TO: Members of the Governing Board
FROM: Christopher Silke, District Engineer
REPORT BY: Annamaria Martinez, Assistant Engineer
SUBJECT: Award Construction Contract for the Lift Station A - Sewer Collection Tank Replacement Project, LB 22-03R2
RECOMMENDATION
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Award a Construction Contract to Piazza Construction of Penngrove, CA for the Lift Station A - Sewer Collection Tank Replacement Project, LB 22-03R2; and approve a Budget Amendment (Fiscal Impact: $1,400,000 Expense; Lake Berryessa Resort Improvement District Fund; Not Budgeted; Discretionary)
[4/5 vote required]
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BACKGROUND
The President authorized the American Rescue Plan Act (ARPA) in March 2021 to allocate $1.9 trillion in stimulus monies across a variety of programs. Of the total, $350 billion is allocated to state, local, territorial and Tribal governments to enable them to continue to support the public health response and to lay the foundation for a strong and equitable economic recovery. The U.S. Department of the Treasury released Final Interim Rule regulations on May 10, 2021 defining eligible use of ARPA monies that includes investments into water and sewer utility infrastructure. Local Fiscal Recovery (LFR) funds must be obligated by December 31, 2024 with projects completed no later than December 31, 2026. Napa County received $26,755,157 for ARPA appropriations.
Based on the Final Rule guidelines, water and sewer utility projects that would qualify for funding under the Safe Drinking Water and Clean Water Act Programs are deemed as eligible under ARPA. The District has four (4) high priority projects that satisfy ARPA and the Drinking and Clean Water Act funding criteria - one of the projects being the subject of this agenda report - the replacement of the 91,000 gallons raw sewage collection tank located at Sewer Lift Station A.
History of the Collection Tank at Lift Station A:
The original sewer collection tank at Lift Station A, which collects all raw sewage from Unit 2 of the Berryessa Estates subdivision, was installed in 1967. The tank was constructed of welded steel with a maximum capacity of approximately 50,000 gallons. In the late 1980s/early 1990s, deterioration of the upper tank wall due to corrosion from hydrogen sulfide vapors caused seepage of raw sewage from the upper tank panels requiring the operational level to be lowered to half the height of the tank. Due to lack of funding for full replacement of the tank, a reduced scope project was approved that required removal of the corroded panels above the reduced operational level - leaving the District with limited sewer collection capacity for growth and or storm events.
The tank was operated at this reduced capacity for over a decade; increased flow as a result of community growth, and also from increased inflow and infiltration (I/I) in the collection system, resulted in multiple overflows from the tank and violations from the Central Valley Regional Water Quality Control Board (CVRWQCB). An Administrative Civil Liability Complaint (ACL) that required payment of a fine, was issued and ultimately rescinded, but the District was required to replace the tank with a capacity sufficient to prevent overflows in the future.
In 2002, District engineering staff solicited bids for replacement of the modified original welded steel tank with a 91,000 gallon bolted steel tank. The solicitation required setting the new tank within the footprint of the original tank, and the reuse of the original pad. The vendor, International Tank, Dry & Liquid Storage, Inc. from Kentucky was retained to complete the project design and installation.
The 91,000 gallon tank is now 20 years old, and as with the original tank installation, corrosion and pitting, due to the accumulation of hydrogen sulfide gases, has accelerated along the top tank panels that sit above the operational liquid level of the tank. In an effort to prevent a repeat of prior violations and potential ACLs from the CVRB due to illicit discharges from the tank, staff proposed immediate replacement of the tank pending award of funding availability through the ARPA program.
On February 8, 2022, the District and Napa County executed a Memorandum of Understanding (MOU) outlining the terms of the transfer of the $800,000 ARPA earmark for the project, and on June 21, 2022, staff publicly advertised an RFQ / RFP engineering services package detailing the scope of work, submittal instructions and deadline for the Sewer Lift Station A Tank Replacement Project. After evaluation of the two proposals received, staff recommended and the Board awarded a contract to GHD, Inc. in the amount of $190,674 on September 13, 2022.
Design plans and specifications to demolish the corroded steel tank and construct a new cast-in-place reinforced concrete were approved and authorized to solicit competitive public bids by the Governing Board at its May 16, 2023 meeting. Contractor bids were subsequently opened on July 13, 2023. The lowest qualified bid exceeded ARPA appropriations to award a Contract. All Contractor bids were rejected by the Governing Board in the August 8, 2023 meeting. Supplemental project appropriations in the amount of $1,400,000 from Napa County for water and wastewater improvements were then secured as part of an additional funding award from the Department of Water Resources (DWR) through the California Budget Act of 2022 (AB 179, Stats. 2022, ch. 249, § 207). Including the remaining ARPA funding available, project appropriations with the DWR award totaled $2,009,326.
District staff and GHD, Inc. design team deliberated the feasibility of downsizing concrete tank capacity and geometry simultaneous with replacing the remaining segment of undersized sewer force main as an alternative approach to upgrade sewer collection infrastructure. A preliminary construction cost estimate to build a smaller concrete tank and replace the vintage 6-inch asbestos cement sewer pipe with larger 8-inch diameter high pressure polyethylene pipe thereby increasing pumping capacity totaled less than the combined ARPA/DWR project appropriations. On December 19, 2023 Amendment No. 1 to the GHD, Inc. Agreement was approved by the Governing Board, authorizing the design scope change and directing GHD, Inc. to produce revised plans and specifications. Engineering design budget was increased by $49,114 for an adjusted total of $239,788, leaving total appropriations of ARPA/DWR funding of $1,960,212 to fund construction related services.
The revised construction plans and specifications were approved by the Governing Board for readvertisement of the Project on March 12, 2024. The revised plans included replacement of the existing steel tank with a new cast-in-place reinforced concrete tank of 50,000 gallons capacity paired with replacement of the original 1960’s asbestos cement pipe sewer force main that will improve pumping efficiency. The new tank was proposed to be installed in the same location as the existing tank. Additional project components included a new tank foundation, piping reconfiguration to allow better control of waste volumes entering the tank, and other miscellaneous site improvements necessary to install the tank in the same footprint as the existing tank.
The District Secretary opened two (2) bids on May 30, 2024. While both of the bids submitted for the base bid items were less than the total appropriations for the project as defined above, an error in the bid documents was discovered after bids were opened creating uncertainty with how the various bid alternates would be awarded: one section of the bid documents indicated the bid alternates “may” be awarded (what the District intended), while another section erroneously indicated the bid alternates “will” be awarded up to the amount of available funds.
The lowest bidder on the base bid, Cushman Contracting, believed the additive bid alternates would be awarded based on the erroneous language. Due to the conflicting language in the bid documents and the likely confusion among the bidders as to whether award of the bid alternates was discretionary or mandatory, District staff requested that all bids be rejected on June 25, 2024 pursuant to Section 20150.9 of the Public Contract Code, and that the corrected bid packet be approved and authored by the Board for re-advertise for sealed bids.
The engineer’s opinion of probable construction cost for the third bid advertisement project was $1,793,234, which included the base scope, the tank alternate, and ten bid additives labeled Additive 10 - 19.
The District Secretary opened two (2) bids on August 23, 2024. The available funding for construction of $1,900,000 was announced prior to opening bid and the apparent low bid was determined by the maximum number of additive items that could be awarded within the funding limit after the base scope and bid alternate for tank shape was considered. The bid results of both bidders based on the number of additive construction items that could be constructed within the project budget are listed below:
Piazza Construction Penngrove, CA $1,551,640 (all additives - up to 19)
Cushman Construction Corporations Santa Barabara, CA $1,786,595 (up to additive 16)
The two (2) bids have been reviewed and are considered responsive. Based on the award methodology noted above, staff recommends awarding the Base Bid, Bid Alternate, and Additive Item Nos. 10 - 19 to Piazza Construction as all additive items can be completed within the total funding available to the project and for the lowest cost. Construction is anticipated to commence in late September 2024 and be completed within 120 working days (mid-March 2025), weather permitting.
Piazza Construction is not a local vendor; however, the Public Contract Code requires that the construction contract be awarded to the lowest responsible and responsive bidder, regardless of whether the low bidder is local or not. Staff reached out to the local construction contractor community by advertising the request for bids in the Napa Valley Register and the Solano-Napa Builder’s Exchange, and by posting on the County website. Staff also sent “Notices to Contractors” to the local construction community.
In addition to the original ARPA appropriations totaling $800,000 assigned to this project - of which $567,347 remains - a budget adjustment of $1,400,000 from Uncommitted ($1,400,000) is requested to move this project forward to construction. If approved, total appropriations for construction related activities in the Project will be $1,967,347. Of that total, $1,551,640 is earmarked for the subject construction contract, $229,089 will be encumbered for a construction administration/inspection contract to be brought before the board on September 24, 2024, and the remaining $186,618 will be held for construction contingency, if needed.
It is recommended that the Board awards the construction contract to Piazza Construction for their low bid including all of the project additives totaling $1,551,640, approve the budget adjustment, and authorize the Chair to sign the construction contract.
Requested Actions:
1. Award of Contract to Piazza Construction of Penngrove California for their low total bid of $1,551,640 including Additive items 10 - 19, to provide the scope of work required for the Project and authorize the Chair to sign the construction contract; and
2. Approve a Budget Amendment for the following (4/5 vote required):
a. Increase Transfer Out appropriations by $1,400,000 in the Uncommitted Project Fund (Fund 5220 Sub-Division 5220500, Project LBR00, Account 57900) offset by use of its available fund balance to transfer to Project 22014 (Sewer tank);
b. Increase Construction Services appropriations by $1,400,000 in the LBRID Lift Sation A Sewer Tank Replacement Project Fund (Fund 5220, Sub-Division 5220500, Project 22014, Account 52360) offset by the increase of Transfers In;
c. Increase Transfers In revenue by $1,400,000 in the LBRID Lift Station A Sewer Tank Replacement Project Fund (Fund 5220, Sub-Division 5220500, Project 22014, Account 49900)
FISCAL & STRATEGIC PLAN IMPACT
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Is there a Fiscal Impact? |
Yes |
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Is it currently budgeted? |
No |
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Where is it budgeted? |
A portion of appropriations are budgeted in LBRID (Sub-Division 5220500) Project 22014, however, a budget adjustment from uncommitted reserves is necessary to move the project forward. |
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Is it Mandatory or Discretionary? |
Discretionary |
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Discretionary Justification: |
The existing bolted steel tank is at risk of failure due to the corrosivity of the raw wastewater it stores for pumping purposes and has been replaced historically at 20 year increments since original installation in 1967. The proposed concrete tank is less susceptible to corrosion. A new tank coupled with replacement of the remaining unrenewed segment of sewer force main with larger diameter pipe will improve pumping efficiency lowering energy costs if construction upgrades are allowed to proceed as requested. |
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Is the general fund affected? |
No |
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Future fiscal impact: |
The new concrete tank will have a useful life of at least 30 years compared to the existing bolted steel tank which requires replacement every 20 years. Maintenance for the concrete tanks is minimal compared to the steel tank as well. This will likely reduce maintenance costs over time. |
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Consequences if not approved: |
The construction project will be stalled and the District will be unable to replace the tank and upgrade the sewer force main. The existing tank will be at risk of catastrophic failure, possibly leading to fines issued by the Regional Water Quality Controls Board for discharges of raw wastewater into Putah Creek. |
ENVIRONMENTAL IMPACT
ENVIRONMENTAL DETERMINATION: It has been determined that this type of project does not have a significant effect on the environment and is exempt from the California Environmental Quality Act. [See Class 1 (“Existing Facilities”) which may be found in the guidelines for the implementation of the California Environmental Quality Act at 14 CCR §15301; see also Napa County’s Local Procedures for Implementing the California Environmental Quality Act, Appendix B.]