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HomeMy WebLinkAbout20-03 RESOLUTIONRESOLUTION NO. 20-03 A RESOLUTION TO APPROVE AMENDMENT #8 OF THE CONTRACT WITH OPERATIONS MANAGEMENT INTERNATIONAL, INC. TO OPERATE FAYETTEVILLE'S WASTE WATER TREATMENT PLANT AND PUMP STATIONS; TO SET THE ANNUAL OPERATIONAL ESTIMATED EXPENSE AT $3,874,501.00; AND TO APPROVE A BUDGET ADJUSTMENT IN THE AMOUNT OF $44,000.00. WHEREAS, the Operations Management International, Inc. (OMI) has operated the Nolan Wastewater Plant for many years and the operating contract needs to be updated. NOW, THEREFORE, 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 #8 of the contract between the City and Operations Management International, Inc. for the continued operation of the Nolan Wastewater Plant, pump stations, and other items noted in Amendment #8 in the estimated amount of $3,874,501.00. Section 2. That the City Council of the City of Fayetteville, Arkansas hereby approves a budget adjustment in the amount of $44,000.00 (attached as Exhibit A). i Y i'";"*NPASSED and APPROVED this the 4th day of February, 2003. t ',j;b <F i ;'\ i44 By: iI// DA ' COODY, May. li ATTEST. APPROVED: Sondra Smith, City Clerk • • • AMENDMENT NO. 8 TO THE AGREEMENT FOR OPERATIONS, MAINTENANCE, AND MANAGEMENT SERVICES FOR THE CITY OF FAYETTEVILLE, ARKANSAS WASTEWATER TREATMENT PLANT THIS AMENDMENT, entered into this _4 ehday of February 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 Code of 1986, as amended. This is Amendment No. 8 to the Agreement dated the loth 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: Article 4.1 is hereby deleted in its entirety and replaced with the following Article 4.1: 4.1 For services rendered during the eighth year of this Agreement The City of Fayetteville shall pay to OMI the actual cost of services performed plus a management fee of Ninety Two Thousand Five Hundred and Nine Dollars ($92,509). Said fee and estimated cost (base fcc) shall be paid in twelve (12) equal monthly in- stallments. The management fee for subsequent years will be determined proportional to the increase in estimated cost. 2. Article 4.2 is hereby deleted in its entirety and replaced with the following Article 4.2: 4.2 OMI and The City of Fayetteville agree that at the end of the contract year, OMI will perform a reconciliation of estimated to actual cost and submit the reconciliation within one hundred twenty (120) days of the end of the contract year Any difference due to the City of Fayetteville or OMI will he paid within thirty (30) days of acceptance of the reconciliation by both parties. 3. Article 4.3 is hereby deleted in its entirety and replaced with the following Article 4.3: 4.3 OMI estimates that cost for services for calendar year 2003 shall be Three Million Eight Hundred Seventy -Four Thousand, Five Hundred One Dollars ($3,874,50I) annually. Details of said cost are shown in Appendix J. The base fee, shall he • • negotiated each year in September, beginning in 2003 for calendar year 2004. Should the City of Fayetteville and OMI fail to agree, the base fee will he determined by the application of the base tee adjustment formula shown in Appendix F. Should the actual expenditures exceed estimated expenditures by more than Twenty Thousand Dollars ($20,000), in any year of this Agreement, specific approval will be obtained from the City of Fayetteville. 4. Article 4.4 is hereby deleted in its entirety and replaced with the following Article 4.4: 4.8 An administrative fee of 35 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. Article 4.8 is hereby deleted in its entirety and replaced with the following Article 4.8: 4.8 OMI agrees to incur up to $170,000 per year in lift station odor control direct expenses, including costs for necessary chemicals, pumps, tanks, related equipment and such outside services as needed. These expenses will not include labor and benefits for OMI personnel. OMI will rebate to the City of Fayetteville the entire amount that actual lift station odor control expenses arc Icss than $170,000 in any year of this Agreement. 6. Appendices B, C, D, E, J, and K are hereby deleted in their entirety and replaced with the attached Appendices B, C, D, E, J, and K. 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. Authorized Signature: Authorized Signature. .: Pr E. Fo'xcst Forb Title: VP, Project Delivery Dan oody Title: Mayor OPERATIONS MANAGEMENT CITY OF FAYETTEVILLE INTERNATIONAL, INC. Date: JAN 01, 2003 Date: L Appendix B LOCATION OF PROJECT B.1 OMI agrees to provide the services necessary 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. (Timhercrest) 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 W W 10 716 Futrall Drive WWI 1 4412 W. 6" Street W W 12 398 N. Double Springs Road W W I3 878 S. Stonebridge Road W W l4 1820 S. Armstrong W W 15 203 E. 29'" Circle W W 16 3917 S. McCollum Road WWI7 4394 S. School WWI8 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 (Scquoyah Preserve) WW27 1031 River Meadows Drive (Stonebridge Meadow) WW28 " 1603 Plantation Avenue (Heritage Village) • • WW29 Greenland (Todd Bohannan) WW30 2324 Rupple Road W W31 2318 Internet (Research Park) WW32 478 N. Durango Place (Silverthomc) WW33 4644 N. Crossover Road (Copper Creek) c) All equipment, grounds, and facilities now existing within the present property boundaries of or being used to operate the 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 Ibllowing locations: 215 W. 24"' Street 844 N. Crossover Road 4938 E. Mission Boulevard 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 W I Pump Station W2 Pump Station W3 Pump Station W4 Pump Station W5 Pump Station W6 Ground Storage Tank W7 Ground Storage Tank W8 Elevated Storage Tank W9 Elevated Storage Tank W 10 Elevated Storage Tank W11 Elevated Storage Tank W12 Pressure -reducing Valve W I3 Fire Tower Avenue (Goshen) Ground Storage Tank W14 Fire Tower Avenue (Goshen) Pump Station W I5 Co. Road # 55 (Round Mountain) Ground Storage Tank W16 Co. Road # 4343 (Benson Mountain)Ground Storage Tank W I7 Gulley Road Tank W 18 Gulley Road Station 1475 Cato Springs Road 12141 Ed Edwards Road Elevated Storage Tank Pump Station Water & Sewer Ops Center Mt. Robinson Tower Site C.1 • • Appendix C NPDES PERMIT AND PROJECT CHARACTERISTICS OMI will operate Project so that effluent will meet the requirement of NDPES permit No AR00200I0. OMI shall be responsible for meeting thc effluent quality requirements of the City of Fayetteville's NPDES permit unless one or more of the following occurs: (1) the Project influent does not contain Adequate Nutrients to support operation of Project biological processes and/or contains Biologically Toxic Substances which cannot be remove by the existing process and facilities; (2) the flow, influent BODS, and/or suspended solids exceeds the Project design parameters which are: 30 Million Gallons Per Day (MGD) maximum; 17 MDG average weekly maximum flow; 12 MGD average monthly maximum, 25,700 pound of BOD5 per day; 21300 pounds of suspended solids per day. C.2 In the event any one of the Project influent characteristics, suspended solids, BOD5, or flow, exceeds the parameters listed above, OMI shall return the plant effluent to the characteristics required by the NPDES pcnnit in accordance with the following schedule after Project influent characteristics retum to within design parameters: Characteristics Exceeding Listed Parameters By: 10% or Less Above 10% But Less Than 20% 20% and Above Recovery Period Maximum 5 days 10 days 30 days Notwithstanding the above schedule, if the failure to meet effluent quality limitations is caused by the presence of Biologically Toxic Substances or the lack of Adequate Nutrients in the influent, then OMI will have a thirty (30) day recovery period after the influent is free from said substances or contains Adequate Nutrients. C.3 OMI shall not be responsible for fines or legal action as a result of discharge violations within the period that influent exceeds design parameters, docs not contain Adequate Nutrients, contains Biologically Toxic Substances (that exceed process inhibiting levels or creates concentrations exceeding application or discharge limitations), and the subsequent recovery period. C.4 The estimated Costs for services under this Agreement are bases upon thc following Project Characteristics: Flow 12.29 MGD • • BODS 18,314 lbs/day TSS 18,344 lbs/day Phosphorus 747 lbs/day The above characteristics are the actual average for the twelve (12) months ending November of 2002. Any change of ten percent (10%) or more in any of these characteristics, based upon a twelve (12) month moving average, will constitute a change in scope. • • Appendix D INDUSTRIAL PRETREATMENT PROGRAM D.1 a) Conduct a survey of the industrial user base 1 time per 3 years. Update, as required, the list of significant industrial users (Sills) as described in Appendix D according to the definition of SIU in 40 CFR 403 or the definition in the approved pretreatment program (Program), whichever is more stringent. b) Carry out inspection, surveillance, and monitoring procedures to determine if the SIUs arc in compliance with the Pretreatment Standards and the approved Program. Each SIU shall be sampled and inspected at the frequency established in 40 CFR 403 or the approved Program, whichever is more stringent. Maintain adequate records. c) Maintain thc laboratory analysis program for each SIU as described in Appendix D. Results of all industrial sampling and testing shall be reported to The City of Fayetteville, as required, in a timely manner. d) Implement the approved industrial permitting system. Prepare for renewal all necessary industrial user control mechanisms within 45 days of the expiration date or within 180 days after the industry has been determined to be an SIU. e) Prepare notices of violation for noncompliance with 40 CFR 403 or the approved Program, whichever is more stringent, and initiate other cnforccment actions by notifying the City of Fayetteville of the appropriate enforcement action according to thc approved enforcement response plan. 0 Prepare for submission to the Approval Authority (EPA and/or the appropriate State agency) an annual report describing the Program activities over the previous Program year in accordance with 40 CFR 403 or the approved Program, whichever is more stringent. Assist The City of Fayetteville with annual public notice of dischargers in significant noncompliance as required by 40 CFR 403. g) Advise the City of Fayetteville of changes in federal and State Pretreatment Standards and regulations and how the changes affect thc local Program. Request approval from the City of Fayetteville and the Approval Authority prior to implementing significant changes to the approved Program in accordance with 40 CFR 403.18(c). h) Local limits evaluation, if requested, may be provided as an out of scope service. The costs of such evaluation will be determined and negotiated at the time of the request. • • D.2 Industrial Waste Dischargers and Monitoring Program City of Fayetteville Industry Parameters Analyzed Ayrshire Electronics, LLC 1101 S. Beechwood Fayetteville, AR 72701 Mr. Tim Pearce 442-5356 ext. 2113 Cadmium, chromium, copper, lead, nickel, silver, zinc Cooper Power Systems/Kearney Operation 3660 S. School Avenue Fayetteville, AR 72701 Mr. James Raynor 587-6335 Cadmium, chromium, copper, lead, nickel, silver, zinc, cyanide Elkhart Products Corporation PO Box 1 129 Fayetteville, AR 72702 Mr. Jerry Whiteside 443-2367 Chromium, copper, lead, nickel, zinc, oil & grease Hiland Dairy Company PO Box 3478 Fayetteville, AR 72702 Mr. Ray Arnold 521-1707 Biochemical oxygen demand, total suspended solids, phosphorus, pH, oil & grease Danaher Tool Group/K-D Tools 2900 City Lake Road Fayetteville, AR 72701 Mr. Dwight Canfield 442-7779 ext. 316 Cadmium, chromium, copper, lead, nickel, silver, zinc, cyanide Marshalltown Tools 2200 Industrial Drive Fayetteville, AR 72701 Mr. Jim Glass 521-4306 ext. 163 Cadmium, chromium, copper, lead, nickel, silver, zinc, cyanide Mexican Original (East) PO Box 1368 Fayetteville, AR 72702 Mr. Roy Foster 521-4306 ext. 321 Biochemical oxygen demand, total suspended solids, phosphorus, pH, oil & grease Pinnacle Foods Corporation PO Box G Fayetteville, AR 72702 Mr. Fred McLane 443-3451 ext. 216 Biochemical oxygen demand, total suspended solids, phosphorus, pH, oil & grease • • Industry Parameters Analyzed Superior Industries International, Inc. 1901 Borick Drive Fayetteville, AR 72701 Mr. Robert Bracy 443-7870 Cadmium, chromium, copper, lead, nickel, silver, zinc, cyanide Tyson Foods, Inc. 2615 S. School Fayetteville, AR 72701 Mr. Richard Stockton 521-0677 Biochemical oxygen demand, total suspended solids, phosphorus, pH, oil & grease Waste Management PO Box 1310 Springdale, AR 72765-1310 Mr. Jimmy Hendrix 361-1111 Cadmium, chromium, copper, lead, nickel, zinc, p11 • Appendix E • VEHICLE AND MOBILE EQUIPMENT DESCRIPTION Unit # Unit Description Year 1092 Ford Explorer 2002 2009 Ford Ranger 4 X 4 1997 203 GMC Jimmy 4WD 1987 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/crane 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) Freight Liner 1983 1987 734 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 968 Discbine 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 CI-IEMICAL INVENTORY Chemical Purpose 30 -Day Supply Liquid Alum Phosphorus Removal 2,200 Gallons Ferrous Sulfate Lift Station Odor Control 10,000 Gallons Sodium I lydroxidc Digester Odor Control 4,000 Gallons Sodium Hypochlorite Digester Odor Control Digester Odor Control 4,500 Gallons 3,200 Gallons Sulfuric Acid Liquid Oxygen Effluent Dissolved Oxygen 50,000 Cubic Ft • • • Appendix 1 COST DETAIL • The proposed annual estimated costs for 2003 were calculated as follows: Direct Labor & Benefits Labor Markup @ 35% Electricity Electrical Markup @ 5% (0% Markup for 2003) Other Direct Costs Other Direct Costs Markup @ 10% Subtotal Fixed Fee Lift Station Odor Control Total 0 & M Budget SCADA Upgrade Project Total Budget Projected 2002 51,490,254 $521,589 $714,716 S35,736 $718,845 S71,885 53,553,025 S91,128 S 153,420 53,797,573 SO $3,797,573 Budgeted 2002 The following are some of the major reasons for cost circumstances. $1,436,331 S502,716 5744,000 $37,200 S722,275 $72,227 $3,514,749 $91,128 $196,080 $3,801,957 $44,000 $3,845,957 Proposed 2003 $1,487,466 $520,613 $780,000 $0 5709,012 570,901 S3,567,992 592,509 $ 170,000 53,830,501 $44,000 $3,874,501 1. Projected electrical costs due to the experience of'2001 with full utilization of the second aeration basin, as well as the experience of enormous increases in `fuel cost adjustments' to the electrical costs in 2001. The reoccurrence of this situation cannot be ruled out in 2003, even though this adjustment did not occur in 2002. 2. Continued increase in the cost of providing skilled professional labor in Northwest Arkansas' highly competitive job market, as well as a remarkable increase in the cost of benefits. Projected decrease in spending to control odors in the collection system since the tanks, pumps, and controls installed in 2002 will he sufficient for 2003 as well. • • Appendix K SCADA UPGRADE - PHASE 3 - SCOPE OF WORK The following SCADA upgrade tasks will be performed by OMI during the calendar year 2003. 1. Installation of SCADA monitoring equipment (purchased and constructed in 2000) at 15 remote valve sites in the water distribution system, specific sites to he determined by the City, to be compatible with the OMI -developed SCADA system. This work was originally scheduled to be performed in 2000, but was delayed due to delays in construction of the specific water distribution components that will be monitored. Note that this item specifically excludes responsibility for providing the actual sensing or control devices, any road boring or road cutting required for access, installation of electrical service, or purchase/installation of mechanical equipment at these locations. • _ N. 1 • • CORRECTED DATA FOR OMI COSTS AND CONSUMER PRICE INDEX COSTS During the January 28, 2003 Agenda Session an error on the Chart comparing OMI's contract increase percentages with the Consumer Price Index's percentage increase was discovered. The attached charts have corrected the data for calendar year 2002 and have compared the historical CPI changes to the OMI contract changes. This correction does not impact the current year contract amount or the recommendation to approve Contract Amendment Number 8 as negotiated with OMI. If there are any questions, please do not hesitate to contact me. Greg Boettcher Water and Wastewater Director 479.575.8302 CONTRACT PRICE INCREASES COMPATED TO CONSUMER PRICE INDEX El OMI CONTRACT INCREASE ❑CPI INCREASE 0 0 0 c CPI Data from'Ame 2N 0� Z 0 W QN tL W U 0 2 z 00 Z 0 N U) r 3SV3a0NI 3DVIN30i13d 0 COST, FLOW AND LOADING TREND • Average Flow -Ten Million Gallons — —Average Daily Load -Ten Thousand Pounds I0 r O 0 N pO Of Of 0) W • • AMENDMENT NO. 8 TO THE AGREEMENT FOR OPERATIONS, MAINTENANCE, AND MANAGEMENT SERVICES FOR THE CITY OF FAYETTEVILLE, ARKANSAS WASTEWATER TREATMENT PLANT THIS AMENDMENT, entered into this 4th day of February , 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 Code of 1986, as amended. This is Amendment No. 8 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 eighth year of this Agreement The City of Fayetteville shall pay to OMI the actual cost of services performed plus a management fee of Ninety Two Thousand Five Hundred and Nine Dollars ($92,509). Said fee and estimated cost (base fee) shall be paid in twelve (12) equal monthly in- stallments. The management fee for subsequent years will be determined proportional to the increase in estimated cost. 2. Article 4.2 is hereby deleted in its entirety and replaced with the following Article 4.2: 4.2 OMI and The City of Fayetteville agree that at the end of the contract year, OMI will perform a reconciliation of estimated to actual cost and submit the reconciliation within one hundred twenty (120) days of the end of the contract year. Any difference due to the City of Fayetteville or OMI will be paid within thirty (30) days of acceptance of the reconciliation by both parties 3. Article 4.3 is hereby deleted in its entirety and replaced with the following Article 4.3: 4.3 OMI estimates that cost for services for calendar year 2003 shall be Three Million Eight Hundred Seventy -Four Thousand, Five Hundred One Dollars ($3,874,501) annually. Details of said cost are shown in Appendix J. The base fee shall be • negotiated each year in September, beginning in 2003 for calendar year 2004. 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 (520,000), in any year of this Agreement, specific approval will be obtained from the City of Fayetteville. 4. Article 4.4 is hereby deleted in its entirety and replaced with the following Article 4.4: 4.8 An administrative fee of 35 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. Article 4.8 is hereby deleted in its entirety and replaced with the following Article 4.8: 4.8 OMI agrees to incur up to 5170,000 per year in lift station odor control direct expenses, including costs for necessary chemicals, pumps, tanks, related equipment and such outside services as needed. These expenses will not include labor and benefits for OMI personnel. OMI will rebate to the City of Fayetteville the entire amount that actual lift station odor control expenses are less than $170,000 in any year of this Agreement. 6. Appendices B, C, D, E, J, and K are hereby deleted in their entirety and replaced with the attached Appendices B, C, D, E, J, and K. 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. Authonzed Signature: E F. - st Forb Title: VP, Project Delivery OPERATIONS MANAGEMENT INTERNATIONAL, INC. Date: JAN % 1, 2003 Authonzed Signature: Dan Coody Title: Mayor Date: CITY OF FAYETTEVILLE tls-/o NAME OF FILE: CROSS REFERENCE: Resolution No. 20-03 Document NOTES: 1 02/04/03 Resolution 20-03 w/Amendment No. 8 & appendices 2 01/23/03 Staff Review Form w/attachments 1/22/03 memo to mayor/city council copy of Amendment No. 8 copy of 2/4/03 budget adjustment NOTES: Wut u� T. - °IQAJ�- f E o MARSH` CERTIFICATE OF I•URANCE CERTIFICATE NUMBER SEA -00015021210 _ _ PR ODUCEP•, y /- , C 4 . )/ MARSH USA. INC. - 1225 17TH STREET. SUITE 2100 DENVER, CO 80202-5534 11111 CERTIFICATE IS ISSUED A3 A MATTED OF INFORMATION ONLY AND CONFERS N0 RIGHTS UPON THE CERTIFICATE HOLDER OTHER THAN THOSE PROVIDED LN THE POLKY. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES DESCRIBED HEREIN. COMPANIES AFFORDING COVERAGE 15114 •01234.OMI3M- OMI 150212 COMPANY A ZURICH AMERICAN INSURANCE COMPANY INSURED OPERATIONS MANAGEMENT INTERNATIONAL INC. COMPANY B AMERICAN ALTERNATIVE INSURANCE CORPORATION 9193 SOUTH JAMAICA STREET, SUITE 400 ENGLEWOOD, CO 80112-5946 COMPANY C COMPANY D COVERAGES This certificate supersedes and replaces_ any_ previously issued certificate Tor the policy period noted below. 3 THIS IS TO CERTIFY THAT POLICIES OF INSURANCE DESCRIBED HEREIN HAVE BE N ISSUED 10 THE INSURED NAMED HEREIN FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REOUIREMENT. TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THE CERTIFICATE MAY BE ISSUED OR MAY PERTAIN. THE INSURANCE AFFORDED B THE POLICIES OESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS. CONDITIONS AND EXCLUSIONS OF SUCH POLICIES. AGGREGATE LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. CO LTR TYPE OF INSURANCE POLICY NUMBER POLICY l��ECiWE DATE(MWOO/YY) POLICY EXPIRATION DATE IMM/DD/YY) LIMITS GENERAL LIABILITYGENERAL AGGREGATE $ 2,000,000 $ 5,000,000 A X COMMERCIAL GENERAL LIAOILITY GL08378563-08 05/01/03 05/01/04 PRODUCTS -COMP/OP ADO CLAIMS MAGE X OCCUR PERSONAL B ADV INJURY $ 750,000 OWNERS & CONTRACTORS PROT EACH OCCURRENCE $ 750,000 %8250000 SIR FIRE DAMAGE (Any one W) $ 750,000 MED EXP (Any one poison) $ A AUTOMOBILE LIABILITY COMBINED SINGLE LIMIT $ 2.000,000 X ANY AUTO BAP8378516-08 (AOS) 05/01/03 05/01/04 $ ALL OWNED AUTOS TAP8378560-08 (TX) 05/01/03 05/01/04 BOOILY INJURY SCHEDULED AUTOS BAP8378561-08 (VA) 05/01/03 05/01/04 (Pel person) $ HIRED AUTOS MA8378562-08 (MA) 05/01/03 05/01/04 BODILY INJURY NON -OWNED AUTOS (Pa meant) PROPERTYDAMAGE $ GARAGE LIABILITY AUTO ONLY• EA ACCIDENT $ ANY AUTO OTHER THAN AUTO ONLY EACH ACCIDENT $ $ AGGREGATE B EXCESS LIABILITY EACH OCCURRENCE $ 3,000,000 $ 3,000,000 X UMBRELLA FORM 01 -A2 -UM -0000492-01 05/01/03 05/01/04 AGGREGATE OTHER THAN UMBRELLA FORM $ WO KERS COMPENSATION ANDWC STATU X I TORY LI4rt5 OTH- ER A EMPLOYERS•LIABILITY WC8378566-09 05/01/03 05/01/04 El EACH ACCIDENT $ 1,000.000 A THE PROPRIETOR/ _ X INCL WC8378565-08 05/01/03 05/01/04 EL DISEASE•POLICY LI4 T $ 1,000,000 PARTNERS/EXECUTIVE OFFICERS ARE: EXCL EL DISEASE -EACH EMPLOYEE $ 1,000,000 OTHER DESCRIPTION OF OPERATIONS/LOCATION3NEHICLESISPECIAL ITEMS OPERATION, MAINTENANCE AND MANAGEMENT SERVICES FOR THE CITY OF FAYETTEVILLE. CERTIFICATE HOLDER NAMED AS ADDITIONAL INSURED AS THEIR INTEREST MAY APPEAR AS RESPECTS AUTOMOBILE LIABILITY, UMBRELLA LIABILITY AND AS PER BLANKET ENDORSEMENT TO GENERAL LIABILITY POLICY. S 3 CERTIFICATE HOLDER , - d _.. . — . a-/ . q // CROS \./ CITY OF FAYETTEVILLE (AR) 1/\�Y\'1`� , V G,\� ATTN: PEGGY BATES 113 WEST MOUNTAIN STREET T { , FAYETTEVILLE, AR 72701-6083//(�� \J� CANCELLATION CANCELLATION SHOULD ANY OF THE POLICIES DESCRIBED HEREOF CANCELLED BEFORE THE E FPI TE THEREOF. THE INSURER AFFORDING COVERAGE WILL ENDEAVOR TO WAIT... .30 DAYS WROTE TICE TO THE CERTIFICATE HOLDER MANED HEREIN. BUT FAILURE 10 MAIL SUCH NOTICE SHAH IMPOSE N OBLIGATION OR LIABILItY OF ANY KIND UPON THE INSURER •FFORODTG COVERAGE.115 AGENTS OR REPRESENTATIVES. OR THE IBSVfR OF THI$CfRRICAlE 1-.1(` + 7AV �' J% MARSH USA INC."" ''rr� BY Dorothy A. Stevens ,dn,ilKy Os.tyR�P u. _ _._.. .... .- wh - - -- -. MM1(3/02) VALID AS OF: 04/28/03 • FAYETTEVIPLLE ' THE CITY Of FAYSTTFVIIU. ARKANSAS • DEPARTMENTAL CORRESPONDENCE • To: Greg Boettcher Water 8 Wastewater Dept. From: Clarice Buffalohead-Pearman Sr. Secretary Date: 2/10/2003 Re: Resolution No. 20-03 Attached please find an executed copy of the above resolution passed by the City Council on February 4, 2003. Also attached you will find executed copies of the Amendment No. 8 of the contract with OMI for operational services. You will also find a copy of the budget adjustment for your records. The original contract and ordinance along with a copy of the budget adjustment, will be microfilmed and filed in the city clerk's office. The original budget adjustment has been forwarded to the budget and research division. If anything else is needed please let the city clerk's office know. /cbp Nancy Smith, Internal Auditor Kevin Springer • STAFF REVIEW FORM X AGENDA REQUEST CONTRACT REVIEW GRANT REVIEW For the Fayetteville City Council meeting of February 4, 2003 FROM: Greg Boettcher Name Water & Wastewater Water & Wastewater Division Department ACTION REQUIRED: Approval of Amendment No 8 to OMI's contract for operation and maintenance of the Wastewater Treatment Facilities, the annual contract amount for 2003 being $3,874,501.00, including a fixed fee of 592,509.00, non -overwrite costs for odor control of . $170,000 and Phase IV SCADA upgrade of $44,000.00. Approval of a budget adjustment is also requested to allow Capitalization of SCADA costs. • COST TO CITY: Water/Sewer Imp'ts $3,874,501.00 $3,919,794.00 Wastewater Treatment Cost of this Request Category/Project Budget Category/Project Name 5400-5100-5328-00 (OPERATIONS) 5400-5700-5315-00 (SCADA) -0- Account Number Funds Used To Date Program Name 02117-1 (SCADA) Water and Sewer Project Number Remaining Balance F _nd Category REVI W X Budgeted Item X Budget Adjustment Attached Budget C • inato Administrative Services Director CONTRACT/GRANT/LEASE REVIEW: //2aJo2 _ GRANTING AGENCY: Accounting Manager Date ADA Coordinator Date ODP aft i I22'03 �l �ccu rt�,� �MLO / f i4o3 I(aalate Internal ditor Date Ds Date Purchasing Officer Grant Officer- Date STAFF RECOMMENDATION: It is recommended that the City Council approve OMI Contract Amendment No.8 to authorize contract operations from January 1, 2003 to December 31, 2003 for $3,874,501.00. Di vi4/4:5; -. Head `f en Date Cross Reference /- Z3 -03 Depart t Director Date Admin. Svcs Director Date Mayor Date New Item: Yes No Prev Ord/Res N: 94-9 Orig Contract Cate: 4 • STAFF REVIEW FORM Description Meeting Date Comments: Budget Coordinator Reference Comments: Page 2 Accounting Manager Reference Comments: City Attorney Reference Comments: Purchasing Officer Reference Comments: ADA Coordinator Reference Comments: Internal Auditor Reference Comments: Grants Offcier Reference Comments: i • EXECUTIVE SUMMARY FOR AGENDA ITEM -FEBRUARY 4, 2003 AGENDA ITEM: DEPARTMENT: COSTS: WASTEWATER PLANT OPERATING CONTRACT AMENDMENT NUMBER 8 TO OMI CONTRACT Water and Wastewater Department $3,874,501.00 RECOMMENDED ACTION: 1 Approval of Contract Amendment Number 8 for fiscal year 2003 with Operations Management International, Inc. (OMI) for $3,874,501.00. BACKGROUND: Fayetteville entered into a contract for wastewater operations with OMI on August 16, 1994, with the agreement to continue through December 31, 2004 Under this agreement OMI, as a private contract operator, provides the following operations and management services: 1. Operates and maintains the Noland Wastewater Treatment Plant 2. Operates and maintains 33 wastewater pumping stations 3. Administers the city's NPDES discharge permit 4. Manages the city's sludge disposal program 5. Implements the city's industrial pretreatment program 6. Supports the SCADA (supervisory control and data acquisition system) network that monitors water/wastewater facilities 7. Pursues operation economies and efficiencies, permit compliance To encourage operational economy and innovation, an incentive provision in contained within the contract, whereby, budget under runs are distributed as follows: 87 5% to city and 12.5% to OMI. CURRENT SITUATION: OMI has submitted a 2003 budget proposal, under amendment number 8 that is deemed reasonable and consistent with cost trends. With the growing complexities of permit compliance, the escalating energy costs, the increasing loadings, the growing age of the equipment/facilities and the stringent requirements being imposed by regulatory agencies, the incremental increase in operating costs between 2002 and 2003 are justified. • FAYETTEVILLE • City of Fayetteville, Arkansas WATER AND WASTEWATER DEPARTMENT TO: Mayor Dan Coody and Fayetteville City Council VIA: Hugh Earnest Chief Administrative Officer FROM: Greg Boettcher, P.E. Public Works Director DATE: January 22, 2003 SUBJECT: Amendment No 8 to OMI Contract Wastewater Treatment Facility Operations Fiscal Year 2003 RECOMMENDATION: It is recommended that the Fayetteville City Council approve "Amendment No 8 to the Agreement for Operations, Maintenance and Management Services for the City of Fayetteville, Arkansas Wastewater Treatment Plant." This $3,874,501.00 contract amendment with Operations Management International, Inc. (OMI) will address the wastewater treatment contract operations for fiscal year 2003. The contract amount is within the funds budgeted funding for 2003. BACKGROUND: On August 16, 1994 the City of Fayetteville inclined into a multiple -year contract with OMI, this agreement expiring on December 31, 2004. The scope of services provided under this agreement includes: 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 To encourage operational economy and innovation, and incentive provision is incorporated within the contact, whereby, budget under runs are distributed as follows: 87.5% to city and 12.5% to OMI. 1 • FA YETTE VILLE • City of Fayetteville, Arkansas WATER AMD WASTEWATER DEPARTMENT CURRENT SITUATION: OMI has predicted the 2003 operations costs, these costs being categorized as follows: Facility Operations Management Fee Total Operations Lift Station Odor Control @ cost SCADA Upgrades @ cost Total Budget $ 3,567,992.00 $ 92,509.00 $3,660,501.00 $ 170,000.00 $ 44,000.00 $3,874,501 00 The attached chart graphically depicts the growth patterns of costs, flows, and organic loadings. The operating costs reflect continuing economies by the service provider, when the escalating cost impacts of aging equipment, growth of the infrastructure, increasingly stringent regulations and inflationary increases for labor/materials are factored into the analysis. The budget for contract services reflects a favorable trend. The data on the rate of increase of operating costs compared to the Consumer Price Index is shown on an attached chart. The graphical comparisons indicate a less than inflationary adjustment in the contract values confirming the reasonableness of the requested budget. The OMI operations have continuously striven for cost control and operating economics, these efforts materializing in the form of rebates to the City of Fayetteville. The rebates received by Fayetteville are summarized as follows: YEAR 1998 1999 2000 2001 2002 REBATE AMOUNT I $31,310 $7,957 $19,075 $4160 $45,379 It is to be noted that the operation of the treatment plant consumes large amounts of electric energy, this consumption being controlled by load management. Cost-effective energy management has partially offset the stepped increases in operations. In 1999, to sustain reliable treatment processes, another stage of aeration was brought into service increasing the plant's energy use by more than 400 horsepower. Rapid changes in energy prices can significantly impact the budget for this facility, and are not in the service provider's direct control. The City of Fayetteville is obligated to continue the contract operating services of OMI through December 31, 2004 and has received an acceptable budget proposal for fiscal year 2003. Contract Amendment Number 8 is recommended for approval. 2 • • AMENDMENT NO. 8 TO THE AGREEMENT FOR OPERATIONS, MAINTENANCE, AND MANAGEMENT SERVICES FOR THE CITY OF FAYETTEVILLE, ARKANSAS WASTEWATER TREATMENT PLANT THIS AMENDMENT, entered into this day of , 200_, by and between the City of Fayetteville, Arkansas (hereinafter "Owner"), whose address for any formal notice is 113 W. Mountain St, Fayetteville, Arkansas 72701 and Operations Management International, Inc., (heieinafter"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 Code of 1986, as amended. This is Amendment No. 8 to the Agreement dated the 16th day of August, 1994, between Owner and OMI. NOW THEREFORE, Owner 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 eighth year of this Agreement Owner shall pay to OMI the actual cost of services performed plus a management fee of Ninety Two Thousand Five Hundred and Nine Dollars ($92,509). 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 4.2 is hereby deleted in its entirety and replaced with the following Article 4.2: 4.2 OMI and Owner agree that at the end of the contract year, OMI will perform a reconciliation of estimated to actual cost and submit the reconciliation within one hundred twenty (120) days of the end of the contract year. Any difference due to Owner or OMI will be paid within thirty (30) days of acceptance of the reconciliation by both parties. Article 4.3 is hereby deleted in its entirety and replaced with the following Article 4.3: 4.3 OMI estimates that cost for services for calendar year 2003 shall be Three Million Eight Hundred Seventy -Four Thousand, Five Hundred One Dollars ($3,874,501) • • • annually. Details of said cost are shown in Appendix J. The base fee shall be negotiated each year in September, beginning in 2003 for calendar year 2004. Should Owners 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 year of this Agreement, specific approval will be obtained from the Owner. 4. Article 4.4 is hereby deleted in its entirety and replaced with the following Article 4.4: 4.8 An administrative fee of 35 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. Article 4.8 is hereby deleted in its entirety and replaced with the following Article 4.8: 4.8 OMI agrees to incur up to $170,000 per year in lift station odor control direct expenses, including costs for necessary chemicals, pumps, tanks, related equipment and such outside services as needed. These expenses will not include labor and benefits for OMI personnel. OMI will rebate to the Owner the entire amount that actual lift station odor control expenses are less than $170,000 in any year of this Agreement. 6. Appendices B, C, D, E, J, and K are hereby deleted in their entirety and replaced with the attached Appendices B, C, D, E, J, and K. 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. Authorized Signature: Authorized Signature: E. Forrest Forbes Title: VP, Project Delivery Dan Coody Title: Mayor OPERATIONS MANAGEMENT CITY OF FAYETTEVILLE INTERNATIONAL, INC. Date: Date: