supplemental board agenda memorandum p3 related...july 28, 2015: board approved dual track strategy...
TRANSCRIPT
0914a-a.docx 1 of 2
Meeting Date: 09/22/15 Agenda Item No.: Manager: G. Hall Extension: 2750 Directors: All
SUPPLEMENTAL BOARD AGENDA MEMORANDUM
SUBJECT: Expedited Purified Water Program
REASON FOR SUPPLEMENTAL MEMORANDUM:
This Supplemental Agenda Memorandum is required to transmit: (1) PowerPoint presentation for the Expedited Purified Water Program; and (2) Draft Standard Consultant Agreement between Santa Clara Valley Water District and HDR Engineering, Inc.
RECOMMENDATION:
A. Receive and discuss the Expedited Purified Water Program updates and provide direction to staff as needed.
B. Authorize the Chief Executive Officer (CEO) to negotiate and execute a consultant agreement with HDR Engineering, Inc., (HDR) of Walnut Creek, California, for project management services for the Expedited Purified Water Program for a fee up to $2,400,000.
C. Receive and discuss information regarding environmental review and permitting services.
D. Approve a budget reallocation/adjustment of $1,300,000 from the Indirect Potable Reuse Projects—Planning (IPR) to the Silicon Valley Advanced Water Purification Center (SVAWPC) Expansion Project, a program element, to allow staff to proceed with planning and design of the Expansion Project.
SUMMARY:
This Supplemental Agenda Memorandum is to provide the Board with the PowerPoint presentation and draft Standard Consultant Agreement, which was not available at the time of posting the regular agenda memorandum.
FINANCIAL IMPACT CHANGE:
No changes.
CEQA:
No changes.
FC 1703 (08-17-11)
SUBJECT:
2 of 2
ATTACHMENTS:
Attachment 1: PowerPoint Presentation on Expedited Purified Water Program Attachment 2: Draft Standard Consultant Agreement
Expedited Purified Water ProgramExpedited Purified Water Program
September 22, 2015
Attachment 1Page 1 of 28
Organization of Presentation
Staff Recommendation
Program Background
Program Updates
HDR Project Management ContractHDR Project Management Contract
Environmental review/permitting services
Budget Reallocation/Adjustment
Attachment 1Page 2 of 28
Recommendation
A. Receive and discuss Program updates and id di tiprovide direction
B. Authorize CEO to negotiate and execute contract with HDR, up to $2.4M
C Receive and discuss environmental review C. Receive and discuss environmental review and permitting services
D. Approve budget reallocation/adjustment of $1.3M from IPR to SVAWPC Expansion Project
Attachment 1Page 3 of 28
$ 3 S C p j
Key Drivers of the Expedited Program
California in fourth year of drought
Urgent need to develop drought-proof, reliable, and locally controlled water supply
Risk of subsidence and significant impact on infrastructure and economy of the countyinfrastructure and economy of the county
Environmental benefits of purified water use
Attachment 1Page 5 of 28
Potential Groundwater Impacts Due to Extended Drought
Projected Continued Drought
Water Shortage
Contingency Plan Stage
NORMALAbove 300,000
AF
Projected Continued DroughtPlan Stage
20% Conservation ( ith 25 000 AF dditi l i t d t )ALERT
250,000 – 300,000 AF
SEVERE 20%
(with 25,000 AF additional imported water)
e
200,000 – 250,000 AF
CRITICAL150 000 – 200 000
%
Su
bsi
den
ceR
isk 0%
13%
IPR could raise groundwater
storage by 35 000
35,000 AF
150,000 – 200,000 AF
EMERGENCYBelow 150,000 AF In
crea
sed R storage by 35,000
AF each year
Attachment 1Page 6 of 28
2014 2015 2016 2017 2018 2019
Program Background
March 12, 2015: Board receives information on the opportunity for an Expedited Purified Water Programpp y p g
April 28, 2015: Board authorizes single source contracts and contract amendments to expedite Program
June 22, 2015: Program updates and presentation on the Project Delivery Method Evaluation
July 28, 2015: Board approved Dual Track strategy for P3 and continuing planning and design of the SVAWPC expansion project
Attachment 1Page 7 of 28
The ProgramD li t 45 000 f t ifi d t f t bl b 2020Deliver up to 45,000 acre-feet purified water for potable reuse by 2020
Planned Potable Water Reuse Projects SJ/SC Regional
Wastewater FacilityFacility
Palo Alto WPCP Sunnyvale WPCP
Legend
IPR/DPR Purified Water Pipeline
Mid-Basin Injection Wells IPR - 5,600 AFY
Future Wolfe Road Pipeline
Existing Recycled Water Pipeline
District Raw Water Pipeline
Expanded SVAWPC
Water Pollution Control Plant
Water Treatment Plant
Pump Station
DPR to Central
Pipeline -5,000 AFY
Sunnyvale yIPR
Westside Injection
Wells IPR
Los Gatos Recharge Ponds IPR - 20,200 AFY
Ford Recharge Pond
IPR – 4,200 AFY
Attachment 1Page 8 of 28
Expedited Purified Water Program StrategiesAdministrative
StrategicPlanning
Operations & Capital Program
Board Support & Outreach
Administrative and Financial Management
1. Complete & 5. Deliver projects 8. Support Board 11. Develop and 1. Complete & Implement Master Plans
5. Deliver projects in CIP
8. Support Board engagement in policy & governance
11. Develop and implement financing plan
2 Promote & 6 Expedite purified 9 Build community 12 Develop District 2. Promote & conduct research to support potable reuse
6. Expedite purified water expansion program (Public Track)
9. Build community & stakeholdersupport for potable reuse
12. Develop District workforce to support expanded program
3. Integrate withgroundwatermanagement
7. Develop public-private-partnershipfor the Program
10. Promote legislation and regulations to
(P3 Track) advance potable reuse
4. Develop partnership
Attachment 1Page 10 of 28
partnership strategy for countywide system
Dual Track - Financial Overview
Public Delivery MethodDistrict pro ides capital rates & chargesDistrict provides capital – rates & charges
Debt issuance
Pay as You GoPay-as-You-Go
P3 Delivery MethodPrivate partner provides capital
Project financing
District repays thru rates & charges
Hybrid Approaches
Attachment 1Page 12 of 28
P3 Project Finance
Lender
Non-Recourse Debt
Corporate Sponsor
Single-Purpose
Entity (SPE)The District
P3Agreement
C
EPC Contract
EPC Contractor
Attachment 1Page 13 of 28
P3 Project Finance – Capitalization
Lender
Loan Proceeds
Corporate Sponsor
Single-Purpose
Entity (SPE)The District
EquityContribution
C
Construction Costs
EPC Contractor
Attachment 1Page 14 of 28
P3 Project Finance – Repayment
Lender
Debt Service
Corporate Sponsor
Single-Purpose
Entity (SPE)The District
EquityReturn
P3 Agmt.Payments
O&M
Operator
Attachment 1Page 15 of 28
P3 Legal and Financial Threshold Issues
Private activity issues for tax-exempt debt under IRS regulationsIRS regulations
Mitigated by: Qualified Management Contract; federal legislative remedies; and IRS private letter ruling
Availability of tax-exempt financing
legal issues with procurement/public contractinglegal issues with procurement/public contracting
Availability of grants/low-interest loans
I t l/ t l t k h ld i t tInternal/external stakeholder interests
Attachment 1Page 16 of 28
P3 RFQ/RFP Framework
Managed in parallel with DB
Shortlist min three P3s to deliver all or parts of the Shortlist min. three P3s to deliver all or parts of the Program
Q i i 3 i i l h RFQ criteria: P3 experience; capital strength; responsiveness; client references; etc.
RFP criteria: proposed approach; allocation of risk; pricing; terms & conditions; compliance with District’s requirements; SBE
Stipend may be offered to encourage participation
Attachment 1Page 17 of 28
P3 & DB RFQ/RFP Target Schedule
Calendar Year 2015 2016
Sep- Jan – Apr – Jul – Oct –pDec Mar
pJun Sep Dec
Technical Studies (Prelim. Eng.; Operations; Groundwater; Brine)
1. Publish RFQ
2. Evaluate & select P3/DB Teams
3. Pre-proposal conf. /technical updates4 Publish RFP4. Publish RFP
5. Evaluate Proposals
6. Board decision: P3 or DB
Attachment 1Page 19 of 28
Project Management Contract
Project management services RFQ published on 6/18/15
Five Statements of Qualification receivedFive Statements of Qualification received
HDR ranked highest
Contract not to exceed $2.4 million
Task DescriptionTarget
ScheduleSchedule
1 Fast-Start Activities Dec. 2015
2 Core Project Management Activities Mar. 2017
3 E l V l E i i M 20163 Early Value-Engineering Mar. 2016
4 Environmental/Permit Planning Mar. 20175 Assistance with Public-Private Partnership
M 201
Attachment 1Page 21 of 28
Mar. 20176 Support Workforce Development Mar. 20177 Supplemental Services Mar. 2017
Environmental Review and Permitting Services
CEQA exemption available for certain
recycled water elements
CEQA consultant selection process
initiatedinitiated
Pursuing federal legislation for NEPA g g
exemption
Attachment 1Page 24 of 28
Budget Reallocation/Adjustment
Board approved $16.5M for the Indirect
Potable Reuse Projects – Planning (IPR) in FY
2016 Budgetg
Reallocating $1.3M to the SVAWPC
Expansion Project for FY 2016
No change to FY 2016 Program costNo change to FY 2016 Program cost
Attachment 1Page 26 of 28
Summary
Urgency in expediting Program due to ongoing
d h i k f b id d i drought, risk of subsidence and impacts to
infrastructure and economy of county
Approval of staff Recommendations B and D
will allow Program work to continuewill allow Program work to continue.
Attachment 1Page 28 of 28