Supplemental Agenda Items March 30, 2015: 2.H, 2.I, 2.J, 5.A, 6.H, 6.I, 6.J, 8.A Agenda Items March 31, 2015: 7.A Distributed 3/30/15

Transcription

1 Supplemental Agenda Items March 30, 2015: 2.H, 2.I, 2.J, 5.A, 6.H, 6.I, 6.J, 8.A Agenda Items March 31, 2015: 7.A Distributed 3/30/15 Allan Epstein March 30 and 31 Council Meetings 3/29/ of 9 Pages Monday s and Tuesday s Council Meetings contain a number of complex matters, which I would like to afford to you the benefit of my review. I am only sending my comments to the two of you so you can decide how best to address the issues raised. I hope you will find this discussion helpful in preparing for the meetings. Aside from Building and Planning, the Town s principal business is managing contracts by which most of its tasks are accomplished. As you read my comments you will sense my continued, general dissatisfaction with the Town s and Public Works Department s contract management practices. As this performance relates to the Sewer Fund, deficient practices have existed for over a decade, I believe the Town should consider establish a standing Public Works or Utilities Commission to oversee the Town staff and advise the Town Council, or consider outsourcing the entire management of the sewer system to a third party. Short of this, as demonstrated by results over many years, I believe there will be little improvement in performance and rate payers will continue to receive far less than what they are entitled. March 30, 2014 Council Meeting 2 H. Presentation of Sewer Operation and Maintenance Services by West Bay Sanitary District (10 minutes) 2.H-Presentation of Sewer Operation & Maintenance As you can see by the lack of content at the link above, as of Saturday, March 28, 2015, there is no presentation available to review. Frankly, it is disappointing and discourteous to both the Council and the public. West Bay Sanitary has been the operations and maintenance service provider since August 2014 and there has been more than ample time to prepare a presentation. In fact, their one year contract expires in just three months and terms for a follow-on agreement, if any, have not been reached. The fault for not having a presentation in advance of the meeting is the Town s for not ensuring its availability, not West Bay s. West Bay s District Manager is quite familiar with making presentations, in fact its Board holds meetings every two weeks and operations and maintenance reports are presented monthly as well as an annual 60+ plus page Performance Evaluation Report. Minutes of the West Bay s March 11, 2015 meeting contained the following information relating to LAH: Town of Los Altos Hills: To date: cleaned 16 miles, TV d 6.5 miles, and responded to 4 SSOs. System is 54 miles. DM will provide information on revenue and cost to date. Town of Los Altos Hills Operations and Maintenance Report February By comparison the Town Council has been provided little or no visibility into the operations and conditions of the Town s sewer system and rarely holds any substantive discussion; its actions being largely award or acceptance of contracts handled mostly by consent. 2 I. Presentation of Sewer Collection System Assessment Report by V.W. Housen and

2 3/29/ of 9 Pages Associates (10 minutes) and Review Sewer Collection System Assessment Technical Memo (Staff: R. Chiu) 2.I-Sewer Collection System Assessment Technical Memo 2.I-Attachment 1 The hiring of a wastewater system expert such as V.W.Housen was proposed by the Ad Hoc Sewer Committee in June The Town continues to have substantial difficulty in managing the Sewer System and has had this problem over a much extended period of time. Projects are not completed on time, subcontractors are not closely supervised, regulatory requirements are not being fully met and Sanitary System Overflows (SSO) are increasing,,,, recommend hiring a proven, experienced Wastewater System expert. to review the Town's Sewer System and make recommendations. Budget not to exceed $10,000. Despite considerable effort to prod this project forward, it dragged. The original recommendation requested the consultant s report be provided first to the FIC. This was never done. As you can see the report while stamped March 23, 2015 and dated January 8, 2015, is largely a description of an investigation completed last fall, just after the first work by West Bay started. After asking many times I did receive a draft copy of the report on March 16, I asked if the report would be updated, but as you can see the final report was not. Not surprisingly in a consultant s report criticism of found deficiencies is muted, however a discerning reader can identify the plethora of shortcomings. I believe the consultant has demonstrated her ability to provide needed guidance and direction and until other steps can be taken continued oversight of Town administration should be considered. Some specific comments on matters identified in the VWHA Sewer System Report Dated January 8, 2015 follow: 1. The report dated January 8, 2015 is now two and a half months old and the data analyzed in the report is from work completed a few months before that. Statements that include a reference to time, e.g. as of this date, now, are under review, etc. are now five months old. While this may not change many of the recommendations in the report, system status should be much better informed nine months into West Bay's contract and a number of the near term recommendations should have been implemented by the end of March It certainly would be helpful to perform a quick review of current status and update the report so it is not stale. 2. Has the SSMP been updated and when will it be presented to the Council? 3. What updates have been recommended by West Bay for the CMMS system and have they been implemented? 4. The report implies that root foaming may have helped reduce SSO s in the second half of 2014 based entirely on the fact that there have just been fewer. Note: four more since

3 3/29/ of 9 Pages the foaming. It points out that Veolia s pipe ratings for the same pipe are different from West Bay's and believes West Bay s are closer to the standards. 5. Based on the CCTV work completed to date can one make a more informed assessment of the overall system status and its projected impact on future repair costs? 6. Based on generalized factors and primarily the overall length of the sewer system the report includes opinions on necessary staffing levels, maintenance and future capital spending. Recommendations appear highly generalized and individual district dependent and of limited benefit. 7. The report strongly criticizes the 2004 Sewer Master Plan and proposes a new plan at a cost of $400,000 for data collection, modeling and recommendations; a hard to fathom amount for the size of the system and the likely benefits the report will generate. 8. The Town failed to provide proper oversight of Veolia s and prior vendors work and did not perform repairs on a timely basis. CCTV work from the first year of Veolia s contract was not cited or reviewed. Do we know if current efforts with West Bay are any better? Has the Town made any effort to independently review, verify or assess the quality of West Bay s work. Why does VWHA reach different repair recommendations than West Bay using the same data? 9. West Bay s maintenance contract expires in three months. What are the plans for the future? 10. The report makes little effort to assess the adequacy and quality of prior efforts and the cause for poor performance. It does not quantify or benchmark the Town's SSO or other performance relative to other municipal systems. The report does outline processes for moving forward and contains a number of recommendations that should be implemented. 11. Proposed 2015 capital projects are different from what is described in the report and includes most of the locations identified by Veolia, West Bay and VWHA. Differences in repair approach and reason for omitted items should be investigated. 12. Maps show cleaning and root foaming activity north east of 280 and south of Magdalena. Los Altos is responsible for this area not Los Altos Hills so why are the Town's contractors working in these areas? 2 J. Presentation of the Sewer Fee Study Report by Municipal Financial Services (10 minutes) and Resolution Declaring the Intention to Increase Sewer Service Charges in Both Palo alto and Los Altos Sewer Basins, Setting a Public Hearing and Directing Staff to Mail Notices to All Sewer Users (Staff: R. Chiu) 2.J-Sewer Service Charges Staff Report & Attachment 1

4 3/29/ of 9 Pages 2.J-Attachment 2 2.J-Attachment 3 The Consultant did a good job, built a robust model and output is totally based on the input assumptions provided. The need for the large proposed increase in the next two years is driven by the proposed huge increase in the level of capital spending planned by the Town (capital project expenditures totaling $4,850,000 for FY16 FY20). This is approximately 2.4 times the level of spending over the last five years. With the exception of FY 15, there are no specific, identified projects, other than more root foaming, and capital plan estimates were prepared by the Public Works Director based on reasonable factors. Greater overhead allocations from the Town, increased staffing, and higher treatment and operations and maintenance spending results in an overall annual expense approximately $1 million more per year than in recent years. While the proposed thirtynine percent increase in the first year is significant, one should remember it has been eight years since the last increase. If the past is a predictor of the future, the Town s actual expenditure rate has been considerably less than its estimates, and as was the case in the last rate change action, future increases may likely be less than those shown. The Town has no obligation to increase rates per the adopted rate increase action. It just cannot charge mote than the rates enacted in the hearing. 5. NEW BUSINESS A. Consideration of Fiscal Year Mid-Year Cycle Adjustments and Adoption of a Resolution to Adjust Fiscal Year Budget (Staff: Y. Carter) 5.A-Fiscal Year Mid-Year Cycle Adjustments 5.A-Attachment 1 5.A-Attachment 2 5.A-Attachment 3 5.A-Attachment 4 5.A-Attachment 5 5.A-Attachment 6 This section really addresses two issues, the revised budget and the proposed changes to the Sewer Fund Overhead allocation. As for the revised budget, the good news is that despite the additional expenditures for the new projects, and the Revised Budget being out of balance (expenditures exceed revenue), the All Government Funds Ending Balance is now projected to be $1.2 million greater than the adopted budget, partially due to higher revenue, but primarily due to the fact that actual FY 14 General Fund Ending balance was almost $1.5 million more than the Adopted FY 15 Budget expected.

5 3/29/ of 9 Pages The FY 15 Budgeted Overhead Allocation the Staff agreed was excessive and reduced it from an estimated $309,313 to $201,287 (The actual figure will be based on the actual costs). Personally, I believe this revised allocation is still around $60,000 more than a fair assessment; however the rationale is too involved to present here. Utilizing exactly the same methodology that the Staff accepted for FY 15 adjustment would result in a $55,000 credit for FY 14. The Staff did not agree to make this change. There is really no valid argument for not making this change. The unfairness of the Sewer Overhead Allocation was raised in early 2014 long before the year end, however the Staff did not want to address the issue until the Midyear Budget update. Accepting this change will only mean reducing the FY 15 allocation from the estimated $201,287 to $146,287 a relatively insignificant change considering the $1.2 million additional fund balance expected above. Roddy and my recommendation is that the change in Overhead Allocation should be made for both years. The CAP model methodology is fine; however additional work should be done as part of the yearend closing process to assure that the allocation percentages are fairly calculated based on current results. 6. Consent Calendar H. Resolution Approving Amendment No. 2 to Sewer Agreement with City of Los Altos (Staff: R. Chiu) 6.H-Second Amendment to Sewer Agreement with Los Altos This amendment has already been approved by Los Altos. One would have hoped after eight years and changed circumstances that an effort would have been made to modify some of the onerous conditions added in the 2007 Agreement, but the proposed amendment simply attempts to remove measured flow and replace it with calculated flow and a daily and annual limit calculated by multiplying 1100 connections using 300 gallons/day per property. Since no attachments were provided it is not possible to determine what the impact of transfers of geographical areas has on the total flows. No one knows for sure what level is being used especially when the total is expected to include wet weather flows as well. It is surprising that while the lawyers can find time to write an amendment the two City Engineers can t find time to determine how much money should be returned to LAH ratepayers. (CITY agrees to reimburse TOWN approximately [$77,000} [with such number being subject to final confirmation of total project costs as determined by the TOWN's engineer and CITY's engineer] for 50% of the costs of design, construction and installation of the sewer meters and all of any unused portion of the TOWN's funds..). The Agreement also contains a number of typographical errors. Here are some: WHEREAS, the City has agreed to repair any damage to the sewer lines that may result from the installation repair of the sewer meters; and [note: there is no obligation for the CITY to remove the meters]

6 3/29/ of 9 Pages TOWN Cost of Treatment = (T'OWN flow/total flow of CTTY and TOWN at master meter at master meter (should not be removed since it is referring to the master meter at the PARWQCP and not at City or Town meter) multiplied by (Total Cost of Treatment based on P ARWCQP billings). (i) CITY shall be responsible for design and construction for all capital improvements for Joint-Use Mains within CITY's sewer system. TOWN's cost share for improvements will be based on the proportion of metered calculated flow of TOWN contribution as determined by multiplying 300 gallons per day times the number of the nearest upstream meter(s) connections properties of TOWN flow contributing to the sewer main and the total flow at the downstream location of the improvement. CITY will be responsible for measuring calculating flow and determining the duration that the meter will be in place for such measurement. determining the duration that the meter will be in place for such measurement [Notte; this is a temporary meter that will be installed to measure total flow to use to determine the denominator in the calculation.] TOWN has the right to participate in the physical flow calculation measurement measurement and will be provided data from the flow calculation measurement. (iii) TOWN's share of costs for all capital improvements related to the P ARWQCP will be paid for as part of the TOWN Costs of Treatment as determined in Section 4 e g above. 6. I. Resolution Awarding a Contract for the 2015 Sanitary Sewer Repair and Rehabilitation Project to Express Plumbing Service (Staff: R. Chiu) 6.I-2015 Sanitary Sewer Repair & Rehab Project 6.I-Supplemental No. 1 Overview The Agenda does not contain any details for this project and bid summary does not contain an engineer s estimate. Only two bids were received for this project and the variance between the two bids is almost 60%. The few bidders who responded to the RFP notice may be due to limit awareness of the project, the short bidding period and the short duration to complete work. Without an engineer s estimate it is impossible to know if the low bidder s price is fair. The wide disparity in the two bid prices also raises concerns. The work to be done has been known for months and in some cases years and there is no need for undo haste. Bidding practices that do not result in multiple bids and appropriate analysis increase the likelihood that rate payers are not receiving best value. The stated method of performing the work in some cases does not match the consultant s estimate. By comparison West Bay Sanitary District recently concluded a bid for sewer work and received nine bids. Below is a link to their Bid Summary with engineer s estimate. Contract should not be awarded and should be rebid with more notice and greater effort to reach qualified contractors. Town should implement improved construction bid practices with wider notice and required bid summaries with engineer s estimates as it did in the past. See Federal Highway Administration Policy below as guide. Details

7 3/29/ of 9 Pages This project was first public noticed on February 25, 2015 in the Town Crier. I have been told it was also posted on three local electronic bid posting sites although an Internet search only found two postings, one of which was not posted until March 12,/2015. A mandatory bid meeting was scheduled for March 9, 2015 and the final bids were due on March 17, Two subsequent addendums to the project were posted on March 10 and 12, The work is required to be completed in 35 days. Supposedly four bidders attended the bid meeting but only two bids were received. I do not know how many bidders requested bid packages. This is a complex project with work at 31 different locations on more than 20 streets with construction both in the public right-of-way and on private easements. The noticed work description for the project: WORK DESCRIPTION. This project consists of replacing various segments of the existing sanitary system. The work includes, but not limited to, mobilization and demobilization; potholing all crossing utilities' cleaning/de-rooting and video inspection of the project site sewer mains; replacing approximately 1,615' of existing sewer pipe with 8" HDPE SDR 17 via pipe bursting method and/or pipe reaming method; replacing approximately 240' of existing piping with 6" PVC and 5' with 8" PVC via open trench spot repairs; repairing manhole connections; repair existing manholes; reconnecting 4" sewer laterals and new piping; cleaning, pressure testing and color video inspection; repair and/or replacement of pavement markings, and street monuments; restoring all improvements disturbed by the project at various locations throughout the Town of Los Altos Hills; replacing landscape in kind to the original condition; replacing the asphalt pavement, and replacing all damaged properties caused by this work; and doing all appurtenant work as shown on the plans and described in the specifications with the title 2015 Sanitary Sewer Repair and Rehabilitation Project and on file in the office of the Public Works Director. The PW Director s memorandum states, The selected sewer main repair list is a combination of the segments that were delayed from the last annual sewer repair project, and results from video inspection data and repair recommendations from Town's previous and current operation and maintenance contractors, Veolia and West Bay Sanitation District. Obviously, there is not an immediate need to complete this work. The bid notice requires the work to be complete in 35 days yet the PW Director s memorandum provides a tentative schedule with a Construction Completion Date of July, 2015, which is 90 days. West Bay's Belle Haven Sewer Project Replacement Complete list of the Bid Holders which includes exchanges and companies. _Sewer_Mains_Project_-Planholders_List.pdf Bid summary of the 9 vendors who bid on the project pdf Paper on the importance of Engineer s estimates in bid evaluations. Federal Highway Administration Guidelines on Preparing Engineer's Estimate, Bid Reviews and Evaluation 6. J. Resolution Awarding Contract for the 2014 Pavement Rehabilitation Project #2 to

8 3/29/ of 9 Pages Granite Rock Company (Staff: R. Chiu) 6.J-2014 Pavement Rehab Project - 2 This project rehabilitates Briones Way, Laurel Lane, Moody Springs Court and Robleda Lane approximately 1600 center line feet of road. All of these streets were formally private now public roads with very low PCI indices. There were seven bidders. The bid summary does not provide the engineer s estimate or the detailed component breakdown of the bids. Two questions: 1. Why were only these streets selected and not more streets or other streets? Adobe Lane and Almaden Ct. require the same type of treatment are in similar condition and appear on the 2015 PM report, but were passed over. 2. The Pavement Management report estimated the cost to repair the four roads to be $123,104. The low bidder s price is almost 50% higher and including contingency and inspection costs is almost 80% higher. Why? Is this due to the small amount of work being bid or should we assume that the PM report is understating estimated costs by a very large margin? 8. COUNCIL INITIATED ITEMS A. Scheduling a Joint City Council/FIC Budget Review Meeting (Mayor Corrigan) 8.A-Calendar for a Joint City Council/FIC Meeting I am not available the week of May 11. March 31, 2014 Council Meeting 7. CONSENT CALENDAR 7.A. Resolution Awarding a Contract for the El Monte Road Preservation Project (Staff: R. Chiu) 7.A-El Monte Road Preservation Project The Staff recommendation does not even include the actual cost of the project or to whom it will be awarded. That is because the bids for the project are not due until 2:00 PM on March 31. Staff has asked the Council, sight unseen, to grant the Town Manager authority to award this contract. The requested authority is a blank check with the only limitation being that the Town will award the contract to the low bidder. The Council should not grant this authority. This project should proceed in the customary manner and be awarded at the next scheduled Council meeting when the details can be reviewed by both the Council and the Public. This project was not included in the 2015 budget. Staff has requested an additional $525,000 in expenditures be added to the 2015 budget to provide for this project. The recommendation includes a misleading statement, and the Federal Grant of

9 3/29/ of 9 Pages approximately $186,000 to be received in FY will offset the total cost of the project. The grant is for $186,000 which will be used to partially offset the total cost of the project. At this time the Town s share of the cost is estimated to be $340,000. It is interesting to note that the 2014 Pavement Management Report projected less than $50,000 will be required to maintain El Monte Ave through 2019.