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Home My WebLink About197-03 RESOLUTION• • RESOLUTION NO. 197-03 A RESOLUTION APPROVING AMENDMENT NO. 10 TO THE CONTRACT WITH OPERATIONS MANAGEMENT INTERNATIONAL (OMI) IN THE AMOUNT OF $4,373,573.00 FOR THE OPERATION AND MANAGEMENT OF THE FAYETTEVILLE WASTEWATER TREATMENT PLANT FOR 2004. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1. That the City Council of the City of Fayetteville, Arkansas hereby approves Amendment No. 10 to the contract with Operations Management International (OMI) in the amount of $4,373,573.00 for the operation and management of the Fayetteville Wastewater Treatment Plant for 2004. A copy of Amendment No. 10, marked Exhibit "A" is attached hereto, and made a part hereof. Section 2. That the City Council of the City of Fayetteville, Arkansas hereby authorizes the Mayor to sign Amendment No. 10 to the contract with OMI, contingent upon final approval of the FY2004 Budget. PASSED and APPROVED this 16th day of December, 2003. tErr. 1„ TEST By: Arn�AN SONDRA SMITH, City Clerk APPROVED: By: DAN COODY, Ma,.r 4 • • AMENDMENT NO. 10 TO THE AGREEMENT FOR OPERATIONS, MAINTENANCE, AND MANAGEMENT SERVICES FOR THE CITY OF FAYETTEVILLE, ARKANSAS WASTEWATER TREATMENT PLANT THIS AMENDMENT, entered into this/6t day of iliwnkfie 2003, by and between the City of Fayetteville, Arkansas, whose address for any formal notice is 113 W. Mountain St, Fayetteville, Arkansas 72701 and Operations Management International, Inc., (hereinafter "OMI") with offices at 9193 S. Jamaica Street, Suite 400, Englewood, Colorado 80112 is made and entered into for purposes of amending certain provisions of the "Agreement for Operations, Maintenance, and Management Services for the City of Fayetteville's Wastewater Treatment Plant," dated August 16, 1994 (the "Agreement") to prevent the facilities covered by the Agreement from being deemed to be used in the trade or business of OMI pursuant to Section 141 (b) of the Internal Revenue Codc of 1986, as amended. This is Amendment No. 10 to the Agreement dated the 16th day of August, 1994, between the City of Fayetteville and OMI. NOW THEREFORE, The City of Fayetteville and OMI agree to amend the Agreement as follows: 1. Article 4.1 is hereby deleted in its entirety and replaced with the following Article 4.1: 4.1 For services rendered during the ninth year of this Agreement the City of Fayetteville shall pay to OMI the actual cost of services performed plus an annualized management fee of Seventy Nine Thousand Nine Hundred Fifty Seven Dollars ($79,957.00). Said fee and estimated cost (base fee) shall be paid in twelve (12) equal monthly installments. The management fee for subsequent years will be determined proportional to the increase in estimated cost. 2 Article 4.3 is hereby deleted in its entirety and replaced with the following Article 4.3: 4.3 OMI estimates the cost for services for the calendar year 2004 shall be Four Million Three Hundred Seventy Three Thousand Five -Hundred Seventy Three Dollars (54,373,573.00) annually. Details of said cost are shown in Appendix J. The base fee shall be negotiated each year in September, beginning in 2004 for calendar year 2005. Should the City of Fayetteville and OMI fail to agree, the base fee will be determined by the application of the base fee adjustment formula shown in Appendix F. Should the actual expenditures exceed estimated expenditures by more than Twenty Thousand Dollars ($20,000), in any ycar of this Agreement, specific approval will be obtained from the City of Fayetteville. 3. Article 4.4 is hereby deleted in its entirety and replaced with the following Article 4.4: • • 4.4 An administrative fee of 30 percent is added to personnel services and 10 percent to all other costs for administration, support, management and overhead, with the exception of electricity and lift station odor control direct expenses. 5. Appendices B, E, H, and K are hereby deleted in their entirety and replaced with the attached Appendices B, E, H and J. All other terms and conditions remain in effect in accordance with the Agreement referenced in this Amendment. Both parties indicate their approval of this Amendment to the Agreement by their signatures below as of the date shown above. Au �- r= "i-P:a,VEawn2D F. fcgfES Executive Vice President OPERATIONS MANAGEMENT INTERNATIONAL, INC. Date: 11122/M Date: JJ. // 7/13 Dan Coody Mayor CITY OF FAYETTEVILLE Cl. 11-21k-03 • • Appendix B LOCATION OF PROJECT B.1 OMI agrees to provide the services neccssary for the management, operation and maintenance of the following: a) All equipment, vehicles, grounds and facilities now existing within the present property boundaries of or being used to operate the City of Fayetteville's Wastewater Treatment Plant located at: 1400 North Fox Hunter Road Fayetteville, Arkansas b) All equipment, grounds, and facilities now existing within the present property boundaries of pump stations described as follows: WWI 978 E. Zion Road WW2 4938 Mission Blvd. (Timbercrest) WW3 Crystal Springs/Salem Road WW4 691 W. Poplar WW5 3896 N. Gregg WW6 3021 N. Old Wire Road WW7 2034 N. County Road 877 WW8 729 W. North Street WW9 1336 N. Porter WWIO 716 Futrall Drive WWI I 4412 W. 6'" Street W W I2 398 N. Double Springs Road WW13 878 S. Stonebridge Road WW I4 1820 S. Armstrong W W 15 203 E. 29'" Circle W W I6 3917 S. McCollum Road WW17 4394 S. School W W I8 202 N. Sandy (Greenland) W W 19 988 S. Mallywagnon Road WW 20 3212 N. Highway 112 WW21 1687 S. Happy Hollow Road WW22 630 N. Double Springs Road WW23 Masters Addition (Country Club — 2) WW24 4071 South McCollum (Airport East) WW25 Willow West (Farmington) WW26 74 S. Kestrel (Sequoyah Preserve) WW27 1031 River Meadows Drive (Stonebridge Meadow) WW28 1603 Plantation Avenue (Heritage Village) WW29 Greenland (Todd Bohannan) • WW30 WW3I WW32 WW33 WW34 W W 37 • 2324 Rupple Road 2318 Internet (Research Park) 478 N. Durango Place (Silverthome) 4644 N. Crossover Road (Copper Creek) Airport South Clabber Creek c) All equipment, grounds, and facilities now existing within the present property boundaries of or being used to operate the City of Fayetteville's Sludge Management Site located east of the wastewater treatment facility across the White River: d) The potable water SCADA system at the following locations: 215 W. 24'h Street 844 N. Crossover Road 1016 E. Ash Street 707 E. Rogers Drive 456 E. Baxter Lane 707 E. Rogers Drive 113 N. Sang 1170 E. South Skyline 1044 E. Township Road Mt. Kessler Highway 45 Valve Station Firc Tower Avenue (Goshen) Fire Tower Avenue (Goshen) W I Pump Station W2 Pump Station W4 Pump Station W5 Pump Station W6 Ground Storage Tank W7 Ground Storage Tank W8 Elevated Storage Tank W9 Elevated Storage Tank W10 Elevated Storage Tank W 1 1 Elevated Storage Tank W12 Pressure -reducing Valve W13 Ground Storage Tank W14 Pump Station W15 Co. Road # 55 (Round Mountain) Ground Storage Tank W I6 Co. Road # 4343 (Benson Mountain)Ground Storage Tank W 17 Gulley Road Tank W18 Gulley Road Station 1475 Cato Springs Road 12141 Ed Edwards Road Elevated Storage Tank Pump Station Water & Sewer Ops Center Mt. Robinson Tower Site • Appendix E • VEHICLE AND MOBILE EQUIPMENT DESCRIPTION Unit # Unit Description Year 1092 Ford Explorer 2002 2009 Ford Ranger 4 X 4 1997 239 Ford F150 Flare Side 266 GMC V -Jimmy 1990 284 Ford Ranger 4 X 4 1992 310 Ford F-350 3 -Way Dump 1990 320 Ford F-350 Crew Cab 1999 324 Ford F-350 w/cranc 1999 339 Ford F-350 4 X 4 2002 539 Ford CM224 Mower 1994 550 Ford 5640 Tractor w/Loader 1995 551 Ford 3930 Tractor 1995 556 Ford/New Holland 8160 Tractor w/Loader 1997 562 New Holland 8160 Tractor 1999 563 New Holland Tractor 1999 564 New Holland Tractor w/Loader 1999 566 Ford LS55 Lawn Tractor 1999 570 New Holland 95 hp Tractor 2000 644 New Holland Backhoe/Loader 2000 701 Ford 8000 Dump 1983 712 Ford 8000 (Gooseneck) 1983 734 Freight Liner 1987 76 Caterpillar Articulated Tanker 1988 77 Caterpillar Articulated Tanker 1988 806 Case 1150G Bulldozer 1995 82 Sykes 6" Pump/Trailer 1995 900 Generator 1987 9002 New Holland 648 Round Baler 1999 9003 New Holland 1411 Mower 1999 9004 John Deere 348-C Square Baler 1999 9017 New Holland 1411 Mower 2000 9031 E -Z Go Workhorse 2001 9034 Yale Forklift 2001 9037 E -Z Go Workhorse 2002 910 16 Ft. Trailer N/C 1987 927 24' Parker Gooseneck Trailer 1991 959 Bush Hog 2620 Cutter 1995 966 18 Ft. Trailer 1996 • 969 Lo -Boy Trailer 1996 987 Hesston Large Square Baler 1998 988 Hesston Wheel Rake 1998 989 M & W Wheel Rake 1998 990 New Holland 1411 Mower 1998 991 Polaris 500 4 X 4 1998 992 Polaris 500 4 X 4 1998 • • Appendix H THIRTY -DAY CHEMICAL INVENTORY Chemical Purpose 30 -Day Supply Liquid Alum Phosphorus Removal 2,200 Gallons Ferrous Sulfate Lift Station Odor Control 10,000 Gallons Liquid Oxygen Effluent Dissolved Oxygen 50,000 Cubic Ft Polymer Belt Filter Press 6870 Pounds • • Appendix 1 COST DETAIL The annualized estimated costs for the calendar year of 2004 were calculated as follows: Direct Labor & Benefits Labor Markup Electricity Electrical Markup (0% Markup for 2003) Existing Other Direct Costs Other Direct Costs Markup Additional Other Direct Costs Other Direct Costs Markup Subtotal Fixed Fcc Lift Station Odor Control Capital Item Amortization Total 0 & M Budget SCADA Upgrade Project Total Annualized Budget Net Annualized Increase Original 2003 $1,487,466 5520,613 S780,000 $0 $709,012 $70,901 $3,567,992 $92,509 $170,000 $3,830,501 S44,000 $3,874,501 Modified 2003 $1,519,208 $455,762 $738,000 $0 $692,083 S69,208 $253,501 S25,350 53,753,112 $73,031 5170,000 $100,622 $4,096,765 $0 $4,096,765 $222,264 The following arc some of the major reasons for cost circumstances: Proposed 2004 $1,671,667 $501,500 $660,000 $0 $768,057 $76,806 $306,915 $30,692 $4,015,637 $78,139 $179,175 $100,622 54,373,573 $0 54,373,573 $499,072 1. Projected decrease in electrical costs due to the change in sludge disposal option from land application to landfill. However, the reduction in cost is offset by additional costs incurred by the new sludge disposal method for truck maintenance and repairs, fuel, tipping fees, and turnpike fees 2. Continued increase in the cost of providing skilled professional labor in Northwest Arkansas' highly competitive job market, additional personnel for sludge hauling, as well as a remarkable increase in the cost of benefits. • City Council Melt of December 16, 2003 CITY COUNCIL AGENDA MEMO M 7 On/ z'a9 Awe/nay` Ab, 0 To: Mayor and City Council Thru: Hugh Earnest, Chief Administrative Officer From: Greg Boettcher, Water/Wastewater Director Date: November 26, 2003 Subject: WASTEWATER TREATMENT PLANT OPERATIONS CONTRAC I' Operations Management International Contract Amendment No. 10 (2004) RECOMMENDATION Fayetteville City Administration recommends approval of "Amendment No. 10 to the Agreement for operations, maintenance and management services for the city of Fayetteville, Arkansas Wastewater Treatment Plant." This contract amendment totalling $4,373,573.00 provides services for 2004 and is included in the proposed Fiscal Year 2004 Budget. BACKGROUND The City of Fayetteville's first private operating contract commenced in 1987 with this year marking 17 years of privatized services from Operations Management International, Inc. (OMI). In May of 2003, Fayetteville City Council approved Amendment No. 9 extending this agreement through December 31, 2008. Said 5 -year continuation was justified on the basis of changed sludge management requirements, using the five-year period to spread capital costs (belt filter/trailers/tractors) and enable landfill disposal of wastewater sludge for balance of 2003 without a budget adjustment. It was noted in May of 2003 that the full -year impact of the alternative sludge disposal method will represent an annual operations cost increase of approximately S435,000.00. This cost did not include an consideration of increased costs for resolution of the nutrient issues at the sludge management site. The scope of services provided by OMI to the City of Fayetteville include the following: 1. Operate and maintain the Noland Wastewater Treatment Plant 2. Operate and maintain 33 wastewater pumping stations 3. Administer the city's NPDES discharge permit 4. Manage the city's sludge disposal program 5. Implement the city's industrial pretreatment program 6. Support the SCADA (supervisory control and data acquisition system) network that monitors water/wastewater facilities 7. Pursue operation economies, efficiencies, and permit compliance 8. Actively participate in the design and construction of the Wastewater System Improvement Project providing technical, operational and maintenance input • City Council Mec g of December 16, 2003 To encourage operational economy and innovation an incentive provision is incorporated within the contract, whereby, budget undcrruns are distributed as follows: 87.5% to city and 12.5% to OMI. DISCUSSION the operating expenses for fiscal year 2004 reflect a substantial increase from 2003, the primary cause being the changed sludge management methods. The forced abandonment of liquid sludge application on the 540 acre sludge management site brought about greater expense for sludge disposal. The increased expenses include labor costs, capital costs, chemical costs, trucking costs, and landfill tipping fees. Coupled with the increased biosolids management expenses are costs for the optimization of nutrient use on the 540 -acre site to maximize irrigation of effluent and hay crop production. To meet vegetation needs and conform to required agronomic practices, soil chemistry must be maintained at target levels using commercial fertilizer and lime. The cost elements that primarily drive the budget changes include: Cost Cateuory Dcwatering/Landfilling Sludge Irrigation Site Crop Management Increased Biosolids Expenses Reduced Digester Energy Costs Reduced Sludge Equipment/Site Costs Net Sludge Cost Increase 2004 Costs S564,027.00 97,578.00 $661,605.00 (120,000.00) ( 52,913.00) S488,692.00 These changed sludge management factors alone account for $488,692.00 of the 5499,072.00 in cost change from the 2003 budget. The remaining small difference involves minor changes in labor, materials and supplies. BUDGET IMPACT The full value of 54,373,573.00 of Contract Amendment No. 10 with Operations Management International is included in the proposed budget for Fiscal Year 2004. The increased costs of current sludge management practices were anticipated as a.component of the operation costs of the Wastewater System Improvement Project, and are factored into the proposed rate change for wastewater services. The approval of Contract Amendment No. 10 is consistent with the city's financial management plan. The authorization of Amendment No. 10 will be conditioned upon the approval of the 2004 budget. • • RESOLUTION NO. A RESOLUTION APPROVING AMENDMENT NO. 10 TO THE CONTRACT WITH OPERATIONS MANAGEMENT INTERNATIONAL (OMI) IN THE AMOUNT OF 54,373,573.00 FOR THE OPERATION AND MANAGEMENT OF THE FAYETTEVILLE WASTEWATER TREATMENT PLANT FOR 2004. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1. That the City Council of the City of Fayetteville, Arkansas hereby approves Amendment No. 10 to the contract with Operations Management International (OMI) in the amount of S4,373,573.00 for the operation and management of the Fayetteville Wastewater Treatment Plant for 2004. A copy of Amendment No. 10, marked Exhibit "A" is attached hereto, and made a part hereof. Section 2. That the City Council of the City of Fayetteville, Arkansas hereby authorizes the Mayor to sign Amendment No. 10 to the cont act with OMI, contingent upon final approval of the FY2004 Budget. /-'il PASSED and APPROVED this 16°' day of December, 2003. APPROVED: DA N G DY, Mayor By: I 1 ISOO NDRA'SMIT , City Clerk AGENDA REQUEST CONTRACT REVIEW GRANT REVIEW STA. REVIEW FORM - FINANCIAL OBL:GAI-!ON For the Fayetteville City Council Meeting of: December 16, 2003 FROM: Greg Boettcher Name Water and Wastewater Division Wastewater Treatment Department ACTION REQUIRED: Resolution approving Amendment No. 10 to the contract with Operations Management International (OMI) for 2004 in the amount of $4,373,573.00. Mayors authorization to execute agreement is conditioned upon the City Council's approval of the Fiscal Year 2004 Budget. COST TO CITY: $4,373,573.00 Cost of this request 5400.5100.5328.00 Account Number • Project Number $6,467,341.00 Water/Wastewater Category/Project Budget Program Category / Project Name $0.00 Wastewater Treatment Funds Used to Date Program / Project Category Name S 6,467,341.00 Water and Sewer Remaining Balance Fund Name BUDGET REVIEW: Budget Manager Budgeted item Budget Adjustment Attached Date CONTRACT/GRANT/LEASE REVIEW: Accounting Manager P City Atto;jiey /201/63 Date t0.3 Date !nternal Ay c itor N Purchasing Manager (a1/0.3 Date fcl% o3 Date STAFF RECOMMENDATION: Division Head Depargfient Director Fifianee a internal Date i— 2G -L13 Date /2-2-e3 Services Dir. Date �,11 ei /fir. t.a.L4 Cit /:mini rative Officer Mayor Date Date Received in Mayor's Office Cross Reference: Previous Ord/Res#: Orig. Contract Date: Orig. Contract Number: New Item: /p3 Date Yes No 1 FAYETTEVTLLE THE CITY OF FAYETTEVILLE. ARKANSAS DEPARTMENTAL CORRESPONDENCE • To: Greg Boettcher Water & Wastewater Director ��yQ From: Clarice Buffalohead-Peamian City Clerk Division Date: December 22, 2003 Re: Res. No. 197-03 Attached is an executed copy of the above resolution approved by the City Council on December 16, 2003, approving contract Amendment No. 10 for OMI to operate the Noland Wastewater Treatment Plant for 2004. I am returning three originals to you. This resolution and agreement will be recorded in the city clerk's office and microfilmed. If anything else is needed please let the clerk's office know. /cbp attachments cc Nancy Smith, Internal Auditor