CITY OF SAN MATEO
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CITY OF SAN MATEO
Agenda Report
City Hall
330 W. 20th Avenue
San Mateo CA 94403
www.cityofsanmateo.org
Agenda Number: {{item.number}} Section Name: {{section.name}} Account Number: 72-4671 File ID: {{item.tracking_number}} TO: City Council
FROM: Alex Khojikian, City Manager
PREPARED BY: Public Works Department
MEETING DATE: February 05, 2024
SUBJECT:
Wastewater Treatment Plant Upgrade and Expansion Project and Furnishing Services for New Administration Building – Appropriation and Agreement
RECOMMENDATION:
Adopt a Resolution authorizing an appropriation in the amount of $7,000,000 from the Sewer Fund Reserves to the Capital Projects Funds for the Wastewater Treatment Plant Upgrade and Expansion Project and approving an alternative purchasing procedure to award an agreement to One Workplace to provide furnishings, design, project management, and installation services for the Wastewater Treatment Plant’s new administration building in the amount of $400,297.76; establish a contingency reserve in the amount of $40,000; and authorize the Public Works Director to execute the Agreement in substantially the form presented and issue change orders within the contingency amount.
BACKGROUND:
The City is currently under a Regional Water Quality Control Board Cease and Desist Order requiring improvements to its sewer collection system and Wastewater Treatment Plant (WWTP) to eliminate sanitary sewer overflows and unauthorized discharges of untreated or partially treated wastewater to San Francisco Bay. The Clean Water Program (CWP) includes several capital improvement projects that are currently under construction and intended to comply with the Cease and Desist Order. The WWTP Upgrade and Expansion Project (Project) is the largest of these CWP projects, which will result in a new treatment plant for processing wastewater.
The Project budget accounts for construction contract costs, as well as engineering services, environmental permits, project management, construction management services, and contingencies. Currently, the Project is scheduled to be complete in Fiscal Year 2024-2025 and the latest estimate to complete the project is approximately $562 million, which is still subject to change. Prior to the award of the construction contract, in the amount of $379.9 million with a $13.9 million contingency in 2019, staff determined that management of the project account on a cash-flow-based needs instead of the typical encumbrance-based approach best served this Project. For an encumbrance-based approach, the City would have had to appropriate the full construction contract value at the time of award, which was not feasible with the approach that the sewer service charge rates and revenue were strategically structured. On the other hand, following a cash-flow-based approach allowed the City to increase sewer rates to align with the revenue needs to increase the project account budget each fiscal year. Accordingly, since the inception of the project account, staff would estimate each fiscal year’s anticipated spending and cash flow needs and request adoption of the estimated budget for each fiscal year. Specifically, for Fiscal Year 2023-2024, a $11,210,000 budget was adopted to align with the fiscal year’s anticipated spending and cash flow needs. As of the current Fiscal Year 2023-2024, the overall budget of $535,927,000 has been appropriated.
Construction has been progressing well overall. However, the Project has incurred several changes due to unknown site conditions or issues beyond the original project scope and understanding requiring contract change orders utilizing the
CITY OF SAN MATEO
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construction contract’s contingency reserve. In order to meet the construction schedule of the Project, the Contractor has worked overtime and on Saturdays to complete the additional work from these approved change orders. As a result of the change orders and schedule challenges, construction expenditures for the current fiscal year have exceeded the previously anticipated cash flow projections for the Project. To address the cash flow needs and the budget deficit for the remainder of the current Fiscal Year 2023-2024, a budget appropriation of $7,000,000 from the Sewer Enterprise Fund Reserves to the Project account is recommended. This appropriation will increase the current Fiscal Year 2023-2024 budget to $18,210,000 to align with the cash flow needs.
The remaining budget needed to complete the Project is still planned to be budgeted in upcoming Fiscal Year 2024-2025.
Based on the above, staff recommends for City Council to adopt a resolution authorizing an appropriation in the amount of $7,000,000 from the Sewer Fund Reserves to the Capital Project Funds for the Project.
With regard to the proposed agreement for furnishing services, City/WWTP Operations staff is planning to occupy the building in Spring 2024 in time for process startup and operations of the new WWTP. Under the City’s existing agreement with HDR Engineering, Inc. for engineering services during construction for the Project, Burks Toma Architects, the Architect for the Project, assisted the City in the selection of the furnishings (office furniture, workstations, office equipment, etc.) for the new building. The timely procurement and installation of the office furnishings and equipment is critical to meet the schedule for the startup of the new WWTP process facilities. Staff utilized Sourcewell pricing through One Workplace for the purchase of the selected furnishings.
San Mateo Municipal Code Section 3.60.070(h)(3) authorizes the City Council to approve alternative purchasing procedures when it finds doing so is in the best interest of the City. Sourcewell (formerly NJPA) is a government organization that solicits, receives, and reviews competitive bids for various specialty equipment, including furniture, fixtures, and office equipment. Sourcewell has conducted competitive, public bids to select furniture vendors to achieve competitive pricing and selected One Workplace. Therefore, the purchase of the office furnishings for the new Administration Building from One Workplace is in the best interest of the City because the City may rely on bids obtained from Sourcewell who has solicited, received, and reviewed competitive bids for the desired furnishings through its cooperative purchasing program. One Workplace will provide the furnishings, design, project management and installation services. Based on the above, staff recommends approval of the Agreement with One Workplace for services to furnish the new Administration Building because it is in the best interest of the City, due to the timely need for these furnishings.
BUDGET IMPACT:
There are sufficient funds available in the Sewer Fund Reserves for this appropriation to the WWTP Flow Management Upgrade and Expansion Project (46t003) in the Capital Projects Fund, increasing the total project budget to date from $535,927,000 to $542,927,000. The appropriation would also provide sufficient funds for the proposed agreement with One Workplace.
ENVIRONMENTAL DETERMINATION:
The City prepared a Final Programmatic Environmental Impact Report (Final PEIR) in accordance with the California Environmental Quality Act (CEQA) (SCH No. 2015032006). Council on June 6, 2016, certified the PEIR. In accordance with CEQA, the Final PEIR serves as the primary environmental compliance document for the implementation of the Clean Water Program. The City prepared Addenda to the Final PEIR that was approved on July 16, 2018 (Addendum 1) and April 15, 2019 (Addendum 2). This work is within the scope of the Project evaluated in the PEIR and Addendum.
NOTICE PROVIDED
All meeting noticing requirements were met.
ATTACHMENTS
Att 1 - Proposed Resolution
Att 2 - Agreement
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STAFF CONTACT
Thomas Ruark, Project Manager II
[email protected]
(650)522-7280
Deryk Daquigan, Acting Deputy Director of Public Works
[email protected]
(650)522-7287
Brad Underwood, Interim Director of Public Works
[email protected]
(650)522-7303