HomeMy WebLinkAbout2005-09-14 Packet - Special CITY OF UKIAH
CITY COUNCIL AGENDA
SPECIAL MEETING
CITY OF UKIAH COUNCIL CHAMBERS
300 SEMINARY AVENUE
Ukiah, CA 95482
September 14, 2005
5:00 p.m.
1. ROLL CALL
2. JOINT MEETING WITH THE CITY COUNCIL AND UKIAH VALLEY SANITATION
DISTRICT (UVSD): Presentation and Discussion by Bartle Wells Associates Regarding
the Sewer Rates and Bond Issues for the Wastewater Treatment Plant Rehabilitation
and Capacity Addition Project
3. JOINT MEETING WITH THE CITY COUNCIL AND UKIAH VALLEY SANITATION
m
DISTRICT (UVSD): Discussion and Possible Award of Bid Contracts to Kiewit
Pacific Company and Ewing Construction Services Related to the Rehabilitation
and Capacity Addition of the Wastewater Treatment Plant Facility ("Improvement
Project")
ELECTRIC WORKSHOP: The Electric Workshop is being presented to City Council
to make Council aware of the progressive and financial steps in operating the City's
electric business. Staff, through an interactive discussion with Councilmembers,
will make a PowerPoint presentation discussing the various financial and technical
aspects of running the City's largest utility business. A focus on the progress of the
utility along with a look at new initiatives will be discussed.
5. ADJOURNMENT
I hereby certify under penalty of perjury under the laws of the State of California that the
foregoing agenda was posted on the bulletin board at the main entrance of the City of
Ukiah City Hall, located at 300 Seminary Avenue, Ukiah, California, not less than 72 hours
prior to the meeting set forth on this agenda.
Dated this 13th day of September, 2005.
By:
Marie Ulvila, City Clerk
AGENDA
ITEM NO: 2
MEETING DATE: September 14, 2005
SUMMARY REPORT
SUBJECT:
PRESENTATION AND DISCUSSION BY BARTLE WELLS
ASSOCIATES REGARDING THE SEWER RATES AND BOND ISSUES
FOR THE WASTEWATER TREATMENT PLANT REHABILITATION
AND CAPACITY ADDITION PROJECT
The Wastewater Treatment Plant is currently being planned for a rehabilitation and
capacity addition to meet Federal, State, and County requirements and the City has
contracted with the firm of Bartle Wells Associates for finance planning, rate reviews,
and ultimately bond sales services to provide long-term financing for the project.
This meeting is a continuation of a previous meeting on June 1,2005 when both joint
groups agreed and approved a rate structure. At that time authorization was given to
the City Manager to arrange for mailing of Proposition 218 notices and to schedule a
public hearing on the proposed wastewater utility rate changes. The new rates were
tied to an anticipated plant construction price of approximately $46 M. On June 2, 2005
construction bid prices were received and opened. The lowest bid was at $56,538,000.
This unexpected bid price temporarily set aside any go-forward strategy related to rates
and bonds as directed to the City Manager by the joint groups on June 1,2005.
Bartle Wells Associates will present to the joint City Council and Ukiah Valley Sanitation
District Board (UVSD) their updated analysis of the current wastewater rate structure
tied to the present plant construction bid, and future financial requirements, including
RECOMMENDED ACTION: Discuss the updated analysis of the City and UVSD's
wastewater utility rates and the changes needed to support bond financing for the
wastewater treatment facility.
ALTERNATIVE COUNCIL POLICY OPTIONS: Provide direction to staff and Bartle
Wells Associates
Citizens Advised:
Requested by:
Prepared by:
Coordinated with:
Attachments:
N/A
Candace Horsley, City Manager; Mike McCann, Director of
Finance; Bernie Ziemianek, Public Utilities Director
Bernie Ziemianek, Public Utilities Director
Candace Horsley, City Manager
Bartle Wells Associates Presentation
Approved: -C~ndace Horsley, Cit~Manager
recommendations to make rates acceptable while generating the additional revenue
needed to support the bond financing leading to a required Prop 218 public notice.
ITEM NO. 3
AGENDA
SUMMARY
DATE: September 14, 2005
REPORT
DISCUSSION AND POSSIBLE AWARD OF BID CONTRACTS TO KIEWIT PACIFIC
COMPANY AND EWING CONSTRUCTION SERVICES RELATED TO THE
REHABILITATION AND CAPACITY ADDITION OF THE WASTEWATER TREATMENT
PLANT FACILITY ("IMPROVEMENT PROJECT")
On April 25, 2005, a Request for Bids was issued for the construction of the City of Ukiah
Wastewater Treatment Plant ("WWTP") Improvement Project. 51 sets of plans and
specifications were distributed to plan rooms, contractors, subcontractors and suppliers. On
June 2, 2005, bids were received from two contractors, Kiewit Pacific Company ("Kiewit") and
Slayden Construction Company ("Slayden"). Kiewit's bid was the apparent Iow bidder at
$56,538,000 compared to Slayden's bid at $57,910,000. Brown and Caldwell's ("Engineer's
Estimate") was approximately $46,000,000.
Although Kiewit's bid was the lowest, it was about 25.6 percent above the Engineer's
Estimate. Because the bids were higher than estimated, a City Council ("City") and Ukiah Valley
Sanitation District ("District") subcommittee was formed to investigate specific information
relevant to the bid by considering the overall design elements, and construction costs, relative to
borrowing construction funds.
(Continued on Page 2)
RECOMMENDED ACTION: After thorough discussion, award bid to Kiewit Pacific Companyfor
the construction of the City of Ukiah Wastewater Treatment Plant Rehabilitation and Capacity
Addition Project in the amount of $56,538,000 and Ewing Construction Services in the amount of
$38,366.25 by authorizing the City Manager to execute the individual agreements.
ALTERNATIVE COUNCIL POLICY OPTIONS:
1. Determine award of bid requires further consideration and remand to staff with direction.
2. Determine award of bid is inappropriate at this time and move to reject all bids and
provide further direction to Staff.
Citizen Advised:
Requested by:
Prepared by:
Coordinated with:
Attachments:
N/A
Bernie Ziemianek, Director of Public Utilities
Bernie Ziemianek, Director of Public Utilities and Ann Burck, Project
Engineer/Manager
Candace Horsley, City Manager
1. Ewing Construction Services Proposal
Candac~ Horsley, City-~nager
On July 14, 2005, a Special Joint Meeting of the City and District was held for
consideration and possible action on Kiewit's bid. The subcommittee recommended to the full
City and the District members a number of specific options related to the bids. Concern was
expressed that construction costs/materials would likely increase if the project were delayed and
whether a delay would be the most cost effective approach. The subcommittee had evaluated
the risk in delaying the project and determined that overall there was greater benefit in waiting.
However, it was the consensus of the City and the District not to reject the bid, but to
request a 60-day extension from Kiewit on their bid to allow for further value engineering and
design change options. On July 25, 2005, Kiewit agreed to extend its bid for an additional 60
days for a total of 150 days to November 2, 2005. A similar request was presented to Slayden
who also agreed to an additional 60 day extension.
During this time, Staff recommended Ewing Construction Services ("ECS") to the
subcommittee as a highly regarded neutral third party to provide value engineering in support of
both pre- and post-award review emphasis on developing ideas to reduce the cost of the project.
The subcommittee met with Mr. David Ewing, owner of ECS, to discuss his ability to assist the
City and District. The subcommittee discussed the proposed scope of services that included
both a pre-award and post-award plan. Mr. Ewing discussed his previous assignments,
activities, and successes involving cost reduction ideas on wastewater treatment projects. The
subcommittee recommended to Staff to follow up with the appropriate project Scope, timelines,
milestones and costs associated with services from ECS. Staff did follow-up as directed and is
presenting to the City and District a proposal by ECS in the amount of $38,366.25 for a cost
reduction review. This is a sole source bid and is recommended as a result of the background
and previous experience ECS has for review of Brown and Caldwell project designs and with
very similar wastewater treatment plant designs.
However, in the aftermath of Hurricane Katrina's devastation of the Gulf Coast, Staff
has received a number of telephone calls from various suppliers, contractors, and
consultants inquiring about the schedule for the WWTP project. Their calls were more of an
"inform" nature that as a result of Hurricane Katrina their company's and shop's attention will
be turning to providing primary service to the needs of the three southern States hit with the
disaster. As an example, on August 31,2005 Brown and Caldwell Corporate sent their Staff
a "heads-up" internal email message ....
"Hurricane Katrina is sure to have an impact with future construction costs,
especially materials. There will be a major need for steel, concrete, wood,
masonry and other construction materials. There may also be a labor shortage
as many contractors may head to the area for work. This could have notable
impacts to costs and should be considered in current and future cost estimates."
Since this note various segments of the construction industry have been analyzing the
economic impact of Hurricane Katrina on construction costs. According to an article from the
Associated Press, "The expected economic hit from Hurricane Katrina keeps growing and likely
to top $100 billion and could go much higher. Most of that -$100 billion- is damage to homes
and businesses plus roads, bridges, levees, telecommunications, water and sewer systems
and other public infrastructure." Ken Simonson, chief economist of The Associated General
Contractors of America stated, "the devastation wrought by Hurricane Katrina will have varied
impacts on construction markets for the rest of 2005 and into 2006. A large run-up has already
"occurred in the cost of cement, steel, copper, gypsum, and petroleum-based inputs.
Unfortunately, Katrina will push many of these costs much higher."
In July, how much, or even if construction costs would continue to escalate was not
known. At that time, the subcommittee was trying to assess the impact of building materials and
energy escalations against the loss of these materials to the Asian markets. According to
construction industry analysts, there is now little doubt this latest incident will continue to
increase and bear down on domestic prices and material access. It is no longer a chess game
on where future construction prices will be.
In addition, Staff discussion with ECS as late as Monday, September 12, 2005 regarding
their read of such impacts disclosed recent price swings in material delivery charges (i.e. fuel
surcharges), 18% increase in plastic pipe and conduit, and stiff increases in copper related
materials. They further stated cement prices are on the rise as a result of the loss of a major
material distribution point at the New Orleans ports. (A subsequent conversation with cement
industry personnel indicated to Staff that up to 60% of the Nation's cement is brought through
the New Orleans ports. Albeit, most of this is probably destined for the east and mid-west but will
no doubt have an impact on west coast product price and availability)
According to the City Attorney, State law requires the bids be put out in a prescribed
manner where the lowest bid from a responsible bidder is accepted or, all bids are rejected and
re-bid. State law is clear in that renegotiation of a change order before entering into a contract or
to expect a contract be awarded with the implied understanding that it is not the project being
awarded is not an option, since the project is to be significantly modified in order to get cost
reductions after the award. The City and District have two options, 1 ) accept the bid or 2) reject
it and re-bid. Staff suggests that if the bids are rejected, the previous subcommittee's prescribed
timeline of re-bidding in the December/January timeframe will have a high probability of an
additional increase of some $15 to $20 million or perhaps higher. One factor for this is due to
the already existing extension of the project for 150 days. This by itself will no doubt render an
increase if re-bid given the circumstances.
Therefore, Staff believes this project needs to go forward or the City and District will face
a huge increase in costs resulting from both uncontrollable market drivers and potentially a "band
aid" fix approach to plant deficiencies with higher long term costs and increased likelihood of
discharge permit violations. Based on the bid and evaluation by Harris, current and past
discussions with ECS and other external references, Staff recommends that after a thorouqh
City and District discussion, to award the City of Ukiah Wastewater Treatment Plant
Improvement Project contract to Kiewit Pacific Company for the bid amount and to award a
contract for the services of ECS for their proposal amount to help uncover potential cost savin.qs
items and to aid in minimizinq any future cost increases.
As stated in a previous Agenda Summary Review, the project construction manager,
Harris and Associates (Harris) reviewed the bids and found no inconsistencies. Harris contacted
the California State Contractors License Board and found the licenses for both bidders to be in
good standing.
Ei4ringoo o ,o
SERVTCES
/ngenuity from Concept through Comp~etlon
August 22, 2005
Mr. Bernie Ziemianek, Public Utilities Director
City of Ukiah
411 Clay Street
Ukiah, CA 95482
Re: Ukiah Wastewater Treatment Plant Improvement Project- Cost Reduction Review
Dear Bernie:
It was a pleasure meeting with you, Mayor Ashiku, Councilman Crane and City Manager
Horsley last Thursday to discuss the Ukiah WWTP project. As a result of this meeting and our
previous discussions, Ewing Construction Services (ECS) offers the services outlined below to
assist the City in developing ideas to reduce the cost of this project. ECS will utilize Mr. Frank
Dryden, Process Engineer and Mr. Thomas Frisch, Electrical Engineer, in completing the
proposed scope of work. As we discussed, the proposed scope of work is broken down into pre-
award and post-award phasing.
Proposed Scope of Services
Pre-Award
Review of Contract Documents with emphasis on developing ideas to reduce the cost of the
project without adversely impacting the necessary project and process elements. This review
will include a review of the current construction schedule and milestones. Following this review,
ECS will deliver a written report via email to the City no later than October 15, 2005. The level
of effort devoted to Pre-Award services is as follows:
Consulting Time:
David Ewing-
Franklin Dryden-
Thomas Frisch-
64 hrs @ $100/hr
40 hrs @ $125/hr
52 hrs @ $115/hr
$ 6,400.00
5,000.00
5,980.00
Expenses:
Site Visit by Tom Frisch-
Misc. expenses
ECS 5% mark-up on Subconsultants-
200.00
50.00
559.00
Total Pre-Award Phase costs
$18,189.00
417 Mace Boulevard, Suite J-336 · Davis, CA 95616-6053 ° Phone: 530-304-0972 · Fax: 530-756-7657
City of Ukiah Proposal
Page 2
Post-Award
Post Award services will include the following:
1. ECS will meet with the Contractor individually at their office to further develop cost
reduction ideas and give Contractor a timeline and outline for a cost reduction summit
meeting at City offices.
2. ECS will meet with the Brown &Caldwell (B&C) design team individually at their office
in Walnut Creek to further develop cost reduction ideas and give B&C a timeline and
outline for a cost reduction summit meeting at City offices.
3. ECS, Dryden and Frisch will study initial cost reduction ideas provided by Contractor,
B&C and the City in preparing for the cost reduction meeting at City offices.
4. ECS, along with its subconsultants, Frank Dryden and Tom Frisch, will facilitate an all-
day cost reduction meeting to held at the City offices no later than 2 weeks following the
contract award date. Invitees will include appropriate City staff and elected officials,
B&C Design team, Harris & Associates, Contractor, appropriate subcontractors and
appropriate major suppliers. ECS will prepare an agenda for this meeting. City will
provide a person to take meeting minutes and distribute following to meeting attendees.
5. Following this meeting, ECS will prepare an outline of cost reduction ideas that warrant
further review and consideration. This will be the last deliverable to the City and it is
expected that City staff, Contractor, B&C and Harris will continue forward with this
process which will conclude with the appropriate deductive change orders to the
Contract.
The level of effort devoted to Post-Award services is as follows:
Consulting Time:
David Ewing-
Franklin Dryden-
Thomas Frisch-
76 hrs @ $100/hr
40 hrs @ $125/hr
50 hrs @ $115/hr
$ 7,600.00
5,000.00
5,750.00
Expenses:
Dave Ewing travel costs-
Frank Dryden travel costs-
Tom Frisch travel costs-
Misc. expenses-
ECS 5% mark-up on Subconsultants-
275.00
500.00
275.00
200.00
576.25
Total Post-Award Phase costs
$20,176.25
ECS and its subconsultants will not exceed the above hours or costs as outlined above without
first receiving the City's approval.
City of Ukiah Proposal
Page 3
The City will provide the following to ECS as part of this review process:
1. Three copies of Contract Document and all addenda.
2. Three CD copies of Contract Documents.
3. One copy of complete bid form submitted by apparent low-bidder.
4. One copy of any relevant post bid communications pertaining to project design and cost.
In addition, the City will provide meeting space and catered lunches for the post award cost
reduction meeting.
This proposal is contingent upon ECS review and approval of the City's standard professional
services agreement. Any agreement executed must recognize that any cost reduction ideas
proposed by ECS, its subconsultants and others must be thoroughly evaluated, approved and
stamped by B&C since they are the engineer-of-record for this project. ECS and its
subconsultants will not accept any design responsibility for ideas generated during this cost-
reduction process. Our job is to develop, promote and facilitate cost reduction measures that will
be given final design review and cost estimates by your Engineer and Contractor respectively.
Thank you for requesting a proposal for these services. Please do not hesitate to contact me
should you have questions or want to discuss further. We look forward to helping you meet your
objectives on this project.
Sincerely,
David B. Ewing
Owner
o
· ·
N N
I'll m
0 0
0
0 0
-~ I
0 ~
I
·
·
I '11 -.I m m o~
..~ ~ ~ r- r-
-r .~ I I
·
Z
rn
0
Z
Z
[11
I
·
r-
ITl
0
0
ITl
rn
Z
ITl
I
·
· ·
m rn
0 0
C: --
~ z
~: m
rn ~
~ I
i _~
I~ ·
· cD
o -4
=mae
· ia r"
0
I
,,al
(nO>
0 33 --I
· . =1'
· ·
I'0 0 "~ ~>
rn
r" r- r- rn
0 0 0 Z
I I I 0
~, ~ I'll
,..~ ,..~ "r' Z
~'~ ~ Z
;> :> i mm:> m 5- "n
<
~o~ ~ ~D o
:3 133 '"i'0
< 0
II'l
ITl
·
·
·
·
·
·
·
_,
·
·
·
·
·
·
·
·
·
·
·
·
·
·
·
·
·
·
·
·
_.
,/
JULI)~t~
J~O~
AUGO~05
I--
m~
m o~m
~ 0 ~
~ B --.
0
I /I
I I
I I I
--
,
o o o ~1~1~ ~1~1~1~ o!o ~1~1~1~ o o, ~ · ,
0
I I
II II II
m
m ·
ITl
0
rrl
I"
0
Q.
0
Q.
0
N
0
0
0
0
· ·
rn~
0
0
0
O'
O'
~ ~ ~ Z Z ~ Z ~ -~
m 0 0 ~ ~ ~ ~ ~ m
r-- ~'~'m m -Im -.-I
-Im m --I 'n
0 ~ ~ 0 0 0 0 0 0
r- '-r -ri "ri Z -ri Z '13
z o - m :1:,, --I m
~ rll33 ~ ~ Z m --
~ ~m ~ m m ~ m 0
0 ~ ~ ~ 'n ~ z
_~ 1:13 'n 0
-~ ~ -,.:~ m I ~ -- I
0 ~ · I m ~ m i=. m
z I I z
b"') ¢n ro m
m
ITl
---I
Z
m
m
Z
.-I
rn
ITl
IT!
IT!
Z
0
0
m
i :
·
C
rtl
::13
m
1:3
C:
IT!
'13
m
Z
0
-4
m:a
'nm
Z
ITl
0
m
m
.-!
rn
Z
m
--I
m
.-I
ITl
Z
Z
ITl
0
~Z
m
<
m
0:13
:am
zO
~0
0
ZO
-m
Zl~
~z
m
'13
m
r-~
m
ITl
I-'
Z
.--I
m
-130
m
::D
m
Z
IT!
Z
---I --I
m-.i
ITl
0
'13
r-
m
,,-I
m
m
ITl
Z
m
0
::D
ITl
C::
m
C/)
m
m
1
III
Z
m
m
Z
0
Z
~i _~'o
COO
0
0
September 13, 2005
M15£0
John Schoenenberger
Kiewit Pacific
5000 Marsh Drive
Concord, CA 94520
Subject:
UKIAH VVWTP IMPROVEMENT PROJECT
BID PRICE EXTENSION REQUEST
Dear John,
At your request, we had each of our Iow bid manufacturers sign your July 28, 2005 request to
hold their Ukiah WWTP bid prices firm for an additional 60 days.
Historically this has been an easy task, as most manufacturers mentally "book" orders as soon
as they hear that they were listed by the low contractor, and they don't want to loose what they
have fought to win.
That being said, we have seen a significant tightening of pricing flexibility this year, as raw
material price volatility has hit home. Increasing steel, stainless steel and petroleum based
product prices in particular have caused unforeseen losses on longer term equipment contracts.
Manufacturers are attempting to adjust by increasing their prices or by adding more
contingency, and even by stating, and enforcing, pricing adjustments at the time of shipment.
The attached USFilter/Envirex T&C page from the Ukiah WWTP DAF quote is a typical
example.
The jump in gasoline prices has increased all freight charges, which need to be factored and
included in bids. The effects of Katrina are obvious in the gasoline price spike, but vendors are
also anxious about how this devastation will affect other material prices and availability.
Manufactures are probably building larger contingencies into their bid pricing, and we are seeing
for the first time in several years notifications that list prices on standard equipment items are
also increasing. The attached September 12, 2005 letter from JWC indicates a 2.5-10%
increase in all of their products.
In both of these cases, Envirex and JWC are honoring our bid prices to you, but a further price
extension will be more difficult to secure. We sincerely appreciate your business, and don't want
you to misinterpret this info. It's just that "business as usual" is getting a little more difficult as
some of these external forces make people anxious, and probably necessarily, more cautions.
We are here to bridge the gap.
Sinc
/ Steven H. Garnick
i'~,>~litill k\',t Ii · t'il~\;,\\l,)\ * 1>1,i'-,\1 k * !'th >l 'xt',, * \IH{ ?I t'~'I?l 1~
Environm.ental ®
290 Paularino
Costa Mesa, CA 92626-3314
TEL (949) 833-3888
(800) 331-2277
FAX (949) 833-8858
e-mail jwce~jwce.com
12 September 2005
TO:
All JWCE Representatives & Distributors
FROM: Ronald Duecker
RE:
Pricing Adjustment
We have continued to see volatility in material costs, most especially metals including
cast iron, stainless steel, alloy steel, and tungsten carbide. In addition, transportation
surcharges are being levied at unprecedented rates. We can no longer continue to
absorb these added costs.
Effective immediately:
1. Muffin Monster, Mini Monster, Macho Monster products are primarily
affected by increases in cast iron and alloy steel are now subject to an
additional 2.5% on all quotations.
2. Channel Monsters products are primarily impacted by cast iron and the
cost of the stainless steel drums and are now subject to an additional 5%
on all quotations.
3. Auger Monsters, Honey Monsters, Screenings Washer Monsters and
Monster Separation Systems products are highly impacted by stainless
steel and are now subject to an additional 10% on all quotations.
An updated price list will be sent to you by October Ist. Tn the mean time, please add
these percentages to any budget or formal quotations.
]WCE will continue to honor quotations issued prior to this date until the expiration time
stated on the quotation.
.IWCE will continue to work diligently to mitigate these added costs and surcharges and
trust that you understand the market pressures on core materials. Your cooperation
and assistance is appreciated.
Sincerely,
Ronald A. Duecker
cc- 3WCE Sales
JM
SQUARED ASSOCIATES,
PUMPING, PROCE~:S AND FLOW CONTROL PRODUCTS
FOR THE WATER AND WASTEWATER INDUSTRY
3975-D INDLI-~TRIAL WAY · CONCORD, C;A ~!4520-8534
T~L: (~-5) 79~l-2500 · FAX: (925) 7~8-7737
14, 2005
Kiewit Pacific
5000 Marsh Drive
Concord, CA 94520-5322
Attention: John Schoenenberger
RE: City of Ukiah WWTP Improvements
7/28/05 Letter of Price Extension
iNC.
Dear John:
Confirming our telephone conversation of 9/9/905 please accept this letter as
formal notification that we will not be able to hold our bid time pricing firm
after the expiration of our sixty (60) day extension as issued on 7/28/05.
As you well there have been significant events which have occurred since
the bid date of this job. Both Fairbanks Morse and Rodney Hunt have issued
pricing alerts effective 9/1/05 (of which you are exempt at this time) which
require us to pass on the following additional costs:
· Freight surcharges in excess of 50%
· Raw material costs in excess of 30%
Miscellaneous parts and metals cost increase of 8%
Motor and sub-vendor costs averaging 11%
It's in our mutual fiscal interest to move forward on this project before our
price guarantees elapse.
James "Jimmy" MacNichols
Cc: Brad Kaufman
(IBIS W£ W~gq:60 _9~, PI riBS
cJOOZ/~L/6 'HWT~;:6 :le
~ 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
~ 0
0
+
Z
0 0 ~ 0 0 0 0 0
0 0 0 0 0