TO: HONOR ABLE MAYOR FROM: Kerrie Romanow
AND CITY COUNCIL Matt Cano
S
UBJECT: SEE BELOW DATE: August 2, 2022
Approved Date
8 /3/2022
S
UBJECT: CONSTRUCTION CONTINGENCY INCREASE FOR THE 7382-
DIGESTER AND THICKENER FACILITIES UPGRADE PROJECT AT
THE SAN JOSE-SANTA CLARA REGIONAL WASTEWATER
FACILITY
RE
COMMENDATION
A
pprove a $3,107,049 increase to the construction contingency amount of $67,490,625 for a revised total contingency amount of $70,597,674, to provide funding for the City’s negotiated settlement of a loss of productivity claim and changes to the Project control system increasing the not-to-exceed amount from $175,415,625 to a total revised contract amount not-to-exceed $178,522,674 for the 7382 – Digester and Thickener Facilities Upgrade Project.
O
UTCOME
A
pproval of the recommended construction contingency increase will provide funding for the City of San José’s (City) negotiated settlement of a loss of productivity claim and changes to the control system on the 7382-Digester and Thickener Facilities Upgrade Project (Project) at the San José-Santa Clara Regional Wastewater Facility. This will be the final contingency increase as all construction has been completed and the project is in its operational testing phase before closing out.
E
XECUTIVE SUMMARY
I
n May 20161, the City Council awarded a contract for the construction of the 7382-Digester and Thickener Facilities Upgrade Project to Walsh Construction Company II, LLC (Contractor) for $107,925,000, with a construction contingency of $13,490,625. Construction began in July 2016 and was completed in April 2022.
1 May 24, 2016: http://sanjose.granicus.com/metaviewer.php?view_id=&event_id=2137&meta_id=573928 COUNCIL AGENDA: 8/23/22
FILE: 22-1257
ITEM: 6.1
HONORABLE MAYOR AND CITY COUNCIL
August 2, 2022
Subject: Construction Contingency Increase for the 7382-Digester and Thickener Facilities Upgrade Project
During the early stage of construction, the Project encountered significant unforeseen issues that necessitated adding scope to the project, resulting in schedule delays and increased costs. In November 20172, City Council approved a $15 million increase to the construction contingency to address a multitude of unknown conditions, utility relocations, major repairs to large diameter deteriorated piping, and delays to the Project caused by changes in regulatory conditions. In June 2018
3, City Council approved an additional $25 million increase to the construction contingency to address seismic design issues, structural modifications, and hazardous materials issues.
In April 2021
4, City Council approved an additional $14 million increase to the construction contingency to pay for additional civil work outside of the original scope, including grading, drainage, and paving; delay time related overheads; and costs associated with the complex testing, start-up, and commissioning process which included integration of new controls with existing legacy systems; and the discovery of digester leakage due to the age of the structure.
Staff informed City Council that costs were still unknown for potential claims related to the loss of productivity at the time of the third contingency increase request. This memorandum discusses the Contractor’s claim for loss of productivity, summarizes the analysis of the claim by the City’s expert project controls consultant, and describes the City’s proposed negotiated settlement of the claim. This memorandum also discusses the basis for additional agreed changes to the control system. Approval of the recommended contingency increase of $3,107,049 will enable the City to pay for the negotiated settlement and control system changes and allow the Project to proceed to final completion with no open changes or claims.
BACKGROUND
Prior City Council memos linked above in the Executive Summary and attached to this report provide significant and detailed information about the Project need, scope, and challenges encountered.
To address the full amount and complexity of challenges that could not have been reasonably known back in 2013, City Council authorized three previous construction contingency increases.
The increases, as approved by City Council and attached herein, were largely needed to address issues that were unforeseen and not part of the Project’s original scope:
• First contingency increase addressed replacement of deteriorated pipe, unexpected regulatory requirements, utility conflicts, and unforeseen conditions (Attachment B).
2 November 28, 2017: https://sanjose.legistar.com/LegislationDetail.aspx?ID=3213847&GUID=0FA9A966- 5DA0- 4FC3-B8F6-1B1D07A7373A
3 June 12, 2018: https://sanjose.legistar.com/LegislationDetail.aspx?ID=3514676&GUID=B39B4EC3- 4007-431C- B2A1-70C94FCBC022
4 April 20, 2021: https://sanjose.legistar.com/LegislationDetail.aspx?ID=4903338&GUID=0A52AE76 -FEAA- 47AF-9B03-C6029700F2E8
HONORABLE MAYOR AND CITY COUNCIL
August 2, 2022
Subject: Construction Contingency Increase for the 7382-Digester and Thickener Facilities Upgrade Project
• Second contingency increase addressed seismic design upgrades, hazardous material remediation, and other changes and delay costs (Attachment C). • Third contingency increase addressed issues resulting from additional civil work, control changes and re-sequencing of construction activities to address the complexity of testing, startup, and commissioning, integration of new controls with existing legacy systems, addressing digester leakage due to the age of the structure and additional costs and delays associated with the new COVID-19 mandatory compliance requirements (Attachment D).
All work identified in the original scope and under the previous contingency increases has been completed. City staff has settled all change and delay claims known at the time of the third contingency increase request within these approved contingency amounts.
When the third contingency increase request was brought forward, staff informed City Council that costs were still unknown for potential claims related to COVID-19, inefficiencies (loss of productivity), and unnegotiated delays.
Since approval of the third contingency increase, contract change orders have been resolved and paid using the third contingency funds addressing issues resulting from additional civil work, control changes and re-sequencing of construction activities to address the complexity of testing, startup, and commissioning, integration of new controls with existing legacy systems, addressing digester leakage due to the age of the structures. In addition to these construction-related changes, City staff proactively negotiated with the Contractor to minimize the cost and time impacts on several delay claims and the additional costs and delays associated with the new COVID-19 mandatory compliance requirements. As a consequence of City staff’s proactiveness and diligence, it was possible to use funding from the third contingency increase to settle these additional claims.
As a result, only two items remain outstanding and require this fourth contingency increase; a loss of productivity claim submitted by the Contractor on January 12, 2022 and a change request for additional work by the Contractor on the controls system for the rehabilitated digesters. This memorandum presents the rationale, analysis, strategy, and settlement of these two outstanding items.
ANALYSIS
Loss of Productivity Claim
On July 31, 2020, the Contractor notified the City that it intended to submit a claim for loss of productivity on its work due to the cumulative impact of the many changes on the Project. The Contractor submitted this claim to the City on January 12, 2022 in the total amount of $5,061,279.
HONORABLE MAYOR AND CITY COUNCIL
August 2, 2022
Subject: Construction Contingency Increase for the 7382-Digester and Thickener Facilities Upgrade Project
The claim was based upon the large number of changes during the Project. The claim stated that these changes significantly reduced the productivity that the Contractor otherwise would have achieved on its planned scope of work (termed “base contract” work). This reduced productivity increased the total number of worker labor hours required to perform the work and subsequently increased the Contractor’s cost. The costs claimed were for the time period between March 3, 2019 to July 3, 2021. Any change impacts prior to March 3, 2019 were resolved in previous contract change orders. After July 3, 2021, the Contractor’s base contract work was largely completed, with only change order work remaining.
The City engaged its expert project controls consultant PMA Consultants (PMA), to review the claim and to advise the City as to whether such claims are accepted in the industry and if so, to review the details of the claim and to provide its assessment and recommendations on entitlement and potential compensation that might be due to the Contractor. City construction management staff worked closely with PMA on this review and assessment. PMA and construction management staff met with the Contractor several times to obtain additional information to support the claim and answer questions raised during its review.
PMA advised the City that such claims are recognized and accepted in the industry. Based upon PMA’s own experience and other published industry studies, references, and federal and state court cases over 40 years, it is understood that excessive changes on a project can have a cumulative impact on the Contractor’s performance and productivity. Such impact is separate and distinct from the direct costs paid to the Contractor to perform the change work and from the costs of any delays caused by the changes.
Numerous industry organizations such as the U.S. Army Corps of Engineers and Association for the Advancement of Cost Engineering International (AACEI) have done research to determine how a large volume of changes can have a cumulative impact on productivity. The impacts can arise from a number of factors. Some of these include contractor forced to continually re-plan work to accommodate changes, supervision is diluted as it must manage both the high volume of changes and the original base contract work, field work forced to stop/start as changes arise, and work areas become overcrowded with both base contract and change work.
PMA confirmed that the Project did incur a large number of changes. During the period of the claim, there were over 240 potential change orders and 83 design change memoranda.
Construction work associated with these potential change orders and design change memoranda comprised over 40 percent of the total labor hours spent by the Contractor. While contractors typically expect some percentage of changes on a project which can be accommodated without impacting the overall productivity, the volume of changes on the Project far exceeded what any reasonable contractor could have expected and could not be accommodated without impact.
While cumulative impact damages have been recognized in construction, it is difficult to prove in adequate detail the “adverse impact” (i.e., increased labor costs) was directly “caused” by the owner’s changes versus other factors that may have contributed to the increased costs (e.g., self- inflicted harm, excessive rework, estimate errors, etc.)
HONORABLE MAYOR AND CITY COUNCIL
August 2, 2022
Subject: Construction Contingency Increase for the 7382-Digester and Thickener Facilities Upgrade Project
For this reason, AACEI developed a recommended practice for determining losses in labor productivity in construction. That recommended practice also prioritizes methodologies that should be considered by contractors when trying to quantify the adverse impacts on planned productivity due to changes and events beyond their control or responsibility. AACEI’s recommended practice shows that the two methodologies used in the Contractor’s claim are accepted in the industry but provide less direct evidence of how the magnitude of changes impacted the specific project. As a result, there is less certainty in the degree to which the changes impacted the project’s productivity.
The first method was an industry study done by Professor William Ibbs which calculates the loss of productivity using curves representing the percentage of change on the project. These curves are based upon a database of over 2,000 projects. The second method called the “Modified Total Cost” compares the actual labor hours spent to do the base contract work with the planned labor hours. After deducting labor hours due to the Contractor’s own mistakes and rework, the remaining difference was attributed to the impact of the excessive changes on the Project. The amount of the claim submitted by the Contractor was the average of these two methods.
In addition to identifying AACEI’s recommended practice, PMA reviewed the details of the claim and met with the Contractor to discuss questions about the claim. Based upon that review, PMA concluded that the claim had a number of weaknesses and areas lacking adequate substantiation including 1) how the Ibbs methodology was applied to the specific change data on the project and 2) the inclusion of loss of productivity impacts due to COVID-19 which the City believed were resolved as part of the COVID-19 settlement. While PMA did not quantify a specific amount of entitlement, PMA concluded that the claim could be reduced by close to $2 million.
Following completion of PMA’s review, City leadership met with the Contractor on May 27, 2022 and discussed the key findings of the City’s assessment. During that meeting City staff and Contractor agreed to a proposed settlement of $2,550,000 for the claim. This proposed settlement is approximately 50 percent of the claim amount.
Changes to Control System
On January 13, 2022, the Contractor notified the City of additional construction changes associated with the control strategies for the digester system. The changes included work not required by the specifications, revisions to specification requirements for the control system, and other changes needed to prepare for easier testing, startup, and commissioning activities. Due to the complexity and volume of the changes to the control systems, these changes could not have been contemplated during the design and were not fully identified until beginning of 2022.
The Contractor has submitted three notices since the beginning of the year documenting changes to the control systems in the amount of $1.1 million. Staff met frequently with the Contractor through the first half of the year and requested further information to substantiate the changes and the associated cost and time impacts. As a result of these discussions, the Contractor
HONORABLE MAYOR AND CITY COUNCIL
August 2, 2022
Subject: Construction Contingency Increase for the 7382-Digester and Thickener Facilities Upgrade Project
provided a revised estimate of $557,049. City staff reviewed this revised proposal and considered it reasonable for the cost impacts caused by these changes.
CONCLUSION
Staff recommends proceeding with the current contingency increase request and believes the costs to be reasonable to address the additional changes to the control system and the loss of productivity claim. City Council approval of this fourth contingency increase of $3.11 million will ensure that the Contractor is fairly compensated and allow the Project to proceed to final completion.
EVALUATION AND FOLLOW-UP
Since this issue was last presented to City Council, staff has limited construction changes, carefully reviewed change pricing, and negotiated reasonable costs. A progress report on this and other San José-Santa Clara Regional Wastewater Facility capital projects is presented on a semiannual basis to the Transportation and Environment Committee, most recently on March 7, 2022. Quarterly progress reports of the San José-Santa Clara Regional Wastewater Facility Capital Improvement Project are submitted to the Treatment Plant Advisory Committee and posted on the City’s website.
CLIMATE SMART SAN JOSE
The recommendation in this memorandum has no effect on Climate Smart San José energy, water, or mobility goals.
PUBLIC OUTREACH
This memorandum will be posted on the City’s Council Agenda website for the August 23, 2022 City Council meeting.
COORDINATION
This Project and memorandum have been coordinated with the City Attorney’s Office and the City Manager’s Budget Office.
HONORABLE MAYOR AND CITY COUNCIL
August 2, 2022
Subject: Construction Contingency Increase for the 7382-Digester and Thickener Facilities Upgrade Project
COMMISSION RECOMMENDATION/INPUT
This memorandum is scheduled to be heard at the August 11, 2022 Treatment Plant Advisory Committee meeting. A supplemental memo with the TPAC’s recommendation will be included in the amended August 23, 2022 City Council meeting agenda.
FISCAL/POLICY ALIGNMENT
This Project is consistent with the City Council-approved focus on improving wastewater treatment efficiency, protecting vital core services, and meeting air permit discharge requirements.
COST SUMMARY/IMPLICATIONS
1. AMOUNT OF RECOMMENDATION/COST OF PROJECT: $3,107,049
2. Original Construction Contract Amount $107,925,000
Original Contingency (12.5%) $13,490,625
Original Total Contract Amount $121,415,625
Contingency increase #1 $15,000,000
Contingency increase #2 $25,000,000
Contingency increase #3 $14,000,000
Contingency increase #4 $3,107,049
Total Contract Amount $178,522,674
Current Project Delivery $40,643,674
Total Project Costs $219,166,348
Prior Year Expenditures $213,338,906
REMAINING PROJECT COSTS $5,827,442
SOURCE OF FUNDING: 512 – San José-Santa Clara Treatment Plant Capital Fund.
Funding in the Project appropriation in 2021-2022 is sufficient to increase the contingency.
PROJECT COST ALLOCATION: In accordance with the recommendations set forth in the Capital Project Cost Allocations Technical Memorandum (Carollo Engineers, March 2016), the cost for the Project is allocated 40 percent to biochemical oxygen demand and 60 percent to total suspended solids.
HONORABLE MAYOR AND CITY COUNCIL
August 2, 2022
Subject: Construction Contingency Increase for the 7382-Digester and Thickener Facilities Upgrade Project
BUDGET REFERENCE
The table below identifies the fund and appropriations to fund the contract recommended as part of this memorandum and remaining project costs, including project delivery, construction, and contingency costs.
Fund
#
Appn
# Appn Name
Total
Appn
Budget
Action Req
2022-2023
Proposed
Capital
Budget Page
Last Budget
Action (Date,
Ord. No.)
512 4127 Digester and
Thickener
Facilities Upgrade
$12,838,000 $3,107,049 228 06/21/22
Ord. No.
30790
CEQA
The San José-Santa Clara Regional Wastewater Facility digester and Thickener Facilities Upgrade Project Mitigated Negative Declaration, File No. PP15-055.
/s/ /s/
KERRIE ROMANOW MATT CANO
Director, Environmental Services Department Director of Public Works
For questions, please contact Mathew Nguyen, Deputy Director, Public Works Department at 408.535.8384.
Attachment A – Report on Bids and Award of Construction Contract for 732- Digesters and Thickener Facilities Upgrade Project
Attachment B – Construction Contingency First Increase for the 7382 – Digester and Thickener Facilities Upgrade Project
Attachment C – Construction Contingency Second Increase for the 7382 – Digester and Thickener Facilities Upgrade Project
Attachment D – Construction Contingency Third Increase for the 7382 – Digester and Thickener Facilities Upgrade Project
COUNCIL AGENDA: 05/24/16
ITEM:
CITY OF
SAN IPSE Memorandum
CAPITAL OF SILICON VALLEY
TO; HONORABLE MAYOR
AND CITY COUNCIL
FROM: Kerrie Romanow
Berry Ng
Jennifer A. Maguire
SUBJECT: SEE BELOW DATE: May 11, 2016
Approved Date
SUBJECT: REPORT ON BIDS AND AWARD OF CONSTRUCTION CONTRACT
RECOMMENDATION
(a) Adopt a Resolution
(1) Approving the Digester and Thickener Facilities Upgrade Project Initial Study/Mitigated Negative Declaration and related Mitigation Monitoring and Reporting Program (File No. (2) Reporting on bids and award of construction contract for the 7382- Digester and Thickener Facilities Upgrade project to the low bidder, Walsh Construction Company II, LLC, to include the base bid less Revocable Item No. 5, in the amount of $ 107,925,000, and approve a 12.5 percent construction contingency in the amount of $13,490,625. (3) Authorizing the Director of Public Works to execute one or more change orders in excess of $100,000 for the duration of the Digester and Thickener Facilities Upgrade project, not to exceed the total contingency amount approved for the project. (b) Adopt the following 2015-2016 Appropriation Ordinance Amendments in the San Jose- Santa Clara Treatment Plant Capital Fund:
(1) Decrease the Energy Generation Improvements appropriation to the Environmental Services Department by $6,000,000;
(2) Decrease the SBWR System Reliability and Infrastructure Replacement appropriation to the Environmental Services Department by $4,692,000;
(3) Decrease the Tunnel Rehabilitation appropriation to the Environmental Services Department by $600,000;
(4) Decrease the Ending Fund Balance - Unrestricted appropriation by $17,253,000; and FOR 7382 - DIGESTER AND THICKENER FACILITIES UPGRADE
PROJECT AT THE SAN JOSE-SANTA CLARA REGIONAL
WASTEWATER FACILITY
PP15-055).
7.1 Attachment A
HONORABLE MAYOR AND CITY COUNCIL
May 11,2016
Subject: 7382 - Digester and Thickener Facilities Upgrade Project
(5) Increase the Digester and Thickener Facilities Upgrade appropriation to the Environmental Services Department by $28,545,000.
OUTCOME
Award of this construction contract will allow for the construction of the Digester and Thickener Facilities Upgrade project (Project), improving reliability at the San Jose-Santa Clara Regional Wastewater Facility1 (RWF), Approval of a 12.5 percent contingency will provide funding for any unanticipated work necessary for the proper completion of the Project. Adoption of a resolution approving the Initial Study/Mitigated Negative Declaration and implementing the Mitigation Monitoring and Reporting Program for the Project will ensure all environmental mitigation and monitoring measures will be carried out. Adoption of a resolution authorizing the Director of Public Works to execute change orders up to the contingency amount will allow for timely implementation of any changes required in the project for completion as scheduled in fall 2019. .
EXECUTIVE SUMMARY
The RWF biosolids process facilities include 16 anaerobic digesters, 16 Dissolved Air Flotation Thickener (DAFT) units, and an extensive biogas collection system routed through an underground tunnel system. These facilities are aged with units ranging between 30 and 60 years of continuous operation, some of which have been taken out of service and the remaining of which are in need of rehabilitation in order to maintain reliable biosolids processing capacity.
Due to the physical configuration and ventilation conditions at the tunnels, they are considered as hazardous areas under the National Fire Protection Associations (NFPA) standard for Fire Protection in Wastewater Treatment and Collection Facilities (NFPA 820). As such, the location of the gas piping and other flammables in the tunnels presents certain safety concerns. The existing digester gas manifold also has leaky joints, is undersized for predicted gas production, and has no redundancy for operational flexibility or maintenance activities.
Key construction elements included with this construction contract include rehabilitation of four digesters (digesters 5 to 8) to operate as a Temperature-Phased Anaerobic Digestion (TPAD), six DAFT units (units 1 to 6) to operate as co-thickening units, a new primary sludge screening facility, two new electrical buildings and associated electrical equipment, an external elevated gas piping system and gas flare system, and miscellaneous civil works.
Due to the cost and complexity of this Project, potential bidders were required to be pre-qualified before being invited to submit bids on the Project. Nine highly qualified general contractors were selected to bid on the Project. A total of five bids were subsequently received; all bids were higher than the Engineer's Estimate of $85,000,000. The low bid, submitted by Walsh 1 The legal, official name of the facility remains San Jose/Santa Clara Water Pollution Control Plant, but beginning in early 2013, the facility was approved to use a new common name, the San Jose-Santa Clara Regional Wastewater Facility.
HONORABLE MAYOR AND CITY COUNCIL
May 11,2016
Subject: 7382 - Digester and Thickener Facilities Upgrade Project
Construction Company II, LLC of Concord, CA, in the amount of $109,925,000 is 29 percent higher than the Engineer's Estimate. The other four bids range from 37 percent to 53 percent above the Engineer's Estimate. .
A combination of the high volume of construction work being performed in the Bay Area, the resulting shortage of skilled labor, and some higher material costs are the primary reasons for the higher bid. Considering these factors, staff considers the bid reasonable for the work involved.
Staff recommends award of a construction contract to the low bidder, Walsh Construction Company II, LLC, in the amount of $ 107,925,000 (which represents the low bid less revocable item 5, which is estimated at $2,000,000); approval of a 12.5 percent construction contingency in the amount of $13,490,625; and adoption of a resolution authorizing the Director of Public Works to execute one or more change orders in excess of $100,000 for the duration of the Project, not to exceed the total contingency amount approved for the Project. Staff also recommends a number of budget appropriation actions to enable award of the construction contract and San Jose's portion of the construction contingency.
BACKGROUND
Description of Existing Digestion System
The anaerobic digestion process is a critical element of the RWF's biosolids processing and functions to stabilize biosolids and generate biogas to help meet the RWF's energy needs. Key components of the digestion process include the anaerobic digesters, digester gas system (e.g. gas storage, piping, piping appurtenances, waste gas flares), and dissolved air flotation thickeners (DAFT).
The RWF has 16 anaerobic digesters of varying sizes and design that were built in six stages between 1954 and 1983. Each digester is 100 to 110 feet in diameter and varies in height from 32 to 40 feet tall. The digesters have been in continuous operations for more than 30 to 60 years and are in need of significant rehabilitation. Rehabilitation of the digesters and associated gas systems was previously identified as a high priority project in the 2007 Infrastructure Condition Assessment Report completed by CH2M Hill. Currently, six digesters (Digesters 2, 4, and 5 to 8) are permanently out of service due to structural damage and mechanical failures. The remaining 10 digesters are operational, with a minimum of eight units required for daily operations and two units as back-up to allow yearly scheduled cleaning and maintenance.
Digesters 1 to 4, which are the oldest digesters at the RWF, cannot be rehabilitated to meet current seismic code and will be permanently disconnected once this Project is completed. (See Attachment A for project location map).
The digester gas system collects biogas produced from the anaerobic digestion process and transports, stores, and manages the gas for utilization. The majority of die piping associated with the digester gas system is located in underground tunnels. Due to the physical configuration and ventilation conditions at the tunnels, they are considered as hazardous areas under the National
HONORABLE MAYOR AND CITY COUNCIL
May 11,2016
Subject: 7382 - Digester and Thickener Facilities Upgrade Project
Fire Protection Associations (NFPA) standard for Fire Protection in Wastewater Treatment and Collection Facilities (NFPA 820). As such, the location of the gas piping in the tunnels presents certain safety concerns. The existing digester gas manifold also has leaky joints, is undersized for predicted gas production, and has no redundancy for operational flexibility or maintenance activities.
Biogas, produced as part of the anaerobic digestion process, is compressed and blended with natural gas purchased from PG&E and used as fuel for the RWF's cogeneration engines and engine-driven blowers. Any excess biogas is burned by the waste gas flares. The RWF has two flares: a smaller ground flare and a high-capacity open flare. The existing flare is over 30 years old; a condition assessment performed in 2015 revealed signs of corrosion and deterioration.
The RWF also has 16 DAFT units that work to thicken waste-activated sludge from the secondary treatment process. The DAFT units are in poor condition and in need of rehabilitation.
Project Description
This Project is the first phase of a comprehensive upgrade to the biosolids processing facilities at the RWF. The scope of work includes rehabilitation of four digesters (digesters 5 to 8), retrofit of six DAFT units (units 1 to 6) including odor control, a new primary sludge screening facility, two new electrical buildings and associated electrical equipment, a new elevated gas piping system and gas flare system, and miscellaneous civil works. It is anticipated that a total of nine digesters and eight DAFT units will ultimately be needed to serve future loads and allow for redundancy. The additional five digesters and two DAFT units to be rehabilitated will be completed as part of separate project in the future.
The digester rehabilitation work will include new covers and mixing systems; structural repairs and seismic retrofits; heating system and gas collection conveyance system upgrades; and electrical, instrumentation, and control systems upgrades. The four rehabilitated digesters will operate at a higher temperature (thermophilic) as the first phase of the TP AD process, improving biogas production and pathogen destruction. Digesters 9 to 16 will operate as the second phase at a lower temperature (mesophilic), which is the current mode of operation of the system.
The retrofit of six DAFT units will allow for the co-thickening of primary and secondary sludge.
This reconfiguration, along with the modernization of associated process equipment, will result in the reduction of the ultimate number of units required to be kept in operation. Modifications to the existing DAFT system include upgrades to existing piping, tanks, mechanical equipment and electrical and instrumentation components to allow for the new operation scheme. The upgraded units will be provided with covers and odor control system. A new primary sludge screening facility will be provided to remove debris prior to introducing sludge to the DAFT and digestion process, easing maintenance for equipment associated with these processes and cleaning of the structures.
HONORABLE MAYOR AND CITY COUNCIL
May 11,2016
Subject: 7382 - Digester and Thickener Facilities Upgrade Project
An external, elevated pipe network will collect biogas from the entire digester campus, allowing the removal of biogas piping the tunnels as well as the relocation of flammable material piping from the tunnels. The completion of this Project will be the first step toward "declassifying" the tunnels and eliminating hazardous environment conditions. The elevated pipe will also connect to a new gas flare and to the rehabilitated existing flare.
Additional work will include site work and paving, construction of two electrical rooms, concrete flow distribution boxes, relocation of utilities and a sampling station, and provision of a new storage fuel tank.
This project is being delivered using a traditional design bid build delivery method. Several factors contributed to this decision. At the time of design initiation of this project in October 2013, State authority to use an alternate delivery method was only offered through a limited pilot program. Furthermore, this project includes many complex interfaces that need to be designed to a high level of detail. Given the extensive level of rehabilitation of existing infrastructure in a 24/7 facility there were also limited opportunities for design innovation and schedule acceleration, both of which are key benefits of design build. Talcing these factors into consideration it was determined that the traditional design bid build delivery was more suitable for this project. However, given the magnitude and criticality of the project staff recognized the importance of having well qualified contractors through the low bid process and selected a pool of contractors through a robust pre-qualification process.
Pre-Oualification of Contractors
Council Resolution No. 71816, adopted on November 4, 2003, provides a policy for pre- qualifying contractors based on a project's complexity and construction value of more than $10,000,000. Due to the complexity and large construction value of the Project, a rigorous pre- qualification process was completed to develop a list of qualified bidders. The pre-qualification process considered factors such as experience, financial ability, safety history, etc.
A Request for Pre-Qualifications of Bidders was advertised on September 14, 2015. The City received pre-qualification packages from nine potential contractors on October 7, 2015. Staff evaluated the submissions and determined that all nine contractors met the pre-qualification requirements. Of the nine pre-qualified contractors who were invited to submit bids, five submitted bids.
HONORABLE MAYOR AND CITY COUNCIL
May 11,2016
Subject: 7382 - Digester and Thickener Facilities Upgrade Project
ANALYSIS
Bids were opened on March 17, 2016 with the following results:
Contractor Base Bid Amount
Variance
Amount
Over/ (Under)
Percent
Engineer's Estimate $85,000,000
Walsh Construction Company II, LLC $109,925,000 $24,925,000 29% Overaa & Co. $116,427,000 $31,427,000 37%
Skanska USA Civil West California District, Inc. $121,370,000 $36,370,000 43% Keiwit Infrastructure $122,118,000 $37,1183,00
0 44%
PCL Construction, Inc. $129,971,463 $44,971,463 53%
Eight out of the nine prequalified bidders attended two non-mandatory pre-bid meetings and site walks for this Project on January 28, 2016 and February 25, 2016. A total of five bids were subsequently received; all bids were higher than the Engineer's Estimate. The low bid, submitted by Walsh Construction Company II, LLC of Concord, CA in the amount of $109,925,000 is 29 percent higher than the Engineer's Estimate. The other four bids range from 37 percent to 53 percent above the Engineer's Estimate.
The Engineer's Estimate prepared by the design consultant was based on construction costs experienced over the last several years for similar municipal wastewater projects as well as quotes obtained from equipment and material vendors. However, the San Francisco Bay Area is currently experiencing a high volume of construction, with billions of dollars of construction projects underway in the San Jose/Santa Clara vicinity, including a number of large commercial projects (e.g., new campuses and upgrades for companies such as Google, Apple, and projects at Stanford University, among others). Typically, commercial projects do not impact the municipal wastewater market, since the pool of general contractors is different for the two sectors.
However, specialty subcontractors that work in both markets, such as electrical, instrumentation and control, heating, ventilation, and air conditioning (HVAC), etc., are in high demand, resulting in an increase of the pricing for this type of work.
The design consultant and staff have confirmed with contractors that the cost estimate for equipment and concrete work was in the range of their pricing and that the major differences could be primarily attributed to the increase in pricing from multiple subcontractors as well as the volatile conditions in the local labor market. Due to the high volume of work in the area, there appears to be a shortage of local craft laborers working and reportedly empty union halls, forcing the general contractors to add a premium over and above the latest prevailing wage rates to account for importing non-local craft laborers and potential slower productivity due to an unknown labor force.
A combination of the high volume of work in the area, the shortage of skilled laborers, demand for specialty subcontractors, and some higher material costs are believed to have contributed to
HONORABLE MAYOR AND CITY COUNCIL
May 11,2016
Subject: 7382 - Digester and Thickener Facilities Upgrade Project
the higher bid. Despite the significantly high bids staff is recommending proceeding with the Project at this time. Rehabilitation of the digesters and gas handling systems has been identified as a high priority capital improvement project due to the condition of the infrastructure as well as safety concerns. Delaying the Project will increase the risk of digester and gas piping failures, with higher operations and maintenance costs and possibly safety and permit violations. It is also uncertain if future construction prices will be lower, since construction activity in San Jose and the surrounding area has not shown imminent signs of slowing down and the criticality of this Project does not allow for a long delay in re-bidding the Project.
The base bid amount includes work related to five bid revocable items, identified in the bid form as item (3), the cost for providing all system integration and programming ($800,000); item (5), the allowance for relocation of utilities ($2,000,000); item (6), the cost of new diesel storage tank ($184,000); item (7), the cost of a new heat loop steam converter and condensate return system ($512,000); and item (8), the cost of new digester gas flares ($1,060,000).
Staff recommends award of contract to the low bidder for the base bid less revocable item (5), in accordance to Special Provisions 3-1.01D, for a total of $107,925,000. Staff believes that this item can be revoked without affecting the project and that relocation of unforeseen utilities can be covered, if necessary, by change orders using the project contingency.
Staff has also benchmarked the construction cost for the anaerobic digestion portion with 12 wastewater agencies that have completed similar projects in the last few years. Because the projects present variations in total digester capacity, overall scope, site conditions, construction completion date and geographical location, a direct comparison cannot be readily made.
However, costs per unit of digester volume (gallons of capacity) can be used as a key indicator.
The comparison completed by staff showed that other agencies had construction costs in the range of $3 to $ 13 dollars per gallon of treatment provided. The associated cost per gallon of treatment, based on the recommended bid, is equivalent to $4.50 per gallon, therefore in the lower end of the spectrum of cost for comparable agencies.
Project delivery cost for the project is equivalent to 24.50 percent of the construction cost and includes professional consultant services, and City staff cost for project management and construction management. This is in line with costs experienced by other similar wastewater programs.
In addition of the base bid scope of work, there was one Add Alternate bid item to demolish existing piping in some areas of the tunnels and some yard piping ($420,000). Due to the high bid result, staff is not recommending award of the Add Alternate. Demolishing of piping in tunnels and yard piping is not critical to the Project and can be addressed as part of future capital projects.
Council Policy provides for a standard contingency of ten percent on public projects involving utilities and building projects. However, on this project a contingency of a 12.5 percent is being requested to account for the challenge of maintaining continuous operations at the RWF during construction, in addition to complex project interfaces with existing electrical and process
HONORABLE MAYOR AND CITY COUNCIL
May 11,2016
Subject: 7382 - Digester and Thickener Facilities Upgrade Project
control facilities, potential utility conflicts, and other concurrent capital improvement projects underway.
Staff also recommends delegating authority to the Director of Public Works to execute one or more change orders in excess of $100,000 for the duration of the Project. This is not to exceed the total contingency amount approved for the Project, and is subject to other applicable limitations on the authority of the Director in the San Jose Municipal Code. Approval of these recommendations will provide staff with the flexibility to efficiently and effectively respond to and provide the funding for any unanticipated work necessary for the proper completion of the Project.
Funding Strategy
Funding for the Project appropriation in 2015-2016 is insufficient for this award. Budget actions are recommended to increase the total appropriation budget by $28,545,000 to award the construction contract and the City's portion of the construction contingency.
To offset this increase and minimize impacts to ratepayers and the tributary agencies, staff recommends decreasing existing project appropriations and the Unrestricted Ending Fund Balance for the San Jose- Santa Clara Treatment Plant Capital Fund, as outlined below. • Energy Generation Improvements appropriation ($6,000,000): the equipment pre ' purchase for the Cogeneration Facility project is now anticipated in 2016-2017. New funds have been programmed for these costs as part of the 2017-2021 Proposed Capital Improvement Program (CIP).
• South Bay Water Recycling (SBWR) System Reliability and Infrastructure Replacement appropriation ($4,692,000): this was originally appropriated to pay for the cost to maintain and rehabilitate the SBWR program's existing facilities. After further evaluation, staff has determined that the maintenance and rehabilitation work can be deferred to a future year, and paid for from the sale of recycled water revenue through the San Jose-Santa Clara Treatment Plant Operating Fund.
• Tunnel Rehabilitation appropriation ($600,000): this project has not started due to a lack of staff resources and has been deferred; funds have been programmed for these costs in 2017-2018 as part of the 2017-2021 Proposed CIP.
• Unrestricted Ending Fund Balance ($17,253,000): the proposed action allocates $17.3 million of the $42.8 million Unrestricted Ending Fund Balance to cover a portion of the increased costs. It is anticipated that $7.7 million of this amount will be replenished in 2016-2017 from the liquidation of prior year carryover encumbrances in 2015-2016 that will be recognized as part of the 2015-2016 Annual Report process this fall. This amount contains contributions from the tributary agencies for prior year projects that will be trued up during the 2015-2016 CAFR reconciliation process prior to January 2017. The remaining $9.6 million being recommended for appropriation from this fund balance will cover the contingency costs for San Jose only; contingency costs for Santa Clara and the tributary agencies have been programmed in 2016-2017 as part of the 2017-2021 Proposed CIP. While this action would only cover 70.8 percent of the $13,490,625 recommended in this memorandum for project contingency and is not at the full, ideal
HONORABLE MAYOR AND CITY COUNCIL
May 11,2016
Subject: 7382 - Digester and Thickener Facilities Upgrade Project
contingency level normally included with award of construction projects, the balance of the full contingency level is incorporated in the 2016-2017 Proposed Capital Budget, which is currently scheduled for adoption by the City Council on June 21, 2016, Concurrently, staff is pursuing a Clean Water State Revolving Fund (SRF) loan to finance the Project through the State Water Resources Control Board (Board). The loan application was finalized in December 2015; both the technical and environmental packages for the Project have been approved and the financial security package is currently under review by the Board. Staff anticipates that the process will be completed by summer 2016 and that the Board, contingent on the availability of funds, will proceed to issue an initial agreement for up to approximately $119,000,000 that will be used to cover costs related to planning, design, administration, and construction of the Project. At this time, the Board has not expressed concerns regarding availability of funds for this Project; however, this may change in the future since several other large water and wastewater projects/programs in California are also underway and competing for the same low interest SRF loan program.
Since bids received for the project were higher than originally expected, the City will have the opportunity to amend the original application and submit a final budget approval package to receive a finalized agreement for a revised amount, contingent on the availability of funds. The final amount may also be adjusted to reflect participation from only the co-owners of the RWF (i.e., San Jose and Santa Clara), pending the outcome of ongoing discussions with the tributary agencies.
EVALUATION AND FOLLOW-UP
A progress report on this and other RWF capital projects will be made to the Transportation and Environment Committee and the Council on a semiannual basis. Monthly progress reports of the RWF Capital Improvement Program (CIP) will also be submitted to the Treatment Plant Advisory Committee (TPAC) and posted on the City's website.
If the SRF application is successful, staff anticipates returning to Council in August 2016 to' seek approval to enter into a financing agreement for the Project.
The City Council is also currently scheduled on June 21, 2016 to adopt the 2016-2017 Proposed Capital Budget, which includes funding for several projects as referenced in this memorandum, including the remaining Project contingency from Santa Clara and the tributary agencies.
POLICY ALTERNATIVES
Alternative 1: Direct City staff to reject all bids and re-bid the Project Pros: Re-bidding the Project may result in a more favorable bid result.
Cons: Re-bidding the Project will delay the construction schedule, increase project delivery costs, and may result in a higher bid.
HONORABLE MAYOR AND CITY COUNCIL
May 11,2016
Subject: 7382 - Digester and Thickener Facilities Upgrade Project
Reason for not recommending: Re-bidding a project does not always result in lower bids. The five bids received showed good interest from the construction industry. All of the bids were fairly close, which indicates a competitive bidding climate. Rebidding the Project will require additional consultant and staff costs and delay the construction schedule for at least three to six months (or longer, if new pre-qualification of contractors is needed). In addition, the construction market in the San Jose area may tighten further, potentially increasing costs substantially. Some or all of the highly qualified bidders may decide not to pursue the Project.
Alternative 2: Direct City staff to modify the scope and re-bid the Project Pros: Modifying the scope and re-bidding the Project may reduce cost in the short term.
Cons: This alternative will delay the construction schedule, increase the Project's delivery costs, and not fulfill the original Project needs.
Reason for not recommending: Modifying the scope to remove some construction elements would require rejecting all bids and incurring additional consultant and staff costs to redesign and rebid the Project, adding at least 12 to 14 months to the construction schedule. The removed items of work would be still need to be completed as part of the future phase of work at a potentially higher cost due to escalation and result in an incomplete Project. In addition, considering the tight labor market and abundance of construction work in the San Jose area, costs may increase substantially, reducing the potential savings to the City.
Alternative 3: Direct City staff to postpone the Project and rebid under a more favorable construction bidding climate
Pros: Postponing the Project and waiting to rebid under a more favorable construction bidding climate may result in a more favorable bid result.
Cons: The digesters and gas handling facilities are an essential part of the solids treatment process. The facilities are aged and have been in continuous operation for more than 30 to 60 years. Six out of 16 digesters are currently permanently out of service due to condition. The remaining ten digesters represent the minimum number of units required for day-to-day operations (eight units in service plus 2 redundant units). Based on age and condition, the risk and consequence of failure of the remaining units is high.
Reasons for not recommending: Rehabilitation of the digesters and gas handling systems has been identified as a high priority capital improvement project due condition as well as safety concerns associated with the gas piping in the tunnels. Delaying the project will increase the risk of digester and gas piping failures, with higher operations and maintenance costs and possibly safety and permit violations. In addition, the Project's delivery costs would be significantly increased, due to additional staff and consultant efforts to re-design and re-bid the project in the future. It is also uncertain if future construction prices will be lower, since the market in the San Jose area may continue to be highly competitive and other municipal agencies in the vicinity will start implementing other scheduled water and wastewater projects, increasing demand substantially, and therefore construction costs.
HONORABLE MAYOR AND CITY COUNCIL
May 11,2016 ,
Subject: 7382 - Digester and Thickener Facilities Upgrade Project
PUBLIC OUTREACH
This Project was advertised on BidSync on January 13, 2016. This memorandum will be posted on the City's Council Agenda website for the May 24, 2016 City Council meeting.
COORDINATION
This Project and memorandum have been coordinated with the Departments of Planning, Building and Code Enforcement, Fire, and Finance, and the City Attorney's Office. This memorandum is scheduled to be heard at the May 19, 2016 TP AC meeting.
FISCAL/POLICY ALIGNMENT
This Project is consistent with the Council-approved focus on improving wastewater treatment efficiency, protecting vital core services, and meeting air permit discharge requirements.
COST SUMMARY/IMPLICATIONS
1. AMOUNT OF RECOMMENDATION/COST OF PROJECT: $107,925,000 - Project Delivery $26,474,054*
Construction $ 107,925,000
Contingency (12.5%) $13,490,625
Total Project Costs $147,889,679
Prior Year Expenditures $8,196.395
Remaining Project Costs $139,693,284
* Project delivery includes $15,793,433for professional consultant services (feasibility/development, design, and engineering services during construction), $133,586for project management during feasibility and development, $879,114for project management during design, $78,468for bid and award, $9,066,631 for construction management (including special inspections), and $522,822for project management during post construction and project closeout. The estimated project delivery cost is 24.5% of the construction cost, which is in line with project delivery costs for capital projects at other wastewater facilities.
2. COST ELEMENTS OF AGREEMENT/CONTRACT:
This is a lump sum contract. $ 107,925,000
3. SOURCE OF FUNDING: 512 - San Jose-Santa Clara Treatment Plant Capital Fund.
HONORABLE MAYOR AND CITY COUNCIL
May 11,2016
Subject: 7382 - Digester and Thickener Facilities Upgrade Project
4. OPERATING COSTS: The annual costs to operate and maintain the upgraded and new Project facilities are estimated to be approximately $6,760,000 for the initial operation year in 2019-2020. This is an increase of about $1,500,000 over the current annual operations and maintenance costs to run the existing digester and thickener facilities, and includes polymer, power, equipment repair/maintenance, digester cleaning, screenings hauling, and labor costs. A portion of this cost could be offset by the increase in biogas production.
5. PROJECT COST ALLOCATION: In accordance with the recommendations set forth in the 2015-2016 Budget Adjustments for the San Jose-Santa Clara Regional Wastewater Facility Capital Improvement Program memorandum, as approved by the City Council on March 22, 2016, the cost for this project will be allocated 40 percent to biochemical oxygen demand (BOD) and 60 percent to total suspended solids (TSS).
BUDGET REFERENCE
The table below identifies the fund and appropriations proposed to fund the contract recommended as part of this memorandum and remaining project costs, including project delivery, construction, and contingency costs. Additional funding sources have been identified to cover the costs above the original budgeted estimate for this Project.
2015-2016
Fund
#
Appn
# Appn Name
Current Total
Appn
Rec. Budget
Action
Amount for
Contract
Adopted
Capital Budget
(Page)
Last Budget
Action (Date,
Ord. No.)
Remaining Project Costs $139,693,284
512 4127
Digester and
Thickener Facilities
Upgrade
$90,258,000 $28,545,000 $107,925,000 V-180
10/20/2015
Ord. No.
29636
Total Current Funding Available 90,258,000
New Funding to be Appropriated $28,545,000
TOTAL FUNDING $118,803,000*
Source of New Funding
512 8999 Unrestricted Ending
Fund Balance $42,826,803 ($17,253,000) N/A V-170
03/22/2016
Ord. No.
29709
512 7454 Energy Generation
Improvements 16,600,000 ($6,000,000) N/A V-183
06/23/2015
Ord. No.
29589
512 7455
SBWR System
Reliability and
Infrastructure $4,692,000 ($4,692,000) N/A V-I97
06/23/2015
Ord, No.
29589 Replacement
06/23/2015
Ord, No.
29589
01/26/2016
512 7698 Tunnel Rehabilitation $700,000 ($600,000) N/A V-194 Ord. No. 29680
Total ($28,545,000)
* The remaining project funding of $20.9 million is included in the Proposed 2017-2021 Capital Improvement Program.
HONORABLE MAYOR AND CITY COUNCIL
May 11,2016
Subject: 7382 - Digester and Thickener Facilities Upgrade Project
CEOA
San Jose-Santa Clara Regional Wastewater Facility Digester and Thickener Facilities Upgrade Project Mitigated Negative Declaration, File No. PP15-055.
An Initial Study (IS) and Mitigated Negative Declaration (MND) were prepared by the Director of Planning, Building and Code Enforcement for the project. The documents were circulated for public review from August 28, 2015, to September 28, 2015. One comment letter was received from the State Water Resources Control Board on the IS/MND.
The Initial Study identified two potentially significant impacts to biological resources and cultural resources resulting from the project. The mitigation measures identified in the IS/MND would reduce these two project impacts to a less-than-significant level. The entire MND and IS are available for review online at: https://www.sanioseca.gov/index.aspx?NID=4989 Senior Deputy City Manager/
Budget Director
For questions, please contact Ashwini Kantak, Assistant Director, Environmental Services Department at (408) 975-2553.
Ashwini Kantak for
KERRIE ROMANOW
/si
BARRY NG
Director of Public Works Director, Environmental Services Department Attachment A - Digester and Thickener Facilities Upgrade Project Map
CITY OF
SAN JOSE
CAPITAL OF SILICON VALLEY
COUNCIL AGENDA: 11/28/17
ITEM
11/28/17 ^
T-\
Memorandum
TO: HONORABLE MAYOR
AND CITY COUNCIL
FROM: Kerrie Romanow
Barry Ng
Jennifer A. Maguire
SUBJECT: SEE BELOW DATE: November 2, 2017
SUBJECT: CONSTRUCTION CONTINGENCY INCREASE FOR THE 7382-
DIGESTER AND THICKENER FACILITIES UPGRADE PROJECT AT
THE SAN JOSE-SANTA CLARA REGIONAL WASTEWATER
FACILITY
RECOMMENDATION
(a) Approve a $15,000,000 increase to the construction contingency amount of $13,490,625 for a revised total contingency amount of $28,490,625 and increasing the contract not-to- exceed amount from $121,415,625 to a total revised contract amount not-to-exceed $136,415,625 for the 7382 - Digester and Thickener Facilities Upgrade Project. (b) Adopt the following 2017-2018 Appropriation Ordinance Amendments in the San Jose- Santa Clara Treatment Plant Capital Fund:
(1) Decrease the Yard Piping and Road Improvements appropriation to the Environmental Services Department by $8,000,000;
(2) Decrease the Aeration Tanks and Blower Rehabilitation appropriation to the Environmental Services Department by $7,000,000; and
(3) Increase the Digester and Thickener Facilities Upgrade appropriation to the Environmental Services Department by $15,000,000.
OUTCOME
Approval of the recommended construction contingency increase will provide funding for the significant unanticipated work necessary for the proper completion of the 7382-Digester and Thickener Facilities Upgrade Project (Project) at the San Jose-Santa Clara Regional Wastewater Facility1 (RWF).
1 The legal, official name of the facility remains San Jose/Santa Clara Water Pollution Control Plant, but beginning in early 2013, the facility was approved to use a new common name, the San Jose-Santa Clara Regional Wastewater Facility.
Attachment B
EXECUTIVE SUMMARY
In May 2016, the City Council awarded a contract for the construction of the 7382-Digester and Thickener Facilities Upgrade Project for $107,925,000, with a construction contingency of $13,490,625. Construction began in July 2016 and is approximately 35% complete. The Project has experienced significant construction challenges and is currently behind schedule. Delays occurred in most of the categories shown in the table below, however many of them can be considered concurrent. The total final negotiated delay impact to date is 140 working days.
Approved and pending Contract Change Orders (CCOs) to address these challenges have consumed approximately $11.59 million (86%) of the approved contingency. The primary causes of delay and contingency use to date are:
HONORABLE MAYOR AND CITY COUNCIL
November 2, 2017
Subject: Construction Contingency Increase for the 7382-Digester and Thickener Facilities Upgrade Project
Cause of Contract Change
Approved and
Pending CCOs
to Date
Underground utility conflicts and unforeseen conditions $2,506,434 Design changes $2,583,313
Unexpected regulatory requirements $1,472,171
Deteriorated pipe conditions $3,583,320
Seismic design issues $1,000,000
Hazardous materials mitigation $445,279
TOTAL $11,590,517
This memorandum describes the challenges and delays that have been experienced on the Project to date, and the much higher than expected use of contingency at this early stage of construction.
Major issues have arisen that will delay the project further and add significant costs to complete the project so that the improvements can function properly. The most significant unforeseen issues are deteriorated pipe conditions, seismic design issues, and hazardous materials mitigation. The deteriorated pipe repairs will require over $14 million in additional funding.
Evaluation of the seismic design and hazardous materials issues is underway and will require a future project contingency increase to resolve once the details are developed.
Approval of the recommended contingency increase will allow the project to proceed towards completion in the summer of 2020. The restored contingency balance will provide the funds necessary to complete known changes to the work and future unforeseen project conditions, except for future costs related to seismic design and hazardous materials mitigation issues that are currently being investigated. Staff will return to the Treatment Plant Advisory Committee (TPAC) and the City Council within six months with recommendations for further contingency increases related to seismic design work and hazardous materials mitigation.
BACKGROUND
HONORABLE MAYOR AND CITY COUNCIL
November 2, 2017
Subject: Construction Contingency Increase for the 7382-Digester and Thickener Facilities Upgrade Project
On May 24, 2016 (Item 7.1), the City Council awarded a construction contract for the 7382- Digester and Thickener Facilities Upgrade Project (Project) to the low bidder, Walsh Construction Company II, LLC, (“Contractor”) in the amount of $107,925,000 and approved a
12.5% construction contingency in the amount of $13,490,625. Key construction elements included in this construction contract are rehabilitation of four digesters to operate as a Temperature-Phased Anaerobic Digestion (TPAD), six Dissolved Air Flotation Thickener (DAFT) units to operate as co-thickening units, a new primary sludge screening facility, two new electrical buildings and associated electrical equipment, an external elevated gas piping system and gas flare system, and miscellaneous civil works. See Attachment A for a project site map.
The City issued the Notice to Proceed for construction on June 22, 2016 with an original contract duration of 790 working days. Construction is approximately 35% complete to date and includes the installation of 79 concrete footings and columns for the elevated pipe rack, demolition of DAFT tank exterior walls and internal equipment, utility relocation and connections, digester tank cleaning, and removal of the 100-foot diameter tank roofs, original post-tensioned cables and exterior concrete. New concrete work includes floor and drains in the bottom of the tanks, column supports for the new roof, foundation and walls for the new fine-screening building, and relocating/removing facilities in the tunnels to make way for new pipe installation.
A 15% construction contingency is typically set aside for all RWF projects to address unknown site conditions and other unanticipated issues. Since this project was over $100 million and bids were significantly over the Engineer’s Estimate, staff proposed a 12.5% construction contingency to manage risk while managing the project budget. As construction has progressed on this complex and widespread project, it has become clear that the construction contingency is not adequate.
A total of 24 change orders have been issued to date, totaling $6,395,551 for various items of work. This represents approximately 47% of the approved contingency amount of $13,490,625.
Additional change orders totaling $5,194,966, or 39% of the approved contingency, are pending or under review. These change orders are related to unforeseen site conditions, including utility conflicts, removal of additional hazardous materials, compliance with additional environmental requirements, and several significant design changes that were not part of the original scope of the Project. Attachment B summarizes the paid and pending change orders to date.
ANALYSIS
This Project is one of the most complex and extensive capital projects in the RWF’s ten-year capital program, spreading over the majority of the RWF operational area, including work in underground tunnels and galleries, connections to major process piping and underground structures. All construction is being completed while maintaining all operational aspects of the facility and complying with all environmental permits.
The Project has faced numerous unforeseen challenges since the beginning of construction. To date, the Project is delayed by 140 days and has used approximately 86% of the approved contingency through approved or pending change orders (See Attachment B). Many of these issues are typical of large, complex construction projects, however the magnitude of these issues on this Project have consumed a disproportionate amount of contingency at this early stage of construction.
Underground Utility Conflicts and Unforeseen Conditions Upgrades to the existing facility and location of new structures were based on available record drawings and information at the time of design. Over 100 potholes (excavations performed to verify buried utility locations) were completed during the design phase to try to confirm the location of major utilities. However, once excavation started, it became apparent that the number and types of buried utilities far exceeded what was shown on existing record drawings and what was verified in the field. These findings are not limited to one area, but common across the entire Project site. In many cases City staff and the Contractor had to resolve these conflicts by confirming and removing abandoned pipes and relocating active pipes and duct banks. In other cases, the design consultant, Brown and Caldwell, had to redesign portions of the Project to avoid some of the more critical utilities and large electrical duct banks.
Unforeseen conditions are often encountered during construction, usually requiring a design change from what was specified in the contract documents. A partial list of the unforeseen conditions encountered on this Project include:
• Uneven floors in the digester tanks, requiring adjustment of the columns and mixing equipment;
• Tanks that were believed to be round, were slightly misshapen, requiring modifications to the circular roof design;
• Rebar congestion that resulted in rerouting of conduit and anchors; • A concrete ledge around the tops of the digester tanks, that required sawcutting to accommodate the numerous seismic cables;
• Specified equipment that did not fit the actual field conditions, and required modifications to work properly; and
• Unexpected steel mesh in the digester tank exterior, requiring significant extra effort to remove.
This additional work has resulted in approximately $2.5 million in executed and pending change orders. Excavation and demolition for the Project is largely complete, so the cost to manage future unknowns related to underground utilities and unforeseen conditions are anticipated to not exceed $1,000,000.
Design Changes
As construction has progressed there have been multiple areas where the original design has required modification. These changes are due primarily due to insufficient design details
HONORABLE MAYOR AND CITY COUNCIL
November 2, 2017
Subject: Construction Contingency Increase for the 7382-Digester and Thickener Facilities Upgrade Project
HONORABLE MAYOR AND CITY COUNCIL
November 2,2017
Subject: Construction Contingency Increase for the 7382-Digester and Thickener Facilities Upgrade Project
necessary to construct the work, incompatible equipment specifications, improper equipment sizing, conflicts with existing structures/utilities, and incomplete process and instrumentation diagrams. Design changes are a normal occurrence in all projects; however, changes due to design errors and omissions have occurred at a higher rate than expected for this stage of construction. Changes to date amount to $2.58 million. Future design changes, not related to the seismic issue described below, are estimated to not exceed $2.0 million.
Unexpected Regulatory Requirements
Another major unforeseen situation on the Project was the approach to the removal of the gas piping from the tunnels. Initially, gas bypass work was planned to be constructed with minimal temporary piping, and carried out with controlled atmospheric venting of digester gas. This was understood to be in compliance with the RWF’s existing air permit from the Bay Area Air Quality Management District (BAAQMD), and current best-practice. Work was initially planned to be completed on January 27, 2017. However, negotiations with the BAAQMD resulted in the agency making a different interpretation of the permit conditions and instructing the City to implement a system that sent all gas through the existing permitted abatement devices. This new approach involved building a complete gas bypass system that connected all functional digesters to the existing flare to avoid venting of gas. This solution has proven difficult to implement due to the size and complexity of the existing system, which must be kept on-line while the bypass work is taking place. The new system has been designed and authorized under a change order at the additional cost of over $1.4 million.
Delay Damages
The combination of issues described above has significantly delayed the Project. The City completed a time impact analysis (T1A), reviewing all activities and their impact on the critical path for the Project. As a result, City staff and the Contractor have agreed that the impact to the project schedule through the end of September is equivalent to 140 working days. This 140-day delay may be considered compensable under the contract since the Contractor could not have reasonably foreseen the issues encountered in the project that have led to delay. The City and Contractor are currently negotiating the amount which is estimated to be approximately $3.2 million. It is considered a best-practice to negotiate and settle undisputed delays and associated costs at the time they are identified. Waiting until the end of the project often leads to disagreements about how and when the delays occurred, and who is at fault. This often results in claims and litigation. Staff recommends a $3.2 million increase to the Project contingency to pay for delay damages incurred to date and avoid future claims associated with those delays.
The range of issues listed above are typical of most large projects, especially when it involves rehabilitation work at an old facility. The City Council-approved contingency was set aside to manage these challenges as they arise, however this Project has encountered an inordinate amount of challenges requiring a higher than expected use of the Project contingency in the early stages of construction.
The issues described below, however, are not typical of large projects and will have a major impact on the overall Project budget and schedule. By far the most significant issues encountered to date are due to deteriorated pipe conditions, seismic design issues, and hazardous material mitigation that were unforeseen at the time of award of the construction contract.
Deteriorated Pipe Conditions
In November 2016, the Contractor completed a visual inspection of a 78-inch primary effluent pipe in preparation to make a necessary connection to this line. During the inspection, the pipe and adjacent junction structure were found to have been severely corroded due to hydrogen sulfide gas eating away at the inside top of the concrete pipe and disintegrating the rebar. This situation raised serious concerns about its condition and of the other adjacent pipes (a 96-inch and 87-inch by 136-inch elliptical pipes). In February 2017, the Contractor performed a detailed inspection of nearly 1,200 linear feet of pipe using laser scanning and closed-circuit TV.
Examination of the pipes showed they indeed were in poor to severely corroded condition (See Attachment C).
The Project must make a connection to these pipes to bring the rehabilitated digesters on line. It is also important to note that the Contractor cannot proceed safely with construction of other aspects of the Project due to the risk of damage to these pipes and junction structure unless repairs are made to them first. At some point, the Project will effectively be on hold until this issue is addressed. Given the timing and the criticality of the repairs, staff began considering alternatives to repair these structures, including an analysis of a range of design lives and associated costs. Short term solutions included providing a concrete cap over the pipe or a welded steel pipe liner that would allow for minimal repairs to be completed within the Project and have the final repairs completed by a future project. Longer term repairs included replacement of structures or structural slip-lining.
Since there is no redundant system to carry this flow, any repair to the pipes and structures requires that they be taken out of service and bypassed. A bypass pumping system is needed to send the flow, normally conveyed by the 78” pipe, directly to the aeration tanks. The bypass system itself is a major undertaking, as it needs to be sized to manage 100 million gallons per day (MGD), or nearly 60% of the rated flow capacity through the RWF. To minimize the impacts to operations and to mitigate risks associated with the failure of the pumping system, construction activities and the associated bypass are limited to the dry weather period (May to October).
Typically, bypass pumping equipment would be rented for the duration of construction and would usually run on diesel. City staff evaluated options for renting pumps and piping to provide the required 100 MGD capacity and it was found to be nearly equivalent to the cost of purchasing the equipment. The estimated purchase price of this bypass system is $5 million.
Purchasing the system would be adequate to provide bypass capacity to rehabilitate three additional sections of large pipes (two segments of 96-inch and 87-inch by 136-inch elliptical pipe) which are planned to be done as part of a future project, potentially saving the City up to $3 million by avoiding future bypass rentals.
HONORABLE MAYOR AND CITY COUNCIL
November 2, 2017
Subject: Construction Contingency Increase for the 7382-Digester and Thickener Facilities Upgrade Project
HONORABLE MAYOR AND CITY COUNCIL
November 2, 2017
Subject: Construction Contingency Increase for the 7382-Digester and Thickener Facilities Upgrade Project
Because both the short-term and long-term repairs require a complete bypass system, staff concluded that the long-term repairs would provide the best value since the bypass system necessary to repair the 78-inch pipe and junction structure would only be required once. The pipe repair work is estimated to cost $9.4 million. Given the significance of the damage to the 78-inch pipe and junction structure, the immediate need to connect to these facilities and the associated costs, staff recommends increasing the construction contingency for the Project to complete the repairs in a timely manner. All bypass materials and equipment need to be on-site and installed by April 2018, in order to test and fine-tune the operation and promptly start repairs by May 2018 in order to complete all work within the upcoming dry season.
Current estimates for the bypass pumping system and pipe repairs are approximately $14.3 million. To date, a total of $1.4 million has been issued via change order to allow for the procurement of long lead-time items, such as concrete piping and electrical equipment. An additional $2.2 million to purchase pumps and begin fabrication of the bypass system is under negotiation with the contractor and is pending approval. An additional $10.7 million (for a total of $14.3 million) is required to complete the demolition and replacement of the deteriorated pipe and the junction structure. The Contractor is very concerned about the potential for further damage to adjacent pipes, or that the bypass system somehow causes damage to other RWF facilities. The $14.3 million includes approximately $1 million in risk pricing for this work.
Given the uncertain condition of the underground utilities, staff agrees that it is prudent to compensate the Contractor to assume this risk.
Repair of this line was originally planned as a first phase of a separate capital project, Yard Piping and Road Improvements Project (Yard Piping), with construction scheduled to begin 2020. Funding for this bypass and repair work is proposed to be funded primarily from the current Yard Piping appropriation as discussed in the Cost Summary/Implications section below.
In the event the City Council does not approve the recommendations contained in this memorandum, the purchased materials will be stored for use at a later date when the Yard Piping design-builder has been procured.
Issues with Unknown Impacts
Seismic Design Issues
The second most significant challenge to the Project has been the identification of structural issues related to seismic design of the digester tanks. The existing tank walls are not adequately connected to the foundation to resist seismic uplift forces as required by current building codes.
The issue and resolution options are currently being evaluated to understand the implications on the timing, cost, and functionality of the Project. Although options are currently being evaluated as the facts are developing, staff has determined that these structural changes are the result of inadequate design. The design consultant is in the process of developing a solution that can be implemented with the minimum disruption to the Project, however the cost and schedule delays will be significant.
The full impact of these changes is unknown at this time. To date, $400,000 has been approved through a change order to temporarily wrap the post-tensioning cables on the digester tanks to prevent degradation due to harmful ultraviolet light. Another $600,000 is pending approval to procure and install stress plates at new tank wall penetrations. This memorandum requests the addition of $1 million to restore the contingency used to address the initial costs of this change.
Within the next six months, once the full costs and delay impacts are known, staff anticipates returning to the City Council with funding recommendations to address this issue.
Staff is in the process of identifying the necessary actions to resolve the design issues and discussing with the design consultant how associated costs will be determined. It is staffs position that responsibility for the design issues will reside with the design consultant, however, resolving the issues will likely take some time. Staff is tracking all costs associated with the design issues and staff will bring forward to the City Council recommendations regarding the responsibility for these costs.
Hazardous Materials Mitigation
In 2014, a hazardous materials survey was performed during the planning phase of the Project with the purpose of identifying potentially hazardous materials that could be disturbed during construction. The survey was completed in accordance with the requirements of Cal/OSHA and BAAQMD. The results of the survey were incorporated in the contract documents and the handling, removal and disposal of these materials was included in the bid pricing submitted by the contractor. The survey identified the presence of asbestos in piping insulation, gaskets and roof sealants, lead-containing paint, and Polychlorinated Biphenyls (PCBs) in the caulk outside the base of the digester tanks. As construction progressed, lead paint and PCBs were found in additional areas outside the scope of the hazardous materials survey that were only accessible after construction began. Approximately $445,000 has been approved in change orders to date to address hazardous materials issues.
Staff is currently in discussions with the U.S. Environmental Protection Agency to develop a PCB management strategy for the rest of the Project. Additional testing and removal of PCBs will be required as the Project progresses, which will likely cause delays and additional removal and disposal costs. Additional remediation costs are expected and staff will return to Council with a strategy for funding and implementing the work.
Lessons Learned
The quantity and scale of the unforeseen issues on this Project have created serious challenges to the Project team and the Contractor. One way to minimize these issues in the future is to improve the existing utility mapping and record drawings of underground facilities at the RWF.
The RWF-GIS group is documenting all utilities exposed by the Contractor to help ensure that the locations of utilities are accurately being reflected in their maps. Upon completion of this Project, all record drawings and “as-builts” will be transmitted to the City in electronic format for easy use on other projects.
HONORABLE MAYOR AND CITY COUNCIL
November 2, 2017
Subject: Construction Contingency Increase for the 7382-Digester and Thickener Facilities Upgrade Project
Another way to mitigate unforeseen issues is to perform more detailed condition assessments of facilities that may be impacted by future construction. This will require significant analysis and process shutdowns, well in advance of construction, however the investment in time and effort will in all likelihood far outweigh the potential cost and schedule impacts of discovering these issues during construction. Projects in the planning phase are currently re-evaluating the scope of condition assessment work to ensure enough effort is being done to evaluate the impacted facilities.
Recommended Contingency Increase
The combination of issues described above represent a total of approximately $15 million of extra work that was not anticipated at the time of award of the construction contract. The full extent of the seismic design issue as well as PCB remediation work are unknown at this time and will be brought forward for City Council consideration once they are known. The criticality of this Project requires that the additional work identified at this time be addressed immediately.
The total amount of contingency increase requested in this memorandum is summarized in the following Table 1:
Table 1 - Approved/Pending Change Orders and Forecasted Needs
HONORABLE MAYOR AND CITY COUNCIL
November 2, 2017
Subject: Construction Contingency Increase for the 7382-Digester and Thickener Facilities Upgrade Project
Reason for Change Orders Approved
and Pending
Change
Orders
Forecasted
Need
Total
Underground utility conflicts,
unforeseen conditions
$2,506,434 $1,000,000 $3,506,434
Design changes 2,583,313 2,000,000 4,583,313
Unexpected regulatory requirements 1,472,171 0 1,472,171 Delay Damages 0 3,200,000 3,200,000
Deteriorated pipe conditions 3,583,320 10,700,000 14,283,320 Seismic design issues (partial funding)* 1,000,000 TBD 1,000,000 Hazardous materials (partial funding)* 445,279 TBD 445,279 Total $11,590,517 $16,900,000 $28,490,517
Approved Contingency $13,490,625
Additional Contingency Required $14,999,892
* Final costs for hazardous materials and seismic design issues are not known at this time.
EVALUATION AND FOLLOW-UP
The final cost and delay impacts of the seismic design changes and hazardous material remediation described above are unknown at this time. Staff anticipates returning to the City Council with funding recommendations for these costs once they are known, likely within the next six months.
A progress report on this and other RWF capital projects is presented on a semiannual basis to the Transportation and Environment Committee, most recently on October 2, 2017. Monthly progress reports of the RWF Capital Improvement Program (CIP) are submitted to the Treatment Plant Advisory Committee (TPAC) and posted on the City’s website.
HONORABLE MAYOR AND CITY COUNCIL
November 2, 2017
Subject: Construction Contingency Increase for the 7382-Digester and Thickener Facilities Upgrade Project
POLICY ALTERNATIVES
Alternative 1: Bid the pipe repair work as a separate project.
Pros: Potentially gets better bids for the work
Cons: Delays the work until a complete design package can be developed, bids solicited and received, and mobilization of the contractor. Also creates significant coordination and interface challenges with the existing contract.
Reason for not recommending: The 78-inch SES line repairs are critical since the deterioration of the pipe places it at risk of imminent failure that could result in upwards of 100 MGD of primary effluent spilling into the San Francisco Bay. There is no time to put a complete bid package together without significantly delaying the current contract, at significant additional cost. There is also the logistical concern of having multiple contractors working on the same facilities at the same time; the likelihood of interference, safety concerns and conflicts further delaying the completion of the work and adding cost. Staff recognizes that contemplating a significant amount of work under a change order scenario may not result in the best pricing of the work, however there is little choice but to work with the existing contractor to perform the work quickly and efficiently, thus keeping the delays to a minimum and driving the Project to completion. Additionally, the multitude of other issues, especially the seismic design and hazardous materials issues, would not be adequately addressed, jeopardizing the ability of the Project to be completed and function as intended.
PUBLIC OUTREACH
This memorandum will be posted on the City’s Council Agenda website for the November 28, 2017, City Council meeting.
COORDINATION
This memorandum has been coordinated with the City Attorney’s Office.
COMMISSION RECOMMENDATION/INPUT
This item is scheduled to be heard at the November 9, 2017, TPAC meeting. A supplemental memorandum with the committee’s recommendation will be included in an amended November 28, 2017, City Council meeting agenda.
FISCAL/POLICY ALIGNMENT
HONORABLE MAYOR AND CITY COUNCIL
November 2,2017
Subject: Construction Contingency Increase for the 7382-Digester and Thickener Facilities Upgrade Project
This Project is consistent with the City Council-approved focus on improving wastewater treatment efficiency, protecting vital core services, and meeting air permit discharge requirements.
COST SUMMARY/IMPLICATIONS
1. AMOUNT OF RECOMMENDATION:
2. COST OF CONTRACT
Original Construction Contract Amount
Original Contingency (12.5%)
Original Total Contract Amount
Contingency Increase (13.9%)
Total Contract Amount
$15,000,000
$107,925,000
$13,490,625
$121,415,625
$15,000,000
$136,415,625
3. SOURCE OF FUNDING: 512 - San Jose-Santa Clara Treatment Plant Capital Fund.
4. PROJECT COST ALLOCATION: In accordance with the recommendations set forth in the Capital Project Cost Allocations Technical Memorandum (Carollo Engineers, March 2016), the cost for the Project is allocated 40 percent to biochemical oxygen demand (BOD) and 60 percent to total suspended solids (TSS). The cost for the Yard Piping Project is allocated between the four billable parameters relative to a rolling weighted average distribution of all RWF assets. The cost for the Blower Improvements Project is allocated 20 percent to flow, 60 percent to BOD, and 20 percent to ammonia (NH3). This results in revised cost allocations for San Jose, Santa Clara, and the Tributary Agencies as outlined in the table below.
Agency Name
Original Cost
Allocation
Updated Cost
Allocation Change
City of San Jose 9,994,860 10,398,000 403,140
City of Santa Clara 2,335,500 2,429,700 94,200
West Valley Sanitation District 927,190 820,500 (106,690) City of Milpitas 606,290 483,900 (122,390)
Cupertino Sanitation District 1,024,270 783,600 (240,670) County Sanitation District 2-3 74,710 59,400 (15,310)
Burbank Sanitary District 37,180 24,9000 (12,280)
Total 15,000,000 15,000,000 -
The updated cost allocations for the Project result in an increase of approximately $403,060 to the proportional share of Project costs for San Jose and approximately $94,200 for Santa Clara, with a corresponding decrease in the proportional share of Project costs for the
Tributary Agencies. The 2017-2018 Adopted Capital Budget has sufficient Ending Fund Balance to offset the expected decrease in revenue to support the recommended cost allocation adjustments for San Jose. Adjustments to the 2017-2018 budgetary revenue contributions may be brought forward to the City Council at a future date based on these updated cost allocations.
5. FISCAL IMPACT: Funding in the Project appropriation in 2017-2018 is insufficient to increase the contingency. Budget actions are recommended in this memorandum to increase the total appropriation budget by $15,000,000. To offset this increase and minimize impacts to ratepayers of San Jose and Santa Clara, as well as the tributary agencies, staff recommends decreasing existing project appropriations as outlined below:
• Yard Piping and Road Improvements ($8,000,000): Repair of the 78-inch pipe was originally scoped and programmed as part of the Yard Piping project, so the scope of this project will be decreased, as this work will now be done under the Digester Project.
• Aeration Tanks and Blower Rehabilitation ($7,000,000): Construction award for the Blower Improvements Project is now anticipated in early 2018-2019. New funds will need to be programmed for these costs in the 2019-2023 Capital Improvement Program (CIP), and are therefore subject to appropriation in that process.
In developing the 2019-2023 Proposed CIP, staff will explore options to potentially defer one or more projects to balance the overall five-year capital budget.
HONORABLE MAYOR AND CITY COUNCIL
November 2, 2017
Subject: Construction Contingency Increase for the 7382-Digester and Thickener Facilities Upgrade Project
BUDGET REFERENCE
The table below identifies the fund and appropriations proposed to fund the contingency increase recommended as part of this memorandum.
Fund
#
Appn
# Appn Name
Current Total
Appn
Rec. Budget
Action
2017-2018
Adopted
Capital
Budget
(Page)
Last Budget
Action (Date,
Ord. No.)
512 4127
Digester and
Thickener Facilities
Upgrade
$1,861,000 $15,000,000 282 6/20/2017,
29962
512 7396 Yard Piping and
Road Improvements $11,716,000 ($8,000,000) 299 6/20/2017, 29962
512 7677
Aeration Tanks and
Blower
Rehabilitation
$40,222,000 ($7,000,000) 280 6/20/2017,
29962
CEOA
San Jose-Santa Clara Regional Wastewater Facility Digester and Thickener Facilities Upgrade Project Mitigated Negative Declaration, File No. PP15-055.
HONORABLE MAYOR AND CITY COUNCIL
November 2, 2017
Subject: Construction Contingency Increase for the 7382-Digester and Thickener Facilities Upgrade Project
/s/Ashwini Kantak for /s/
KERRIE ROMANOW BARRY NG
Director, Environmental Services Department Director of Public Works Senior Deputy City Manager/
Budget Director
Attachment A - Site Location Map
Attachment B - Table of Approved and Pending Change Orders Attachment C - Photographs of pipe corrosion damage
For questions, please contact Ashwini Kantak, Assistant Director, Environmental Services Department at (408) 975-2553.
Digester and Thickener Facilities Upgrade
Project Site Map
MODIFICATIONS TO DIGESTER 5-8
NEW ELEVATED PIPE RACK
MOD F CAT ON TO DAFT 1-6
NEW SLUDGE SCREEN, ODOR CONTROL,
STEAM CONVERTERS, AND POLYMER
STORAGE/BLENDING FACILITIES
PROJECT SITE AREAS
/TV TIE-IN TO EXISTING
LINES <D
DIGESTER 5-8
AREA
/«v SECONDARY BLOWER
^ BUILDING <D
MOTOR CONTROL
CENTER
/gV NEW SLUDGE
SCREENING FACILITY <2> NEW GAS FLARE
/TV DAFT AND DAFT
W GALLERY ©
REMOTE
DIGESTER (9-16)
ATTACHMENT A
Digester and Thickener Facilities Upgrade
Approved and Pending Change Orders to Date and Forecasted Needs Reason for Change Orders Approved
Change
Orders
Pending or
Under
Review
Forecasted
Need
Total
Underground utility conflicts,
unforeseen conditions
1,795,480 710,954 1,000,000 3,506,434
Design changes 1,282,621 1,300,692 2,000,000 4,583,313
Unexpected regulatory
requirements
1,472,171 0 0 1,472,171
Delay Damages 0 0 3,200,000 3,200,000
Deteriorated pipe conditions 1,400,000 2,183,320 10,700,000 14,283,320 Seismic design issues 0 1,000,000 TBD 1,000,000
Hazardous materials 445,279 0 TBD 445,279
Total 6,395,551 5,194,966 16,900,000 28,490,517
Approved Contingency 13,490,625
Additional Contingency Required 14,999,892
ATTACHMENT B
Digester and Thickener Facilities Upgrade
78” Pipe Corrosion and Structural Damage
ATTACHMENT C
Attachment C
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TO: HONORABLE MAYOR FROM: Kerrie Romanow
AND CITY COUNCIL Matt Cano
Jim Shannon
SUBJECT: SEE BELOW DATE: March 29, 2021
Approved Date
4/1/2021
SUBJECT: CONSTRUCTION CONTINGENCY INCREASE FOR THE 7382-
DIGESTER AND THICKENER FACILITIES UPGRADE PROJECT AT
THE SAN JOSE-SANTA CLARA REGIONAL WASTEWATER
FACILITY
RECOMMENDATION
(a) Approve a $14,000,000 increase to the construction contingency amount of $53,490,625 for a revised total contingency amount of $67,490,625, increasing the not-to-exceed amount from $161,415,625 to a total revised contract amount not-to-exceed $175,415,625 for the 7382 – Digester and Thickener Facilities Upgrade Project.
(b) Adopt the following 2020-2021 Appropriation Ordinance Amendments in the San José-Santa Clara Treatment Plant Capital Fund:
(1) Decrease the Nitrification Clarifier Rehabilitation appropriation to the Environmental Services Department by $14,000,000.
(2) Increase the Digester and Thickener Facilities Upgrade appropriation to the Environmental Services Department by $14,000,000.
OUTCOME
Approval of the recommended construction contingency increase will provide funding for the additional work and delays encountered in the last two and a half years of construction of the 7382-Digester and Thickener Facilities Upgrade Project (Project) at the San José-Santa Clara Regional Wastewater Facility (RWF). Approval of the appropriation ordinance amendments will permit the increase to the construction contingency this fiscal year.
COUNCIL AGENDA: 4/20/21
FILE: 21-740
ITEM: 6.1
Attachment D
HONORABLE MAYOR AND CITY COUNCIL
March 29, 2021
Subject: Construction Contingency Increase for the 7382-Digester and Thickener Facilities Upgrade Project
EXECUTIVE SUMMARY
In May 20161, the City Council awarded a contract for the construction of the 7382-Digester and Thickener Facilities Upgrade Project for $107,925,000, with a construction contingency of $13,490,625. Construction began in July 2016 and is approximately 94% complete to date.
During the early stage of construction, the Project encountered significant unforeseen issues that necessitated adding scope to the project, resulting in a delayed schedule and increased costs. In November 20172, City Council approved a $15.0 million increase to the construction contingency to address a multitude of unknown conditions, utility relocations, major repairs to large diameter deteriorated piping, and delays to the Project caused by changes in regulatory conditions. Staff informed City Council then that a future contingency increase would be required to resolve seismic design and hazardous materials issues. In June 20183 City Council approved a $25.0 million increase to the construction contingency to address those issues. Costs covered by the contract’s original contingency and these increases include structural modifications to the digesters to address seismic design issues ($14.3 million), a new reroute pumping system and repairs to the 78-inch settled sewage pipe ($14.2 million), associated delay costs ($10.0 million), additional work to address unexpected changes in regulatory requirements ($3.0 million), and hazardous materials mitigation ($2.0 million).
This memorandum describes further unforeseen conditions, additional requirements and other challenges encountered on the Project since mid-2018 and the resulting increased cost and delay anticipated as a result. The most significant reasons for additional costs are for the need of additional civil work outside the original scope, including grading, drainage, and paving; a very complex testing, start-up, and commissioning process; integration of new controls with existing legacy systems, and the discovery of digester leakage due to the age of the structure. In addition, the Project has also experienced additional costs and delays associated with new COVID-19 mandatory compliance requirements. Staff is proactively working to minimize the remaining cost impacts and will return to City Council at a later date once the analysis is completed and more information is known.
Approval of the recommended contingency increase of $14,000,000 will allow the Project to proceed toward completion. Staff will return to the City Council in FY 2021-22 with further recommendations to increase the contingency related to the currently unnegotiated delays, potential inefficiencies, and COVID-19 claims. Staff is exercising due diligence and involving an expert project controls consultant to evaluate delay claims, minimize delays, and verify costs.
Any necessary budget adjustments will be included in the 2021-2022 Proposed Capital Budget and 2022-2026 Capital Improvement Program to address these cost increases.
1 May 24, 2016: http://sanjose.granicus.com/metaviewer.php?view_id=&event_id=2137&meta_id=573928 2 November 28, 2017: https://sanjose.legistar.com/LegislationDetail.aspx?ID=3213847&GUID=0FA9A966-5DA0- 4FC3-B8F6-1B1D07A7373A
3 June 12, 2018: https://sanjose.legistar.com/LegislationDetail.aspx?ID=3514676&GUID=B39B4EC3-4007-431C- B2A1-70C94FCBC022
HONORABLE MAYOR AND CITY COUNCIL
March 29, 2021
Subject: Construction Contingency Increase for the 7382-Digester and Thickener Facilities Upgrade Project
BACKGROUND
This Project follows the premise of the Plant Master Plan (PMP) to rehabilitate existing infrastructure at RWF and is the most complex and extensive in the RWF’s Capital Improvement Program (CIP). It includes work in underground tunnels and galleries, installations of up to ten different piping systems, expansion and renovation of existing tanks, and new electrical, mechanical and control systems. It replaces and connects new facilities and structures to others that have been in continuous operation for 30 to 60 years. Prior Council memos, linked above in the Executive Summary and attached to this report (Attachments A, B and C), provide significant and detailed information about the Project need and scope, and challenges encountered, as well as previous Council authorizations for increasing construction of the Project.
Despite the considerable amount of work performed during the planning and design stages to identify potential risks to the Project, the full amount and complexity of these challenges have been beyond those reasonably foreseen back in 2013. During construction, many issues have arisen that are reflective of the complex nature of performing rehabilitation work at an aged operational facility. Some of these impacts have been consistently encountered since the beginning of construction (missing or inaccurate record drawings, unforeseen underground conditions, etc.) and some are newly encountered as construction is completed and commissioning starts, such as unexpected leaks in the existing digesters.
The majority of the previous contingency increases were used to address issues that were unforeseen and not part of the Project’s original scope (e.g. replacement of deteriorated pipe, unexpected regulatory requirements, seismic retrofits and PCB remediation). These issues have been resolved and all work is completed. Construction of the original Project scope is approximately 94% complete. Work completed to date includes the new elevated gas pipe rack; rehabilitation of four digesters and six Dissolved Air Flotation Thickener (DAFT) tanks; installation of two new flares; construction of two new electrical buildings; construction of a new sludge screening building, and odor and polymer systems. All work identified under the first and second contingency increases has been completed.
ANALYSIS
As of February 1, 2021, the Contractor had given notice of approximately $4.9 million in needed changes, which consist of $3.2 million to address unforeseen ageing infrastructure, $1.4 million to address startup complexity, and $0.3 million to address additional impacts due to design changes. of approximately $6M in needed changes, which consist of $4.2M to address unforeseen ageing
HONORABLE MAYOR AND CITY COUNCIL
March 29, 2021
Subject: Construction Contingency Increase for the 7382-Digester and Thickener Facilities Upgrade Project
Unanticipated impacts due to aging infrastructure
Due to the age of the facility and the extent of area that is affected by the work, staff anticipated that a full set of record drawings that depicts all details of the existing infrastructure would be lacking, however, the degree of insufficiency or inaccuracy has been much greater than expected.
This has resulted in the constant need of re-design during construction to remove conflicts between the new works and existing underground infrastructure. This has increased the need for additional and reworked designs as well as additional grading, drainage and paving. The following categories cover the issues that the project has encountered associated with the age of the facility.
1. Digester Leaks - Two of the four digesters (Digesters 5 and 6) were recently tested with water after the completion of structural rehabilitation, prior to the introduction of sludge, and both are leaking in excess of contract specifications. Investigations are ongoing to determine the cause of the leaks and the repairs needed, but it is not apparent that the leaks are associated with new equipment installation or structural changes (i.e., contractor responsibility), and it may be related to the previous conditions of the structures (i.e., owner responsibility). The tanks being rehabilitated had been out of service for several years even before planning started in 2013. At present, $250,000 has been paid for divers to inspect two tanks, another digester is undergoing crack sealing at locations that were not evident at the time of design and staff is working with the designer to resolve the issue. It is estimated that costs of approximately $1.0 million may be incurred to address the leakage.
2. Additional Civil Work – Additional civil work was needed for the additional excavation associated with rerouting of piping, additional improvements, site grading, curbs, gutters, walkways and street paving. The area disturbed by excavation for the project has cost twice as much than originally estimated due to unforeseen buried utility conflicts that could not have been known prior to construction.
3. Coordination With Other CIP Projects - Coordination with other CIP projects has required this project to make additions to the original scope to respond to the needs of the program. As an example, to address future drainage conditions, the Contractor, directed by the City, increased the size of a storm drain in a street that was already being excavated to avoid re-excavation in the future and to eliminate the work from the forthcoming Storm Drain System Improvement Project ($0.5 million). In addition, to accommodate needs for the Cogeneration Project and provide additional operational flexibility, this Project added a hot water loop to the elevated pipe rack, including necessary structural support ($0.2 million).
4. Additional and Redesigned Pipe Installation - The project has consistently encountered conflicts with existing utilities underground and in the tunnels. This included multiple and complex rerouting of electrical duct banks and large piping along tunnels, roadways and buildings. The extent of this work could not have been known by the Contractor
HONORABLE MAYOR AND CITY COUNCIL
March 29, 2021
Subject: Construction Contingency Increase for the 7382-Digester and Thickener Facilities Upgrade Project
prior to bid. As such, special construction sequences had to be developed to minimize traffic disruption and extensive research was required to minimize temporary process shutdowns during the complex installation. The original plans called for new piping to be supported or “hung” from the ceiling of the tunnels and galleries. However, once construction started, it was found that the tunnel concrete and pipe supports were more deteriorated than originally assumed, resulting in multiple pipes having to be supported from the floor instead. Each design by the Contractor, sometimes with up to 700 pages of calculations, was reviewed and approved by the designer before the Contractor could order, deliver, fabricate, and install each support.
5. Safety-Driven Changes - Several changes were required for safety reasons to the electrical and fire systems. Up to five years passed between project design and inspection. Fire Department plan checkers approved plans under earlier codes than those relied upon by inspectors even a few years later, requiring some updates.
6. Integration With Distributed Control System (DCS) - Another consequence of the age of the facility is the need to integrate new controls with the legacy DCS which was installed 30 years ago. This Project was originally scheduled to be complete before internal DCS upgrades were started and was designed to connect to the legacy units. Due to Project delays, some of the new control systems had to be reprogrammed to integrate into the new DCS system.
Complex Testing, Startup and Commissioning (TSC) Processes
Over 300 individual process shutdown requests have been necessary to temporarily interrupt treatment processes to connect new equipment with legacy systems. Many more are expected.
To date, this category of TSC impacts amounts to almost $1.4 million.
Multiple changes were needed to prepare for easier TSC activities, to improve process efficiency and reduce the time and cost of maintaining the new equipment. Improvements were identified which will return greater benefits during the life of the equipment. These changes created flexibility for sludge routing during startup, moved buried pipe for easier access to equipment on the ground, revised the orientation of a sampling station, increased pipe size for additional flow, and added overflow sensors.
Changes were also needed to improve DCS programming. Control strategies explain how each piece of equipment is to be controlled and integrated. In the industry, they are written generally and then the details worked out during process training and startup. Valuable information is revealed during operational testing that requires additional control programing and corrections to previously programmed controls.
New and revised programming is costly for several reasons. Operators explain how the legacy system is controlled then the designer explains differences in how the new system will be controlled, then edits the control strategies to include all details. The system integrator, as a
HONORABLE MAYOR AND CITY COUNCIL
March 29, 2021
Subject: Construction Contingency Increase for the 7382-Digester and Thickener Facilities Upgrade Project
subcontractor to the General Contractor, programs the controls and returns multiple clarifying questions to the designer who works with the Contractor’s startup coordinator and the operators to answer them. The system integrator also continues to carry out additional work under a separate contract with RWF for the DCS Upgrade Project and under contracts with every other construction project. To remedy these inefficiencies, RWF will be proposing to add specialist controls staff in 2021-2022 to assist in this effort on future projects.
Additional programming included trending for the new flare to ensure efficiency and permit compliance, flexible control options for the DAFT bottom sludge pumps, and integration of the HVAC and Fire systems in the new sludge screening building, a requirement that was not evident earlier during Fire Department plan review. The volume and complexity of these changes could not have been contemplated during design.
Additional Impacts as a result of Design Changes during Construction
Resolution of the seismic issue required installation of large, wide and deep concrete foundation rings around each digester. This caused significant impacts to the mechanical piping, pumps, gas compressors and their supporting concrete pads in the order of $300,000. Some of this complex pipework had to be elevated, requiring design of additional structural supports, with other pipework moved below ground or into the tunnels. When the designer evaluated the new concrete equipment pads to ensure they met edge clearance and anchorage requirements, the pads had to be made larger further limiting the space available.
Delay Costs since 2018
The City issued the Notice to Proceed for construction on June 22, 2016 with an original contract duration of 790 workdays. Project duration was extended first by 140 workdays due to regulatory changes as approved by Council in November 2017. It was again extended by 133 workdays due to impacts of seismic re-design and the finding of hazardous materials (PCBs) on site and approved by Council in June 2018. The Time Related Overhead (TRO) for the 2017 and 2018 delays was approximately $23,000 per day. TROs cover project staff, vehicles, equipment, on-site and off-site office and administrative expenses, escalation for the price, risk premiums for additional work, and subcontractor overhead.
The Contractor has since made three claims for additional time, totaling 237 delay days since 2018, which have been caused by the high number of changes that are diverting their efforts to complete the original scope of work. Three years have passed since the first delay in 2018.
During this time, costs have escalated due to inflation and the overall contract time has been extended significantly. With each delay, the construction insurance carrier increases the Builder’s Risk based on the new contract and contingency amounts. The Contractor has incurred more Builder’s Risk costs than they have billed. At this point, the Contractor has updated TRO costs to $38,413 per day to reflect these changes, which would be equivalent to $9.1 million.
Staff is exercising due diligence and involving expert project controls consultant to evaluate
HONORABLE MAYOR AND CITY COUNCIL
March 29, 2021
Subject: Construction Contingency Increase for the 7382-Digester and Thickener Facilities Upgrade Project
delay claims, minimize delays and verify TRO costs. Once actual delay days and compensation are negotiated, the City will memorialize them in a contract change order.
The Contractor has continued to work in good faith pending resolution of delay claims. The effect of each change on the schedule is recorded in their monthly Time Impact Analysis (TIA) on most of the change orders executed since the 2nd contingency increase, the Contractor has reserved the right to later claim TRO. The full delay impact will not be known until construction is completed in late 2021.
In addition, the continuation of work under COVID-19 pandemic has also increased costs to the Project to address new regulatory requirements, delays in the supply chain and additional time for work due to social distancing protocols and staff screening. The City has received claims from the Contractor to address these new conditions and staff is working to ensure a consistent approach is taken for all capital projects in the City. This impact will be negotiated with the Contractor in the future.
Costs for these currently known changes are shown as Known Additional Need in Table 1, below.
Table 1 – Approved/Pending Change Orders and Known Additional Needs Reason for Contingency Use Approved & Pending
CCOs (Previous
Contingency)
Known Additional
Need
Total
Unanticipated impacts due to aging
infrastructure $ 10,937,100 $3,237,419 $14,174,519
Complex testing, startup and
commissioning processes $1,355,600 $1,355,600
Additional Impacts of previous design
changes $303,100 $303,100
Delay Costs $9,991,240 $9,103,881 $19,095,121 Deteriorated Pipe Conditions, Seismic,
Hazardous Materials $32,562,285 $32,562,285
Total $53,490,625 $14,000,000 $67,490,625
Approved Contingency $53,490,625
Additional Contingency Required $14,000,000
Forecast Costs for Unknown Conditions
Three major costs impacts are not yet negotiated as they remain unknown: COVID-19, potential inefficiencies and further delays. For this reason, staff expects to return to Council later in 2021 to report and request funds for other potential impacts.
HONORABLE MAYOR AND CITY COUNCIL
March 29, 2021
Subject: Construction Contingency Increase for the 7382-Digester and Thickener Facilities Upgrade Project
In response to the COVID-19 pandemic, each Contractor working at RWF is required to submit COVID-19 plans, hire an on-site illness prevention specialist, conduct screening, maintain cleanliness standards, and purchase necessary supplies. One Contractor has made claims of over $650,000 for COVID-19 through January 2021. This claim is still to be negotiated and settled.
Further delays may occur, and additional construction tasks may be identified during the upgraded sludge systems start up process. Multiple piping systems, including hot water supply and return, thickened sludge, transfer sludge, recirculating sludge, digester gas and compressed air are necessary to operate the process. Industry estimates are 2 to 12 months for the new microbe population to mature until the full process is underway.
Staff will continue to research and negotiate daily delay fees and ensure that risk premiums are correctly applied. Staff will monitor yet unknown costs and mitigate them where possible. The Contractor and City leadership will continue to manage and negotiate these yet unknown conditions.
Lessons Learned
This Project was the earliest of its size and complexity undertaken by the CIP and the Program Team has applied lessons learned on this Project to subsequent projects. This has included more extensive assessments of underground conditions, existing structures, operating equipment and the conduct of preliminary hazardous materials surveys. Additionally, given the complexity of the Project and the experience that the Program has gained on other projects, it is likely that if initiated today, the progressive design-build (PDB) delivery method would have been used.
However, this delivery method was not available at time of award.
Lastly, although scope changes to projects are to be avoided, the Project Team has also recognized the potential net program value by incorporating scope additions related to other CIP projects. For example, the expenditure associated with the re-route system for this Project has saved the City up to $3.0 million by avoiding future re-route rentals. Recently the re-route system was used in the Spring 2020 to rehabilitate two additional sections of large pipe and will be reused to rehabilitate further sections of large pipe which are planned to be done as part of the Yard Piping Improvements project.
CONCLUSION
Staff recommends proceeding with the current contingency increase request and believes the costs to be reasonable to address the unanticipated challenges of changing laws, technological changes, deterioration, startup complexity and other difficulties encountered on the project.
Council approval of this third contingency increase of $14.0 million will allow construction and startup to continue and will ensure that the Contractor is fairly compensated for the negotiated delay caused by the necessary changes.
HONORABLE MAYOR AND CITY COUNCIL
March 29, 2021
Subject: Construction Contingency Increase for the 7382-Digester and Thickener Facilities Upgrade Project
EVALUATION AND FOLLOW-UP
Since this issue was last presented to Council, staff has continued to limit construction changes to only those necessary, review change pricing and negotiate reasonable costs. A progress report on this and other RWF capital projects is presented on a semiannual basis to the Transportation and Environment Committee, most recently on September 26, 2020. Monthly progress reports of the RWF CIP are submitted to the Treatment Plant Advisory Committee (TPAC) and posted on the City’s website.
CLIMATE SMART SAN JOSE
The recommendation in this memo has no effect on Climate Smart San José energy, water, or mobility goals.
POLICY ALTERNATIVES
Alternative #1: Delete remaining known Potential Change Orders (PCOs) and delay them to a future project.
Pros: Cost savings and fewer time delays.
Cons: New Temperature-Phased Anaerobic Digestion (TPAD), primary sludge screening and co-thickening wastewater processes could not be commenced.
Cons: Control Programming would be inadequate to operate in compliance with permits and industry standards.
Cons: Drainage would be inadequate during storm events preventing Operators and Mechanics from accessing critical equipment.
Reason for not recommending: This alternative would prevent project goals from being realized.
PUBLIC OUTREACH
This memorandum will be posted on the City’s Council Agenda website for the April 20, 2021 City Council meeting.
COORDINATION
This Project and memorandum have been coordinated with the City Attorney’s Office and the Public Works Department.
HONORABLE MAYOR AND CITY COUNCIL
March 29, 2021
Subject: Construction Contingency Increase for the 7382-Digester and Thickener Facilities Upgrade Project
COMMISSION RECOMMENDATION/INPUT
This memorandum is scheduled to be heard at the April 8, 2021 TPAC meeting.
FISCAL/POLICY ALIGNMENT
This Project is consistent with the Council-approved focus on improving wastewater treatment efficiency, protecting vital core services, and meeting air permit discharge requirements.
COST SUMMARY/IMPLICATIONS
1. AMOUNT OF RECOMMENDATION/COST OF PROJECT: $14,000,000
2. Original Construction Contract Amount $107,925,000
Original Contingency (12.5%) $13,490,625
Original Total Contract Amount $121,415,625
Contingency increase #1 $15,000,000
Contingency increase #2 $25,000,000
Contingency increase #3 $14,000,000
Total Contract Amount $175,415,625
Current Project Delivery $38,851,375
Total Project Costs4 $214,267,000
Prior Year Expenditures and Encumbrances $194,464,570
REMAINING PROJECT COSTS $19,802,430
3. SOURCE OF FUNDING: 512 – San José-Santa Clara Treatment Plant Capital Fund.
Funding in the Project appropriation in 2020-2021 of $6.3 million is insufficient to increase the contingency. Budget actions are recommended in this memorandum to increase the total appropriation by $14,000,000. To offset this increase and minimize impacts to ratepayers of San José and Santa Clara, as well as the tributary agencies, staff recommends decreasing the Nitrification Clarifier Rehabilitation appropriation by $14,000,000. The Nitrification Clarifier Rehabilitation project is expected to end the year with approximately $15,000,000 in savings due to a construction contract award that was significantly lower than the budgeted Engineer’s Estimate.
4 The Total Project Costs is expected to increase as a result of further refining costs related to the unknown conditions described in the Analysis section. Any necessary budget adjustments will be included in the 2021-2022 Proposed Capital Budget and 2022-2026 Capital Improvement Program, which is scheduled to be released April 29, 2021.
HONORABLE MAYOR AND CITY COUNCIL
March 29, 2021
Subject: Construction Contingency Increase for the 7382-Digester and Thickener Facilities Upgrade Project
4. PROJECT COST ALLOCATION: In accordance with the recommendations set forth in the Capital Project Cost Allocations Technical Memorandum (Carollo Engineers, March 2016), the cost for the Project is allocated 40 percent to biochemical oxygen demand (BOD) and 60 percent to total suspended solids (TSS). The cost for the Nitrification Clarifier Rehabilitation appropriation is allocated 40 percent to flow and 60 percent to BOD. This results in revised cost allocations for San José, Santa Clara, and the Tributary Agencies as outlined in the table below.
Agency Name
Original Cost
Allocation
Updated Cost
Allocation Change
City of San José 9,384,480 9,641,660 257,180 City of Santa Clara 2,267,580 2,329,740 62,160 West Valley Sanitation District 836,500 765,800 (70,700) Cupertino Sanitation District 518,140 451,640 (66,500) City of Milpitas 900,900 731,360 (169,540) County Sanitation District 2-3 66,220 56,560 (9,660) Burbank Sanitary District 26,180 23,240 (2,940) Total 14,000,000 14,000,000 -
The updated cost allocations for the Project result in an increase of approximately $257,180 to the proportional share of Project costs for San José and approximately $62,160 for Santa Clara, with a corresponding decrease in the proportional share of Project costs for the Tributary Agencies. The 2020-2021 Adopted Capital Budget has sufficient Ending Fund Balance to offset the expected $319,340 decrease in revenue to support the recommended cost allocation adjustments for San José. Adjustments to the 2021-2022 budgetary revenue contributions may be brought forward to the City Council at a future date based on these updated cost allocations.
BUDGET REFERENCE
The table below identifies the fund and appropriations to fund the contingency increase and remaining project costs, including project delivery and construction costs.
Fund
#
Appn
# Appn. Name
Total
Appn.
Rec. Budget
Action
2020-2021
Adopted
Capital
Budget Page
Last Budget
Action (Date,
Ord. No.)
512 4127 Digester and
Thickener
Facilities Upgrade
$6,321,000 $14,000,000 V-137 10/20/20
Ord. No.
30494
512 7074 Nitrification
Clarifier
Rehabilitation
$17,926,000 ($14,000,000) V-147 1/26/21
Ord. No.
30521
HONORABLE MAYOR AND CITY COUNCIL
March 29, 2021
Subject: Construction Contingency Increase for the 7382-Digester and Thickener Facilities Upgrade Project
CEQA
The San Jose-Santa Clara Regional Wastewater Facility digester and Thickener Facilities Upgrade Project Mitigated Negative Declaration, File No. PP15-055.
/s/ /s/
KERRIE ROMANOW MATT CANO
Director, Environmental Services Department Director of Public Works
JIM SHANNON
Budget Director
For questions, please contact Napp Fukuda, Assistant Director, Environmental Services Department at 408.793.5353.