Item Number: 8
City Council / Board of Directors
Written Communications
Meeting of: May 21, 2024
Submitted By:
Fredy Bonilla, City Engineer
Doug Mathews, Director of Public Works & Water
Subject:
Woodard & Curran - Industrial Wastewater Treatment Plant (IWWTP) Operations Contract Amendments and Spending Authorizations
Recommendation:
That the Honorable City Council and Board of Directors of the Victorville Water District take the following actions:
1. Approve Amendment No. 3 for Engineering Services;
2. Approve Amendment No. 15 to the Operations & Maintenance Contract;
3. Ratification of spending for the annual contract in the amount of $5,346,043; and
4. Approval to increase the FY 23-24 spending amount in the amount of $578,631.52.
Fiscal Impact:
Moving forward with the staff recommendation does not require an additional appropriation. There are sufficient funds budgeted to cover these expenses in Fund 412 – Industrial Wastewater Treatment Plant (IWWTP). Please see the accounts impacted below:
Project Name Amount Account String
Eng. Services – Amendment No. 3 $217,642.41 4120710-52300 W&C – Mag Ox Project – Amendment No.
15 $390,000 4120710-55040-76039
Annual W&C Contract – FY 23-24 $4,995,843 4120710-52300 FY 22-23 True-up $405,576 4120710-52300
Sanitary Influent Pump $144,424.43 4120710-55040-74480
Man Lift $210,000 4120740-55040-74479
SCADA Replacement $12,679.09 4120710-55070-74456
Heat Exchangers Repair $155,952 4120710-52300
Engineering Services New Amount $217,642.41 4120710-52300 3 6
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W&C – MagOx Project Amendment No. 15 $390,000 4120710-55040-76039 Ratification Amount1 $5,345,843 4120710-52300
4120710-55070-74480
4120710-55040-74479
FY 22-23 True-up2 $405,576 4120710-52300
Additional Funds for Sanitary Influent
Pump3
$4,424.43 4120710-55040-74480
Additional Funds for SCADA Replacement4 $12,679.09 4120710-55070-74456 Additional Funds for Heat Exchanger
Repairs5
$155,952 4120710-52300
1Annual Agreement Amount approved on 6.20.23 was only $497,200, please refer to Attachment D; original FY23-24 budget amount was $5,843,043, which included the Sanitary Influent Pump ($140,000) and Man Lift ($210,000) these items were broken out in the fiscal impact as they have their own project codes but are included in the overall ratification amount request. 2Per the original contract, Exhibit C – Compensation, Part 2(E)(1) (Attachment E) – at the end of each fiscal year, a true will be done.
Please see the Discussion section for more details.
3Original FY23-24 amount was $140,000; however, project quote came in at $144,424.43. 4Project was appropriated in FY 22-23 in the amount of $60,000; however, quote came in at $72,679.09. 5Project was originally in the operating budget of FY22-23 and was not re-budgeted in the FY23-24 operating and maintenance costs, which is when the work was completed. The project does not “roll” fiscal years because it is not capital.
There are sufficient budgeted funds to cover these expenses as there were cost savings in a capital project and less expenses than originally anticipated for discharge costs to Victor Valley Reclamation Authority (VVWRA).
Strategic Plan Goal:
This item aligns with “Goal E Invest in Infrastructure” in the City of Victorville Strategic Plan 2023-2026. The operations and maintenance required of the City’s treatment plant is essential for providing wastewater treatment for those business and residences in Service Area B.
Background:
On June 17, 2008, City Council approved a contract with Woodard & Curran (W&C) for the design and operation of the Industrial Wastewater Treatment Plant (IWWTP), which began operating in July of 2010. Amendment Nos. 1 through 11 authorized the compensation for various capital projects and/or extended the term of the contract.
Amendment No. 12 was approved by the City Council on December 7, 2021. This amendment was for a capital project to upgrade and replace certain items related to the plant’s magnesium hydroxide storage and delivery system (Mag Ox System). This system is an integral part of the wastewater treatment process. Currently, the W&C operations team must mix and feed the chemical manually twice a day. The replacements and upgrades would automate the process and thus eliminate the need for manual labor.
Furthermore, being able to feed the chemical into the process automatically throughout the entire day would benefit the treatment process in the IWWTP. The proposed replacement and upgrade include removing parts of the existing system, installing new equipment, and installing ancillary electrical and automation components. The total project cost was initially estimated to be $340,000.
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Additionally, the IWWTP treatment process uses membrane bioreactors (MBR), a method consisting of microfiltration combined with a biological process, to treat wastewater. The membranes, which are hollow fibers, separate solids from the liquid that passes through the membranes. The membranes are assembled in a series of modules and combined to make an MBR unit. Wastewater flows through a number of these MBR units in four membrane trains in the IWWTP as part of the treatment process.
On May 13, 2022, City Council approved Amendment No. 13 to the contract with W&C.
This extended the term of the contract until 2034, authorized the replacement of the four MBR trains, and resulted in W&C entering into a twelve-year service agreement with Suez, the vendor that supplies, replaces, and services the MBRs. Under Amendment No. 13, the additional compensation to W&C for the twelve-year service agreement was $515,630 for the first year (Fiscal Year 2022/2023) and $415,630 per year for the subsequent eleven years.
On February 7, 2023, City Council approved Amendment No. 14 to the contract with W&C. This contract increased the compensation to account for sales tax and base markup fees that were inadvertently omitted from the additional scope approved under Amendment No. 13 for the MBR replacements. The W&C markup fees of 10% are established in the original contract, Section C.2.01.C. The twelve-year service agreement was amended to increase the compensation for the first year by $101,192.39, for a total increase of $616,822.39. The increase in compensation for the next eleven years would be $81,567.39 per year for a total increase of $497,197.39 per year.
Discussion:
Wastewater management in Victorville centers on the collection, conveyance, treatment, reuse, and disposal of wastewater. Victorville has two wastewater treatment options depending on the service area. Service Area A’s sewer flows go to the Victor Valley Wastewater Reclamation Authority (VVWRA), and industrial customers and Service Area B’s sewer flows go the IWWTP located at the Southern California Logistics Airport (SCLA).
The City’s IWWTP processes 2.0 million gallons (MG) of wastewater a day. As such, certain challenges have been faced to ensure the facility is maintained in accordance with standards set by the California State Water Resources Control Board (SWRCB) and requirements of the City’s wastewater permit issued by the SWRCB, thereby avoiding the issuance of violations of any type.
Engineering Services – Amendment No. 3
On November 10, 2022, the City entered into an Engineering Services contract with W&C to analyze particular wastewater operations, modifications, protocols, and specifications that are not related to the daily maintenance and operation of the plant and fall outside of the contract scope for operations and maintenance. This Engineering Services contract was utilized this fiscal year for monthly engineering services and an additional emergency effluent bypass project repair. Despite diligent maintenance efforts by plant staff, the 3 6
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influent pipe has experienced significant deterioration, leading to an increasing number of leaks. The identification of critical structural failures in two key locations necessitated urgent action to ensure uninterrupted conveyance of industrial wastewater through our treatment processes and avoid a potential facility stoppage.
To address these challenges, an emergency repair was successfully executed under the repair timeline and details are as follows:
•Process Influent Pipe @ Fine Screens:
oSept. 23, 2022: Hole #1 - Repair clamp installed.
oNov. 29, 2022: Hole #2 - Second repair clamp installed. oJan. 26, 2023: Multiple holes - Five additional repair clamps installed. •Equalization Influent Elbow:
oJan. 13, 2023: Hole - Patch installed.
oJul. 14, 2023: Leak #2 - Repatched.
•Additionally, a replacement project was undertaken:
oOct. 16/17, 2023: Replaced existing pipe sections with stainless steel. oOct. 31, 2023: Additional support installed on equalization influent pipe.
The repair was also intended to prolong the lifespan of the influent pipes by replacing crucial sections with stainless steel for enhanced durability and sustainability. This decision is supported by water quality data from the plant, confirming its effectiveness as a long-term solution. As this repair was conducted as an emergency measure and was not anticipated in the budget, it resulted in an overage of $152,624.41.
Following discussions between City staff and W&C, it has been determined additional engineering services are required for this fiscal year in the amount of $65,000. Those services include:
•Analysis and technical assistance related to wastewater treatment issues for wastewater discharged from Keurig-Dr.Pepper;
•Evaluation of options for replacing aging or failing equipment; •Grant assistance and documentation: environmental documentation, engineering reports, and hosting funding workshops;
•Permitting services, as needed; and
•Attendance of monthly meetings by the W&C Project Manager.
If approved, Amendment No. 3 (Attachment B), would amend the Engineering Services contract by $217,642.41 for a new not to exceed amount of $377,624.41 for FY 23-24.
Operations & Maintenance – Amendment No. 15
Amendment No. 15 (Attachment C) to the consultant/professional services agreement for the operation and maintenance of the IWWTP with W&C is a change order for Amendment No. 12, specifically pertaining to the Mag Ox System project. This modification results in an increase of $390,000 to the total project budget, from the initial price of $340,000 to $730,000. W&C acquired a fiberglass reinforced plastic (FRP) bulk 3 6
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storage tank with a top mount mixer at the pre-planning stages of the project. Both pre- purchased units are currently onsite, awaiting installation. Since the original award in 2021, labor costs have substantially increased due to inflation and other economic factors. Additionally, a change was recommended to address current industry standards for plant design which include a circulatory loop to dose magnesium hydroxide to breakdown byproducts to a fluid level that will not settle or block the system pipes.
Amendment No. 12 was originally designed without incorporating a system for dosing magnesium hydroxide into the process in a circulated loop, but rather relied on dosing followed by flushing with water. Industry standard for a magnesium hydroxide distribution system dictates a circulated loop, which maintains velocity in the circulated lines, preventing any settling and plugging in the lines. Due to this design improvement, the scope and details of the original project needed to be altered, resulting in increased costs to comply with industry and regulatory guidelines. The change of scope breakdown is provided below:
Amendment No. 12 – Original Mag Ox. Project $340,000
Larger magnesium hydroxide circulation pumps $60,000
New Variable Frequency Drive (VFD) panel with an outdoor rated enclosure equipped with an air conditioning unit for proper cooling $170,000
Heat trace & freeze-protectant insulation of the Mag Ox distribution loop $110,000 Increase cost in pumps & pinch valves $50,000
Amendment No. 15 – Change Order Amount $390,000
New Project Total $730,000
After review of the project scope and the increase in efficiency in plant operations when compared to the current daily manual process of using 300-gallon totes mixed with air as a temporary solution to dose the flows, staff believes this is an acceptable infrastructure upgrade to the original project scope and recommends approving Amendment No. 15, increasing the contract amount by $390,000 for a total project cost of $730,000.
Ratification of FY 23-24 Expenditures
As new City staff have joined the team providing oversight of IWWTP operations, an audit was performed for FY 23-24 to better understand and reconcile this fiscal year’s contract, O&M costs, and various infrastructure projects. In review of the Annual Supply and Service Agreements for FY 23-24 and the staff report approved by City Council on June 20, 2023, staff realized there was an entry error related to the original contract amount listed for W&C.
The annual contract amount for W&C was listed as $497,200 (Attachment D); however, the total amount for the operation of the plant, the ion exchange facility, operating R&R and the Industrial Pre-treatment Program total should have been $5,843,043. Below is a breakdown of the FY 23-24 operation and maintenance costs that were anticipated:
Base Budget $2,627,255
Base (10%) Fee $262,722
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Ion Exchange Budget $1,173,666
Ion Exchange Fee $122,400
Industrial Pretreatment Program Budget $147,000
R&R Projects (listed individually below)
Wet Well Cleaning $500,000
Heat Exchanger Cleaning $150,000
Annual UV Maintenance $95,000
Misc. Repairs $150,000
VFD Final Effluent Pump Replacement $45,000
UASB Pump B Rebuild $25,000
MBR Tank Rehab $150,000
Equalization Pump Flow Meter $45,000
Capital Projects
Two Sanitary Influent Pumps $140,000
Man Lift $210,000
Total FY23-24 Contract Amount $5,843,043
Authorizing Contract Amount for FY 23-24 $497,200
Requesting Ratification Amount for FY 23-24 $5,345,8431 1Requesting Ratification amount for FY 23-24 in the fiscal impact section under contract services does not include the two listed Capital Project as they have separate coding.
Staff is seeking ratification of $5,346,043 [$5,843,043 (Annual Contract Amount) - $497,200 (6.20.23 Council Approval Amount)], as these were anticipated costs for Fund 412 – Industrial Wastewater Treatment Plant and are required for proper plant operation.
Additional Funds Needed for IWWTP | W&C
As part of the forementioned audit, review of the W&C contract, and discussions with W&C, there are additional expenditure costs that staff is requesting approval for FY 23- 24 in the amount of $578,631.52. The breakdown of these expenditures is listed below:
•FY22-23 Reconciliation for R&R: As per the original W&C contract, Exhibit C – Compensation, Part 2(E)(1) (Attachment E): At year’s end the Engineer (W&C) shall submit to the Owner (City) a final detailed report of actual costs versus budget and any difference between the amount paid versus actuals will be paid to Engineer by Owner by November 1st each year. In review of W&C’s actuals versus budgeted amounts for FY 22-23 operations, the City owes W&C $405,576. This true up amount is due to additional costs associated with cleaning, maintaining, and repairing aging plant infrastructure. The table below outlines the budgeted versus actual costs for FY 22-23:
Project
Budgeted
Amount Actuals Difference
Wet Well Cleaning $324,000 $556,436 -$232,436
Heat Exchanger Cleaning $75,000 $106,650 -$31,650
Annual UV Maintenance $85,000 $84,030 $970
Misc. Repairs1 $120,000 $381,789 -$261,789
SCADA Connectivity & PLC Upgrades $80,000 $28,937 $51,063 3 6
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O&M Shared Savings Payback - Exhibit C – Compensation, Part 2(B)(2) – Reimbursable Cost Savings2
-$68,266
FY 22-23 True-up $405,576
1Misc. Repairs include: Sanitary Pump Bypass, USAB repairs, HVAC Replacements, Screen Repairs, Meter Items and Boiler Repairs
2FY 22-23 O&M – Budgeted: $2,279,148 | Actuals: $2,188,126.85 = $91,021.15. Reimbursed at a rate of 75% = $68,266 •SCADA Replacement – Capital Project: This capital project was originally estimated at $60,000 in FY 22-23. However, the total project cost was $72,679.09 due to unforeseen issues experienced as the project progressed and increased costs for labor/equipment, resulting in a project overage of $12,679.09. •Sanitary Influent Pumps – Capital Project: This capital project was originally estimated to be under $140,000; however, sales tax was not included as part of the costs. Once sales tax was factored in, the project total is $144,424.43, resulting in an overage of $4,424.43 from the original approved budget. •Heat Exchanger Plate Repairs: The heat exchangers are a component of the treatment plant that assist in maintaining an adequate temperature for the biological treatment process. Due to the solids being processed on the industrial side of the plant, there is a higher cleaning interval and a lower useful life for the heat exchanger plates. The cleaning interval for these plates is currently every 30 to 45 days; whereas, it was formerly done annually. The heat exchanger plates required additional repairs this year that were unforeseen in the amount of $155,952. Without these plate repairs, the plant would not be able to adequately treat sewer flows from industrial and non-industrial customers.
The table below is a summary of the additional amounts on a per-project basis that staff are seeking authorization for. Unless there are emergency items, staff does not anticipate additional expenses this fiscal year.
Project Additional Requested Amounts
FY 22-23 True-up $405,576
SCADA Replacement Project $12,679.09
Sanitary Influent Pumps $4,424.43
Heat Exchanger Repairs $155,952
Total $578,631.52
Staff remains available for any questions or comments Council may have.
Attachments: A. Wastewater Treatment Plant Service Area Map B. Amendment No. 3 – Engineering Services
C. Amendment No. 15 – Professional Services Agreement for IWWTP Operations
D. June 20, 2023 Annual Supply Agreement List
E. IWWTP Original Contract - Exhibit C – Compensation, Part 2(E)(1)