City of
Laredo
City Council Workshop
2001-W-04
Public Works
Service Center Training Room
5512 Thomas
July 17,
2001
5:30
p.m.
I. Call to order.
With a quorum present, Elizabeth
G. Flores called the meeting to order.
In attendance
Elizabeth G. Flores, Mayor
Alfredo Agredano, Council
Member, District I
Louis H. Bruni, Council
Member, District II
Johnny Amaya, Council
Member, District IV
Eliseo Valdez, Jr., Mayor
Pro Tempore, District V
Joe A. Guerra, Council
Member, District VI
Jose A. Valdez, Jr., Council
Member, District VII
Gustavo Guevara, Jr., City
Secretary
Larry Dovalina, City
Manager
Cynthia Collazo, Assistant
City Manager
Homero Martinez, Assistant
City Attorney
Motion to excuse Cm. Galo and Cm. Ramirez.
Moved: Cm. Agredano
Second: Cm. J. Valdez
For: 6 Against: 0 Abstain: 0
Presentation on the direction and
progress of the Secondary Water Supply Project.
Fernando Roman, Utilities Director,
presented the following persons in attendance:
Mike Milan – H . B. Zachary
Ken Olson – H. B. Zachary
David Ortiz – United Water
Dana Batiste - United Water
Charles Martens – Killiam Water
Company
Fernando Roman, Utilities Director,
gave the following presentation:
Secondary Water Supply
Structured Procurement Process
Procurement Process Status & Required Decisions
Project Sizing and Verification Process
Procurement Process Options
̃
DBO
by September 1, 2001
̃
Traditional
Delievery by late 2002
̃
Hybrid
Structure by early 2002
Procurement Documents &
Process
̃
Request
for Proposal
̃
Service
Agreement & Schedules (included price)
̃
Evaluation
& Selection
̃
Contract
Negotiation & Approval
Future
Council Transactions
Preliminary Price Proposal Costs
For 20 MGD Delivery, Million Dlls.
|
|
Zachry |
United Water |
U. S. Filter |
|
Engineering |
$ 13.9 |
$ 1.6 |
$ 9.6 |
|
Cost
of Wells |
$ 12.2 |
$ 7.5 |
$ 15.8 |
|
Collection
Lines |
$ 6.2 |
$ 0.8 |
$ 2.1 |
|
Conveyance
Lines |
$ 20.4 |
$ 18.3 |
$ 2.1 |
|
Pumping
and Controls |
$ 13.0 |
$ 0.2 |
$ 2.9 |
|
Treatment |
$ 0.1 |
$ 0.2 |
$ 30.1 |
|
Total |
$ 66.0 |
$ 28.7 |
$ 70.5 |
|
|
|
|
|
|
Operation
and Maintenance Cost, $/1000
gal |
$ 2.60 |
$ 0.32 |
$ 9.60 |
February 8, 2001: Industry Workshop
March 5, 2001: DBO procurement process Contract approved
June 26, 2001: Council direction on sizing and requirements
of proponents
July 3, 2001:
Request for Proposal (RFP) for 20 MGD supply via DBO delivery issued
with addendum noticing Council direction
July 9, 2001:
Revised RFP for 5-10 MGD supply issued
September 1, 2001:
SB 510 effective
Key Decisions:
1. Project Sizing:
§
Previously
indicated 20 MGD contract
§
June
26th Council direction for 5 – 10 MGD
2. Groundwater Verification Process
§
Proposed
Scope of Work required in RFP
§
June
26th option for ‘certification letter’
3.
Procurement Process
§
Original
RFP contemplates DBO by September 11, 2001
§
Traditional
Design – Bid – Build with adjustments to reflect ownership of
land, water rights, selected
assets
§
Hybrid
Option – modification of DBO process to ensure compliance with
SB 510 via qualification
based selection of engineering services
Project Sizing Decision
Recommend 20 MGD
Jefferson plant capacity will max out in 2010
Plans to expand should begin in 2004
Minimum plant expansion should be 25 MGD at a cost
of $30 million
Construction of a 20 MGD groundwater project will
defer construction of treatment plant capacity
20 year planning horizon
Economies of scale available
Potential for treatment plant deferrals
Groundwater Verification
Decision
Recommend Verification
June 26th Direction allows for:
1. Certify with Letter of Credit
If later proved not a Sustainable Supply, Company
incurs penalties outlined
in Service Agreement.
2. Propose SOW and perform Verification Study
If proved not a Sustainable Supply, Company
reimbursed for 50% of
verification costs.
If proved a Sustainable Supply, City may or may not
proceed with project.
In either case, Company reimbursed for 100% of
verification costs.
Original RFP contemplated (2) only
Low yield and low transmissivity
prevails in all 3 areas of study
Long-term sustainability concerns
Water quality information required to ensure
compatibility
Verification recommended:
delivery of critical
resource
Procurement Process
Decision
Recommend
Design/Build/Operate
Cost saving through project delivery and efficient
operations
Reduction in project delivery complexity through
single point of contact - - less management effort
Encouragement of innovation by rewards coupled with
project delivery – integrated delivery teams
Transfer of risk
Fixed price requirements
Reduction in potential for litigation
Design/Build/Operate approach
§
Contract
execution must be completed by September 1, 2001
Traditional Design – Bid-Build delivery
§
City
must initiate a new procurement process
§
Contract
execution estimated for late 2002
§
Substantial
risk transfer to the City
§
Cost
impacts uncertain though likely increase in total cost
§
Legal
complexities must be addressed
Hybrid Approach
§
Proposals
for total project development without pricing of engineering services
§
Qualification
– based engineering services selection
§
Projected
contract by early 2002; substantial procurement risk
Procurement
Documents and Process
Request for Proposal Service Agreement
& Schedules (incl. Price)
Evaluation & Selection
Contract Negotiation &
Approval
Ownership of the Facilities
After
System Acceptance, City will purchase all Turnover Assets
§
City
also pays for all Non-Capital Costs
§
Company
defines the System to be purchased
Operations
§
Company
operates and maintains entire System, irrespective of ownership
boundaries
§
Company
continues system build-out consistent with technical proposal
Fees, Charges, and Cost Recovery
Capacity
Charge
Recovers
costs for all Non-Turnover Assets
Fixed
O & M Fee
Recovers costs for all fixed operating expenses
(MMRR, Metering, labor &
benefits, etc.
Variable O & M Fee
Recovers costs for all variable operating expenses
(residuals disposal, electricity,
chemicals, etc.
Turnover Price
Recovers all
Non-Capital Costs and costs for Turnover Assets
Response to Project
Definition requirements
Life-cycle pricing
Financial
security/guarantees
Risk allocation
Future Council
Transactions
Council direction on key
decisions today
Prohibition on ex parte
communications effective today
August 6, 2001 Status
report
August 13, 2001 Council
action on recommendation of selected proponent
August 27, 2001 Council
authorization to execute contract
The providers expressed concerns that they may not
be able to provide a comprehensive RFP by
September 1, 2001, but they will provide one with
exceptions.
The Council made the recommendation of 20 million
gallons per day and to execute a Letter of
Intent for August 27, 2001.
Motion to adjourn.
Moved: Cm. Agredano
Second: Cm. Amaya
For: 6 Against: 0 Abstain: 0
I, Gustavo Guevara, Jr., City Secretary, do hereby
certify that the above minutes contained in
pages 01-05 are true, complete, and correct
proceedings of the City Council Workshop held
on the 17th day of July, 2001.
_______________________________
Gustavo
Guevara, Jr.
City
Secretary