CITY OF LAREDO

SPECIAL CITY COUNCIL MEETING

M2006-SC-16

CITY COUNCIL CHAMBERS

1110 HOUSTON STREET

LAREDO, TEXAS  78040

NOVEMBER 13, 2006

12:15 P.M.

 

I.          CALL TO ORDER

 

            With a quorum present, Mayor Raul Salinas called the meeting to order.

 

II.        PLEDGE OF ALLEGIANCE

 

            Mayor Raul Salinas led in the Pledge of Allegiance.

 

III.       ROLL CALL

 

            In attendance:

 

            Raul G.  Salinas,                                                                       Mayor

            Mike Garza,                                                                             Council Member, District I

            Hector Garcia,                                                                          Council Member, District II

            Michael Landeck,                                                                     Council Member, District III

            Johnny Amaya,                                                                         Council Member, District IV

            Johnny Rendon,                                                                        Council Member, District V

            Gene Belmares,                                                                        Council Member, District VI

            Juan Chavez,                                                                            Council Member, District VII

            Juan Ramirez,                                                                           Mayor Pro Tem, District VIII

            Gustavo Guevara, Jr.,                                                               City Secretary

            Cynthia Collazo,                                                                       Acting City Manager

            Horacio De Leon,                                                                     Assistant City Manager

            Rafael Garcia,                                                                           Assistance City Manager

            Valeria Acevedo,                                                                      Acting City Attorney

 

IV.       RESOLUTION

 

            2006-R-109  Canvassing the returns of the Special City Charter Amendment Election held                              on Tuesday, November 7, 2006 and approving the results.

 

                                  Motion to approve Resolution # 2006-R-109 as amended.

 

                                  Moved:  Cm.  Garza

                                  Second:  Cm.  Amaya

                                  For:     8                                     Against:  0                                Abstain:  0

 

                                  Anthony McGettrick, Assistant City Attorney, said that in preparing the                                     resolution the propositions were prepared by Gustavo Guevara, Jr., and he

                                  discovered that there was a discrepancy between the change proposed in

                                  section 10.01 (a) which was embodied and proposition number 55.  He

                                  explained that the question asked did not relate to the proposed change.  He

                                  said that he had concluded to place the following:  “the City Council officially

                                  finds, determines, and declares the results of said election to be that the

                                  propositions number one to thirty eight and forty to eight one so submitted

                                 have received a favorable majority vote, and that the proposition number 39

                                 So submitted has failed to receive that vote.  Provided however, due to

                                 material discrepancy between the proposed change to section 10.01 (a) of the

                                 Charter, a set forth an ordinance to 60205 and the wording of proposition

                                 number 55 pertaining to that proposed change in section 10.01 (a) the Council

                                 determines that the proposition has submitted and favorably voted on being in

                                 conflict with the substance of the change authorized for submission to the

                                 voters that such section be not changed at this time since the proposition was

                                 no submitted with wording to correspond to the change proposed.”  

 

                                 Motion to accept election results without the exception or the caveat and to                                           instruct legal staff to amend Section 10.01 of the ordinance to concur with the

                                 reading on the election ballot that was presented to the voters.

 

                                 Moved:  Cm.  Garza

                                 Second:  Cm.  Landeck

                                 For:     7                                      Against:  1                                Abstain:  0

                                                                                    Cm.  Ramirez

                                            

V.        MOTIONS

 

            2.  Adopting a schedule of hearings and proceedings for voluntary annexations for calendar             year 2006, in accordance with Section 43.052 or the Texas Local Government Code.

 

                 Motion to approve.

 

                 Moved:  Cm.  Belmares

                 Second:  Cm.  Chavez

                 For:      8                                         Against:  0                                            Abstain:  0

 

            3.  Authorizing the City Manager to engage legal services in an amount not to exceed                      $15,000.00 for the purpose of providing a legal opinion on the employment contract                       between the City of Laredo and former City Manager, Larry Dovalina, specifically                          relating to the City’s pension and deferred compensation contributions.

 

                 This item was discussed together with item VI-A (2).

 

VI.       GENERAL COUNCIL DISCUSSIONS AND PRESENTATIONS

 

            A.  Request by Council Member Dr.  Michael Landeck

 

            1.  Discussion with possible action regarding the process of the search for a new City       

                 Manager.  (Co-sponsored by Council Member Juan Chavez.)

 

                 Dan Migura, Administrative Services Director, reported that he had provided a summary           packet to Council three weeks ago advising them how staff is recruiting for the City                         Manager.  He asked Council to provide clarification as to what Council would expect in                 a City Manager.  A lengthy conversation was held discussing posting for the position for                the city manager.

 

                 Motion to instruct staff to proceed with posting for a position of a new city manager                  with the following qualifications:  accreditation through ICMA; City Manager,

                 Assistant City Manager, or Director experience; preferred degree; minimum salary of

                 $150,000, and return to Council with a list of candidates.

 

                 Moved: Cm.  Garza

                 Second:  Cm. Garcia

                 For:     8                                          Against:  0                                            Abstain:  0

 

            2.  Discussion with possible action regarding the request for payment of Larry Dovalina in               conjunction with termination of his contract as of October. 24, 2006.

 

                 Cm.  Landeck explained that he had placed the item on the agenda because he believes

                 that several issues on the contract for Larry Dovalina, prior City Manager, needs legal

                 clarification.  He expressed his concerns about the public perception of bias if staff or                               Council reviews the contract of Mr.  Dovalina.  He said that he would be satisfied if City            Council would obtain clarification from a counsel that is not working for the City of

                 Laredo.  

 

                 Cm.  Garza explained that Mr.  Dovalina’s contract is very clear regarding two issues                              including the six month payment provision and the amount of days that are to be paid.   

                 He noted that he was in favor of paying the City Manager whatever is due according to              the contract.  He said that he would be in favor of paying Mr.  Dovalina immediately. 

 

                 Cm.  Garcia stressed the importance of following the same procedure for releasing Mr.              Dovalina as they have other City Managers.  He said that he feels as though the current

                 Council is singling out Mr.  Dovalina.  Finally he noted that the City of Laredo is

                 spending monies to end Larry Dovalina’s contract and he feels that it would not be

                 prudent to spend an additional $15,000 to hire outside council. 

 

                 Cm. Landeck said that the language in the current contract truly concerns him;

                 therefore, he continued to ask for outside counsel to clarify the contract.

 

                 Valeria Acevedo, Assistant City Attorney, said that the contract states that the timing of

                 the pay off shall be at the prior City Manager’s option.  She said that the City

                 Manager has from the time of termination up to six months to receive the severance pay. 

                 It is at the City Manager’s option.

                

                 Motion to instruct staff to immediately pay Larry Dovalina, prior City Manager, the                    entire amount recommended by the City Attorneys monies; however, continue to seek a

                 outside legal counsel to review and clarify the contract and return to council with

                 recommendations for future City Managers.  If counsel finds that the opinion is different

                 than the City Attorney’s the City of Laredo City Council shall make a decision to

                 get their funds back from Mr.  Dovalina.  

 

                 Moved:  Cm.  Garza

                 Second:  Cm.  Rendon

                 For:     7                                          Against:  0                                            Abstain:  1

                                                                                                                                    Cm. Landeck

VII.     EXECUTIVE SESSION

 

            The City Council hereby reserves the right to go into executive session at any time during             this public meeting, if such is requested by the City Attorney or other legal counsel for the             City, pursuant to his or her duty under Section 551.071 (2) of the Government Code, to             consult privately with his or her client on an item on the agenda, or on a matter arising out           of such item.

 

I.          STAFF REPORT

 

            Staff report on Secondary Water Project draft RFP with possible action.

 

            Bill Norris, NRS Consulting Engineers, explained the RFP process for the Secondary Water             Project.  He stated that the most important issue for the City of Laredo Council to consider        in selecting a company is that the applicant should be able to provide long term supply of   water.  Council should also look for financial guarantee through bonds and insurance.  He          added that the City should have exclusive rights to the water.  He submitted the following     material:

Comments & Questions

NRS Consulting Engineers

Laredo RFQ/RFP

Secondary Water Supply

 

            1.  Three known respondents interested in providing supply to Laredo in various stages of

                 development.  They have all submitted information regarding their respective projects. 

                 These have not been reviewed by NRS as they are unsolicited. 

            2.  NRS has received a March 10, 2006 submission entitled “Feasibility Report for the City

                 of Laredo, Texas Secondary Water Project”. Prepared by TCB/AECOM.

            3.  NRS has received the MWH Proposal for Secondary Water Supply System that has

                 since been dropped due to unsustainable supply. 

            4.  NRS has heard a presentation by the City of Encinal May 31, 2006.

            5.  City has developed a RFP for use in development of secondary water supply.

            6.  Develop a clear understanding of the need of Laredo including water quality, quality,                                guarantees, etc.

            7.  RFP vs FRQ – perhaps use the RFQ if the cost for preparing the RFP process is a costly

                 proposition for the proponents.  This is usually used to limit the number of proponents to

                 avoid excessive applications and expense.

            8.  If RFP is used to select who can participate in the RFP, factors should be used such as:

                 Financial stability

                 Past experience and references

                 Knowledge of Laredo and process involved

                 Criteria specific to the Secondary Water Supply

            9.  Develop criteria to be used in the evaluation whether it is the RFQ or FRP process.

            10.  What is import to Laredo?

      • Ability for proponent to deliver long term sustainable supply.
      • This will include due diligence to determine the groundwater sustainability
      • Cost
      • Financial guarantee through bonds and insurance
      • Competition for water from same source

            11.  Does Laredo want value based award whereby technical proposals are considered first

                   and price send.

            12.  RFQ/RFP should be set up to minimize the subjective assessment evaluation and

                   should be spelled out clearly.

            13.  Be prepared to discuss the evaluations to all proponents. 

            14.  Does the City of Laredo want to consider the payment of a stipend to unsuccessful

                   proponents for the effort taken to prepare the proposal?

            15.  Does Laredo want to offer partial payments until the project is completed or pay when              water is delivered?

            16.  Is the LWC in place to allow for the use of the Design Build process?  Will it remain in               place and how is it set up?

            17.  Aside from the legal ramifications, what impact on Laredo if the project come into

                   problems 5 to 10 years later if well yields decrease substantially while Laredo demand               increase?  You would have legal recourse but you would still be with out water that

                   was guaranteed.  This would indicate a need for contracting with a proponent that has

                   done the required work to assure Laredo that the water is available for the long term. 

            18.  How much water does Laredo want to contract for by Phase. 

            19.  What source of guarantee is being sought? ; Bonds, insurance?

 

            Introduction:

 

            In October of 1999, the City of Laredo began a process to procure a secondary source of             water to support economic development throughout the region and supply potable drinking             water to its citizens, the City has continued to field interest to provide for the financing,   design, construction, and operation of a secondary water supply project, conditioned on the      City of Laredo’s purchase of this water delivered to its distribution system at pre-            established minimum volume amounts. 

 

            Under this RFP, the procurement, development, implementation, and operation of the             Secondary Water Supply System will consist of several project phases: 

 

            Procurement

 

            Companies will be required to submit water source information, a scope of work for             groundwater availability verification activities, a narrative and other information of the     technical approach and system build-out, a price proposal, and other information as set    forth in the RFP.  Each of these factors will be considered by Laredo in the evaluation and             selection process.

 

            Laredo will rank the companies and immediately enter into negotiations with the highest ranked group to establish and negotiate the business terms within a Service Agreement and        otherwise prepare to execute the Service Agreement.  If necessary, adjustments to the       company’s guaranteed Initial Facility Development Process will be made to reflect any           changes in the facility requirements occasioned through the negotiations.  The company’s    Scope of Work and proposed fee for the Groundwater Availability Verification activities   will be negotiated.   

            Groundwater Availability Verification Period

 

            After the Service Agreement is executed, the selected company (the Company) will       proceed with the Scope of Work for the Groundwater Availability Verification Activities.            It is recognized that in some cases, the Groundwater Availability Verification will not be             required in instances where The Company has sufficient information from an existing well       field usage that allows for the Company to submit guaranteed pricing without the benefit of      further hydrologic analysis for determination of well field withdrawals, drawdown, well            spacing, etc.  Based on the results of the study, Laredo will evaluate the availability and   sustainability of the water source.  The source will be designated a Sustainable           Groundwater Supply if it meets the following two criteria: 

 

                        1.  the water source can sustain initial withdrawals of at least 10 mgd and 2 mgd                                         each year thereafter for a maximum rate of 20 mgd for 100 years.

 

                        2.  The overall price proposal will not increase more than 10% as a result of the                                          actual water quality parameters established. 

 

            Based on the water source analysis, three different scenarios could occur:

 

                        1.  The supply is proved to be a Sustainable Groundwater Supply, and Laredo                               proceeds with the project.  If the Sustainable Groundwater Supply is less than the                      targeted City of Laredo demands or differences in water quality assumptions                                   force the Company to increase its price, Laredo and the Company will enter into

                             negotiations to adjust, as appropriate, the price.  Costs for the Groundwater                                          Availability Verification Activities will be paid for by Laredo.  

 

                        2.  the supply is proved to be a Sustainable Groundwater Supply, and Laredo does

                             NOT proceed with the project and terminates the Agreement for convenience. 

                             Laredo will not reimburse the Company for any activities beyond the GAV

                             Scope of Work (even those activities related to future development of the

                             project.)

 

                        3.  The supply is not proved to be a Sustainable Groundwater Supply and the

                             Agreement is terminated.  Laredo will reimburse the Company for 50% of all

                             costs incurred after the Effective Date as outlined in the Groundwater

                             Availability Verification Scope of Work.  Laredo will not reimburse the

                             Company for any activities beyond the Scope of Work.

 

            After Laredo is satisfied with all Groundwater Availability Verification activities have been             successfully completed, it will notify the Company to proceed with its Development Period             responsibilities. 

 

            Development Period

 

            The Company and Laredo shall commence with all Development Period activities.  As to             Company obligations, these activities include, but are not limited to Permitting,   Environmental and Archeological Investigations, commencement of the production of   Design Requirements, Cultural Resources Survey, Utility Survey Report, and Community         Awareness Program.  When the Company and Laredo have satisfied their Development             Period responsibilities, Laredo can issue a Notice to Proceed to begin the Construction     Period.

 

            Development and Construction Period

 

            This phase consists of all preliminary engineering, design, and construction activities        necessary to provide the physical assets required to satisfy the initial Water Quantity          Guaranty and Treated Water Quality Performance Standards.  The preliminary engineering      services shall include all required permitting, environmental and archaeological      investigations, investigation of cultural resources and utility surveying.  Design will be          structured to complement a demand schedule for minimum volumes of secondary supplied       water and will include preparations of all design necessary to ensure the facilities to deliver          this water will meet industry standards for public water system.  To close out the             Construction Period, the Company will perform all necessary tests to ensure the installed             facility meets industry standards for public water systems. 

 

            Operations Period

 

            The Company will begin operations after the System Acceptance Date and will company             with all Operations Period responsibilities as agreed to in the Service Agreement.  These             responsibilities include the Major Maintenance, Repair and Replacement activities for all             facility assets required to be kept in service throughout the term of the Service Agreement,             including any extensions of the term exercised by Laredo.  All components of the System             will be operated and maintained by the Company throughout the term of the Service             Agreement.  During the Operations Period, the Company will to install additional System             facilities to meet the Water Quantity Guaranty schedule.  For each capital expenditure, the             company will closely follow its proposed conceptual narrative of the build-out of facilities.              Any adjustments to the Company’s proposed narrative will be negotiated between Laredo             and the Company.

 

            At the conclusion of the Term, Laredo has the option to extend the Agreement for an     additional 20 years and, at the end of the second Term, for an additional ten years (a total             possible Term of fifty years).

 

            Recovery Costs

 

            The company shall propose Capital, Non-Capital, and Operations and Maintenance Costs to             deliver the Water Quantity Guaranty over the Term. 

 

            In the proposal, the Company must designate whether each capital asset will be made    available for public ownership (a Turnover Asset) or held privately (a Non-Turnover        Asset).  While the Company will thus define ‘the system’ to be purchased by Laredo, the   Company will be evaluated, in part, based on the set of assets to be made available for            Laredo acquisition.  Insofar as the unavailable Non-Turnover assets would compromise     Laredo’s ability to secure a sustainable water supply, the Company should submit detailed      language describing the manner in which Laredo will be able to retain continued access to          these resources and facilities beyond the original planning period and up to 50 years.

 

           

 

            The company will recover costs through one monthly fee and charge:

 

            Variable O & M Fee:  The Variable O & M Fee will be established as a per 1000 gallon             unit cost and be based on metered deliveries at the Delivery Point over the billing period.              The Variable O & M Fee will consists of a raw water costs, amortized payment proposed             by the company for all facilities required to deliver the required volumes of water and     financed by the Company, disposal of residuals and waste, power costs, chemical cost, and        others variable costs proposed by the company.  The Variable O & M Fee is calculated as       the sum of the base Variable O & M Fee and any incremental fee increases proposed by the           company. 

 

            Escalation adjustments should be included within the proposed unit cost pricing.

 

            Information to Proposers

 

            1.1 Introduction

 

            This document is the Request for Proposal (RFP) issued by the City of Laredo (“Laredo”)             for the Secondary Water Supply System (the “System”) Project (the “Project”).

 

            This RFP requests specific and detailed information to be submitted in order for Laredo to:

 

                        1.  Establish the specific facilities to be developed, designed and constructed and the                       operation and maintenance requirements to be met throughout the Project.

 

                        2.  Establish and verify groundwater availability, when such availability has not yet                           been established.

 

                        3.  Establish acceptance by Laredo of the Proposer’s Project approach as to meeting                     the goals and objectives for this Project.

 

                        4.  Design, Build, Operate, and Maintain the Secondary Water Supply System.

 

            The basic elements of the Project are the following:

 

                        1.  Wells and Wellfield

 

                        2.  Treatment facilities as required

 

                        3.  Pump stations

 

                        4.  Transmission pipeline

 

                        5.  Terminal storage at delivery point

 

            This RFP invites the Proposers to submit a proposal to Laredo describing in detail the             organizational, technical, and financial aspects by which each proposed to meet the             requirements and objectives of the Project.  Laredo will select a Proposer for negotiations             for the Project on the basis of these Proposals. 

 

            Description of Procurement Process

 

            2.1  Introduction

 

            The objectives of this procurement process are to:

 

                        1.  Select a Proposer (s) to provide high quality and reliable Secondary Water

                             Supply services.

 

                        2.  Assure that a Proposer is selected whose technical approach, financial

                             capabilities, costs and risk profile will result in Laredo achieving the best value

                             and a reliable project that meets all Laredo’s objectives. 

 

                        3.  Benefit from the knowledge and experience of Proposer (s) in maximizing                                  performance and allocating risk at a reasonable cost.

 

            2.2 Procurement Process

 

            2.2.1  RFP Process

 

            The Process that Laredo will use moving forward is simple, straight forward and allows for             maximum flexibility.  For the Proposal to be submitted, in addition to the other   requirements described in Section 3 of this RFP, Proposers will be required to submit a         price proposal based on a technical and business approach established by proposer.  This price proposal must be all a technical and business approach established by a proposer.    This price proposal must be all inclusive of all of the assumptions that affect the offered         price.  A Service Agreement process is described below.  The price proposal must be presented in the format and on the form included in the RFP. 

 

            The evaluation of the Proposals will consist of two phases:  completeness review and     evaluation criteria review.  A completeness review will be made to determine if the             Proposal meets all requirements of the RFP.  Laredo reserve the right to deem a Proposer             non-responsive or request additional information if the completeness review indicates any   deficiencies in the submittal. 

 

            The evaluation criteria review consist of reviewing the Proposal against the evaluation     criteria described in Section 4 of this RFP and the appropriate RFP requirements pertaining      to each of the evaluation criterion.  Evaluations are to be made by Laredo in its sole and          exclusive judgment. 

 

            Laredo shall consider the extent and impacts of a Proposer’s exceptions and potential    revisions to proposer’s cost of service in the evaluations process.

 

            2.2.2

 

            Service Agreement-Procurement Protocol and Process

 

            In the intent of Laredo to reduce the time required for negotiations to the maximum extent             practicable, consistent with the prudent practice.

 

            Laredo will consider a proposed service agreement format offered by each proposer but in             Laredo’s exclusive judgment, Laredo may elect to offer proposer, during negotiations, its             own service agreement for use in establishing terms for continuous service by proposer through development and construction, start-up, and operation of the facilities required to           deliver the required secondary water supply to the City of Laredo.  Proposers should         carefully list all assumptions and caveats which proposer intense to exercise that in any way       affect the proposed cost for the complete financing, design, construction, and operation of           the required facilities in proposer’s response to this RFP. 

 

            Laredo shall consider the extent and impacts of a Proposer’s exceptions and potential    revisions to proposer’s cost of service in the evaluations process.

 

            With each exception taken or revision suggested, the Proposer will include in its price    proposal the specific detailed language that is needed to fully address the exception or      revision.  The greatest extent possible, there will be no negotiations of any terms or      conditions about which no exceptions were taken of or had revisions requested.  If no             exceptions are taken, it is clearly understood that there will be negotiations of the details of           potential cost change. 

 

            2.4  Schedule

 

            The following represents Laredo’s current estimate of a schedule of events.  Laredo       reserves the right to change this schedule at any time, but shall promptly notify Proposers             of any such changes.

 

            2.4  Laredo Rights and Options

 

            Laredo reserves, holds and may exercise, and its sole discretion, the following rights and             conditions with regard to this RFP. By responding to the RFP Proposers acknowledge and             consent to the following conditions relative to the procurement and election process.

 

            This RFP does not obligate Laredo to procure or contract for any services.

 

            Laredo reserves the right to change or alter the schedule for any events associated with this             procurement upon notice to the Proposers, and a Proposer, by submitting a Proposal, agrees     to be bound by any modification made by Laredo.

 

            All costs incurred by a Proposer in connection with responding to the RFP, the evaluation             and selection process undertaken in connection with this procurement, and any negotiations             entered into in connection with developing the Service Agreement will be borne by the   Proposer. 

 

            Laredo reserves the right to reject, for any reason, any and all Proposals and components             thereof and to eliminate any and all Proposers responding to this RFP from further             consideration for this procurement.

 

            Laredo reserves the right to eliminate any Proposer who submits incomplete or inadequate             Proposals or is not responsive to the requirements of this RFP.

 

            Laredo reserves the right, at any time, to determine that any or all Proposers will not be             selected for further consideration and to notify such Proposers of Laredo’s determination.

 

            Laredo may require Proposers to send representatives to Laredo for interviews and             presentations. 

 

            Laredo reserves the right to discontinue negotiations with any Proposers for any or no    reason.

 

            Laredo reserves the right, without prior notice, to supplement, amend, or otherwise modify             this RFP, or otherwise request additional information. 

 

            The remaining Secondary Water Source can be viewed at the City Secretary’s Office. 

 

II.        ADJOURN

 

            Motion to adjourn.                                                                                            Time:  2:15 p.m.

 

            Moved:  Cm. Belmares

            Second:  Cm. Garcia

            For:     8                                               Against:  0                                            Abstain:  0

 

I, Gustavo Guevara, Jr., City Secretary, do hereby certify that the above minutes contained in pages 01 to 11 are true, complete, and correct proceedings of the City Council meeting held on November 13, 2006.

 

                                                                        ____________________________________

                                                                        Gustavo Guevara, Jr.

                                                                        City Secretary