March 1, 2005

SUBJECT:     Award of Bid #F0411-19 for Oxidation Pond Levee Improvements at the Water Pollution Control Plant and Approval of Budget Modification No. 28

REPORT IN BRIEF

Approval is requested for the award of a contract to HSR, Inc., of Santa Clara for Water Pollution Control Plant oxidation pond levee improvements for the Department of Public Works Engineering Division Project Administration (Project #UY-02/07-03).  Approval is also requested for Budget Modification No. 28 which is necessary to fully fund this project and provide an adequate project contingency.

BACKGROUND

The Water Pollution Control Plant (WPCP) has 440 acres of oxidation ponds that are a key element in the secondary treatment of wastewater.  The levees that contain these ponds are slowly settling into the underlying mud and need to be brought back to their proper elevation to maintain the integrity of the ponds. 

This project consists of constructing improvements to approximately 5,900 linear feet of internal levee on the north and east sides of Oxidation Pond #2.  The project also includes slip-lining of twenty-four 30” diameter corrugated metal pipes which are embedded in the levee to allow the effluent to cross from the distribution channel to the pond.  These pipes have not been replaced or relined since they were constructed approximately forty years ago.

DISCUSSION

Bid specifications were prepared by Public Works and Purchasing staff.  The Notice Inviting Bids was published in The Sun on November 17, 2004; and the bid package was distributed to Bay Area Builders Exchanges and broadcast to potential contractors through DemandStar by Onvia procurement network.  Twenty-five contractors requested bid documents.

Sealed bids were publicly opened on December 15, 2004.  Three responsive bids were received.

Bidders	Total Bid
Engineer’s Estimate	$650,000
HSR, Inc., of Santa Clara	$718,850
O. C. Jones & Sons of Berkeley	$813,025
Fanta, Inc., of San Lorenzo	$1,186,674

Due to the unique uncertainties involved with working in wastewater oxidation ponds, and the limited number of contractors with qualifications and experience to perform this type of work, the lowest responsive bid was approximately 10.5% over the engineer’s estimate.

Staff recommends acceptance of the bid from HSR, Inc., the lowest responsive and responsible bidder.

A determination was made that this project will have no significant effect on the environment in accordance with CEQA guidelines for categorically exempt projects.

FISCAL IMPACT

The City has a large number of wastewater collection and treatment system projects underway.  Current funding for wastewater projects is provided from two sources: wastewater rate revenues and proceeds from the Water and Wastewater Revenue Bonds Series 2001. 

At its September 28, 2004, meeting, Council approved Budget Modification No. 6 (RTC No. 04-341) which modified the budgets for ten wastewater projects.  The modifications, which were both increases and decreases in budgeted funds, were based on the most recently available cost information for each project.  The Budget Modification resulted in an overall surplus of $1,148,212, which was earmarked for return to the Wastewater Management Fund Resource Allocation Plan Reserve for re-appropriation during this current project budget cycle. 

As detailed in the discussion section of this report, the unique working environment that exists in the wastewater oxidation ponds resulted in a bid that exceeded the engineer’s estimate by approximately 10.5%.  For this same reason, staff is recommending that our standard 15% contingency be carried on this project. 

A total of $780,000 was budgeted in the current year for Capital Project 811700 - Oxidation Pond Levee Improvements.  To date, $1,844 has been spent on various project costs, leaving $778,156 in available funding.  The current project budget is not adequate to fund a 15% contingency.

Project Costs include: 

Year to date expenditures	$    1,844
Construction	$718,850
Contingency (15%)	$107,828
Total Cost	$828,522

Staff recommends the approval of Budget Modification No. 28 to appropriate $48,522 from the Wastewater Management Fund Resource Allocation Plan Reserve to Capital Project 811700 to fund the full 15% contingency for the project.  If unused, the contingency funds will return to the Wastewater Management Fund Resource Allocation Plan Reserve for re-appropriation.

Budget Modification No. 28

Fiscal Year 2004/2005

	Current	Increase (Decrease)	Revised
Expenditures
Project 811700 – Oxidation Pond Levee Improvements	$780,000	$48,522	$828,522
Reserves
Resource Allocation Plan Reserve	$3,177,200	($48,522)	$3,128,678

RECOMMENDATION

It is recommended that Council:

1.                  Award a contract, in substantially the same form as the attached draft and in the amount of $718,850, to HSR, Inc., for oxidation pond levee improvements at the Water Pollution Control Plant; and

2.                  Approve a project contingency in the amount of $107,828; and

3.                  Approve Budget Modification No. 28.

Prepared by:

Elaine Wesely

Purchasing Officer

Reviewed by:

Mary J, Bradley

Director, Finance

Reviewed by:

Marvin Rose

Director, Public Works

Approved by:

Amy Chan

City Manager

ATTACHMENT

A.       Draft General Construction Contract(PDF)