DOMESTIC WATER POLICY COMMITTEE MODESTO IRRIGATION DISTRICT 1231 Eleventh Street, Modesto, California October 1, :30 a.m.

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1 Dave Cogdill, Chairman, City of Modesto John Mensinger, Vice-Chairman, MID Bill Zoslocki, Councilmember, City of Modesto Nick Blom, Board Member, MID DOMESTIC WATER POLICY COMMITTEE MODESTO IRRIGATION DISTRICT 1231 Eleventh Street, Modesto, California October 1, :30 a.m. AGENDA ITEMS THE PUBLIC IS INVITED TO COMMENT ON ANY ITEM, WHICH IS LISTED ON THE AGENDA AT THE TIME THAT ITEM IS BEING DISCUSSED. ANY PERSON WISHING TO ADDRESS THE COMMITTEE WILL BE LIMITED TO 5 MINUTES UNLESS PRIOR ARRANGEMENTS HAVE BEEN MADE OR UPON THE CONSENT OF THE COMMITTEE CHAIR. Item No. Tab No. 1. CALL TO ORDER 2. ROLL CALL 3. PUBLIC COMMENT APPROVE MEETING MINUTES August 11, 2015 and September 3, PAT RYAN DOMESTIC WATER PROJECT UPDATE PAT RYAN WATER YEAR ALLOCATION AND DELIVERIES TO THE CITY CHRIS DAVENPORT GREG DIAS MODESTO REGIONAL WATER TREATMENT PLANT PHASE TWO EXPANSION REPAIR PROJECT UPDATE Western Summit Constructors, Inc.: Phase 2 Expansion RAM Mechanical CHRIS DAVENPORT GREG DIAS CONCUR TO: Increase the budget to complete the modifications to the Membrane Plant s Ozone and Chemical feed systems from the previously authorized not to exceed amount of $520,000 to $750,000. Use RAM Mechanical (RAM) to complete modifications to the clean in place (CIP) chemical feed facilities and fund their work with project funds Authorize Project Staff to make the final determination of the cost split between WSCI and RAM to complete the work. 9. PROPOSED FUTURE POLICY COMMITTEE MEETINGS 10. ADJOURNMENT November 5, 2015, MID BOARD ROOM 8:30 A.M. 9:30 A.M. December 10, 2015, MID BOARD ROOM 8:30 A.M. 9:30 A.M.

2 Tab No. 1 Present: Absent: John Mensinger, Vice-Chairman, MID Bill Zoslocki, Councilmember, City of Modesto Nick Blom, Board Member, MID Dave Cogdill, Chairman, City of Modesto Item No. DRAFT DOMESTIC WATER POLICY/TECHNICAL COMMITTEE Meeting Minutes August 11, Call to Order Vice Chairman Mensinger called the meeting to order 2. Roll Call Roll call was taken. Chairman Cogdill was absent. A quorum was present. 3. Public Comment None 4. Approve Meeting Minutes May 14, 2015 and June 22, 2015 Councilmember Zoslocki moved to approve the minutes for the May 14, 2015 and June 22, 2015 meetings. Board Member Blom seconded the motion. It was approved unanimously. 5. Domestic Water Project Update (Pat Ryan) We are getting close to submitting the 2016 Domestic Water Budget. There is a MID budget workshop on August 25 th and shortly thereafter we will be taking the budget to the Committees and then to the Board for approval. We got nearly through the 21-day test and operations staff had time to look over the shoulder of Carollo and Evoqua while they ran the Membrane Plant and then run the Membrane Plant themselves. Due to the delay of start up at the Plant, staff has been able to work on record keeping and standard operation procedures for the Membrane Plant that might not have been able to get done in the detailed way that it will. They understand the new facilities well from having run them and are working with the MID IT Department to create databases to collect all of the data they will need to record Water Year Allocation and Deliveries to the City (Pat Ryan) We are tracking with where we thought that we should be. By design, we are tracking quite a bit ahead of schedule compared to a uniform monthly draw throughout the water year. We are producing between 13mgd on a low water day to 18mgd on a high day at the City s request in order to keep up with their production needs. In another months, we will

3 Tab No. 1 begin multiple day shut downs. We will coordinate with the City staff so that we can minimize the impact on the water delivery system as much as possible. 7. Modesto Regional Water Treatment Plant Phase Two Expansion Repair Project Update (Chris Davenport, and Greg Dias) Greg stated that this meeting is intended to be a joint action meeting for both the Technical Committee and Policy Committee. We are conducting the meeting in this way so that we can save the public dollars as cost can incur quickly on the project for every day that goes by without authorization of the work being considered at this meeting. WSCI will be done with their scope of work next week and then the project will own the cost of any delay which can cost roughly $5,000 per day. Rather than wait and address the Technical Committee first and then schedule the Policy Committee afterwards, we thought it best to combine the two meetings. Chris reported that during the week of 7/27/15, Carollo brought in experts from both the ozone and chemical side to conduct field investigations and to write reports on their findings. Their reports are separated into two categories: 1) things that need to be done in order to get to safely complete the 7-day test and get the Plant in to commercial operation and 2) things that they recommend that the District seriously consider doing to enhance long term operations. We received their reports on 8/3/15 and have been reviewing their recommendations. There were four items on the critical path delaying the start of the 7-day test. Two of them were WSCI items, the 4-24 inch valves and the filtrate turbidity meters. WSCI just recently completed replacing the four valves. The new ones have been tested and verified that they seal. WSCI received the replacement turbidity meters earlier this week and their plan is to install and calibrate them by the end of the week. Greg informed the committee that he is recommending that a 10% contingency be added to the dollar amounts for action items 8 and 9. He stated that even with the contingency added, the committed/allocated project funds are close to $9 million, but do not exceed it. He is recommending the contingency because of the additional unknowns that go with a design-build style of work instead of a design-bid-build style and the high cost of delays should additional authorizations become necessary. Greg also noted that there are other credits that will be coming back to the Project that will help keep costs below the shortfall amount such as the Auburn Shared Savings Plan and the amounts left in the contracts that we don t expect to spend. Also, according to the ARTDA, once the project goes into commercial operations, which is right after the 7-day test, the funding source shifts from the project s construction budget into the WTP O&M budget. In regards to action item #9, the amount that is listed ($500,000), which is proposed to be amended to add the 10% contingency, represents significant discussions and negotiations with WSCI. As stated in their contract, WSCI is able to charge additional home office costs (up to $2,700 a day) should we have a delay. Chris has been able to obtain a verbal agreement stating that WSCI will not charge those extra costs if we can complete the extra work and get back to the 7-day test by early October. Chris expects to have that agreement memorialized shortly so that we are able to have a written record of it.

4 Tab No Concur To Formalize A Contract Increase With Carollo Engineers In An Amount Of $400,000 To Provide Engineering Services On The MRWTP Phase 2 Expansion This item was presented at the Technical Committee (TC) Meeting held on 7/29/15. It is being reconsidered because it is for a different amount than what the TC recommended at that time. Carollo/Covello s remaining contract value in January of 2013 was $5.5 million. At that time, the project team updated the overall project budget increasing Carollo s budget amount to $5.9 million. However, at that time Carollo was confident that they would be able to complete the project within the original contract amount and so no formal budget increase was done. Now, due to issues such as the membrane delivery delay and the additional programming for the Chem/Ozone modifications, Carollo requests a formal increase in their budget to $5.9 million. This does not negatively affect the projected overall Phase 2 Expansion budget since this amount had already been accounted for. Pat Ryan and William Wong approved this item on behalf of the Technical Committee. Vice- Chairman Mensinger called for a motion to concur. Council Member Zoslocki moved to approve the item. Board Member Blom seconded the motion. The motion passed unanimously. 9. Concur To Establish An Allowance Item With Western Summit Construction Inc. (WSCI) In The Amount Of $500,000 To Cover The Work Required To Implement The Recommendation Of Items That Must Be Done Before Moving On To The 7-Day Demonstration Test As Listed In Carollo s Chemical And Ozone Audits There are 3 components to this item: 1) changes to the chemical system ($220,000) 2) changes to the ozone system ($130,000) and 3) components of delay which includes the temporary pump station that we have on-site and also the site overhead ($150,000). Pat states that the items that are being considered today are required safety items and that the facility cannot be run without them. Pat Ryan and William Wong approved this item on behalf of the Technical Committee. Vice- Chairman Mensinger called for a motion to concur. Board Member Blom moved to approve the item. Council Member Zoslocki seconded the motion. The motion passed unanimously. 10. Proposed Future Policy Committee Meetings September 3, 2015 at 8:30 a.m. October 1, 2015 at 8:30 a.m. - Vice Chairman Mensinger stated that he will not be able to attend this meeting. 11. Adjournment Meeting adjourned at approximately 9:15 a.m.

5 Tab No. 1 Present: Absent: John Mensinger, Vice-Chairman, MID Bill Zoslocki, Councilmember, City of Modesto Nick Blom, Board Member, MID Dave Cogdill, Chairman, City of Modesto Item No. DRAFT DOMESTIC WATER POLICY COMMITTEE Meeting Minutes September 3, Call to Order Vice Chairman Mensinger called the meeting to order 2. Roll Call Roll call was taken. Chairman Cogdill was absent. A quorum was present. 3. Public Comment None 4. Approve Meeting Minutes July 16, 2015 Vice-Chairman Mensinger called for a motion to approve the minutes for the July 16, 2015 meeting. Councilmember Zoslocki moved to approve. Board Member Blom seconded the motion. It was approved unanimously. 5. Domestic Water Project Update (Pat Ryan) We have two pumps out at the MRWTP that have needed to be repaired. They currently work, but are unreliable because they continue to shut themselves down. We are considering abandoning the pumps as they do not hold enough value to justify the cost and labor-hours associated with replacing or repairing them. It would cost approximately $370,000 to replace them and require roughly 200 labor-hours to complete the repair. We were going to see how the bypass operates without the pumps and make our final decision once those results have come in, but due to various reasons, including the drought, we have not been able to run the bypass as much as we would like. What to do with these pumps will be a discussion item at the next Technical Committee meeting Water Year Allocation and Deliveries to the City (Pat Ryan) By design, we are tracking about 30 days ahead of schedule. Within the next few weeks to a month, the City will want to start a series of shut downs. The goal is to end up right on target at the end of the Water Allocation year.

6 Tab No Modesto Regional Water Treatment Plant Phase Two Expansion Repair Project Update (Chris Davenport and Greg Dias) Greg stated that we are officially closing two contracts: K.G. Walters and Manito Construction. Closing these contracts means that a significant portion of the project risk has been resolved. By closing these contracts, it is essentially taking funds from what we had allocated as risk money and moving it back into the $9 million shortfall so that we are able to use the money towards the remaining risks in the project such as WSCI s work as well as other work should it become necessary. On September 22 nd, we will be bringing these action items (closing of the contracts) to the MID Board for approval. Chris gave a brief update on the project status. He stated that as of last month, WSCI had roughly $48,000 left in contractual work which will be the start-up. He stated that in regards to the chemical and ozone work to be done, there are 14 chemical items and 9 ozone related items to be completed before we can get back to the 7-day test. One big item left is the re-piping at the neutralization basin which is where the sulfuric acid leak was. This area is being completely reconfigured to reduce/eliminate the potential of a leak happening again. Our goal is to be able to return to the 7-day testing on October 5 th. 8. Concur To Recommend That The MID Board Formally Accept The Work For The Terminal Reservoir Valve Replacement And Bypass Project In The Construction Contract with K.G. Walters ( KGW ) And Record A Notice Of Completion Within 15 Days Following Such Action. (Presented By Chris Davenport) Chris stated that this is a procedural action that the MID Board needs to take so that we are able to record the notice of completion with the county 35 days after which no more stop notices can be filed, and we are able to release the remaining funds and formally close out this contract. Vice-Chairman Mensinger called for a motion to concur. Council Member Zoslocki moved to approve. Board Member Blom seconded the motion. The action passed unanimously. 9. Concur to Reduce the Amount of KGW s Project Retention Amount That MID Is Withholding from $127, to $63, (Presented by Chris Davenport) The contract has a provision that allows us to reduce the retention by 50% while the contract is being closed. MID is currently holding $127,000 and, therefore, would still hold approximately $65,000 should any stop notices be filed. Vice-Chairman Mensinger called for a motion to concur. Board Member Blom moved for approval. Council Member Zoslocki seconded the motion. The action passed unanimously. 10. Concur To Recommend That The MID Board Formally Accept The Repair Work For The Expansion Plant Project Included In The Construction Contract With Manito Construction, Inc. ( Manito ) And Record A Notice Of Completion Within 15 Days Following Such Action. (Presented by Chris Davenport) Manito was the first contractor brought on to repair the deficiency work. They completed the roof to wall connection and the lower-west wall plus some smaller items throughout the Plant that needed to be repaired due to deficiency.

7 Tab No. 1 Vice-Chairman Mensinger called for a motion to concur. Council Member Zoslocki moved to approve. Board Member Blom seconded the motion. The action passed unanimously. 11. Concur To Amend The Construction Contract With Auburn Constructors, Inc., ( Auburn ) By Issuing A Change Order For An Amount Not To Exceed $270,000 To: 1) Adjust the dollar limits of allowances items to reflect as built effort, 2) Various field modifications change order, 3) Execute the cost sharing contract provision of the project prior to final completion, and 4) Reduce the project retention from $469,679 to $25,000. (Presented by Chris Davenport) This contract originally contained 6 allowance items, but we raised that to 8 throughout the course of the project. Two of the allowance items went over the allocated budget and Auburn submitted reimbursement requests. The first item was for site supervision (due to the project being pushed out longer due to various challenges that were discovered) and the painting the filter basins (approved through Construction Change Order #2). The second item was for various changes associated with the Floc-Sed unit as well as smaller items such as installing a concrete curb. With the exception of removing the temporary isolation bulkhead, all of the contract work is completed. The contract currently has a provision that splits the remaining funds 60/40 (60% for the project and 40% for the contractor), but this savings plan cannot be executed until the project is officially accepted. Those funds would essentially become unallocated additional funds and be put back into the project. Closing the contract also means that Auburn cannot spend anything toward the project unless it s for the temporary isolation bulkhead. Also, it would reduce the retention held from the current level of $467,000 to $25,000. Vice-Chairman Mensinger called for a motion to concur. Council Member Zoslocki moved to approve. Board Member Blom seconded the motion. The action passed unanimously. 12. Proposed Future Policy Committee Meetings October 1, 2015 at 8:30 a.m. - Vice Chairman Mensinger stated that he will not be able to attend this meeting. November 5, 2015 at 8:30 a.m. 13. Adjournment Meeting adjourned at approximately 8:56 a.m.

8 Tab No Accumulative Water Production Versus Monthly Target A c 8000 F t 6000 Total Production Target Production Month

9 MRWTP EXPANSION PROJECT UPDATE DOMESTIC WATER POLICY COMMITTEE October 1,

10 MRWTP Phase 2 Expansion Project Contractor Western Summit Constructors, Inc. (WSCI) Work Defective Work Corrections Chemical and Ozone System Modifications Complete Testing, Start-up, Training and Commissioning 2

11 Construction Contract Cost Status Western Summit Construction, Inc. (WSCI) Original Contract Amount - $ 57,333, Adjusted Amount per Settlement - $ 56,172, Change Orders and 2 Field Orders (post settlement) - $661, Current Contract Amount - $ 56,834, Payments thru August $ 55,889, Held in Retention ($716,495.51) Balance to Finish - $944,

12 Work Completed Last Month: Chemical and Ozone System Modifications: 6 Ozone System Design Modification Packages 7 Chemical System Design Modification Packages On target to meet goal of completing work by October 2,

13 5 Upcoming Work Schedule: October: 7-day Commissioning Test Start 10/5/15 Trouble Shooting Substantial Completion Commercial Operations Punch List Work Trailer Demobilization November: Project Close-out

14 Ozone System Modifications 6

15 New Vent Out of Building Air Relief Old Vent into Building 7

16 Ozone Modifications Inside the 60-inch FLT Eyebrow 2-inch Vent 8

17 2-inch Vent Pipe 9

18 New Level Instrument Outlet 10

19 New Ozone Exterior Alarm Beacon 11

20 Chemical System Modifications 12

21 Protection Railing to Protect from Vehicles 13 Neutralization Basins Chemical Lines

22 CIP Room New Splash Curtains New Sulfuric Acid Containment Bumpers to Protect Air Line from Forklift 14

23 Old CPVC 10-inch CIP Manifold 15

24 New Alloy 20 S.S. 10-inch CIP Manifold 16

25 RAM Mechanical Site Setup 17

26 Old Chemical Hose Connections in Chemical Vaults 18

27 Phase 2 Expansion Hoses Removed from Chemical Duct-banks 19

28 New HDPE Chemical Tubing 20

29 New Chemical Tubing Connections in Chemical Vault 21

30 Exterior Chemical Injection Point 22 CPVC Sulfuric Piping

31 Alloy 20 S.S Piping 23

32 New CPVC Neutralization Piping Analyzers Only 24

33 New Chemical Injectors Directly Into the Neutralization Basins 25

34 Example of RAM Welding Quality 26

35 MRWTP Phase 2 Expansion Project Completion Budget Update (Actual Partial Costs Through May 2015) Current Estimate of Costs to Complete to Full Capacity - $23,632,686 Available Funds (Project + Settlement + Escrow) - $23,929,975 Current Projected Surplus $306,389* 27 * Amount remaining of the City funded $9 million

36 Expansion Projects Questions? 28

37 POLICY COMMITTEE AGENDA REPORT Meeting Date: October 1, 2015 Tab No: 4 Subject: Recommended Action: Background and Discussion: Modesto Regional Water Treatment Plant ( MRWTP ) Phase Two Expansion Project Chemical and Ozone Systems Modifications Concur to: 1. Increase the budget to complete the modifications to the Membrane Plant s Ozone and Chemical feed systems from the previously authorized not to exceed amount of $520,000 to $750, Use RAM Mechanical (RAM) to complete modifications to the clean in place (CIP) chemical feed facilities and fund their work with project funds. 3. Authorize Project Staff to make the final determination of the cost split between WSCI and RAM to complete the work. On May 22, 2007, the MID Board of Directors and Modesto City Council approved contract documents and awarded the construction contract to WSCI for the construction of the MRWTP Phase Two Expansion Project, for $57,333,902. The Board of Directors authorized an additional change order authority to the General Manager of up to eight (8) percent of the construction Contract amount; provided that such change orders have been approved through the process described in the Amended and Restated Treatment and Delivery Agreement with the City of Modesto. The Technical and Policy Committees approved issuing Western Summit Constructors, Inc. (WSCI) a field order in a not-to-exceed amount of $500,000 to modify the new Membrane Plant Ozone and Chemical systems during a joint meeting held on August 11, This amount combined with the initial authorization of $20,000 reflects the current authorization of $520k. Since then, Carollo Engineer s has issued over 10 design clarifications detailing the required and necessary system modifications. The project team s goal is to have those modifications completed by the end of September 2015 so that the 7-day demonstration test can be started by October 5, 2015 which would minimize project delay costs averaging approximately $5,000/day. WSCI started working on the modifications immediately following the previous approvals. After a few weeks of working on the modifications it became apparent to WSCI and the rest of the project team that WSCI needed additional labor and resources to complete the work by the end of September However, WSCI currently does not have a labor force in the state of California and so it has been using forces from its parent company, Kiewit and where possible, other local subcontractors. WSCI notified the project team at the September 2, 2015 weekly progress meeting that they were have difficulty securing additional work crews and thus RAM Mechanical, MID s on-call contractor, was discussed as an alternative source to provide the necessary labor and resources. It was also discussed whether a contract for RAM s labor and resources could be with MID instead of WSCI. WSCI s Project Manager noted that it would take a minimum of 2 weeks to execute a subcontract with RAM, which could unnecessarily delay the project, and it could divert the attention of the site supervision staff away from the field work. WSCI agreed that it would handle coordination and communication among the field crews, including RAM, and monitor progress but determined that it could not subcontract with RAM. Project Staff agreed 1

38 POLICY COMMITTEE AGENDA REPORT that MID should contract with RAM for the most expedient course of action that had the highest probability of completing the Ozone and Chemical modification work by the end of September 2015, and minimize Project costs. WSCI made the initial contact with RAM the afternoon of September 2, 2015; RAM confirmed that they have available mechanical labor. After discussing this further WSCI recommended that RAM mobilize and work on two specific items of extra work; Carollo Packages 94.Chemical.5a Neutralization Basin and CIP Room Piping Mods and 94.Chemical.6 Chemical Duct bank Hose Replacements. RAM is performing this work on a time and materials basis and the funding will come from the Project by reducing the amount of WSCI s field order authorization, plus additional project funds. WSCI has agreed to this approach. This item was originally presented to the Technical Committee at its September 15, 2015 meeting, which concurred with using RAM to complete some of the extra work and to reduce WSCI s authorization by $200,000, and use those project funds to pay for RAM s work. Since the Technical Committee item was approved it has become apparent that the costs for WSCI and RAM to complete all of the Ozone and Chemical System modifications will exceed the original $520,000 authorization. Based on costs to date and projected costs (based on current crew size and schedule) to finish, the updated estimate is $750,000. The exact split between WSCI and RAM will not be known until the completion of the work but is roughly estimated at 60% WSCI and 40% RAM. Because the final cost split is difficult to calculate at this time, Project Staff is asking for the authority to determine the final split within the overall authorized budget. RAM s contract was authorized through MID s internal Purchase Order process and a purchase order has been issued. Alternatives, Pros and Cons of Each Alternative: Because these items of work are both safety issues, there is no alternative to implementing the repairs recommended by Carollo. Concurrence: The Technical Committee is anticipated to address this matter prior to the October 1, 2015 Policy Committee meeting. The Carollo Group and MID staff recommend the proposed actions included in this report. Fiscal Impact: WSCI s original contract value was $57,333, After making the adjustments per the settlement agreement the revised contract value is $56,175, To date, the current executed/authorized change and field order total is $646,587 for a revised contract value of $56,821, The action under this item does not change the current fiscal impact of WSCI s contract. The final value will be determined at the completion of the work and will be memorialized by closing out the field order through a change order. RAM s initial contract amount authorized by Purchase Order was $200,000. The final value of the purchase order will be based on the submitted and agreed to time and material data. The final value when added with WSCI s costs shall not exceed $750,000 without additional authorization. These contract changes will not exceed the amount of funds currently available within 2

39 POLICY COMMITTEE AGENDA REPORT the Project s target shortfall budget of $9,000,000 and thus funding is available for this work. Recommendation: Attachments: Concur to: 1. Increase the budget to complete the modifications to the Membrane Plant s Ozone and Chemical feed systems from the previously authorized not to exceed amount of $520,000 to $750, Use RAM Mechanical (RAM) to complete modifications to the clean in place (CIP) chemical feed facilities and fund their work with project funds. 3. Authorize Project Staff to make the final determination of the cost split between WSCI and RAM to complete the work. Supporting documents attached: Presentation Other supporting docs None attached 3