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SR-071310-1FCity Council Meeting: July 13, 2010 Agenda Item: ~ `" ~ To: Mayor and City Council From: Susan Cline, Acting Director of Public Works Subject: Operations, Maintenance, and Management Services (OMMS) for the Charnock Well Field Recommended Action Staff recommends that the City Council authorize the City Manager to negotiate and execute an agreement with Siemens Water Technologies Corporation in the amount of $556,048 (including a 15% contingency) for the operations, maintenance, and management services (OMMS) of the Charnock Well Field for two years with options for subsequent renewals. Executive Summary The Charnock Well Field (Charnock) was contaminated by methyl tertiary-butyl ether (MTBE) in 1996. The new treatment facility is scheduled to be completed by mid- summer 2010. Staff recommends utilizing an OMMS contractor upon successful completion and regulatory acceptance of the new treatment facility as the treatment required at Charnock has. a limited duration of ten years. The OMMS contractor will assume the responsibility of the operations and maintenance of the treatment facility at Charnock with City staff supervision. Siemens Water Technologies Corporation is recommended as the OMMS contractor at a cost of $556,048. Background In June 1996, the City's drinking water wells at Charnock were shut down due to the detection of gasoline additive MTBE from the leaking underground gasoline storage tanks and pipelines in the vicinity owned by various oil companies. Since then, the City has been importing water from the Metropolitan Water District (MWD} to meet customer demand while determining how to address the contamination of the Charnock sub- basin. After reviewing many treatment options, staff determined the best approach would be to treat the contaminated water at Charnock and pump it to Arcadia Water Treatment Plant (Arcadia) for final treatment and distribution. On February 26, 2008 and Mav 26, 2009, Council approved and amended Agreement 8892 (CCS) with Black 1 & Veatch Corporation for the design and construction of an MTBE treatment facility at Charnock and upgrades to Arcadia. The settlements the City achieved in 2003 and 2006 with the oil companies would provide the funding for the project and the operation and maintenance'of the new treatment facility. Discussion The new treatment facility at Charnock is near completion. The Charnock and Arcadia facilities are scheduled to begin operation by fall 2010, subsequent to approval from the California Department of Public Health (CDPH). The treatment facility at Charnock will operate for approximately ten years until MTBE is no longer present in the City's drinking water wells. Staff recommends that, upon successful completion and acceptance of the new Charnock treatment facility by the City and CDPH, an OMMS contractor assume the responsibility of operating and maintaining the facility with City staff supervision. Staff and the OMMS contractor will work together to meet all regulatory requirements. Staff will continue to operate and maintain the facilities at Arcadia, the MWD connections, and the Charnock to Arcadia pipeline and booster pumps. Treatment at Charnock will be ceased and the facility will be decommissioned once the MTBE contamination is eliminated. Until such time, however, staff believes the use of an OMMS contractor is the most cost effective alternative to increasing City staff for a limited term. Staff estimates that operating and maintaining the new treatment facility using limited-term City staff will require a minimum increase of 1.5 full-time employees to provide daily coverage as necessitated by the required treatment. Given that coverage is required for each permanent employee during vacations, sick time, holidays, and other absences, it is prudent to base the comparison of cost alternatives on the basis of two full time equivalents. In contrast, operations by contract forces can be accomplished with one full time operator, with support and supervision by existing City staff, as an OMMS contractor will assume the additional responsibility of providing coverage for any after-hour calls, weekends, and holidays on an as-needed basis. This 2 alleviates the City from having to provide stand-by compensation to any permanent staffing. Resident operators at the City's existing system at Arcadia are required to remain at the Arcadia facility at all times while on duty and are not available to physically investigate any after-hours alarms at Charnock. Cost savings will be realized in utilizing contract operators as detailed in the annual cost comparison presented below: Contractor (1-FTE) In-House 2-FTE Operations Hourly Rate Annual Rate Hourly Rate Annual Rate Hourly Rate-Treatment O erator $77.00 $160,160 (2080 hrs) $36.58 $152,172 4160 hrs Hourl Rate incl. benefits --- --- $57.43 $238,908 Standby Pay (nts, wkends, holidays) --- --- $4.57 $21 022 (4600 hrs) Technical Oversight & Mana ement Hourly Rate Annual Rate Hourly ', Rate Annual Rate --- $81,600 --- --- Hourl Rate-Admin. Anal st --- --- $37.64 $19,573 520 hrs Hourl Rate incl. benefits --- --- $59.09 $30,727 Hourly Rate-Operator Su ervisor --- --- $45.81 $9,528 208 hrs Hourl Rate incl. benefits --- --- $71.92 $14,959 Hourly Rate-Treatment Administrator --- --- $58.55 $12,178 208 hrs Hourl Rate incl. benefits --- --- $92.39 $19,217 Total $241, 760 $324, 833 A two-year term is recommended for the OMMS contractor, with options for subsequent renewals. At the conclusion of the initial two-year term, staff will have the opportunity to evaluate actual costs of operation and reassess whether the addition of City staff is preferable and cost effective. 3 Contractor/Consultant Selection On May 3, 2010, the City issued a Request for Proposals for an OMMS contractor. Three proposals were received as follows: Bid Amount Bidder Per Year Siemens Water Technologies Corporation $ 241,760 United Water Environmental Services, Inc. $ 520,600 Worley/Parsons Group, Inc. $ 397,790 The firms were .interviewed by staff from the Water Resources and Civil Engineering Divisions and evaluated based on their qualifications and experience on similar projects. Staff recommends Siemens Water Technologies Corporation as it has experience operating and maintaining similar facilities throughout the country with quality results. Financial Impacts & Budget Actions The contract amount to be awarded to Siemens Water Technologies Corporation is $556,048 for two years with options for subsequent renewals. $278,024 is included in FY2010-11 budget at account number 05672.555060 Charnock Treatment Plant. The remaining amount of $278,024 will be included in the FY2011-12 budget in the same account number. Prepared by: Gilbert M. Borboa, Jr., P.E., Water Resources Manager Approved: usa ~ne Acting Director of Public Works Forwarded to Council: ----~ _ Rod Gould City Manager 4 Reference Contract No. 9239 (CCS).