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HomeMy WebLinkAbout2005-08-04 - MinutesMayor Dan Coody City Attomey Kit Williams City Clerk Sondra Smith City Council Water & Sewer Meeting Minutes August 4, 2005 Page 1 of 7 Member Aldermen aye evi le AR KA N SA 5 City of Fayetteville Arkansas City Council Water & Sewer Committee Meeting Minutes August 4, 2005 Ward 1 Position 1 Ward 2 Position 1 Ward 3 Position 2 Ward 4 Position 2 - Robert Reynolds - Kyle B. Cook — Robert Ferrell - Lioneld Jordan A meeting of the Fayetteville City Council Water & Sewer Committee was held on August 4, at 5:00 p.m. in Room 326 of the City Administration Building located at 113 West Mountain Street, Fayetteville, Arkansas. MEMBERS PRESENT: Kyle Cook, Robert Reynolds, Robert Ferrell, Lioneld Jordan Staff Present: Steve Davis, Gary Dumas, David Jurgens, Kit Williams, Tim Conklin, and Ron Petrie Chairman Kyle Cook called the meeting to order. 1. West Side Treatment Plant Action Plan (a) Review of existing bids and related laws, ger attached memorandum (c) Construction Management Process per attached state law (act 1889 of 2005) Kit Williams talked to the committee about the statute regarding the bid. He said that the statute states that you can negotiate only if the low bid is within 25% of the amount appropriated. Historically, the City has used the engineer's estimate as the certified amount for a particular project, and if the bids have come in for more than 25% above the certified amount we are not allowed to negotiate with that contractor unless we include deductibles that would bring it down within the 25% amount. Mr. Williams said that he had contacted Mr. Mumford, who works with the State in the Contracting Division and Mr. Mumford said that he felt this was a correct interpretation of the Statute. Mr. Mumford was very complimentary of the City Purchasing department and their "track record" with the State, and said that he would not recommend varying from our traditional interpretation. Mr. Williams referred to a copy of the new statute, which allows cities to select a contract manager and then negotiate with that entity for the project, which means the sealed competitive bid process is not necessary. He had asked for Mr. Mumford's opinion on this and Mr. Mumford said that since it was such a new process, he was not able to give a definitive analysis of the process. Mr. Williams stated that the City could use that process concurrently with the sealed bid process; however, the negotiation with the contract manager should only go forth until the opening of the sealed bids. Ron Petrie verified that, always in the past, projects have been re -bid if they did not come within the 25%. 113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax) accessfayetteville.org City Council Water & Sewer Meeting Minutes August 4, 2005 Page 2 of 7 Alderman Reynolds asked Kit Williams, as the City Attorney, to tell the committee what was needed to put things on track to get the plant under construction as soon as possible. Kit Williams advised not to negotiate with the lower of the two bidders. Mr. Williams stated that there were several options, including going back through the bidding process looking at different processes or any new technology that might be less expensive. He also stated that the new statute gives the City the power to select a general contractor and negotiate with them and could be used concurrently with the bid process. Alderman Reynolds asked if the Broyles Road and wet land construction were pulled from the contract and it was re -bid, how long the process would take. Steve Davis stated that it would be about a 13 week process. Mr. Davis reviewed the timeline which was given to the Committee. The original plan had bids opening on July 21st, and the contract awarded on October 4, 2005. That allowed 10 weeks for review and agency concurrence. Under the modified flan, McGoodwin, Williams and Yates begins the process of repackaging the bids on August 7t , which would take 6 weeks, followed by 6 weeks bid time, and 10 week agency review. A contract could be awarded by City Council on Jan 3, 2006. Under the Negotiated Procurement Law, the City would advertise on August 12, 13, and 14, with early bid opening on August 22nd. There are two selection committees required by the statute. One is a Pre -Selection committee made up of at least 3 municipal members, who shortlist the respondents to no more than five and schedule interviews for the Final Selection committee. The Final Selection committee interviews and makes a recommendation to the governing body. The Selection Committee could begin meeting August 25th, with 10 days to make the Selection Committee recommendation with a contract award on October 4th Mr. Davis stated that it would take a high level of coordination between the Selection Committee and the State agencies. Mr. Davis said that confirmation has not been received from Soil and Water that this new law is acceptable to them, but should be received by August 5th. The Selection Committee recommendations must be completed by September 15th and a contract be negotiated or the process cancelled unless a price can be arrived at that with which the Negotiation Committee is comfortable. Alderman Jordan stated that if he understood what Mr. Davis was saying, the new law of Negotiated Procurement would be faster but a little riskier, and the modified plan is longer but is the way the City has always done business. Mr. Davis stated that this was correct. He pointed out that we don't lose anything by trying both of them at the same time. Alderman Cook asked if there was any negative to doing both of them concurrently. Kit Williams stated that the only negative was that it is a brand new law. He felt that if the Administration could arrive at a good contract and get the project started months earlier, that it might be the way to go. 113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax) accessfayetteville.org City Council Water & Sewer Meeting Minutes August 4, 2005 Page 3 of 7 Mr. Davis stated that negotiating with a contractor is based on the contractor's qualifications, and that because of the pre -qualification processes previously used, there were already nine companies who qualified if they were interested, and some of the groundwork had already been laid. Alderman Ferrell asked if new permits would be needed. Steve Davis stated that they would not. Kit Williams stated that anyone that was selected would have to meet all the existing permits. Alderman Cook pointed out that this would be unless the design was drastically changed, which was not likely to happen. Alderman Reynolds asked if everything was in order and ready for construction. David Jurgens answered affirmatively. Alderman Jordan moved to accept both processes concurrently. Alderman Reynolds seconded. The motion passed 3 to 1 with Aldermen Reynolds, Jordan and Cook voting yes and Alderman Ferrell voting no. Alderman Reynolds asked Alderman Ferrell to explain his opposition to the motion. Alderman Ferrell stated that he felt the risk to work with the low bidder should be taken, and that construction could begin in a week if that risk was taken. He felt that the risk was not that great and that the City could save four months in the process by taking that risk. Kit Williams stated again that after talking to Mr. Mumford, he felt that the City should "stay the course", and should not try to finesse the law. Alderman Ferrell asked for Mr. Mumford's title and was told by Mr. Davis that he is the State Building Services Construction Manager. Kit Williams said Mr. Mumford told him that he has had some agencies that go through the procedure write a letter stating that a mistake had been made. However, Mr. Williams stated that he does not feel that a mistake was made in this case. Alderman Ferrell stated that he had spoken with some local business people and that the price of different metals continues to rise; for instance the cost of copper is up 29% in the last two months, and he is afraid of further cost increases by waiting another 4 months. He stated that he is concerned with saving the citizens money and that it bears a little closer scrutiny. Alderman Cook stated that he felt there was more risk in doing as Alderman Ferrell suggested as opposed to proceeding with the modified plan and at the same time negotiating. 113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax) accessfayetteville.org City Council Water & Sewer Meeting Minutes August 4, 2005 Page 4 of 7 Alderman Jordan stated that if someone did decide to take the City to court, we could be tied up in court for months. Kit Williams pointed out that it could also mean attorney fees of $10-15 million. Steve Davis pointed out that the Town Center lawsuit delayed that project at least nine months. Kit Williams stated that the city had been fortunate that the judge allowed construction to go forward in that case, because it could have been delayed for years while waiting for resolution by the Supreme Court. I. West Side Treatment Plant Action Plan b. McGoodwin, Williams and Yates Bid Repackaging Gary Dumas pointed out that the action taken in this meeting authorized McGoodwin, Williams and Yates to proceed on the repackaging I. West Side Treatment Plant Action Plan d. Treatment Plan Evaluation Gary Dumas stated that we owe it to the rate payers to, concurrent with all other actions, do a process evaluation to be sure that labor costs, concrete costs, steel costs, etc., have not changed the parameters that were used in the evaluation and that this could happen concurrently with the bidding process and the early parts of construction. With the repackaging, what would be looked for would be a separation of all of those elements within the processing part of the plant which would require a change order to delete those elements and add something else into the project if changes in design were decided upon. This should cause no delays in the project. Mr. Dumas made the recommendation that this be done. David Jurgens stated that when the project was started, one of the technologies specifically considered and evaluated was the membrane filter technology that produces a cleaner effluent. He said that five or eight years ago it was a very new process, and was not looked at because the City did not want to be a "guinea pig" with the new process. He stated that now that it has been in use for about 8 years, he has been in contact with those who are using the process at some plants which are larger than ours. He felt that it might offer some advantages in terms of quality of the discharge and also in the up -front construction costs since it takes a lot less space to build it, a lot less concrete and steel, and a lot less labor — which are all big cost factors. The process would meet all of the same permit requirements that have been issued. It would require another look by the State Health Department to evaluate the process itself, but it would not require a change in permits. Alderman Cook asked if it was not too late in the game to start looking at this, and if it would affect the timeline. Gary Dumas stated that while it was late, it could be done if started now, and that if a contract was awarded on October 4th, the cost elements of the traditional processing method should be known at that time and the City could determine what the difference would be. 113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax) accessfayetteville.org City Council Water & Sewer Meeting Minutes August 4, 2005 Page 5 of 7 Alderman Jordan asked for examples of some of the things that might not have to be built if we went with the new process. Billy Ammons of OMI stated that it would eliminate the need for the effluent filters, which are very large, and for the F-1 Clarifiers, which are big concrete and steel tanks. If those were completely eliminated, the size of aeration basins could be reduced. It is not impossible that the same process could be kept, while retro -fitting with this other design Alderman Ferrell asked if it would cost more to maintain and operate with the newer process and was told that it was a tradeoff and the net results were basically a wash. Alderman Ferrell then asked whether it would increase the timeline if the State Health Department and the ADEQ found something they wanted to discuss if we wanted to change it. Gary Dumas stated that this option would have to be discussed with them if it proved to be of positive benefit cost after the conceptual review. He said that before getting into any design the City would want to make sure all of the State's concerns were addressed. Alderman Ferrell asked if there was an estimate on the parallel track of going both ways as to how much it would increase the cost. Gary Dumas stated that there is the conceptual design and then benefit cost which should be a minimal cost, followed by a design phase which will not be a minimal cost. David Jurgens stated that 30% less in concrete would mean a significant savings, and it might also reduce construction time, which is the cost benefit that needs to be evaluated. Mr. Jurgens stated that when he was with the Federal Advisory Committee on Sewer Overflows at EPA in Washington, one of the items which was discussed was the continued need to increase and improve wastewater discharge. He stated that the current treatment process does not get out certain biological effluents and that biofilters have a good track record for removing biological effluents. Alderman Reynolds stated that we are three years away on this plant and wanted to know what year the plant would take us to with the projected population growth of the City. Specifically, would the West Plant and the Noland Plant serve the population growth to the year 2025. Mr. Jurgens stated that you could not look at years, but needed to look more at population. He stated that the East and West plants combined had permitted numbers of 21.7 million gallons, as opposed to the current rate of 12.6, pointing out that the new plant will handle not quite double current capacity. Steve Davis stated that one plant today is servicing about 80,000 people. Alderman Cook asked if the committee was in favor of moving forward and looking at the biofilters and the consensus was positive, as long as it didn't run the cost or construction time up. 113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax) accessfayetteville.org City Council Water & Sewer Meeting Minutes August 4, 2005 Page 6 of 7 2. WSIP Revised Cost Summary Steve Davis presented the committee with a spreadsheet which showed that the original discussed scope -of -work total in July 2001 was $125,000,000 compared to $169,000,000 today. Mr. Davis stated that these numbers were based on the latest engineers' estimate. The next step is getting the East line and the West line projects bid and negotiating the plant. The bottom line is that more money must be found for the project. The last item in terms of finding money would be to use a revenue bond paid by existing sewer rates. He stated that he has been asked numerous times what the cost overrun is going to do to sewer rates and the answer is that we don't know yet. This is because the real number on the whole project is not yet known. It is not known how much existing rates can be used to pay for some of this shortfall, or existing impact fees, or the sale of the 35 acres off the plant site. He said that the City should look at where the money will come from and what that money is going to cost in terms of interest Alderman Ferrell asked if the City had to go to bonds from the sewer revenues whether that would have a "down -the -road" effect on the enterprise fund. Steve Davis pointed out that the City has existing bond issues that are scheduled to be paid off between 2008 and 2017 and that money is already built into the rate structure. He stated that the City would first look to reallocate that money to these additional bonds and see how much of that can be paid for. The future rate adjustments are expected to be more linked to an asset management program that the City puts in place to make sure that both the water and sewer utilities are properly maintained. Increased operational costs are driven primarily by regulatory issues. Alderman Cook suggested that the committee review the numbers and bring it back up at the next meeting and answer more questions on it. Gary Dumas stated that the numbers would be updated quarterly beginning October Is'. Alderman Ferrell asked if the new estimate reflected the repackaging and some of the other changes. Steve Davis stated that the items under consideration for removal were not going to save that much money, and the building contractor's road cost was included in the estimate. Mr. Davis stated that a $5.9 million contingency is included, whereas previously it was a $1 million contingency, and that the new numbers are more realistic. Alderman Ferrell stated that he had understood there to be about $1.4 million in esthetic items that were going to be pared back to save money and wanted to know if these had been added back in. Steve Davis stated that when McGoodwin, Williams and Yates repackages, those esthetics would be in keeping with what was presented to the Committee on August Is'. David Jurgens pointed out that updated information had been obtained from every consultant to go into these numbers. 113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax) accessfayetteville.org City Council Water & Sewer Meeting Minutes August 4, 2005 Page 7 of 7 3. Hamestring Sewer Basin Update. David Jurgens stated that he had received an email 30 minutes prior to the meeting from the consultant saying that the report had been overnighted and should be received the following day. Ron Petrie stated that from what was presented at the City Council meeting, preliminary findings were that there were around 400 remaining residential units in the two basins and it is critical that the City move forward on the last two action items in that basin. Mr. Petrie stated that the short term solution and the long term solution need to be identified and the cost determined, a funding mechanism set up and special assessment districts for the sewer need to be discussed. A draft should be ready for the September 6th City Council meeting. Mr. Petrie pointed out a need to either amend RJN's existing contract or go with a Selection Committee and hire an engineering company for the study. He stressed that the study should be done in less than a month and that RJN is most familiar with the area. Alderman Jordan stated that he felt the committee needed to move on it and made a motion to go with RJN and amend the existing contract. Alderman Reynolds asked for the cost and Ron Petrie stated that it would be approximately $20,000.00. David Jurgens stated that, as it was negotiated, if it came in below $10,000.00, it would not have to go before the Council for approval which would be the fastest mechanism for getting it done. Alderman Ferrell seconded the motion, and motion carried. The next meeting of the Water & Sewer Committee was set for August 25th at 6:00 p.m. in Room 326 of City Hall. 113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax) accessfayetteville.org