HomeMy WebLinkAboutAgenda Report - December 17, 2003 E-14AGENDA ITEM IE"14
CITY OF LODI
COUNCIL COMMUNICATION
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AGENDA TITLE: Adopt Resolution Authorizing the City Manager to Execute a Contract with
Camp Dresser & McKee, Inc., for Value Engineering Services for the
White Slough Water Pollution Control Facility Project and Appropriate up to
.$120,000
MEETING DATE: December 17, 2003
PREPARED BY: Public Works Director
RECOMMENDED ACTION: That the City Council adopt a resolution authorizing the City Manager
to execute a contract with the engineering firm of Camp Dresser &
McKee, Inc., (CDM) from Walnut Creek for value engineering services
on the White Slough Water Pollution Control Facility Project and
appropriate up to $120,000 from the Wastewater Fund.
BACKGROUND INFORMATION: In anticipation of receiving a State Revolving Fund (SRF) loan for
the White Slough project, staff solicited proposals for value
engineering (VE) services. This is a requirement of the SRF
program on projects over $10 million, although it is not an eligible
expense for the loan. VE, in the context of the wastewater industry and state guidelines, is a specialized
cost -control technique applied by an independent team of experienced multidisciplined professionals who
review design documents during their development for proposed wastewater treatment facility
improvements. VE is intended to provide a systematic, functional and creative study of proposed
facilities or modifications to those facilities to identify life cycle cost savings without sacrificing
performance or reliability. The work is done in a fairly intense workshop setting over the course of a
week or so.
Since 1976 under its construction grants program, the United States Environmental Protection Agency
(EPA) has required value engineering studies on wastewater treatment works with estimated construction
costs greater than $10 million. According to the EPA, during a seven-year review period, VE studies
were conducted on 273 EPA construction grant projects with a resulting net capital savings of $401
million. This produced a $15 return for each dollar invested in VE costs and a 5.4 percent net capital
savings on $7.5 billion worth of total project costs. Substantial operating and maintenance savings may
also be realized over the life of the wastewater treatment works. One could compare this to purchasing
"insurance" — you hope you don't need it, but it's there if you do.
Although these "pro" arguments in favor of the VE process are compelling, there are some
disadvantages, particularly in terms of the City's Phase 2 project. The Phase 2 project is mainly the
purchase and installation of specific equipment and is under a very tight schedule. This process would
cause some delay, potentially significant. City staff and our consultant have reservations as to the time
implications and the limited opportunity to find significant cost savings on this phase, given the nature of
the work. As we have described in other reports to the City Council, we have arrived at this stage of the
APPROVED:
Flynn, City Manager
CValueEngineering. dac 12/8/2003
Adopt Resolution Authorizing the City Manager to Execute a Contract with Camp Dresser & McKee, Inc.,
for Value Engineering Services for the White Slough Water Pollution Control Facility Project and
Appropriate up to $120,000
December 17, 2003
Page 2
project after numerous studies and evaluation of alternatives. In a large part, this has led us to the time
crunch we are in now. In addition, unlike some other projects, operations and maintenance staff have
been heavily involved in the planning and design of our project. Ease of operation and maintenance and
reliability are paramount in their minds and the design takes those views into account. In addition, the
City's construction project manager, who has successfully completed major building projects such as
Hutchins Street Square, Lod Station Parking Structure and the Police Building, is on this project. Part of
his work includes a post -bid VE type review with the contractor which often results in change orders
crediting the City. For example, on the Police Building, we have had four VE -type deductive change
orders totaling slightly over $95,000.
We also note that many of the VE advantages described by EPA are based on older experience. The
industry has matured and benefited from this past work and many of the techniques are now standard
practice.
Staff is recommending that we plan to do the VE work at the appropriate time for Phase 3 and work with
the design team and VE team on a modified process and more focused review of the installation plans
and specifications for the Phase 2 work.
Nine requests for proposals were sent to area engineering firms. Three proposals were received.
The work program from the three firms is fairly comparable, given that it is following established
guidelines, and consists of two separate VE sessions for Phases 2 and 3. The total costs were as
follows:
Harris & Associates $ 96,320
Camp, Dresser & McKee, Inc. $115,352
Black & Veatch $146,220
Staff is recommending that the firm of CDM be selected. CDM's team includes specialists from other
firms. Some of these individuals have previously completed projects for the City and did an exemplary
job and are familiar with our facility. These firms, who were also sent RFPs, combined their talents to
present a well-rounded, knowledgeable VE team.
As noted above, the modified process for Phase 2 will require some changes in the work plan and will
result in reduced cost. Staff proposes to review this work plan with the City Manager for final approval.
FUNDING: Wastewater Capital Fund
L, r _
Vicky MCAthie, Finance Director
14a44_� ,
Richard C. Prima, Jr.
Public Works Director
RCP/pmf
CValueEngineering.doc 12/8/2403
NOW, THEREFORE., BE IT RESOLVED that;the Lodi City Council does hereby
authorize the Ci iy Manager toexecute a contract with Oarnp Dresser & McKee, Inc., for
value engineering services for the White Slough Water Pollution Control Facility Project;
and
BE IT FURTHER RESOLVED that the City Council hereby appropriates tip to
$120,000.00 from the Wastewater Fund for this project.
Dated December 17, 200.3..
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I hereby certify that ;Resolution No. 2003-242 was passed and adopted by the
Lodi City Council its a regular meeting hale Dec mb r 17, 2003, by the following vote.
AYES: COUNCIL MEMBERS ® Beckman, Hitchcock; Howard, Land, and
Mayor Hansen
NOES: COUNCIL MEMBERS - None
ABSENT: WUNUL� MEMBERS - None
ABSTAIN. COUNCILMEMPERS - None
SUSAN J. BLAOKSTON
City Clerk
2003-242