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Home My WebLink About11. Authorize a new capital project to support Central San's Steam Renovation and Improvement Project and a new professional services agreement with HDR, Inc. Page 1 of 4 Item 11. CENTRAL SAN BOARD OF DIRECTORS POSITION PAPER MEETING DATE: MARCH 3, 2022 SUBJECT: APPROVE A NEW CAPITAL PROJECT IN FISCAL YEAR 2021-22 FOR STEAM RENOVATIONS, PHASE 1 AND SEPARATE FROM CURRENT DISTRICT PROJECT 7349; FIND THE NEW PROJECT IS EXEMPT FROM THE CALI FORNIA ENVI RONMENTAL QUALITYACT (CEQA); AND AUTHORIZE THE GENERAL MANAGER TO EXECUTE A NEW PROFESSIONAL ENGINEERING SERVICES AGREEMENT IN AN AMOUNT NOT TO EXCEED $1.4 MILLION WITH HDR, INC. FOR FINAL DESIGN AND BIDDING SERVICES SUBMITTED BY: INITIATING DEPARTMENT: NITIN GOEL, SENIOR ENGINEER ENGINEERING AND TECHNICAL SERVICES- MICHAEL CUNNINGHAM, ASSOCIATE PDS-ASSET MANAGEMENT ENGINEER REVIEWED BY: DANEA GEMMELL, PLANNING AND DEVELOPMENT SERVICES DIVISION MANAGER EDGAR J. LOPEZ, CAPITAL PROJECTS DIVISION MANAGER JEAN-MARC PETIT, DIRECTOR OF ENGINEERING AND TECHNICAL SERVICES Roger S. Bailey General Manager ISSUE The Board of Directors (Board) authorization is required for the General Manager to enter into a new professional engineering services agreement in an amount greater than $200,000, or initiate a new project not listed in the Capital I mprovement Budget (Cl B). March 3, 2022 Regular Board Meeting Agenda Packet- Page 80 of 165 Page 2 of 4 BACKGROUND On December 20, 2018, the Board authorized staff to enter into an agreement with HDR, Inc. (HDR)for the condition assessment and preliminary design of the Steam and Aeration Blower Systems Renovations, District Project (DP) 7349. This decision was made after a very competitive and formal solicitation process and selection that included four qualified consulting engineering firms. HDR has completed the condition assessment evaluations, comprehensive asset evaluations, business case evaluations (BCEs), and preliminary design reports to identify the assets which merit rehabilitation and/or replacement. The Steam and Aeration Blower Systems Renovations is a critical and large program-type project that has produced two separate projects, the Electric Blower Improvements, DP 100015 and Aeration Basins Diffuser Replacement and Seismic Upgrades, DP 100019. Each project aims to address many of the assets and vulnerabilities identified under the planning efforts. A third project, Steam Renovations, Phase 1, is being recommended by staff to address the critical needs of the treatment plant's steam system. The scope of work was identified by condition assessment and evaluations similar to the other projects. Overall, the existing steam system appears to be in very good condition. Most of the steam system elements have been identified to have an estimated remaining useful life greater than 20 years, while others need immediate attention, such as the boiler and deaerator feedwater pumps, and waste steam exchangers. The Steam Renovations, Phase 1 will also address safety-related improvements for the boiler feedwater and blowdown sampling equipment, boiler chemical system, and specific boiler feedwater piping and valves found to be rated below operating pressure. Staff has negotiated fees not to exceed $1.4 million (M)with HDR for final design and bidding services for the new project. I n addition, staff is recommending to include a 30% design for a steam turbine generator to possibly replace a steam turbine in the future, which is considered Phase 2 of the Steam Renovations, if needed. Proceeding with a 30% design now allows for staff to better understand the Phase 2 implementation and costs. For transparency and project accounting purposes, staff is recommending to separate the Steam and Aeration Blower Systems Renovations into a new project and to execute a separate agreement with HDR. Government Code Section 1090 (Section 1090) Compliance: HDR will be performing the technical work for final design of the Steam Renovations, Phase 1, which is in compliance with Section 1090. HDR has not been precluded from continuing with the final design of the Aeration Basins Diffuser Replacement and Seismic Upgrades Project or future phases and associated potential subsequent engineering services during construction of the Steam Renovations, Phase 1 based on the following premises: 1. The publicly advertised scope of the Steam Renovations, Phase 1 for consultant selection included from its inception elements for Phase 3 and 4, related work as well as other phases; 2. HDR's role and scope on the project during the preliminary design, BCEs, and assessments were limited to technical evaluations, in nature only, and did not include any recommendations independent from staff; 3. HDR was not acting in a capacity similar to that of a Central San employee or staff; 4. HDR did not perform work that independently defined the scope of the subsequent contract amendments; 5. HDR did not influence the decision making of Central San regarding the subsequent work; and 6. Board committee meetings and Board presentations were prepared, presented, and recommendations created by Central San staff. March 3, 2022 Regular Board Meeting Agenda Packet- Page 81 of 165 Page 3 of 4 CEQA Staff has concluded that the project is exempt from California Environmental Quality Act(CEQA) under Central San's CEQA Guidelines Section 15301, since it involves repairs, maintenance, and minor alterations to an existing sewage facility with no increase in capacity; and Section 15302, since it involves replacement of existing public facilities at the same location and with the same purpose.Any capacity increases are for non-growth inducing, wet weather purposes.Approval of this project will establish the Board's independent finding that this project is exempt from CEQA. ALTERNATIVES/CONSIDERATIONS The Board could consider two alternatives for the Steam Renovations, Phase 1 Final Design, as follows: Alternative 1: Status Quo - Do Nothing Alternative, which would likely lead to continuing challenges maintaining and operating the steam system which has components beyond their useful life and has been identified through condition assessments and comprehensive asset evaluations to require replacement. Replacing the equipment in a project will allow for planned outages and reduce the operational impact or risks associated with the systems. Do nothing alternative is not recommended. Alternative 2: Postpone or split scope into multiple smaller projects over multiple years, which is not recommended since the overall costs would be higher and all items are critical for either safety or for reliable operations. Projects take several months to design and longer to execute with contractors so postponing and conducting staggered timelines is not recommended. Postpone or split scope alternative is not recommended. FINANCIAL IMPACTS The total estimated project cost for the Steam Renovations, Phase 1 is $28.5 M, which includes detailed design, consultant and staff costs, construction contract, construction management, and contingency. The Steam and Aeration Blower Systems Renovations is listed on page 237 of Central San's Fiscal Year (FY)2021-22 Budget for$35.35 M.A$500,000 transfer will be done under the General Manager's delegated authority after the Board authorizes the separation of the project. Staff will also update the next FY's CI B to reflect the budget adjustments and project descriptions. No increase to the CI B is being proposed or changes that impacts the large range Capital Improvement Plan. COMMITTEE RECOMMENDATION The Engineering and Operations Committee reviewed this project at its meeting on February 16, 2022 and recommended approval. RECOMMENDED BOARD ACTION Staff recommends the following Board actions: 1. Approve a new capital project in Fiscal Year 2021-22 for the Steam Renovations, Phase 1 and separate from District Project 7349 (Steam and Aeration Blower Systems Renovations); 2. Find that the Project is exempt from CEQA: and 3. Authorize the General Manager to execute a new professional engineering services agreement in an amount not to exceed $1.4 million with HDR, I nc. for final design and bidding services for the new project. March 3, 2022 Regular Board Meeting Agenda Packet- Page 82 of 165 Page 4 of 4 Strategic Plan Tie-In GOAL TWO:Environmental Stewardship Strategy 1—Achieve 100%compliance in all regulations 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 SIX:Innovation and Optimization Strategy 2—Improve and modernize operations through technology and efficiency measures March 3, 2022 Regular Board Meeting Agenda Packet- Page 83 of 165