Memorandum

City of Lawrence

Utilities Department

TO:	David L. Corliss – City Manager Diane Stoddard - Assistant City Manager Casey Toomay – Assistant City Manager
FROM:	Melinda Harger – Utilities Engineer
CC:	Dave Wagner – Director of Utilities Mike Lawless – Deputy Director of Utilities Philip Ciesielski – Assistant Director of Utilities Beth Krishtalka – Assistant to Director Mark Hegeman – Utilities Operations Superintendent Dave King – Utilities Maintenance Superintendent Bob Brower – Utilities Field Services Superintendent
DATE:	April 22, 2015
RE:	Award Bid for Project UT1304 Contract 4 Wakarusa Wastewater Treatment Plant and Conveyance Corridor and Execute a Supplement to the Existing Engineering Services Agreement

Project Overview

The Wakarusa Wastewater Treatment Plant (WWTP) and Conveyance Corridor facilities will:

1. Address current wet weather overloading of major sanitary sewer lines along the 31^st Street corridor that serve much of the Wakarusa drainage system west of Iowa and north to 6^th Street as shown on the attached service area map.

2. Help reduce and manage wet weather flows at the Kansas River WWTP. Peak flows exceed the 65 million gallon per day (MGD) peak treatment capacity by 20 MGD.

3. Provide 20 percent additional treatment capacity for growth of the community. The current treatment plant is at or near its’ rated capacity for treatment of organics.

4. Take the first step as adopted in the City’s Integrated Plan, and as required by the latest NPDES permits, to meet new environmental regulations that require reduction of nutrients from treated effluents, specifically nitrogen and phosphorous. The current treatment processes do not reduce nutrients.

Consequences of not proceeding with timely execution of the project include a potential of formal regulatory enforcement actions and an inability to serve current customers without sewer overflows (especially for those areas mentioned above served by the 31^st street sewers). Expanded services for new housing, commercial and industrial uses throughout the community would be limited or not available. There are also environmental and human health drivers for the reduction of nitrogen and phosphorus on local, regional, and national levels.

Project UT1304 includes the Wakarusa WWTP, Pump Station 10 in the area of 31^st and Louisiana, and required force mains and gravity sewers to convey sewerage to and from this point to the Wakarusa WWTP. The project also includes improvements to the existing Kansas River WWTP. All three locations are identified on the attached facility map.

The Wakarusa WWTP was designed as a 2.5 MGD biological nutrient removal (BNR) treatment facility with the option to add a second 2.5 MGD train in order to double the treatment capacity. The Wakarusa WWTP was designed above the 2.0 MGD capacity recommended in the Master Plan in order to optimize equipment and basin sizing for operation and future growth. Also, the final clarifier sized at 2.5 MGD is more suitable for future expansion than one sized for a 2.0 MGD plant. Project enhancements include the operational flexibility of Pump Station 10 as well as laboratory expansion and final clarifier equipment replacement at the existing Kansas River WWTP.

Project History

The 2012 Wastewater Master Plan recommended that the Wakarusa WWTP and conveyance facilities be in operation by 2018. The plan suggested an initial size of 2.0 MGD for the Wakarusa WWTP and provided a plan level estimate of expenditures at $64 million over the course of the 5 year Capital Improvement Plan (CIP) for the project.

The Project Timeline and Project Details are provided as attachments.

Bid Details

After the City rejected previous bids on March 10, 2015, the scope of the project was modified through a rebid process. New bids were received from the following two (2) bidders on April 7, 2015. The bids were opened and the lump sum bids listed below publicly read aloud.

Crossland Heavy Contractors	$49,353,800.00
Garney Construction	$47,150,000.00

Engineer’s Estimate	$51,033,550.00

Alternative bids were also publicly read aloud at the bid opening. Details are summarized on the attached bid tab.

Black & Veatch has reviewed the bids and qualifications of the low bidder and, per the attached letter, recommends awarding the bid to the low bidder, Garney Construction.

Recommended Deductive Alternatives

The Department of Utilities recommends accepting the following deductive alternatives in order to award a contract that is supported by the current rate structure:

Item G – Modify site paving at Pump Station 10 ($69,000 deduct)
Item I – Remove LEED certification and documentation requirements for the Wakarusa WWTP Administration Building ($117,000 deduct)
Item J – Decrease walkways across the process basin ($62,000 deduct)
Item K – Reduce size of sludge storage ($459,000 deduct)
Item L – Eliminate Wakarusa WWTP Vehicle Storage and Maintenance Building ($753,000 deduct)
Item Q – Eliminate redundant grit pump at Pump Station 10 ($46,000 deduct)
Item S – Eliminate redundant processing equipment ($224,000 deduct)
Item T – Eliminate surface aerator air test ($25,000 deduct)
Item V – Eliminate building perimeter insulation ($15,000 deduct)
Item W – Eliminate ribbed form liner on PS 10 retaining walls ($34,000 deduct)
Item X – Modify the electrical switchgear enclosure ($105,000 deduct)
Item Y – Substitute PVC for interceptor sewer piping ($40,000 deduct)

The amount of Contract 4 with Garney Construction will be $45,201,000.00 for the base bid and recommended deductive alternatives listed above. None of the additive alternatives are recommended. We also hope to look for additional opportunities to adjust the work to further reduce project costs and possibly "buy back" options with value that we cannot afford at this time.

Expanded Capacity

The bid alternative for a second BNR train gives the City an option to expand capacity by an additional 2.5 MGD at a cost of $4.6 million. At this time, the additional capacity cannot be utilized. There is not additional sewage beyond the normal flow of 2.0± MGD flowing to Pump Station 10 and the 31st and Louisiana collection system. Capacity beyond 2.0 MGD is not needed until 2030 based on community growth rate and location projections used in the Master Plan. Pump Station 10 at 31st and Louisiana and its force mains will have the capacity to accommodate and deliver future sewage flows in excess of 5 MGD.

The addition of the second redundant train and associated equipment would provide these advantages:

Easier plant maintenance
Additional treatment reliability
Additional treatment capacity to accommodate unexpected community growth, especially west of K10 and within the Wakarusa watershed (may require additional collection system projects)
Option to divert, with completion of addition collection system projects, existing flows that would free up additional capacity at the existing Kansas River WWTP as well as provide better treatment by removal of nutrients (The existing wastewater plant does not remove nutrients, but it will be required to in the future.)
May provide future option to lessen capital expenditures on existing WWTP for providing additional capacity and improve processes to meet future nutrient requirements as outlined in the City’s accepted Integrated Plan within current NPDES permits and the long term CIP

The Department of Utilities does not recommend the expanded capacity option at this time, because it is not supported within the current rate plan. A 0.5% revenue increase for wastewater would be required in 2016, 2017, and 2018 in order to fund the expanded capacity option at a construction cost of $4.6 million.

Construction Phase Services

The design of the Wakarusa WWTP and Conveyance Corridor was completed by Black & Veatch in partnership with PEC, Bartlett & West, and Treanor Architects. The fee of $4,498,410.00 for Supplement Agreement No. 5 includes the following non-basic A/E services:

· Construction phase contract administration and field support services

· Resident engineer services with full-time inspection during construction

· Geotechnical testing

· O&M manuals

· Start-up and training services

Below is a breakdown of the engineering services fee for the project in relation to the construction cost for the project.

Construction costs (Contracts 1-4):	$59,148,950
Construction cost for alternatives not being constructed:	$ 8,095,000
Total Construction Cost of designed project:	$67,243,950
Total A/E Services included in Original ESA & Supplements 1-4:	$ 6,649,782
Total A/E Services estimated through project completion:	$11,148,192 (16.6%)

The total fee for A/E services is lower than previously estimated, due to the amount of work being performed by City staff.

City Provided Services

The Department of Utilities is performing a substantial amount of work in order to significantly reduce engineering fees and construction costs. Utilities staff will design the automation, integration, and programming systems for the new facilities. The City will also benefit from direct equipment acquisition and piping installation performed by Utilities staff. Inspectors and engineers within the Utilities Department have provided some inspection services for the force mains and access roads. Public Works is also assisting with inspection services by providing nuclear density compaction testing for the access roads. Continued inspection by Utilities staff will save an estimated $800,000 through the duration of Contract 4, and this savings has been redirected to material work that the City cannot perform.

Project Schedule

The anticipated construction schedule for the Wakarusa WWTP, Pump Station 10, and Kansas River WWTP Improvements (Contract 4) is as follows:

Award Bid:	April 28, 2015
Anticipated Notice to Proceed:	June 1, 2015
Substantial Completion:	January 2, 2018
Final Completion:	March 2, 2018

The force main installation (Contract 2A) will continue through Fall 2015. The Wakarusa WWTP access road construction (Contract 3) will be complete in June 2015.

Project Funding

The project is included in the Department of Utilities CIP and Rate Plan. The City Commission approved the 2015 Rate Scenario 1 on May 20, 2014. An updated summary on the CIP projects and comparative municipal rates is provided within the updated 2015 Water and Wastewater Rates memo. The approved rate scenario established the 2015 rates and provided an outlook of the cost increase over a five-year period. The planned rate increases for 2016 and 2017 as well as future years are necessary to complete the construction of this project and fund the additional operation and maintenance for these new facilities. The rates to support the Operating and Maintenance Budget, including the new Wakarusa WWTP, and the existing and future CIP debt service are considered each year during the budget process.

The total project cost estimate of the 2.5 MGD capacity WWTP and conveyance corridor is $74.3 million, which includes the following:

Completed and in-progress construction Contracts 1-3:	$ 13.8 million
Contract 4 construction:	$ 45.2 million
Property acquisition:	$ 0.6 million
Professional services to date:	$ 6.8 million
Construction phase services:	$ 4.5 million
City purchased materials and equipment:	$ 1.7 million
Power utility infrastructure:	$ 1.7 million

This project, as outlined above, can be delivered within the projected expenditures of the 2013 to 2017 CIP. This was accomplished by reducing funding for several water and wastewater annual programs from 2015 to 2017 and deferring several water and wastewater projects to 2018 or later.

Action

Award Bid Number B1519, Project UT1304 Contract 4 Wakarusa Wastewater Treatment Plant and Conveyance Corridor to the low bidder Garney Construction in the amount of $45,201,000.00 and authorize the City Manager to execute the contract.

Authorize the City Manager to Execute Supplemental Agreement No. 5, in the amount of $4,498,410.00, to the Existing Engineering Services Agreement with Black & Veatch Corporation for Project UT1304 Wakarusa Wastewater Treatment Plant and Conveyance Corridor Facilities.