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Home My WebLink About#13 Ski Run Tank Replacement Project AGENDA ITEM #13 Public Utility District m MEETING DATE: May 1, 2024 TO: Board of Directors FROM: Neil Kaufman, System Engineer Chad Reed, Water Utility Director SUBJECT: Consider Approval of a Contract with Resource Development Company for the District's Ski Run Tank Replacement Project for an Amount not to Exceed $1,317,600. APPROVED BY: Brian C. Wright, General Manager RECOMMENDATION: Authorize the General Manager to execute a construction contract with Resource Development Company for the District's Ski Run Tank Replacement project in the amount of $1,197,800, plus a ten percent change order allowance of $119,800 for a total authorization not to exceed $1,317,600. BACKGROUND: The District currently operates 34 water storage tanks throughout the water distribution system: • 30 ground level welded steel tanks • Two ground level bolted steel tanks • One partially buried pre-stressed concrete tank • One elevated welded steel tank The tanks range in volume from 100,000 gallons to 1.5 million gallons, with the oldest tank constructed in 1963 and the newest tank constructed in 2021. District staff evaluated adjustments in capital maintenance required to extend the useful life of the inventory of water utility storage tanks during the preparation of the 2020 Water System Capital Improvement Plan update. Through this process, staff determined the need to increase funding allocated to a more comprehensive tank maintenance program, and subsequently adjusted budgets to fund this maintenance. Many of these tanks still use their original interior coating systems, which are approaching 50 years old. The design standards and seismic engineering requirements have also changed significantly, and many tanks do not meet current Page 1 of 4 Page 55 of 215 standards. ANALYSIS AND BODY: In order to efficiently spend these maintenance funds, the need for an outside engineering consultant was identified. Valuable experiences were gained during the Roundhill Tank rehabilitation project. During this project, it was found that the tank infrastructure exhibited more advanced stages of corrosion than originally anticipated, requiring significant change orders to cover additional repairs to address this issue. The additional costs and efforts required to address the advanced stages of metal degradation were approaching the cost of completely replacing the tank. The experience gained in the Roundhill Tank rehabilitation project prompted staff to do a more comprehensive study on rehabilitation versus replacement of existing tanks. In September 2022, the Board of Directors approved a contract with Carollo to conduct engineering evaluations and prepare bid documents for the rehabilitation of the Ski Run and Prosser Lakeview Tanks. During the course of this work, it was determined that the District should not proceed with rehabilitation of the Prosser Lakeview Tank. Detailed inspections revealed that the interior of the tank exhibited advanced stages of metal degradation, exceeding industry standards for rehabilitation. An overall review of water system hydraulics and water storage capacities determined that the water system could function efficiently without the utility of the Prosser Lakeview Tank. Abandonment and demolition of the tank within a 5-7 year time frame is currently planned. Based upon the field inspections, it is believed the Ski Run tank is in better condition than the Prosser Lakeview Tank. However, it should be noted that the Ski Run Tank is experiencing some leakage in the proximity of floor construction and subterranean infrastructure (inlet piping and weld seams). The current configuration of the water system prevents the tank from being removed completely from service to perform a thorough interior inspection. Since the tank cannot be drained for a comprehensive review, the engineers' report denotes some uncertainties regarding the level of rehabilitation required to bring the existing Ski Run Tank to current engineering standards. It should also be noted that the Ski Run Tank was built by the same contractor in the same time frame as the Roundhill tank. For this reason, staff believes similar change orders will be associated with the rehabilitation of Ski Run tank, and that replacement is more fiscally responsible than rehabilitation. A set of bid documents for rehabilitation of the Ski Run tank was prepared, and bidding began in early February 2023. The bid opening was held on March 2, 2023. Five bids were received. The low bid for this work was $395,000. Additional costs would be incurred for inspection and administration of the contract. It was determined that expenditure of $450,000 - $500,000 for rehabilitation of the existing tank would not be advisable, and on staff recommendation, the Board rejected all bids on April 5, 2023. In May 2023, an RFP was issued to secure a consultant to design a new storage tank to replace the existing Ski Run Tank. The consultant would also consider replacing the existing Ski Run pump station, which has been in operation for about 50 years, and is Page 2 of 4 Page 56 of 215 at the end of its useful life. Four proposals were received in response to the RFP. As a result of this RFP process, a contract for design of the new tank was awarded to Sauers Engineering at the August 2, 2023 Board meeting. Construction bid documents were completed in early March 2024, and the District began advertising for bids from construction contractors. The bid opening was held on April 17, 2024. Three responsive bids were received: SUMMARY OF BIDS Bidder Location Bid Amount Responsive Resource Sparks, NV $1,197,800 Yes Development Crosno Arroya Grande, CA $1,408,473.00 Yes Construction Paso Robles Tank Hemet, CA $1,741,700.00 Yes In addition to the construction contract, the District will retain outside consultants to perform construction inspection, environmental services and geotechnical testing for this project. The estimated costs for this work are: • Construction Inspection — CME — Estimated at $25,000 • Environmental Services — Inland Ecosystems — Estimated at $1,000 • Geotechnical Testing — NV5 — Estimated at $10,000 The Board of Directors approved the NV5 contract on December 6, 2023, as part of the annual procurement process. The CME contract was approved by the Board at the February 7, 2024, meeting. GOALS AND OBJECTIVES: District Code 1 .05.020 Objectives: 3. Provide reliable and high quality water supply and distribution system to meet current and future needs. 6. Manage the District in an effective, efficient and fiscally responsible manner. District Code 1 .05.030 Goals: 1. Manage for Financial Stability and Resiliency 4. Take the best of private sector thinking to modernize the utility and add value to our communities. FISCAL IMPACT: The bid price from Resource Development is $1,197,800. It is recommended that a ten percent change order allowance of $119,800 be established, for a total authorization of Page 3 of 4 Page 57 of 215 $1,317,600. The rehabilitation of the Ski-Run tank was included in the water utility's 10- year capital improvement plan. However, after the significant change orders associated with a similarly aged tank, engineering services were consulted, and it was determined that replacement would be the best path forward for this asset. Since the replacement cost is higher than the anticipated rehabilitation cost, additional funding from the District's capital budget will be required, pushing other tank rehabilitation projects back in the CIP scheduled for FY2024. The water utility has sufficient funds for this capital expenditure in 2024. ATTACHMENTS: None Page 4 of 4 Page 58 of 215