Business Item 6b
STAFF REPORT
City Council Business Item
DATE: March 17, 2025
TO: Honorable Mayor and Council Members
FROM: Brendan Byrd, Public Works Director/City Engineer THROUGH: Amy Nilsen, City Manager
SUBJECT: Authorize the City Manager to Execute a Professional Services Contract Amendment with Jacobs Engineering for City’s Wastewater NPDES Compliance Project (CIP 0171)
STAFF RECOMMENDATION:
Authorize the City Manager to execute a professional services contract amendment in the amount of $1,829,722 with Jacobs Engineering to provide engineering and support services for the City of Fortuna Wastewater NPDES Compliance Project (CIP 0171) and establish a contract not to exceed limit of $4,900,000.
EXECUTIVE SUMMARY:
The City of Fortuna is the owner and operator of the Tom Cooke Memorial Wastewater Treatment Plant (WWTP). The plant currently operates as an activated sludge secondary treatment facility, which focuses on the removal of organic matter and suspended solids, and at present does not treat the effluent to remove nutrients (nitrogen or phosphorus). Under current operating conditions, treated effluent is discharged during wet weather periods to Strongs Creek and during dry weather periods to two percolation ponds located generally along the eastern bank of the Eel River.
The City’s WWTP operates under the jurisdiction of the North Coast Regional Water Quality Control Board (Board). In 2017 the Board adopted a Time Schedule Order (TSO) and Waste Discharge Requirement (WDR) for the City’s WWTP. Specifically these orders require that the City treat wastewater to remove nitrogen (by enforcing effluent nitrogen limits on the City’s WWTP), and to move the City’s dry weather effluent discharge from the existing percolation ponds to a new location not affecting surface water flows. Also included in these orders is a compliance schedule, which outlines the timeframe in which the City is required to achieve the overarching goals of the orders. The primary work products required by the Board Orders are shown in the table below:
Business Item 6b
Table 1. Summary of TSO and NPDES Permit Requirements.
Phase of Work TSO/NPDES Permit Requirement
Preliminary Engineering
and CEQA Compliance
Evaluate water quality impacts of discharge on Strong’s Creek and the Eel River
Evaluate site-specific disposal alternatives and develop a technical report for the Preferred Alternative
Submit a preliminary report of waste discharge
Complete CEQA for the Preferred Alternative
Complete a Sanitary Sewer Evaluation Study
Develop a technical report for the Preferred Treatment Alternative Engineering Design,
Permitting, and
Construction
Secure funding for the preferred alternative
Secure necessary land rights and right of way
Complete final design plans, permits, and reports of waste discharge Complete construction
After receiving the orders from the Board in 2017, the City began working with GHD to complete all items included in the Preliminary Engineering and CEQA Compliance phase of work, shown in Table 1 above. These items have been completed and furnished to the Board in 2020.
After completing the Preliminary Engineering and CEQA Compliance phase of work, staff decided to put the Engineering Design and Permitting phase of the project out for competitive bid. In October of 2020, this culminated in awarding a $3 million engineering contract to Jacobs Engineering. In early 2021 the Jacobs team began developing work under the Project Definition phase of work in the scope, which included gathering treatment plant data, developing the wastewater process models, and performing the preliminary field investigations required in order to facilitate the design. These investigations included the project topographic survey, and the geotechnical/geophysical investigation required to facilitate the design of the directionally-bored pipeline that at that time was envisioned to lead to a new subsurface effluent disposal field on the western side of the Eel River.
In early 2022, the City was contacted by the Regional Board regarding the City’s deliverables associated with the Preliminary Engineering and CEQA Compliance phase of work (as noted submitted in 2020). The Board took exception to the Preliminary Report of Waste Discharge, which showed that the proposed subsurface percolation field on the opposite side of the river would result in basin plan violations of water quality. This finding put the City’s proposed project into uncertainty, specifically the proposed effluent disposal field on the opposite side of the river. With significant uncertainly suddenly thrust into the project, the City paused the engineering design contract with Jacobs, and reallocated funding within the existing contract to cover new work tasks.
Approximately $625,000 of the original contract was repurposed for other professional support that was required to deal with the new project uncertainties. This work included assistance to update the City’s grant funding application, a CEQA document amendment, providing triennial review support, expediting the City’s water and wastewater rate study, and providing oversight for the City’s updated Anti-Degradation Analysis.
From 2022 to late 2024, City staff and Jacobs worked with the Regional Board to re-envision the project, specifically the requirement that the City move the location of dry weather periods effluent discharge. Through some expanded analysis which modelled the proposed effluent disposal field on the opposite side of the river, it was found that over time the new percolation fields were anticipated to result in the same impacts as the current percolation ponds at the WWTP. With this Business Item 6b
finding, City staff were very hesitant to proceed with a project that either could be rejected by the Board, or could be deemed out of compliance within a short period of time with the ever-changing regulatory climate. Thus, in early 2024, staff perused being added to the Triennial Review list to seek a Basin Plan Amendment, which has the potential to allow the City to continue to use the existing percolation ponds for dry weather effluent disposal into the future. The City was successfully added to the project review list in the summer of 2024, and staff are working with the Regional Board to characterize what work is required to substantiate and obtain the amendment.
With the disposal portion of the project on a track for an alternate resolution, staff worked with Jacobs to re-evaluate the treatment plant upgrade project. This included taking ‘a few steps back’ and re-performing some of the Project Definition work, which was done using some of the reallocated design funding noted above. The primary goal of reassessing the Project Definition work phase was to make sure that the compliance project at the WWTP would be robust and scalable in the future, given that regulatory treatment mandates will continue increase the requirements put on the City. Additionally, given that another five years had elapsed since the previous contract, staff have identified a number of new items that needed to be included in the project, most notably including installing an automated flow equalization system (to help the WWTP manage high flows during the winter), and redesigning and constructing a new SCADA network, which is the computer system that runs and records the functions of the entire plant. The City’s current SCADA system will be unsupported by the hardware suppliers in 2028.
Recognizing that many years have elapsed, previous contract funding was reallocated to complete unanticipated tasks, and the project definition has changed, the City now needs to renegotiate a contract scope and fee with Jacobs. In late 2024, staff began working with Jacobs on this item, which is the primary subject of this staff report. Specifics on the requested fee by Jacobs are discussed in further detail below.
Lastly, staff would like to note that the amendment scope, fee, and schedule have been reviewed in detail and staff believe the proposed fee is reasonable, and the proposed scope would cover the work necessary to bring the City into compliance with existing regulatory orders. Staff strongly recommend that the Council approve the proposed contract amendment.
Business Item 6b
FINANCIAL IMPACT:
The proposed contract amendment is included as Attachment 1, and the funding summary table from the amendment is presented below.
Task
No.
Task Total Original
Fee Estimate
Proposed
Fee
Adjustment
New
Budget
1 Project Management, Meetings
and Coordination
$195,751 $223,148 $428,899
2 Project Definition and Peer Review $690,821 -$101,056 $589,765 3 Wastewater Rate Study $98,610 -$26,405 $72,205
4 Landowner Outreach Support $8,446 -$8,446 $0
5 Final Engineering Design $1,626,8311 $1,732,483 $3,359,314 6 Triennial Review Support $114,000 $0 $114,000
7 As-Needed Support $126,300 $0 $126,300
Total $2,860,759 $1,829,722 $4,690,481
1. This fee was $2,311,536 in original contract. Was reduced by $625,100 in 2023 to fund unanticipated project work.
As shown, an additional $1,829,722 is being requested by Jacobs to augment the existing contract and take the Engineering Design phase of this project to full completion. The funding augmentations would go to the Final Engineering Design and Project Management phases of work, which are the two scope areas where previous unanticipated efforts were paid from. Also to be noted above is that some of the adjustments are negative, these are task items that came in under the projected budget, and therefore can be moved back toward the Engineering Design phase.
To help put the rationale for the fee increase into perspective, staff have also developed the table below. As previously noted, the need for a contract change order includes three major components; time elapsed and the associated inflation in engineering rates, use of previous design funds for other project deliverables (rate study, triennial review support, project definition), and an expansion of the treatment plant project definition. These factors and their estimated cost implications are summarized below.
Table 3. Approximate breakdown of need for contract fee amendment.
Fee Amendment Reason Fee Impact
Approximate Inflation in Engineering
Rates over 5-years (~20%) $660,000
Budget Previously Reallocated from
Engineering Design $625,000
New Budget for Scope Added to Project $553,000
Total 1,838,000
As shown and discussed above, Jacobs is requesting an adjustment to their total fee to $4,690,481, which is $1,829,722 above the fee previously agreed to in 2020. However, staff will note that at the time of initial contract award the council authorized a contract not to exceed value of $3 million, which allowed for some budgetary flexibility should small issues arise that require change orders.
Business Item 6b
With similar intent, staff are asking now that the Council authorize a contract amendment that would provide the additional funding shown in Table 2 above, and that the Council authorize a change to the contract not to exceed value to $4,900,000. This would provide for an additional ~$200,000 in contingency funding that the City could use in case further changes are identified during the design or permitting process that necessitate a change order with Jacobs.
The additional design funding would be paid for from the Wastewater Reserve Fund (560), which currently has a fund balance of $9 million. The NPDES Compliance Project was also one of the key budget considerations for the recent water and wastewater rate study and rate adjustments that were adopted in 2024. In the five-year rate study, the project was budgeted at $40 million in City funding potential, with an anticipated additional $5.5 million that is expected to be made available as grant funding from the Clean Water State Revolving fund. The current project delivery estimate is approximately $45 million (including Construction and Engineering), which generally matches the City’s budgeting at this point.
RECOMMENDED COUNCIL ACTION:
1. Receive staff presentation and review Council questions with staff
2. Open Public Comment
3. Close Public Comment
4. Motion to approve a professional services contract amendment in the amount of $1,829,722 with Jacobs to provide engineering and support services for the City of Fortuna Wastewater NPDES Compliance Project, CIP 0171, and establish a contract no to exceed limit of $4,900,000. Roll Call Vote.
ATTACHMENTS:
• Jacobs Engineering Draft Contract Amendment