HomeMy WebLinkAbout08. Authorize the General Manager to execute Technical Consulting Services Agreement with National Plant Services, Inc. not to exceed $11,500,000 to provide inspection of large diameter pipes, siphons, and force mainsPage 1 of 13
Item 8.
DCENTRALSAN
MEETING DATE: JUNE 20, 2024
BOARD OF DIRECTORS
POSITION PAPER
SUBJECT: AUTHORIZE THE GENERAL MANAGER TO EXECUTE A TECHNICAL
CONSULTING SERVICES AGREEMENT WITH NATIONAL PLANT
SERVICES, INC. (NPS), IN AN AMOUNT NOT TO EXCEED $11,500,000 TO
PROVIDE INSPECTION OF LARGE DIAMETER PIPES, SIPHONS,AND
FORCE MAINS; AUTHORIZE A BUDGET TRANSFER IN THE AMOUNT OF
$597,000 FROM DISTRICT PROJECTS (DP) 8444 AND $1,200,000 FROM
THE CAPITAL IMPROVEMENT BUDGET (CIB) CONTINGENCYTO DP
8443; FIND DP 8443 AND 8444 ARE EXEMPT FROM THE CALIFORNIA
ENVIRONMENTAL QUALITYACT (CEQA); AND TREATAS A CAPITAL
EXPENDITURE FOR FINANCIAL REPORTING PURPOSES AS ALLOWED
FOR UNDER CENTRAL SAN'S REGULATORYACCOUNTING POLICY, BP
46.
SUBMITTED BY: INITIATING DEPARTMENT:
DANA LAWSON, SENIOR ENGINEER ENG-PDS-DIVISION MANAGER
DAN FROST, SENIOR ENGINEER
REVIEWED BY: DANEA GEMMELL, PLANNING AND DEVELOPMENT SERVICES DIVISION
MANAGER
GREG NORBY, DEPUTY GM - ENGINEERING & OPERATIONS
JOAN COX, ASSISTANT GENERAL COUNSEL
Roger S. Bailey Leah Castella
General Manager District Counsel
ISSUE
The Board of Directors' (Board) authorization is required for the General Manager to execute an
agreement in an amount greater than $200,000 per Board Policy 037, to find projects are exempt from
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CEQA, and to transfer funds more than $500,000 within the Capital Improvement Program (CI P).
BACKGROUND
Central San began its Sewer Closed -Circuit Television (CCTV) Inspection Program in 2002. The
program's goal is to assess the condition of the collection system using CCTV and inform maintenance
and capital improvement needs. Although Central San has performed some CCTV inspections of large -
diameter pipes, Central San's equipment is best suited to smaller -diameter pipes (e.g. sewer mains). Due
to the specialty equipment needed to clean out siphon sections, inspect these larger pipes, and the
difficult access for force mains, staff wanted to develop a comprehensive Inspection Program for these
asset classes. The large scale of such a program necessitated the solicitation of a contractor with the
experience and equipment available, partnering with a consultant (or in-house staff) capable of resolving
access logistics and providing recommendations for prioritizing the piping for renovation timeframes.
Central San has 88 miles of large -diameter pipes (greater than 18 inches), which includes approximately
3800 feet with a siphon configuration and 1200 maintenance access holes. These assets have a
replacement cost of over $2 billion. Approximately 50 percent of these are over 50 years old, so a
comprehensive condition assessment at this point in their lifecycle is appropriate to proactively identify
early failure that can be addressed through spot repairs, provide an estimate of the assets' remaining life to
better inform future replacement in the Capital Improvement Program, and to develop a reasonable re -
inspection program based on the deterioration rates identified.
A request for proposal was prepared by the Planning & Applied Research Group, with the assistance of
Woodard & Curran, and posted to PlanetBids on February 20, 2024. Additionally, staff provided notice of
the posted RFP to several consultants/inspection contractors. While several firms attended the pre -
proposal meeting and submitted questions, only one proposal was received on April 3, 2024 from National
Plant Services (NPS). At least one qualified firm informed staff that they were unable to propose due to
their key staff being unavailable in the near term. Staff spoke to a number of agencies and confirmed the
reasonableness of NPS' cost for the average price per mile and the average footage inspected per day.
Staff reviewed the proposal, conducted reference checks, and confirmed that NPS meets the experience
and qualification requirements. NPS has over 44 years in the business as a licensed contractor for sewer
maintenance, has completed over 10 million linear feet of pipeline and siphon cleaning and inspection
services over the last five years, has Bay -area based equipment, personal and project manager available
for this project, including staff certified by the National Association of Sewer Service Company's
(NASSCO) Pipeline Assessment Certification Program (PACP) and Manhole Assessment Certification
Program (MRCP), and has teamed with subcontractors for traffic control and bypass pumping. NPS has
the experience and the resources to organize, plan, and perform the field work; to manage and compile the
data; and to provide a Final Engineering Report with recommendations for repairs in a timely manner. I n
particular, the references spoke highly of the proposed Project Manager's experience, qualifications, skills,
and abilities.
The scope of work includes multi -sensor inspections to provide a comprehensive condition assessment.
The CCTV inspection will use high -definition cameras that are also equipped with sonar. Depending on
the initial assessment, 3D light detection and ranging (LiDar) may also be deployed. The sonar will identify
and quantify grit and debris build-up to determine if a cleaning project needs to be undertaken or a
program developed. The LiDar will identify corrosion or loss of wall thickness due to corrosion, which will
help inform deterioration rates that can be extrapolated to determine the remaining life of the assets and,
subsequently, the future replacement of the assets for the Capital Improvement Program. LiDar will be
utilized when the field crews do their pre -inspection check and see significant corrosion in the maintenance
access holes. NPS will analyze the data to produce an annual report summarizing the inspection findings and
providing recommendations for repairs. The final annual report will also include recommendations for a re -
inspection program, which will likely suggest a range based on the age, current condition, and deterioration rate
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observed.
If emergency repairs are identified, Central San will also issue a construction contract to NPS under
Uniform Public Construction Cost Accounting Act (UPCAA) guidelines. NPS holds appropriate licenses
(A, General Engineer, and C42, Sanitation System) for this work from the California State License Board,
and experienced in performing a suite of trenchless repairs including: 1. Injection grouting to stop
infiltration, 2. Cured I n Place Pipe (Cl PP) Point repairs to structurally repair compromised pipe sections,
3. Cl PP Lateral Lining to repair lateral connections or pipelines, and 4. Spray mortar lining of pipelines and
manholes.
Staff discussed and negotiated the scope and cost ceiling for the agreement. All costs will be billed on a
time & material basis, as set forth in a fee schedule with annual adjustments over the term of the
agreement. The agreement would have a cost ceiling of $11,500,000 over five years, with annual expenses
ranging from $2 million to $2.75 million. The following is a breakdown of the allocated funds by asset class:
1. $6 million is budgeted for the inspection of approximately 440,000 linear feet of large -diameter pipes, with
an additional $1.8 million reserved for cleaning if this becomes necessary.
2. $2.5 million is budgeted in the first two years for the cleaning and inspection of approximately 3,800 linear
feet of large -diameter siphons over the first two years.
3. $1 million is budgeted in the last three years to inspect approximately 48,000 linear feet of force mains.
See Attachment 1 for a more detailed breakdown of the Project Schedule and Budget. Items 1 and 2 will
be invoiced to the Large Diameter Inspection Program, DP 8443; and item 3 will be invoiced to the Force
Main Inspection Program, DP 8444.
California Environmental Quality Act (CEQA)
Staff has concluded that both the Large Diameter Inspection Program, DP 8443, and the Force main
Inspection Program, DP 8444, are exempt from the California Environmental Quality Act under District
CEQA Guidelines. Approval of these projects will establish the Board's independent finding that these
projects are exempt from CEQA.
ALTERNATIVES/CONSIDERATIONS
1. Reject all proposals and do not conduct inspections. This alternative is not recommended as the
condition of large -diameter pipes and force mains would remain unknown.
2. Reject all proposals and acquire resources for Central San staff to conduct the inspections and
siphon cleaning. Planning and Applied Research staff evaluated the cost of completing the work in-
house versus contracting with an outside vendor and determined it is not cost- or time -effective to
obtain the necessary equipment, staffing and training to complete this work in-house at this time.
Staff does not recommend this alternative but could consider re-evaluating the feasibility of acquiring
equipment, training, and using Central San staff to conduct future inspections after gaining more
experience with inspections and large siphon cleaning under this project.
3. Reduce the number of miles of pipeline inspected. Staff does not recommend this alternative. Staff
& Consultant Woodard & Curran selected the candidate pipelines for the first year of the project to
assess the condition of pipelines that may require near -term renovation based on the information
available. The remaining 60 miles of large -diameter sewers have inadequate condition information at
present to confidently determine their potential likelihood of failure. Reducing inspections completed
per year may elevate business risk exposure for Central San.
FINANCIAL IMPACTS
The agreement would have a cost ceiling of $11,500,000 over five years, with annual expenses ranging
from $2 million to $2.75 million. Current funds allocated to the Large Diameter Pipeline Inspection
Program, DP 8443, are $550,000 with another $400,000 included in the Fiscal Year (FY) 2024-25 Capital
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Improvement Budget (CI B). Therefore, staff requests a transfer from the Force Main Inspection Program,
DP 8444, of $597,000 and $1,200,000 from Contingency in the FY 24-25 CI B. This will bring the project's
allocated budget to $2,747,000 in FY 2024-25 to cover the first year's work. Subsequent FY budgets will
be increased accordingly when the first year's effort proves successful. Any renovation needs identified
through this inspection program will be funded through the separate Large Diameter Sewer Renovation
Program, DP 100007, which will be included in the FY 2024-25 Cl B. (See attachment 2).
COMMITTEE RECOMMENDATION
The Engineering and Operations Committee reviewed this matter at its June 5, 2024 special meeting and
recommended approval.
RECOMMENDED BOARD ACTION
1. Authorize the General Manager to execute a Technical Consulting Services Agreement with National
Plant Services in an amount not to exceed $11,500,000 over a five year term for the Large Diameter
Pipeline Inspection Program - Phase 1, District Project 8443 and Forcemain Inspection Program,
District Project 8444.
2. Authorize a budget transfer in the amount of $597,000 from DP 8444 and $1,200,000 from the
Capital Improvement Budget Contingency to DP 8443.
3. Find that District Projects 8443 and 8444 are exempt from CEQA.
4. Treat as a capital expenditure for financial reporting purposes as allowed for under Central San's
Regulatory Accounting Policy, BP 46.
Strategic Plan re -In
GOAL ONE: Customer and Community
Strategy 1— Deliver high -quality customer service
GOAL FOUR: Governance and Fiscal Responsibility
Strategy 3 - Maintain financial stability and sustainability
GOAL FIVE: Safety and Security
Strategy 2 - Protect personnel and assets from threats and emergencies
GOAL SIX: Infrastructure Reliability
Strategy 1 - Manage assets optimally
ATTACHMENTS:
1. Project Schedule and Budget
2. Accounting Treatment
3. Presentation
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ATTACHMENT 1
Project Schedule and Budget
Year
UP t$44s, Large uiameter
ripenne Inspection
Program
UP 6444, rOrcemain
Insp. Program
Large Siphon
Diameter Pipe Cleaning &
Inspections Inspections
Confined
Space Entry
Locations
MACP
Level
1
MACP
Level
2
1 FY 24-25
79,394
1911
10
300
60
2 FY 25-26
88,953
1910
10
300
60
3 FY 26-27
88,953
10
300
60
16,000
4 FY 27-28
88,953
10
300
60
16,000
5 FY 28-29
88,953
10
300
60
16,000
Quantity
Estimates
435,206
LF
3821 50
LF EA
1500
EA
300
EA
48,000
LF
DP 8443, Large Diameter Pipeline
DP 8444, Forcemain
Annual
Inspection Program
($)
Insp. Program
Budget
Siphon
Estimate
Large Diameter
Optional
Cleaning &
(not including dewatering/
($)
Year
(non -siphon)
Cleaning
Inspection
cleaning if sags)
1 FY24-25
1,050,000
275,000
1,200,000
2,525,000
2 FY 25-26
1,150,000
325,000
1,300,000
2,775,000
3 FY 26-27
1,250,000
375,000
320,000
1,945,000
4 FY 27-28
1,300,000
425,000
330,000
2,055,000
5 FY 28-29
1,400,000
450,000
2,500,000
350,000
1,000,000
2,200,000
Budget 6,150,000
Estimates ($)
1,850,000
11,500,000
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ATTACHMENT 2
ACCOUNTING TREATMENT FOR DISTRICT PROJECTS 8443 AND 8444
During adoption of the FY 2024-25 Budget at the June 6 Board meeting, staff proposed
that spending be capitalized under Board Policy (BP) 046 Regulatory Accounting for the
Large Diameter Pipeline Inspection Program (DP 8443) and the Force Main Inspection
Program (DP 8444). While the Capital Budget included these Projects, a discussion
occurred during the Engineering & Operations Committee meeting on June 5, 2024 as
to whether they should be considered capital or operating & maintenance (O&M). It was
noted that Central San's ongoing closed-circuit television (CCTV) program (primarily to
inspect sewer mains) has been classified as O&M since FY 2014-15.
In recognition that the classification of DPs 8443 and 8444 is debatable, staff
recommends that the Board specify that these efforts be capitalized through BP 046,
which is consistent with how they were treated in the budget documents, to resolve any
ambiguity about treatment. While the Board did approve this treatment on June 6 in
conjunction with the FY 2024-25 budget adoption, one Board member asked for
continued discussion at a subsequent meeting.
The following material has been compiled to compare and contrast the accounting
treatment of these similar but distinguishable programs.
Existing CCTV Program
Central San began using CCTV in the early 2000s to evaluate the condition of sewer
pipes and that effort was capitalized until FY 2014-15. The transition from classifying the
expenses as capital to O&M occurred after staff developed a good baseline inspection
framework that could be replicated to prioritize renovation projects. The costs were then
classified as O&M because it became an ongoing program to update cleaning
schedules and condition scores. Currently, 10% of the collection system is televised
each year, which is approximately 150 miles. The current contract with National Plant
Services (NPS) is approximately $1.1 M/year and the first year of the 5-year contract
was recently completed.
Large Diameter Pipeline & Force Main Inspection Programs (DP 8443 and 8444)
As the existing CCTV Program matured into a routine effort, it became apparent that
different technologies are needed to provide quality data when inspecting larger pipes
and force mains and there have been significant improvements in technology since
Central San's initial CCTV efforts. This new agreement will utilize High -Definition
cameras for CCTV, Sonar, and Lidar to provide a comprehensive condition assessment
more appropriate to these asset classes.
District Projects 8443 and 8444 have been included in the Capital Budget since FY
2016-17; however, spending has been minimal while staff, with consultant support,
evaluated appropriate technologies and requirements for these asset classes. For
example, the Large Diameter Pipeline Inspection Program was slow to start as the prior
vendor (in 2020) had four different project management staff changes which
significantly delayed the progress. As a result, the vendor was terminated in 2023 and
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ATTACHMENT 2
Central San entered into a settlement agreement. However, that effort did identify that
Main Trunk No. 1 (the 39-inch pipe) was in poor condition, resulting in its planned
abandonment under DP 100007 which is currently under design.
It is reasonable and appropriate to capitalize this effort as it is primarily a condition
assessment (pre -design) that directly relates to a capital project. The majority of this
effort is intended to determine the current condition of these assets with the primary
objective of making capital repair/rehabilitation/replacement decisions and initiating
related projects. So, it is similar to the early stages of any major capital project where
Central San invests staff time and other resources to establish the basis for the
subsequent scope, timing, and renovation methods. Thus, once completed, there may
be subsequent capital projects to correct any deficiencies found, similar to the Main
Trunk No. 1 project noted above. This is especially true since the first year's scope
prioritized pipelines without prior condition data. Similarly, the existing CCTV Program
was capitalized until a good baseline inspection framework was developed to prioritize
sewer main renovation projects. Treatment of the costs was switched to O&M when it
became an annual program to update the cleaning program and condition scores.
As this work is intended to be the first comprehensive inspection of all large diameter
pipelines (including siphons) and force mains, it is appropriate to treat as a capital
expense. While we do not anticipate this effort will become routine like the existing
CCTV Program, if it does, then it could be converted to O&M or the existing CCTV
program updated to properly inspect these asset types. The inspection of the large
diameter pipelines (including siphons) and force mains will help Central San determine
the rate of degradation of these assets to forecast their replacement and associated
capital budgeting and to determine if, or when, re -inspection is recommended on
pipelines not requiring near -term capital investment.
There is also no difference in how condition assessment work is treated for large
diameter pipelines or force mains and how we have appropriately and consistently
treated other major undertakings in the early stage of the asset management lifecycle.
Finally, while there is a cleaning allowance in the $11.5M inspection program, this was
included because it is unknown whether a camera can be passed through the pipes
without cleaning and still obtain quality inspection data. However, if we decide to use
the cleaning allowance at the end of the program just for cleaning, this could be treated
as an O&M cost.
Recommended Board Action (Item 4)
Treat as a capital expenditure for financial reporting purposes as allowed for under
Central San's Regulatory Accounting Policy (BP 046).
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1
Agenda
Drivers
Purpose
Inspection Technologies
Strategic Plan Goals
Project Schedule
Project Budget
Recommended Board Actions
s
Z
Attachment 3
1 Its.
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Drivers
88 miles of large -diameter pipes (>18 inches)'
including 3800 feet with a siphon configuration & over 1200
maintenance access structures
interceptors were installed over 70+ years (1940-2010)
50% are over 50 years old
71% are corrodible concrete
Current condition is not well understood — renovation projections
are primarily based on industry -typical remaining life estimates
using pipe material and age
Replacement estimate over $2 billion
3
Interceptors 25
Installed 20
Over 70+
Year Period15
L
G
Gl
O1
110
5
0
1940 1950 1960 1970 1950 1990 2000
Decade of Installation
Whft.__ ■ RCP ■ Lined -RCP ■ PVC ■ AC ■VCP 1960-Present ■ PC ■ DIP ■ CMLC ■ VCP Pre-1960 ■ CM ■ HDPE ■ CAS
4
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Purpose
Comprehensive condition assessment to
optimize the lifecyle of assets by:
proactively identifying & repairing
early failure
estimating assets' remaining life to
better inform the CIP
developing a re -inspection program
based on the condition and
deterioration rates identified
5
Examples
f
98E4M87 -> 96E4R
4• RCP. 38-
f} i
VON- 533111
Exposed Reinforcing Bars in 39-inch—29,000 feet
RCP from late 1940s 30 to 36-inch RCP from mid-1950s
L
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Page 11 of 13
Inspection Technologies
High -Definition Closed Circuit Television (HD CCTV)
Will continue to be used a baseline technology across the entire
asset class
Sonar
If there's enough water to float over the bottom, it will be added
to the equipment platform for use during CCTV inspection
Will identify debris build-up, determine if cleaning program needed
3D Light Detection and Ranging (LiDar)
Will be used at Operator's discretion based on initial assessment
Will identify if wall -loss has occurred, which will inform
deterioration rate to estimate remaining useful life, thus future CIP
and renovation priority
7
Strategic Plan FY 2024-26
Draft Key Metrics
Goal Six— Infrastructure Reliability
All large diameter gravity sewers inspected within 5.—
years (>_ 11 miles per year in FY 2024-25, >_ 15 miles per V,
year starting FY 2025-26)""""
All large diameter siphons cleaned and inspected
within 3 years (z 3 siphons per year)
All pump station force mains inspected within 5 years - ld
(>_ 5 force mains per year starting FY 2025-26)F
Goal Seven — Innovation and Agility
Reviews or pilot test of new and promising technology
and presentations of findings (>_ 3 per year)
I
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Page 12 of 13
l
Project Schedule .`
Large a Diameter Siphon Cleaning Confined Space MACP MACP
g P g Entry • '
Pipe Inspections & Inspections Level I Level 2
Locations
79,394 1911 10 300 60
88,953 1910 10 300 60
88,953 10 300 60 16,000
88,953 10 300 60 16,000
88,953 10 300 60 16,000
Quantity 435,206 3821 50 48,000
Estimates LF LF EA 1500 EA 300 EA LF
I
Project Budget
Large Diameter
(non -siphon)
Optional Siphon Cleaning
Cleaning & Inspection
N
1,050,000
275,000 1,200,000
1,150,000
325,000 1,300,000
1,250,000
375,000
320,000
1,300,000
425,000
330,000
1,400,000
450,000
350,000
Budget 6,150,000
1,850,000 2,500,000
1,000,000
11,500,000
Estimates ($)
10
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Budget Transfers
to fund Year 1 (FY 24-25)
DP 8443
From DP 8444
From Contingency
Proposed Budget for
DP 8443 in FY 24-25
11
550,000 400,000
597,000
1,200,000
$2,747,000
Recommended Board Actions
Authorize the General Manager to execute a Technical Consulting
Services Agreement with National Plant Services in an amount not to exceed
$11,500,000 over a 5-year term for the Large Diameter Pipeline Inspection
Program - Phase 1, District Project 8443 and Forcemain Inspection Program,
District Project 8444.
2 Find that District Projects 8443 and 8444 are exempt from CECA.
3 Authorize a budget transfer in the amount of $597,000 from DP 8444
and $1,200,000 from the Capital Improvement Budget Contingency to DP
8443 to fund Year 1.
Treat as a capital expenditure for financial reporting purposes as
allowed for under Central San's Regulatory Accounting Policy (BP 046).
12
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