 Addenda clarifications, eriod $183 894 000 Per Addenda $140Malation increases. til 6 6 3 September 2, 2021 Regular Board Meeting Agenda Packet- Page 146 of 199 Page 20 of 26 PRICE INCREASES AND DIFFERENCES • Reasons for increased costs since FY 21-22 Budget: • 1,460 Days or over 4 years of construction • Impact of construction sequencing from seismic improvements • Very detailed project construction constraints and milestones • MHFs shut down for 12 months and additional 6 months requires temporary sludge hauling-$19 M • Deferred design: • Pipe and electrical conduits supports and routing • Temporary shoring design for seismic walls • Ash system and metal building • Existing electrical systems issues • Electrical on critical path is very complex and increased the project risk • Limited number of bidders-Only three general contractors and two electrical subcontractors • Included major temporary electrical system as part of sequencing • Bid market impacts • Global supply disruption during COVID-19 One of a kind in difficult times and market CENTRALSAN 7 POST BID/PRE-CONSTRUCTION ESTIMATE No. Item Description Amounts %ConAmolon Cost 1 CON$TRUr7lON a.ConsVrcllan Cnr&W 5179,841,000 b.Project Canlingency at 15%(CM Included) 527,000,600 c.Permks(Air Tesling nowed) 51,000,000 d.HaE rdou9 Compliance[resting included] S700,000 e.ESLF Coriatruation Completed(Not SRF Eligible) 52.886.000 SUBTOTAL-CONSTRUCTION 5211 9117 000 100% 2. CONSTRUCTION MANAGEMENT a.Dorm Farces -Engineering staff(PM,RE,Safety,etc.) 58,000,000 -Operations Support Wl ud ing MaYdenance 55,000,000 6.Consultants MWH:Construction Ma nagem em Services $12,000,000 -Ha[ardom Material Consulting 4300,00D -Existing Electrical Sopyort(Aresine&Carollo) 52,000,000 -S&V(ESD(-,) $4.000,000 H DR(ESOC) S1,000,000 -Degenkale(ESDC) 4850,000 -Furnace Seppart(TED) SB5g600 -As-neewd Servtcas,Tired-Party Rew .Olk=.VE 52 300.000 SUBTOTAL-CONSTRUCTION MANAGEM ENT $34.100.000 16 1'%. 3. PREBID EXPENDITURES P.Engineering -Dlstrkt Stitt Tlme(Ergr.And Operatroris) 53,900,000 -$&V S9 6N 000 -MWH $1,100,000 -aner ConsullaNa 4720,000 -Erauigme nt Selection Procure mem $ 996,000 -Regulatory PaimitG S50,OW SUBTOTAL-PREBID EXPENDITURES 515.866.000 7541. d. TOTAL ESTIMATED PROJECT COST $281,979,000 CEN TRAL SAN 8 4 September 2, 2021 Regular Board Meeting Agenda Packet- Page 147 of 199 Page 21 of 26 PROJECT CONTINGENCY DETAILS • Staff is requesting to budget 15% Contingency • Breakdown for needing 15% or $27 M: • 5% or$9 M is Standard Allowance for change orders; • 5% or$9 M due to major renovation and project complexity; • 5% or$9 M for the following: • Regulatory changes based on Maximum Achievable Control Technology (MACT)50% rule ($5 M) • Additional staffing costs due to change orders and MACT 50% rule or engineering costs to support project($4 M) • Staff will re-evaluate the Contingency required prior to issuing Notice to Proceed (NTP) for Construction. 9 CENTRALSAN PROJECT FINANCING • FY 2021-22 Budget:............ $ 183.9 M • Total Estimated Project Cost: $ 261.4 M • Overall Variance: ($ 77.5 M) OrCENTRAL SAN r to 10 5 September 2, 2021 Regular Board Meeting Agenda Packet- Page 148 of 199 Page 22 of 26 FINANCIAL PLANNING ASSUMPTIONS Our long-term financial plan has updated to evaluate several scenarios related to funding options for the Solids Project. Some of the general assumption updates include: • Unfunded Actuarial Accrued Liability(UAAL)eliminated and debt service on 2021 Certificates of Participation (COPs). • Anticipated Cost-Of-Living Adjustments(COLAs)per anticipated Memoranda of Understanding(MOUs). • Other inflation assumptions updated. • $15.9 M of previously funded costs(pre-bid expenditures for planning and design)of the Solids Project will be reimbursed from the existing$173.1 M SRF loan. $25 M cut to the Ten-Year Capital Improvement Program (CIP)or five years of $5 M per year. o$3 M from Collection System Sewer Renovation; o$0.5 M from Vehicle Replacement Program; and o$1.5 M from Contingency. WE HAVE OPTIONS TO FUND SOLIDS PROJECT FUNDING GAP (Each option includes a proposed reduction of$25 M CIP) PREFERRED APPROACHES 1. Request an additional $50 M from SRF loan. No sewer service rate impacts above what is currently planned. 2. Issue $53 M in revenue bonds or COPs to fund FY 2022-23 Capital Expenditures, freeing up cash that could be set aside for the Solids Project funding gap. No sewer service rate impacts above what is currently planned. Not Recommended 3. Cash finance the funding gap through increased sewer service rates with additional 1.75% for each of four years for a total increase of 7%. 4. Defer another$50 M in projects in the Ten-Year CIP. CENTRALSAN 12 6 September 2, 2021 Regular Board Meeting Agenda Packet- Page 149 of 199 Page 23 of 26 ALTERNATIVES • Alternative 1:Award the Contract Award the project to Kiewit but _— proceed with a multi-step NTP. Evaluate and review project —_ sequencing,milestones,costs,and more ways to reduce risks for the contractor and Central San.Staff will report back prior to issuing _— a NTP for construction. Incorporate VE& NTP-1 NTP-2 Field Verifications NTP-3 Award Project Conductper Contract;Order Begin Value Long Lead Construction Engineering Equipment/Shop (VE) Off Ramp Drawings Terminate for Convenience `13 CENTRALSAN 13 ALTERNATIVES (CONTINUED) • Alternative 2:Reject Bids • A)Rebid the Project:Staff would conform all the addenda with the contract documents,evaluate and incorporate more ways to reduce risks to the contractor and rebid within 6-9 months. • B)Rebid within Approved Budgef:Staff could repackage and rebid the project to proceed within the$183.9 M budget and add a future project(s)to complete the remainder of the scope. • C)Consider Design-Build Proiect Delivery:Staff could evaluate alternative delivery to complete the project using Not Recommended design-build and use the existing Solids Project's bid documents as the basis. • D)Repackage Proiect in Multiple Phases:Staff could split and implement the Solids Project scope into multiple phases. This would include rebidding in various smaller projects which could be implemented in either two or up to six phases and take more years to complete. (Could be evaluated further if all other alternatives are not pursued.) 14 14 7 September 2, 2021 Regular Board Meeting Agenda Packet- Page 150 of 199 Page 24 of 26 ALTERNATIVES (CONTINUED) • Alternative 3(A):Evaluate an Alternative Long-term Solids Handling Approach including Anaerobic Digestions with all new Solids Facilities:Staff recommends re-evaluating the long-term solids handling from current operations based on furnaces,ash disposal and steam recovery to including or changing to anaerobic digestions based on the higher costs of the Solids Project. • Alternative 3(B):Evaluate an Alternative Long-term Solids Handling Approach including Anaerobic Digestions using a Private-Public-Partnership(P3)Approach:Like Alternative 3(A), staff recommends re-evaluating the long-term solids handling from current operations based on furnaces,ash disposal and steam recovery to anaerobic digestions using a P3 approach and use green energy. CENTRALSAN `ss 15 RE-EVALUATE LONG-TERM PATH FOR SOLIDS HANDLING AT CENTRAL SAN Alternative 3 A or B: Re- Alternative 1:Award based Evaluate Long-Term Solids on Contractor Design Assist Handling and reduce risk after VE All New Project: Refurbish -Anaerobic MHFs, Digestion and continue with -� Biogas Co-Gen. Steam and Abandon Steam. Co-Gen with Convert to all Natural Gas Electric Blowers Evaluate both - paths before NTP for - -- construction - == h'16 CENTRALSAN �. 16 8 September 2, 2021 Regular Board Meeting Agenda Packet- Page 151 of 199 Page 25 of 26 CONSTRUCTION SCHEDULE FY 2021-22 FY 2022-23 FY 2023-24 Bid and Award NTP-1:Solids Handling,Phase 1 Optimization VE with Kiewit Alternative Long-Term Solids Handling Alternatives Evaluation Board decision on Alternative Path for Long-Term Solids Handling NTP-2:for Construction Construction July 2021 July 2022 July 2023 July 2024 July 2025 July 2026 ❑ Bid and Award:February 22,2021—September 2,2021 NTP-1:Solids Handling Contract review with Kiewit and Engineering:October 2021—Feb.2022 Q Alternative Long-Term Solids Handling Alternatives Evaluation:September 2021—Feb.2022 Update Board in February 2022 and request approval for construction Q NTP-2:Proceed with Kiewit for Solids Handling,Phase 1 Construction:March 2022 Construction Phase:March 1,2022—February 28,2026(1,460 Days) � v CENTRALSAN 17 PROJECT SUPPORT NEEDED • Construction Management: MWH Constructors, Inc. • Engineering Services During Construction: • Black & Veatch Corporation: Civil, Mechanical, HVAC, and EI&C • HDR, Inc.: Architectural, Structural, and As-Needed • Degenkolb Engineers: Seismic Design • Aresine Engineering: Assist Capital Projects with Review of Electrical and Controls Items and Questions • (TBD): Furnace and Air Pollution Control • Others: As-Needed Engineering to conduct third party independent assessments of Solids Handling Alternatives r 18 CENTRAL SAN 1s 9 September 2, 2021 Regular Board Meeting Agenda Packet- Page 152 of 199 Page 26 of 26 BOARD RECOMMENDATIONS FOR ACTION 1. Award of a construction contract in the amount of$179,841,000 to Kiewit Infrastructure West Co., the lowest responsive and responsible bidder,for the construction of the Solids Handling Facility Improvements, District Project 7348. 2. Authorize staff to enter contractual agreements with third-party consultants to conduct independent assessments of Solids Handling Alternatives 3. Authorize the General Manager to execute five new agreements: a) MWH Constructors, Inc. at a cost not to exceed $12.0 million for construction management services. b) Black&Veatch Corporation at a cost not to exceed $4.0 million for engineering support during construction. c) Aresine Engineering at a cost not to exceed $1.5 million for electrical engineering support. d) HDR, Inc. at a cost not to exceed $1.0 million. e) Degenkolb Engineers at a cost not to exceed $650,000. 4. Authorize the General Manager to execute Contract Documents subject to SRF funding, submittal requirements, value engineering, and include up to a 15-percent project contingency. ` 19 CENTRALSAN 19 QUESTIONS? 51 r 20 20 10 September 2, 2021 Regular Board Meeting Agenda Packet- Page 153 of 199