REPORT TO THE CITY COUNCIL June 11, 2015 FROM: THOMAS C. ESQUEDA, Director Department of Public Utilities THROUGH: MICHAEL CARBAJAL, Division Manager Department of Public Utilities - Water Division BY: ANITA A. LUERA, Senior Engineering Technician Department of Public Utilities - Water Division SUBJECT ..Title Actions pertaining to drilling a new water production well at Pump Station 303A (PS 303A) located at 6780 N. Lafayette Avenue (Bid File 3389) (County island within Council District 2): 1. Adopt a Mitigated Negative Declaration pursuant to Environmental Assessment C-14-110, State Clearinghouse No. 014111021 2. Award a Contract to Zim Industries, Inc., in the amount of $760,259 to drill a new water production well at PS 303A 3. Authorize the Director of Public Utilities, or their designee, to sign all documents on behalf of the City of Fresno ..Body RECOMMENDATIONS Staff recommends that the City Council adopt a Mitigated Negative Declaration pursuant to Environmental Assessment C-14-110, State Clearinghouse No.01411021; award a Contract in the amount of $760,259 to Zim Industries, Inc.; and authorize the Director of Public Utilities or their designee to sign all documents on behalf of the City of Fresno. EXECUTIVE SUMMARY The Department of Public Utilities, Water Division, solicited Contractor services to perform the drilling and development of a new water production well at PS 303A. Zim Industries, Inc. was found to be the lowest responsive and responsible bidder with a bid in the amount of $760,259. The proposed replacement well is essential in ensuring appropriate levels of service are maintained in the surrounding area. BACKGROUND The Water Division maintains a network consisting of more than 260 municipal water supply wells that provide 88% of the City's potable water. The construction of new wells for this network is required to meet increased demands, replace wells that have reached the end of their useful life, or to assist in remediating water quality issues. The proposed well at PS 303A is necessary to offset lost production resulting from the recent and future destruction of multiple outdated wells in the area. The property for this project was previously acquired. Following completion of the proposed water production well, site improvements will be required to tie the new well to the water supply network and bring the pump station to an operational state. These site improvements will comply with the requirements of the associated Conditional Use Permit and will be completed under a separate contract. In order to construct the proposed new well, the Water Division solicited Contractor services through the bidding process. A notice inviting bids was published in the Business Journal and posted on the City of Fresno website on April 6, 2015. Project plans and specifications were distributed to four prospective bidders. One sealed bid proposal was received and unsealed in a public opening on April 21, 2015. Zim Industries, Inc., submitted a bid price in the amount of $760,259 and is the lowest responsive and responsible bidder. The Staff Determination of Award was posted on the City of Fresno website on May 6, 2015. The price submitted is 17% above the Engineer's Estimate of $650,000. ENVIRONMENTAL FINDINGS Staff prepared Environmental Assessment C-14-110 for this project in accordance with the requirements of the California Environmental Quality Act (CEQA) Guidelines. The Initial Study resulted in staff concluding that a finding of Mitigated Negative Declaration (MND) was appropriate. The proposed project has been determined to not be fully within the scope of Master Environmental Impact Report (MEIR) SCH 2012111015 prepared for the Fresno General Plan. With all applicable mitigation measures of the MEIR applied to the project, together with project specific mitigation measures, impacts have been reduced to less than significant, and the project will not cause significant adverse cumulative impacts, growth inducing impacts and irreversible significant effects beyond those identified by MEIR. No substantial changes have occurred with respect to the circumstances under which the MEIR was certified and no new information, which was not known and could not have been known at the time that the MEIR was certified as complete, has become available. Therefore, based on the attached Environmental Assessment and the list of identified mitigation measures, staff recommends that Council find the project will not have a significant impact on the environment and that the filing of a MND is appropriate in accordance with the provisions of CEQA Section 21157.6(b)(1) and CEQA Guidelines Section 15178(b)(1) and (2). A Notice of Intent to Adopt the Mitigated Negative Declaration was noticed and published on May 1, 2015, as required by CEQA with no comments received within the 20 day comment period. LOCAL PREFERENCE Local Preference was not used because only one bid was received. FISCAL IMPACT The project, which is located in a County island within Council District 2, will not have any impact to the General Fund. Funds for the construction of PS 303A are included in Water Division's FY 2015 Capital Improvement Program budget within the Water Enterprise Fund (40101). The construction of replacement water wells was included in the water rate model used to create the five-year utility rate plan and subsequently adopted by City Council on February 26, 2015. No additional funding is required for this project. Attachments: Evaluation of Bid Proposals Fiscal Impact Statement Environmental Assessment C-14-110