REPORT TO THE CITY COUNCIL February 4, 2021 FROM: MICHAEL CARBAJAL, Director Department of Public Utilities THROUGH: BROCK D. BUCHE, PE, PLS, Assistant Director - UP&E Department of Public Utilities - Utilities Planning & Engineering BY: MATTHEW L. BULLIS, Professional Engineer Department of Public Utilities - Utilities Planning & Engineering SUBJECT ..Title Actions pertaining to the accepting additional Groundwater Sustainability Grant funds from the State of California for removal of Perchloroethylene from Groundwater and construction of water well improvements at pump stations PS 117 and PS 284 (Bid File 3775) (Council District 2 and County Island within): 1. Amend the Funding Agreement with the State Water Resources Control Board Groundwater Sustainability Grant to increase funds from $2,254,040 to $4,095,937; 2. Approve a Fifth Amendment to Agreement with Provost & Pritchard Consulting Group, Inc., to extend the term of the Agreement from December 31, 2020 to December 31, 2021; 3. Award a construction contract to Steve Dovali Construction, Inc., in the amount of $3,948,242.25. ..Body RECOMMENDATIONS Staff recommends that City Council amend the Funding Agreement with the State Water Resources Control Board (Board) Groundwater Sustainability Grant (Grant) to increase the funding amount from $2,254,040 to $4,095,937(Project) (Amendment 1); approve a Fifth Amendment to Agreement with Provost & Pritchard Consulting Group, Inc., (Provost), to extend the term of the Agreement from December 31, 2020 to December 31, 2021 for professional engineering services for the design of plans and general construction contract documents for the Project; award a construction contract with Steve Dovali Construction in the amount of $3,948,242.25; and authorize the Director of Public Utilities, or designee, to sign all documents on behalf of the City of Fresno (City). City Council on January 17, 2019 made an adoption of findings of Class 1, Class 3, and Class 32 Categorical Exemptions pursuant to Sections 15301, 15303, and 15332 of the California Environmental Quality Act (CEQA) Guidelines for the construction of wellhead treatment improvements for water well Pump Stations PS 117 and PS 284 (Project). EXECUTIVE SUMMARY On April 10, 2019, the City was awarded a Grant in the amount of $2,254,040 by the Board to fund construction of a groundwater treatment system for the Project. Once designed and advertised, submitted construction bids were 86% higher than the engineer's estimate and the bids were rejected by City Council on August 20, 2020. The Project was redesigned and includes a revised Engineer's Estimate. The City requested and was granted additional funds through the Board, which increased Project funding from $2,254,040 to $4,095,937. The Project was re-bid with one contractor responding (Steve Dovali Construction). The bid amount of $3,948,242.25 is 1.5% below the Engineer's Estimate and below the Grant funding limits. City Council approval of Amendment 1 to the Project Grant funding, extension of engineering (Provost) services during construction and award of construction contract (Steve Dovali Construction) will enable the Project to move forward in removing the contaminant Perchloroethylene (PCE) from groundwater within the influence areas of PS 117 and PS 284. BACKGROUND The Department of Public Utilities, Water Division, maintains a network of approximately 260 municipal water supply wells that provide potable water to the City. Two City wells, PS 117 and PS 284 have shown elevated levels of PCE that exceed State drinking water standards. PCE is a colorless liquid solvent widely used for dry cleaning operations in the 1950's and 1960's, and due to poor disposal practices, has migrated to groundwater. This Project procures design and feasibility studies from Provost with subsequent construction of a connective pipeline between the well sites to accommodate installation of a common well head treatment facility at PS 117 to treat water from both PS 117 and PS 284. On June 7, 2016, the City hired Provost to provide the design and general construction documents for Pump Stations 117 and 284 Wellhead Treatment Improvements for a total fee of $262,473. On May 18, 2017, the City submitted an application to the Board for a Grant which provides funding for programs associated with groundwater treatment. This program makes $86 million available to develop and implement sustainable groundwater planning projects of which groundwater impacted with PCE qualifies for Grant funds. On July 21, 2017, the City and Provost entered into a First Amendment to Agreement increasing the original contract amount by $65,946 for a total fee of $328,419. This Amendment modified design parameters to accommodate two different types of low profile air stripper treatment systems in order to properly evaluate and compare said systems for use in future similar treatment projects. On December 8, 2017, the City and Provost entered into a Second Amendment to Agreement to extend the term of the Agreement without additional compensation to October 31, 2018, to complete the Project. On April 10, 2019, the City was awarded a Grant of $2,254,040 from the Board. Grant funding offset costs associated with engineering design, groundwater feasibility studies, and to fund construction costs. The City and Provost entered into a Third Amendment to Agreement for $28,500 to include a PCE groundwater study as required by the State to meet Grant requirements. On June 17, 2019, the City and Provost entered into a Fourth Amendment to Agreement to increase the total contract amount by $156,000 for a total fee of $512,919, to include the design of a third air stripper unit at PS 117, increased electrical design at PS 284 and additional project plans and reports. This work increased facility treatment capacity to accommodate the additional water generated at PS 284 and conveyed by pipeline to PS 117. On April 22, 2020, the Department of Public Utilities solicited contractor services through the bidding process. A notice inviting bid was published and plans and specifications were solicited to 30 prospective bidders. On May 12, 2020, three bids were received and publicly opened. The bids were approximately 86% higher than the funded budget amount and engineer's estimate. On August 20, 2020, the City Council rejected all bids and staff proceeded with a review of possible design alterations and scheduled a rebid of the Project for November 10, 2020. Due to the higher nature of the bids the City requested additional Grant funds from by the Board. The Board concurred with the City's request and increased the Project funding. Amendment 1 to the Grant increases the Project funding from $2,254,040 to $4,095,937. Project delays associated with Project redesign, rebidding, and development of Board Project funding Amendment 1, required an additional seven months to complete. The proposed Fifth Amendment with Provost will extend the term of the Agreement to December 31, 2021, without additional compensation to match revised project scheduling and timelines contained within the Amended Grant Agreement. On October 12, 2020, the Project was re-bid. A Notice Inviting Bids was published in the Business Journal and posted on the City's Planet Bids website. Project plans and specifications were distributed to 16 prospective bidders. One bid proposal was received and unsealed in a public opening on November 10, 2020. Steve Dovali Construction, Inc., submitted a bid price in the amount of $3,948,242.25, and was determined to be the lowest responsive and responsible bidder. The Staff Determination of Award was posted on the City's website on November 30, 2020. The price submitted is 1.5% below the Engineer's Estimate of $4,009,470. ENVIRONMENTAL FINDINGS Staff has performed a preliminary environmental assessment of this Project and has determined it falls within the Categorical Exemption for existing facilities set forth in section 15301 of the California Environmental Quality Act (CEQA) Guidelines because this Project will result in adding a wellhead treatment facility and pipeline between existing wells, which entails a negligible expansion of existing uses. It also falls within the Categorical Exemption set forth in section 15303 of the CEQA Guidelines for new construction or conversion of small structures because the footprint of the wellhead treatment facility is approximately 2,400 square feet. Finally, the project falls within the Categorical Exemption for infill development set forth in section 15332 of the CEQA Guidelines because this Project will result in a small structure within an existing urban setting in conformance with the adopted General Plan. Furthermore, none of the exceptions to Categorical Exemptions set forth in the CEQA Guidelines, section 15300.2 apply to this Project. LOCAL PREFERENCE Steve Dovali Construction, Inc. is a local business pursuant to the Fresno Municipal Code Section 4-108 (d). FISCAL IMPACT The Project and the acceptance of additional Proposition 1 Groundwater Grant funding will have no impact to the General Fund. Appropriations totaling $4,129,600 for this Project are included in the Fiscal Year 2021 Revised Adopted budget within the Water Division's Capital Improvement Program PROP 1 PCE Contamination Grant Fund 40209. Additional appropriations will be requested in Fiscal Year 2022 to complete the Project. Total available funding for this Project is $4,551,042 and will be from a combination of the following sources for all eligible costs: 1. $4,095,937 Proposition 1 Groundwater Grant from the Board under the Groundwater Construction/Implementation Perchloroethylene Groundwater Cleanup Project. 2. $455,105 in match funding from the Water Enterprise Fund 40101. Attachments: Attachment 1 - State Proposition 1 Groundwater Grant -Amendment 1 Attachment 2 - Fifth Amendment to Agreement with Provost & Pritchard Engineering Group Attachment 3 - Bid Evaluation Attachment 4 - Sample Contract Attachment 5 - Vicinity Map