CITY OF GOODYEAR CITY COUNCIL ACTION FORM

Transcription

1 CITY OF GOODYEAR CITY COUNCIL ACTION FORM AGENDA ITEM # DATE: October 22, 2012 COAC NUMBER: SUBJECT: First Amendment to the Participation Agreement for Corgett Water Wash Water Reclamation Facility (Corgett WRF) Improvements; Construction Contract with MGC Contractors, Inc. for the Corgett WRF Improvement; Change Order for Improvements at the Corgett WRF. STAFF PRESENTER: Jack Friedline COMPANY: NNP III Estrella Mountain Ranch, LLC CONTACT: Greg Bielli RECOMMENDATION: Authorize the City Manager to execute the First Amendment to the Participation Agreement for the Corgett Wash Water Reclamation Facility Improvements between the City of Goodyear and NNP III Estrella Mountain Ranch, LLC. Authorize the City Manager to execute a construction contract with MGC Contractors, Inc. in the amount of $1,343, for the construction improvements of the Corgett Wash Water Reclamation Facility and authorize the execution of such contract following the execution of the of the First Amendment to the Participation Agreement for Corgett Wash Water Reclamation Facility Improvements between the City of Goodyear and NNP III Estrella Mountain Ranch, LLC. Authorize the City Manager to execute a change order in the amount not to exceed $100,000 to undertake improvements at the Corgett Wash Water Reclamation Facility to the steel sludge digester tank. EXECUTIVE SUMMARY: The proposed amendment to the Participation Agreement for Corgett Wash Water Reclamation Facility Improvements reflects the agreement of the City and NNP III Estrella Mountain Ranch LLC for the allocation of costs to design and construct the proposed improvements at the Corgett WRF. The City solicited and received bids to perform the construction of the Corgett WRF Improvements. MGC Contractors, Inc. submitted a responsive low bid of $1,343, Staff is seeking Council s authorization to enter into a Construction Contract with MGC Contractors, Inc. in the amount of $1,343,428.50, and authorize a change order not to exceed $100,000 for improvements to the sludge digester tank. The change order authorization is not part of the MGC Contractors, Inc. Construction Contract; it will be executed at a later date during the project as indicated below. Under the terms of the contract MGC Contractors, Inc. will perform an inspection and analysis of the steel sludge digester tank and provide recommendations and associated costs

2 to improve/repair the tank structure. The change order authorization will allow staff to implement the improvement recommendations identified by the contractor s inspection and analysis report. The decision to authorize any work to improve the tanks will be made by Staff. COMMUNITY BENEFIT: Improvements made to the Corgett WRF will increase the facility filtration capacity and help provide continued effective wastewater services to the residents in the Corgett WRF service area. The treatment process will be more consistent and the end result will be the production of Class A+ effluent. The A+ effluent produced can be used by NNP III Estrella Mountain Ranch, LLC (Newland) for irrigation purposes. DISCUSSION: General Background Under the terms of the Master Development Agreement governing the development of Estrella Mountain Ranch ( EMR ), the developer (Newland) is required to design and construct wastewater treatment facilities needed to serve EMR. Pursuant to this agreement, Corgett Wash Water Reclamation Facility ( Corgett WRF ) was constructed. The facility was designed to process 800,000 gallons of wastewater per day (GPD) and is currently treating approximately 400,000 to 500,000 GPD. The Corgett WRF is not currently rated to treat wastewater to a Class A+ effluent standard. Corgett Participation Agreement The Council approved the Participation Agreement for Corgett Wash Water Reclamation Plant Improvements ( Corgett Participation Agreement ) on June 27, 2011 (COAC ). Generally summarized, under the terms of the agreement, the City was to be responsible for costs associated with the wear and tear of the facility and Newland was to be responsible for the costs associated with improvements that increase capacity of the facility and allow for the production of Class A+ effluent. The parties were to agree on an allocation of costs if the improvement did both. Newland committed up to $660,000 for the improvements and the City committed up to $330,000 for the improvements. Newland and the City were to agree on the design and of the improvements and on the scope of work for the construction of such improvements. Once the construction contract for the improvements was bid, Newland and the City were to enter into an amendment to the Corgett Participation Agreement allocating the actual costs for the project. The City hired Tata and Howard, Inc. to evaluate and recommend improvements to the Corgett WRF that would increase the treatment capacity to the 800,000 GPD design level, address equipment wear and tear, and allow for the production of Class A+ Effluent. Tata and Howard, Inc. issued a report identifying different options that would accomplish the stated goals. The recommended option included the installation of a new disk filtration system (referred to as Option B Improvements ). In addition the report included recommended capital improvements to improve the operating efficiency of the facility, address the existing equipment wear and tear that has occurred during the life of the facility, Page 2 of 5

3 and more consistently produce A+ Effluent. These Recommended Improvements could be added to the project if sufficient funding was available. In order to achieve the permitted treatment capacity of the Corgett WRF and to more consistently produce Class A+ Effluent, the City and Newland entered into a cost participation agreement. The Parties agreed to install the Option B Improvements based on the Tata and Howard report and agreed to the parameters for allocating the costs to design and construct the improvements. Although constructing the Option B Improvements was the primary intent of the Corgett Participation Agreement, the agreement provided for the addition of the Recommended Improvements identified by the Tata and Howard report to the project provided that both parties agreed on the allocation of costs for those improvements and that sufficient funds were available to construct the Recommended Improvements. City staff coordinated with Newland to develop construction plans and cost estimates for the Option B Improvements and the Recommended Improvements. During the design process, it became evident that many of the Recommended Improvements identified in the Tata and Howard 2010 report were critical to the operation of the Corgett WRF and the production of A+ effluent. Some of the existing equipment has exceeded its operational life and needs to be replaced. City staff identified a funding source for the Recommended Improvements. Newland similarly sought to include in the Corgett WRF project Recommended Improvements that will support more consistent production and delivery of A+ effluent. The final design reflects the Option B and the Recommended Improvements that Newland and the City agreed to include in the project. Construction Contract As set forth in the participation agreement, bid documents were prepared based on the final design and a solicitation for bids was advertised pursuant to the requirements of Arizona Revised Statute Title 34. The construction documents included the Option B improvements and the additional improvements requested by Newland and the City. MGC Contractors, Inc. submitted the responsive low bid for the project. The total amount of the contract, including the Plant Water Improvements is $1,343, As reflected in the discussion of the proposed amendment to the participation agreement below, the City would be responsible for $769, of the contract cost and Newland would be responsible for $573, Staff is seeking Council s authorization to enter into a contract with MGC Contractors, Inc. in the amount of $1,343, Pursuant to the terms of the Corgett Participation Agreement, the construction contract will not be executed until the Amendment to the Corgett Participation Agreement has been fully executed and until the City receives $200,000 from Newland, which will be used to pay for part of Newland s share of the costs of the improvements. Under the terms of the participation agreement, the City is entitled to use these funds to cover Newland s share of the costs of the work as construction progresses and Newland is required to replenish the account as funds are expended. Change Order for Additional Improvements The existing steel sludge digester tank at the Corgett WRF has exceeded its design life and is in need of repair or replacement. Additional inspection and analysis is needed to determine Page 3 of 5

4 the actual extent work necessary to repair or replace this tank. One of the items of work that will be performed under the contract with MGC Contractors, Inc. is the inspection and analysis of this existing steel sludge digester tank. Through this effort, MGC Contractors, Inc. will make recommendations to the City for rehabilitation or replacement of the tank. Staff has estimated that the repair or replacement of the digester will not exceed $100,000. Staff is seeking Council s authorization to execute a change order with MGC Contractors, Inc. in an amount up to $100,000 to undertake improvements related to the steel sludge digester tank. Amendment 1 to Corgett Participation Agreement Pursuant to the terms of the Corgett Participation Agreement, before entering into the Construction Contract for the project improvements, the City and Newland are required to execute an amendment to the Corgett Participation Agreement allocating the costs of the Corgett WRF Improvements. Per the agreement, the City was to be responsible for costs associated with the wear and tear of the facility and Newland was to be responsible for the costs associated with improvements that increase capacity of the facility and are necessary for the production of Class A+ effluent. Under the terms of the participation agreement, costs associated with treatment capacity expansion were to be split with Newland paying 2/3 of the costs and the City paying 1/3 of the costs. This split was based on the assumption that the improvements would consist primarily of the improvements to the filter system. However, as set forth above, City staff and Newland included additional improvements to the project. In addition, the amendment includes an allocation of the costs of the Tata and Howard contract, which is consistent with the terms of the participation agreement. The proposed disk filter system was designed to allow for cost effective expansion in the future by simply installing additional disks, thus reducing costs to provide additional filtration capacity. The expandable disk filter system does not, by itself, create any additional treatment capacity of the Corgett WRF without extensive improvements to the rest of the treatment processes at the Corgett WRF. The amendment to the Participation Agreement reserves 2/3 of the additional expansion capacity of the disk filtration system for Newlands benefit and use. The remaining 1/3 of the expansion capacity will be utilized as determined by the City. Staff is seeking Council s authorization to execute Amendment 1 to the Participation Agreement for Corgett Wash Water Reclamation Facility Improvements. FISCAL IMPACT: The total project budget for the project (Design and Construction) is $1,645, The City s share of the total project cost (Design and Construction) is $950, This project involves two separate contracts, one with the consultant (Tata and Howard, Inc.) and one with the contractor (MGC Contractors, Inc.) Page 4 of 5

5 The Tata and Howard, Inc. Consultant Contract includes design, regulatory approval, and construction management services. This contract was approved and executed on September 14, The total contract amount is $202, The City s cost share for the Consultant Contract is $80, The MGC Contractors, Inc. Construction Contract includes the construction of the Option B and Recommended Improvements. The total Construction Contract amount is $1,343, The City s cost share for the Construction Contract is $769, The amounts indicated do not include the requested maximum $100,000 Change Order, which is detailed below. The Change Order for the repairs or replacement of the steel sludge digester tank is not included in the MGC Contractors, Inc. Construction Contract amount at this time. The Change Order will be executed dependent upon the results of the Analysis to be completed as part of the Construction Contract. The City will be responsible for 100% of the costs of any repairs or replacement of the steel sludge digester tank. Any work authorized for this Change Order item will be limited to $100,000 maximum. The City originally budgeted $330,000 for its share of the design and construction of the Option B improvements and the design of the Recommended Improvements, which included design and installation of a disk filtration system. The Recommended Improvements identified by the Tata and Howard report and supported by City staff requires funding in addition to the original budget of $330,000. City staff is requesting approval to fund an additional $620, for the construction of the Recommended Improvements to the Corgett WRF. The requested additional funding of $620, is available from remaining bond money from previous Waste Water Reclamation Facility projects as a result of project savings. ATTACHMENTS: 1. First Amendment to Participation Agreement Corgett Wash Water Reclamation Plant Improvements ( First Amendment ) which includes: Exhibit 1 to First Amendment (Cost Allocation) Has this issue been addressed in a Yellow Paper? Yes No_X_ Page 5 of 5