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0 DATE: March 17, 2025
TO: President and Members of the Estero Municipal Improvement District (EMID) Board of Directors
VIA: Stefan Chatwin, District Manager
Marlene Subhashini, Assistant District Manager
FROM: Andrew Brozyna, Public Works Director/District Engineer Laura Galli, Engineering Manager
Francine Magno, Senior Civil Engineer
DEPARTMENT: Public Works
SUBJECT: WASTEWATER TREATMENT PLANT MASTER PLAN
IMPROVEMENTS PROJECT (CIP 455-652) - CLEAN WATER
PROGRAM - UPDATE FOR QUARTER 4 – OCTOBER THROUGH
DECEMBER 2024
RECOMMENDATION
It is recommended that the Board of Directors of the Estero Municipal Improvement District (EMID) by Minute Order, receive and accept this Q4 progress update on the Wastewater Treatment Plant (WWTP) Master Plan Improvements Project (CIP 455- 652) – Clean Water Program (CWP). No further action is required by the EMID Board of Directors.
EXECUTIVE SUMMARY
This report summarizes the progress-to-date of the WWTP Master Plan Improvements Project (CIP 455-652) - Clean Water Program (CWP) for the City of San Mateo/EMID WWTP for the months of October 2024 through December 2024.
The report includes summary information about construction and other project activities over the fourth quarter of the calendar year.
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0 BACKGROUND
The CWP is a comprehensive Capital Improvement Program to rehabilitate the sanitary sewer collection system in the City of San Mateo and the treatment systems at the San Mateo WWTP. EMID has 24.12% ownership of the WWTP. The City of San Mateo, as the lead agency, has responsibility for the performance of tasks required to develop, implement and complete construction of the CWP Improvements, including administration of design and construction, construction management, and program management contracts; management of the CWP budget; and maintenance and operation of the plant facilities. EMID reimburses the City of San Mateo for its share of the costs.
In October 2014, the City of San Mateo retained Jacobs to serve as the Program Manager responsible for overseeing the management of the approximately $1 billion- dollar combined program, including the coordination of the design, construction, and start-up activities of this multi-year program. EMID’s portion of the CWP consists of the WWTP Expansion Project, Immediate Action Projects (IAPs), and Annual Major Component (AMC) Projects. The WWTP expansion project replaces the existing liquids treatment process with a new facility. IAP Projects comprise critical major infrastructure projects and the AMC Projects comprise rehabilitation and replacement projects that will both continue to remain in operation after the WWTP expansion project has been completed.
The EMID Board of Directors has requested that staff provide updates on a regular basis. The WWTP Expansion Project is the CWP’s largest project and is being performed using a Construction Manager At Risk (CMAR) delivery method. The involvement of the contractor during the early stages of the design process, to provide constructability input and insight to inform the design development, ultimately benefits the overall project delivery.
The WWTP Expansion Project Manager and Construction Manager is Jacobs. The WWTP Expansion Project Design Engineer is HDR. The team for the disinfection improvements portion of the WWTP Expansion Project is Trussell Technologies. HDR is also providing Engineering Services During Construction (ESDC). The CMAR Contractor is Sundt Construction Inc. (Sundt).
ANALYSIS
WWTP Expansion Project
Construction Package 1 – Site Preparation (Original Construction Agreement with Sundt - $33,098,178) – Construction is complete and project closeout activities are continuing.
Construction Package 2 – Foundation Piles (Amendment No. 1 to the Construction Agreement with Sundt - $17,716,049) – Construction is complete and this phase has been closed out.
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0 Construction Package 3 – WWTP above grade Facilities (Amendment No. 2 to the Construction Agreement with Sundt) – Construction is approximately 95% complete and in its final stages. Efforts by the Contractor to mitigate schedule impacts from multiple change events are ongoing.
Administration Building and Maintenance Warehouse
Construction of the Administration Building and Maintenance Warehouse is substantially complete, and both buildings are now furnished. Leadership in Energy and Environmental Design (LEED) commissioning activities for the Administration Building are in its final stages. The project team is working on final punch list items and is working with San Mateo’s Building and Fire Departments to obtain Temporary Occupancy for both buildings. Subsequently, San Mateo’s WWTP Operations staff is planning to occupy the building in time for process startup and operations of the new WWTP. General sitewide work, such as site lighting, irrigation, landscaping, signage, and parking lot work, is ongoing.
Processing Facilities
Mechanical and electrical equipment, including the primary screens, grit chambers, fine screens, and grit washers have been installed in Headworks Area 51. The primary clarifiers (Area 52) are substantially complete. The aeration systems in the Bio Acti Flo area (Area 53) and Biological Nutrient Removal area (Area 55) are also complete, as well as the Membrane Bioreactor filters in Area 56.
Plant Commissioning
Clean water testing of portions of the treatment facilities that are ready for commissioning began in January 2025 and will be ongoing until the entire plant is ready for clean water testing. Full clean water testing cannot be completed until the containment piping for the chemical conveyance is fully replaced (see below for discussion). The schedule for clean water testing, process seeding, startup, and performance testing has shifted and is now anticipated to occur in the April to July 2025 timeframe (previously December 2024 to February 2025). The new liquid treatment processes are anticipated to be in full service by August 2025 (previously March 2025). After the treatment processes are in service, the last step will be the conversion of the existing aeration basins to flow equalization basins, which will take until approximately February 2026.
Final Project Completion
The projected date of final completion has shifted from October 2025 to April 2026 (based on information received in February 2025). The overall schedule has been pushed out an additional 6 months compared to last quarter’s update due to various change events including replacement of the chemical conveyance containment piping. Due to risks, changes, delays, and unknowns identified over the past year, the current estimate at completion for the WWTP plant project has increased by approximately $24.8M. 3 6
0 Estimated Cost to Complete WWTP Expansion Project
During the November quarterly update, staff informed the EMID Board of Directors that the Project Team had recently learned of a new issue that could significantly impact the project schedule and budget. At the time, staff stated it would report back on the impacts at the next quarterly update when more information became available. The schedule delays reported above are related to various change events that the program has been tracking.
Construction has been challenging while still progressing forward. The project has required several significant changes. As a result of the realized and potential change orders and schedule challenges, construction expenditures are going to exceed the previously anticipated estimate at completion for the project.
To ensure there is sufficient funding to complete the WWTP Project, San Mateo staff performed an extensive re-evaluation of upcoming costs as the project approaches its final year of construction. As a result, San Mateo is proposing an increase in the project budget of $24.8 million in FY25-26 to fund the completion of the Project. This $24.8 million increase includes costs associated with the construction contract ($19.5 million) and extended soft costs ($5.3 million for project management, construction management, specialty inspections, insurance, and engineering services during construction). The $24.8 million budget increase is based on information known today and is subject to change as the project progresses closer to completion. However, because the project is 95% complete, the potential for further significant changes is reduced.
This increase of $24.8 million is calculated as follows:
The project currently has a remaining contingency balance of approximately $10.5 million.
There are approximately $14.7 million of known change requests on the project, the largest of which are related to stormwater protection measures, double containment for the chemical conveyance piping, and conversion of the aeration basins to the flow equalization basins. These requests are under review and negotiation by the project team.
There is an estimated $5.0 million in upcoming change requests based on discussions with the Contractor, based on their discussions with their subcontractors, including requests for extra time for tower crane rental, material escalation, and additional stormwater protection measures. These requests have not been submitted to the San Mateo project team yet. There is approximately $5.0 million of potential time impact claims on the project, due to project delays associated with the double containment piping and other project changes. Formal requests for these TIA’s have not yet been submitted. Once submitted, the requests will be reviewed and negotiated by the project team.
There is an allowance of $2.7 million to account for any future changes that are 3 6
0 not yet known or identified. The value is based on a 10% contingency on the remaining $27 million of contract work left in the project. A contingency of 15% has been added onto the projected cost increases, which corresponds to approximately $2.6 million.
Additional budget of $5.3 million is added to cover the costs to extend contracts an additional 6 months, for project management, construction management, inspection, engineering services during construction, and insurance costs.
In total, $35.3 million in additional future costs is estimated. Factoring in the remaining project contingency of $10.5 million, the project is anticipated to require an amount of $24.8 million to complete the project. The EMID share of the increase is approximately $5.98 million (based on the 24.12% EMID ownership). The EAC is based on information known in February 2025 and intentionally reflects the most conservative scenario, as it does not include any reductions that may result from negotiations or rejections of contractor requests. It should be noted that even with the $24.8 million increase to the Expansion Project Budget, the overall contingency ultimately anticipated to be spent on the project is 14%, which remains well within industry standards (typically 15% to 20%), especially for a project of this size and complexity.
Annual Major Components Projects
AMC projects address repairs and replacements of aging components of the existing WWTP that will continue to remain in operation after the expansion project has been completed. At the end of 2024, the project team conducted a thorough review of the AMC project scopes and project costs. As an outcome of this review, the San Mateo project team determined that from the time that the CWP commenced in 2015, the scopes required more definition and previously identified budgets for the AMC projects are insufficient to address the refined scopes. Compounded with the impact of the aging facility and the dynamic construction market, the present value of the projects has increased over the last 10 years. Scopes have been refined and validated, and costs were estimated based on actual costs incurred on relevant and recent projects, and consultant estimates. Additionally, allowances for soft costs have been built into these budgets. To continue progress on these projects, an increase in the overall project budget of approximately $9 million is required, resulting in an overall project budget of $22 million. EMID’s share of the increased amount would be $2.17 million.
QUARTERLY CONSTRUCTION REPORT
Attachment #1 consists of selected portions of the Quarterly Progress Report for October through December 2024 published by the City of San Mateo Program Management Team on January 21, 2025. This report summarizes the budget, schedule, and project activities that have occurred during the fourth quarter of 2024 and activities that are anticipated to occur in the first quarter of 2025 for the WWTP Expansion Project, IAP, and AMC projects. (The budget numbers presented tonight, will be reflected in the next Quarterly Project Report for January through March 2025, to be published by City of San Mateo in April 2025).
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0 Attachment #2 consists of a site plan showing the locations of the various process units being constructed as part of the projects.
Attachment #3 includes photographs of construction activities at the site over the past 3 months.
Attachment #4 includes a history of the Project financing.
More detailed information including additional photographs and architectural renderings of the completed WWTP Expansion Project as well as real time video of the active construction, are available on the Clean Water Program Project site:
https://cleanwaterprogramsanmateo.org/wwtp/.
CALIFORNIA ENVIRONMENTAL QUALITY ACT
A Programmatic Environmental Impact Report (EIR) was prepared for the WWTP Master Plan Improvements Project (State Clearinghouse No. 2015032006).
FISCAL IMPACT
There is no fiscal impact associated with receiving this update.
At the start of the project, a strategic funding and financing plan to deliver the CWP was executed by both Agencies and included raising sewer rates over several years (14.25% FY17/18 to FY22/23; 10% FY23/24; and 2% FY24/25), issuing bonds, and pursuing loans. The CWP successfully received three low-interest rate loans from State and/or Federal programs (see Attachment No. 4). These loans were able to reduce the fiscal impact of the Cities’ investment in the wastewater infrastructure on EMID ratepayers.
Based on the project cash flow estimates, there is sufficient fund surplus to cover the WWTP Expansion Project $24.8 million budget increase (EMID share: approximately $5.98 million) and the AMC $9 million budget increase (EMID share: ~ $2.17 million) without requiring additional rate increases beyond typical inflationary adjustments. The budget information in this update will be incorporated into EMID’s Fiscal Year 2025-2026 Capital Improvement Program Budget for approval later this fiscal year.
With a $24.8 million increase to the WWTP project budget, and an increase of $9 million to the AMC project budget, the estimated cost at completion of the CWP is $597.5 million (or approximately $171.9 million for EMID). The EAC intentionally reflects the worst-case scenario, as it does not include any reductions that may result from negotiations or rejections of contractor requests.
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0 EMID BOARD VISION, MISSION, AND VALUE/PRIORITY AREA
Facilities and Infrastructure
ATTACHMENTS:
Attachment 1 – Portions of Quarterly Progress Report – 4th Quarter Report, October 1, 2024 to December 31, 2024
Attachment 2 – Wastewater Treatment Plant Site Plan
Attachment 3 – Construction Photographs
Attachment 4 – Project Financing