CITY OF SAN MATEO
CITY OF SAN MATEO
Agenda Report
City Hall
330 W. 20th Avenue
San Mateo CA 94403
www.cityofsanmateo.org
Agenda Number: 22 Section Name: {{section.name}} Account Number: 72-4674 File ID: {{item.tracking_number}} TO: City Council
FROM: Alex Khojikian, City Manager
PREPARED BY: Public Works Department
MEETING DATE: August 19, 2024
SUBJECT:
Clean Water Program – Program Management Contingency
RECOMMENDATION:
Approve an increase to the contingency reserve associated with Amendment No. 9 to the agreement with CH2M Hill Engineers, Inc., for program management services for the Clean Water Program, in the amount of $250,000, for a revised contingency reserve of $1,697,000; and authorize the Public Works Director to execute amendments within the contingency amount.
BACKGROUND:
The Clean Water Program (CWP) is a $1 billion capital improvement program necessary to replace aging infrastructure in the wastewater treatment plant and collection system to meet regulatory requirements. On October 20, 2014, Council approved a professional services agreement with CH2M Hill Engineers, Inc. (CH2M) to provide program management for the Clean Water Program for one year with automatic extensions for five additional years, with scope and funding for subsequent years to be authorized annually by the City Council. Council authorized the scope of services for Years 2 through 10 under Amendment Nos. 1 through 9, respectively. The scope and funding for each program year has been jointly developed and negotiated between City and CH2M staff, with annual authorization by Council. Each program year, the amendment term and Program year typically starts in November and ends in October.
The latest approved Amendment No. 9 increased the scope of services and funding for the current Year 10 of the contract.
Year 10 services have continued to focus on project delivery, shifting the final capacity improvement and flow management projects from design phase to construction phase, and project completions. Tasks include program administration, program controls, engineering and project management, construction management and inspection, environmental and permitting support, and public outreach. When Amendment No. 9 was approved by Council in October 2023, the following projects were planned to be in design; start or in construction; or complete construction during the current Year 10:
In Design: WWTP Annual Major Components (various packages); Basin C and Basin D Sewer Rehabilitations Starting or In Construction: WWTP Upgrade & Expansion (Package 3); WWTP Immediate Action Projects (IAP), Package 3; WWTP Annual Major Components (various packages); Basins 2 & 3 – El Camino Real Capacity Improvements; East San Mateo Lift Station Improvements, Package 2; and Basin B Sewer Rehabilitation Scheduled for Anticipated Construction Completion: IAP, Package 2; WWTP Annual Major Components (various packages); Basin A and E Sewer Rehabilitations; Basins 2 & 3 – Underground Flow Equalization System Project, Dale Avenue Pump Station Improvements, and Delaware Street Relief Sewer As part of Council’s October 16, 2023 approval of CH2M’s latest Amendment No. 9, a $1,487,000 contingency reserve was
CITY OF SAN MATEO
approved for Year 10, which was based on estimated costs of additional project/construction management services the City may require if there are delays to active construction projects. This contingency budget also accounted for general risks associated with program/project delivery and unanticipated scope that may arise through Year 10.
Since the start of Year 10, majority of the contingency reserve has been utilized to increase scope and budget due to delays in projects or newly identified scope required to complete a successful Program year. To date, contingency reserve has been utilized for additional program controls services due to the City’s transition to Workday; WWTP and collection system project and construction management due to delays in design and construction of various projects; hydraulic modeling services to support the development of Standard Operating Procedures of the new infrastructure, evaluation of sewer bypassing strategies, and review of peak wet weather meter readings to support compliance of interagency sewer service agreements; SCADA systems support to ensure staff have the ability to control, monitoring, and analyze the new facilities; and environmental compliance inspections due to bird nestings in construction areas. The remaining contingency balance is $139,251, which may not be sufficient to address any remaining risks or unanticipated scope needs for Year 10 of the CWP.
The requested $250,000 contingency increase is based on estimated costs of additional services the City may be required to support the Program delivery and ensure existing/new facilities are operating as intended. Additional contingency may be required to prepare for the startup and commissioning of the new facilities. CWP staff have coordinated with WWTP operations staff and design engineers to forecast the necessary services, equipment, and materials required to run the new facilities; additional support may be required to validate previously estimated operational budget forecasts required to operate and maintain the thousands of new assets/equipment that the CWP is adding to the wastewater treatment and collection system. In addition, experienced operations staff will eventually be required to operate the existing WWTP facilities to allow City operations staff to learn and start operating the new facilities; on-call operations services may also be utilized to support City needs. A separate Request for Proposals (RFP) for these operational services is currently in the advertisement process. Operations services may also be requested to evaluate the WWTP staffing and scheduling plans for when the new facilities become operational to ensure City staff resources are being utilized effectively and efficiently.
BUDGET IMPACT:
Funding for this additional contingency amount is available within the various capital improvement project accounts that CH2M staff provide program and project management services for, which include: 469981, 469988, 46s003, 46s005, 46s090, 46s091, 46s092, 46s093, 46t003, 46t009, 46t010, and 46t090. The WWTP operating budget may also be utilized.
ENVIRONMENTAL DETERMINATION:
Council approval of a contingency increase associated with Amendment No. 9 to the Agreement between the City and CH2M is exempt from CEQA review because the potential use of contingency to increase continued program management can be seen with certainty that there is no possibility that the management services may have a significant effect on the environment. (CEQA Guidelines section 15061(b)(3).) In addition, the City prepared a Final Programmatic Environmental Impact Report (Final PEIR) for the Clean Water Program 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).
NOTICE PROVIDED
All meeting noticing requirements were met.
ATTACHMENTS
None.
STAFF CONTACT
Deryk Daquigan, Deputy Public Works Director
[email protected]
(650) 522-7287