HomeMy WebLinkAbout04-08-15 Desal Committee PacketOTAY WATER DISTRICT
DESALINATION PROJECT COMMITTEE MEETING
and
SPECIAL MEETING OF THE BOARD OF DIRECTORS
2554 SWEETWATER SPRINGS BOULEVARD
SPRING VALLEY, CALIFORNIA
Boardroom
WEDNESDAY
April 8, 2015
11:30 A.M.
This is a District Committee meeting. This meeting is being posted as a special meeting
in order to comply with the Brown Act (Government Code Section §54954.2) in the event that
a quorum of the Board is present. Items will be deliberated, however, no formal board actions
will be taken at this meeting. The committee makes recommendations
to the full board for its consideration and formal action.
AGENDA
1. ROLL CALL
2. PUBLIC PARTICIPATION – OPPORTUNITY FOR MEMBERS OF THE PUBLIC TO
SPEAK TO THE BOARD ON ANY SUBJECT MATTER WITHIN THE BOARD'S JU-
RISDICTION BUT NOT AN ITEM ON TODAY'S AGENDA
DISCUSSION ITEMS
3. APPROVE AMENDMENT NO. 3 TO THE EXISTING CONRACT WITH AECOM
TECHNICAL SERVICES, INC. (AECOM) FOR THE DESIGN OF THE OTAY MESA
DESALINATION CONVEYANCE AND DISINFECTION SYSTEM PROJECT;
INCREASING THE CONTRACT BY $96,506, RESULTING IN A HIGHER CONTRACT
AMOUNT NOT-TO-EXCEED $3,778,438 (COBURN-BOYD)
4. INFORMATIONAL UPDATE FOR THE ROSARITO DESALINATION PLANT AND
CONVEYANCE AND THE OTAY MESA CONVEYANCE AND DISINFECTION
SYSTEM PROJECTS (COBURN-BOYD)
5. ADJOURNMENT
BOARD MEMBERS ATTENDING:
Jose Lopez, Chair
Mitch Thompson
2
All items appearing on this agenda, whether or not expressly listed for action, may be delib-
erated and may be subject to action by the Board.
The Agenda, and any attachments containing written information, are available at the Dis-
trict’s website at www.otaywater.gov. Written changes to any items to be considered at the
open meeting, or to any attachments, will be posted on the District’s website. Copies of the
Agenda and all attachments are also available through the District Secretary by contacting
her at (619) 670-2280.
If you have any disability that would require accommodation in order to enable you to partici-
pate in this meeting, please call the District Secretary at 670-2280 at least 24 hours prior to
the meeting.
Certification of Posting
I certify that on April 3, 2015 I posted a copy of the foregoing agenda near the regular
meeting place of the Board of Directors of Otay Water District, said time being at least 24
hours in advance of the meeting of the Board of Directors (Government Code Section
§54954.2).
Executed at Spring Valley, California on April 3, 2015.
______/s/_ Susan Cruz, District Secretary _____
STAFF REPORT
TYPE MEETING: Regular Board MEETING DATE: May 6, 2015
SUBMITTED BY: Lisa Coburn-Boyd
Environmental Compliance
Specialist
Bob Kennedy
Engineering Manager
CIP./G.F. NO: P2451-
001102
DIV. NO. ALL
APPROVED BY:
Rod Posada, Chief, Engineering
German Alvarez, Assistant General Manager
Mark Watton, General Manager
SUBJECT: Amendment No. 3 to the Contract with AECOM Technical
Services, Inc. for the Otay Mesa Desalination Conveyance and
Disinfection System Project
GENERAL MANAGER’S RECOMMENDATION:
That the Otay Water District (District) Board approve Amendment
No. 3 to the existing contract with AECOM Technical Services,
Inc. (AECOM) for design of the Otay Mesa Desalination Conveyance
and Disinfection System Project, increasing the contract by
$96,506, resulting in a higher contract amount with AECOM of an
amount not-to-exceed $3,778,438 (see Exhibit A for Project
location).
COMMITTEE ACTION:
Please see Attachment A.
PURPOSE:
To obtain Board authorization for the General Manager to execute
Amendment No. 3 with AECOM (see Exhibit B) for the Otay Mesa
Desalination Conveyance and Disinfection System Project
(Project), increasing the contract by $96,506, resulting in a
2
higher contract amount with AECOM of an amount not-to-exceed
$3,778,438.
ANALYSIS:
At the November 3, 2010 Board Meeting, AECOM was awarded a
professional engineering services contract for the Otay Mesa
Desalination Conveyance and Disinfection System Project. The
contract amount approved by the Board was for an amount not-to-
exceed $3,910,297, to be completed by the end of Fiscal Year
2016. The District restricted AECOM’s work to miscellaneous
studies until January 24, 2013, when AECOM was authorized to
initiate work on the preliminary design of a large diameter
pipeline 3.5 miles long, a pump station, and a disinfection
facility, along with the environmental surveys and studies for
CEQA/NEPA compliance.
At the April 8, 2014 Board Meeting, Amendment No. 1 was approved
by the Board increasing the contract amount $136,409 for
additional environmental surveys and project management. The
new contract amount, after approval of the amendment, was
$4,046,706 and the completion date of the Project was extended
to June 30, 2018.
At the October 1, 2014 Board Meeting, Amendment No. 2 was
approved by the Board to decrease the contract by $364,774 to
eliminate construction services from AECOM’s contract and to
remove any suggestion of AECOM’s financial interest in the
construction of the Project by the firm that is completing the
environmental work. This reduced the AECOM contract amount to
$3,681,932.
The Project has been making steady progress towards the
completion of its environmental document (EIR/EIS) which is
required to be completed for the Presidential Permit process.
However, there have been challenges encountered during the
environmental process that have affected the pace of the
Project. Additional work that could not have been foreseen,
such as the resolution of Conflict of Interest documents for the
Department of State (DOS), changes in the alignment alternatives
based on pipeline alignment information from Mexico, and the
analysis of an outfall for out of specification water discharge
have impacted AECOM’s budget and schedule.
The $96,506 budget increase has several components, as detailed
in the letter from AECOM, Exhibit C. In the Contract Amendment
No. 1 to the Agreement with AECOM, the project management budget
3
was extended for six (6) months to September 2014. Since
September 2014, staff was aware that the project management
budget needed additional funding, but rather than issuing a
Contract Amendment under the General Manager’s authority and due
to the project’s visibility, it was decided to negotiate for all
the additional tasks and to continue the Project until the end
of October 2015, when it is expected that the EIR/EIS will be
complete. There is also a component of the requested budget
increase that is due to additional work required by Project
modifications and DOS coordination beginning in January 2014
through the present. Going forward, as the environmental
process moves towards completion, District staff will be
handling more of the project management and all of the
coordination with the DOS in order to control costs.
Staff will bring another update during the September/October
2015 timeframe with further recommendations.
FISCAL IMPACT: Joe Beachem, Chief Financial Officer
The total budget for CIP P2451, as approved in the FY 2015
budget, is $30,000,000. Expenditures to date are
$3,414,499.09. Total expenditures, plus outstanding
commitments, including this contract, totals $6,217,223.15.
Based on a review of the financial budget, the Project Manager
anticipates that the budget is sufficient to support this
Project (see Attachment B).
The Finance Department has determined that, under the current
rate model, 40% of the funding will be available from the
Expansion Fund and 60% of the funding will be available from the
Betterment Fund.
STRATEGIC GOAL:
This Project supports the District’s Mission statement, “To
provide high value water and wastewater services to the
customers of the Otay Water District in a professional,
effective, and efficient manner” and the General Manager’s
Vision, “A District that is at the forefront in innovations to
provide water services at affordable rates, with a reputation
for outstanding customer service.”
LEGAL IMPACT:
None
4
LCB/BK/RP:jf
P:\WORKING\CIP P2451 Desalination Feasibility Study\Staff Reports\Board 05-06-15\BD 05-06-15,
Staff Report, AECOM CO No-3 (LCB-BK).doc
Attachments: Attachment A – Committee Action
Attachment B – Budget Detail
Exhibit A – Location Map
Exhibit B – Contract Amendment No. 3
Exhibit C – Letter from AECOM, March 17, 2015
ATTACHMENT A
SUBJECT/PROJECT:
P2451-001102
Amendment No. 3 to the Contract with AECOM Technical
Services, Inc. for the Otay Mesa Desalination
Conveyance and Disinfection System Project
COMMITTEE ACTION:
This item was presented to the Desalination Committee
(Committee) at a meeting held on April 8, 2015. The Committee
supported presentation to the full Board.
NOTE:
The “Committee Action” is written in anticipation of the
Committee moving the item forward for Board approval. This
report will be sent to the Board as a Committee approved item,
or modified to reflect any discussion or changes as directed
from the Committee prior to presentation to the full Board.
ATTACHMENT B – Budget Detail
SUBJECT/PROJECT:
P2451-001102
Amendment No. 3 to the Contract with AECOM Technical
Services, Inc. for the Otay Mesa Desalination Conveyance
and Disinfection System Project
Level Title Committed Expenditures Outstanding
Commitment
Projected
Final Cost
Vendor
$98,577.34 $98,577.34 $0.00 $98,577.34 CAMP DRESSER & MCKEE
$13,311.19 $13,311.19 $0.00 $13,311.19 CPM PARTNERS INC
$380,200.00 $380,200.00 $0.00 $380,200.00 HECTOR I MARES-COSSIO
$71,530.09 $71,530.09 $0.00 $71,530.09 MARSTON+MARSTON INC
$4,172.90 $4,172.90 $0.00 $4,172.90 SALVADOR LOPEZ-CORDOVA
$267,066.00 $188,355.05 $78,710.95 $267,066.00 SILVA SILVA INTL
$26,700.00 $26,700.00 $0.00 $26,700.00 REA & PARKER RESEARCH
Meals/Travel/
Incidentals
$20,121.05 $20,121.05 $0.00 $20,121.05 STAFF
Printing $60.59 $60.59 $0.00 $60.59 MAIL MANAGEMENT GROUP
$162,041.07 $162,041.07 $0.00 $162,041.07 GARCIA CALDERON & RUIZ
$12,155.04 $6,534.50 $5,620.54 $12,155.04 BROWNSTEIN HYATT FARBER
$43,174.50 $43,174.50 $0.00 $43,174.50 SOLORZANO CARVAJAL
GONZALEZ Y
$25,312.31 $25,312.31 $0.00 $25,312.31 STUTZ ARTIANO SHINOFF
$290.30 $290.30 $0.00 $290.30 S.D. DAILY TRANSCRIPT
$685.20 $685.20 $0.00 $685.20 SAN DIEGO UNION-TRIBUNE
$49,000.00 $29,213.02 $19,786.98 $49,000.00 (W)RIGHT-ON
COMMUNICATIONS INC
$39,500.00 $39,500.00 $0.00 $39,500.00 BUSTAMANTE & ASSOCIATES
$875.00 $875.00 $0.00 $875.00 LEONARD VILLARREAL
$500.00 $500.00 $0.00 $500.00 REBECA SOTURA NICKERSON
(Interpretor)
Standard Salaries $1,009,853.63 $1,009,853.63 $0.00 $1,009,853.63
Total $2,225,126.21 $2,121,007.74 $104,118.47 $2,225,126.21
$5,108.75 $5,108.75 $0.00 $5,108.75 MARSTON+MARSTON INC
$28,770.00 $28,770.00 $0.00 $28,770.00 MICHAEL R WELCH PHD
$5,000.00 $5,000.00 $0.00 $5,000.00 ATKINS
$8,818.00 $8,818.00 $0.00 $8,818.00 CPM PARTNERS INC
$3,681,932.00 $1,079,832.41 $2,602,099.59 $3,681,932.00 AECOM TECHNICAL SERVICES
$96,506.00 $96,506.00 $96,506.00 AECOM TECHNICAL SERVICES
AMENDMENT NO. 3
$3,952.00 $3,952.00 $0.00 $3,952.00 AIRX UTILITY SURVEYORS
Professional
Legal Fees
$7,761.19 $7,761.19 $0.00 $7,761.19 STUTZ ARTIANO SHINOFF
Meals/Travel/
Incidentals
$3,174.39 $3,174.39 $0.00 $3,174.39 STAFF
$114.08 $114.08 $0.00 $114.08 REPROHAUS CORP
$342.80 $342.80 $0.00 $342.80 SAN DIEGO UNION-TRIBUNE
Standard Salaries $150,288.25 $150,288.25 $0.00 $150,288.25
Total $3,991,767.46 $1,293,161.87 $2,698,605.59 $3,991,767.46
Standard Salaries $329.48 $329.48 $0.00 $329.48
Total $329.48 $329.48 $0.00 $329.48
Budget $30,000,000.00
$6,217,223.15 $3,414,499.09 $2,802,724.06 $6,217,223.15
March 23, 2005 through February 28, 2015
TOTAL
Consultant
Contracts
Professional
Legal Fees
Service Contracts
Design
Construction
Planning
Consultant
Contracts
Service Contracts
571-1RESERVOIR
870-1RESERVOIR
OTAY MESA RD
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DONOVA
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DONOVANCORRECTIONALFACILITY
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G.F. BAILEYDETENTION FACILITY
AIRWAY RD
AL
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PASEO DE
LA
F
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T
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STATE PRISON RD
ALT
A
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MEXICO
USA
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A
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FUTUREPORT OFENTRY
OTAY WATER DISTRICTOTAY MESA DESALINATION CONVEYANCEAND DISINFECTION SYSTEM PROJECT
EXHIBIT A
CIP P2451
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CIP P2451
Contract No. 0001124
EXHIBIT B
THIRD AMENDMENT TO AGREEMENT
BETWEEN OTAY WATER DISTRICT AND
AECOM TECHNICAL SERVICES, INC. RELATIVE TO
THE PROFESSIONAL ENGINEERING SERVICES FOR
THE OTAY MESA CONVEYANCE AND DISINFECTION SYSTEM
This Third Amendment (“Amendment”) to the original Agreement for Professional
Engineering Services is made and entered into as of the _____ day of ______________, 2015,
by and between the OTAY WATER DISTRICT ("District"), and AECOM TECHNICAL
SERVICES, INC. ("Consultant").
R E C I T A L S
A. District and Consultant entered into that certain Professional Services
Agreement dated January 3, 2011 (the "Original Agreement"), under which Consultant agreed
to provide the services therein described in connection with the District’s Otay Mesa
Conveyance and Disinfection System (the “Services”). The Original Agreement was amended
on June 16, 2014 (the “Amended Original Agreement”) and on October 21, 2014 (the “Second
Amended Original Agreement”) .
B. The Second Amended Original Agreement is due to expire on June 30, 2018 and
the Services are 31% complete.
C. District and Consultant desire to enter into this Agreement to amend certain
specific terms and conditions of the Amended Original Agreement as indicated below.
NOW, THEREFORE, in consideration of the foregoing and the mutual promises and
covenants hereinafter contained, the parties agree as follows:
1. Exhibit A to the Amended Original Agreement, setting forth the Services to be
provided by Consultant, is hereby amended and supplemented by the attached Exhibit A,
Revised and Supplemented Scope of Work, attached to this Second Amendment and
incorporated herein by reference. This revision increases Task 1, Project Management by an
CIP P2451
Contract No. 0001124
amount not to exceed Thirty Nine Thousand Four Hundred Ninety Eight Dollars ($39,498) and
Task 7, Environmental Documentation for an amount not to exceed Fifty Seven Thousand Eight
Dollars ($57,008).
2. The parties agree that the aggregate amount paid by the District to the
Consultant for the Professional Engineering Design Services rendered by Consultant in excess
of the original Agreement shall be increased by an amount not to exceed Ninety Six Thousand
Five Hundred Six Dollars ($96,506). Therefore, the total compensation paid by the District for
Services described in the amended original contract and this third amendment shall not exceed
Three Million Seven Hundred Seventy Eight Thousand Four Hundred Thirty Eight Dollars
($3,778,438).
3. The parties agree that all terms and conditions of the Amended Original
Agreement not modified or amended by this Third Amendment, including without limitation all
indemnity and insurance requirements, are and shall remain in full force and effect.
4. This Third Amendment is subject to the venue, choice of law and interpretation
provisions of the Original Agreement.
IN WITNESS WHEREOF, the parties have caused this Third Amendment to be
executed as of the day and year first above written.
OTAY WATER DISTRICT
By: ____________________________
Mark Watton
Its: General Manager
Date: ___________________________
CONSULTANT:
AECOM TECHNICAL SERVICES, INC.
By:
Name:
Its:
Date:
Approved as to form:
By: _______________________
General Counsel
Approved as to form:
By: _______________________
Its: _______________________
P:\WORKING\CIP P2451 Desalination Feasibility Study\Agreements-Contracts-RFPs\AECOM\Third Amendment to Existing Agreement.doc
Task
No.Description Labor Subconsultant
Other Direct
Costs Fee Previous Fee Difference
1 Project Management and Administration 187,578.00$ -$ 5,216.00$ 192,794.00$ 153,296.00$ 39,498.00$
7 Environmental Documentation -$ 815,387.00$ -$ 815,387.00$ 758,379.00$ 57,008.00$
*Tasks 2-6, 8-22 2,770,267.00$ Total 96,506.00$
Total 3,778,448.00$
* Tasks 2-6 and 8-22 are not modified or amended by the Third Amendment. The Consultant's fee for these tasks are provided for reference.
Exhibit A
REVISED AND SUPPLEMENTED SCOPE OF WORK
P:\WORKING\CIP P2451 Desalination Feasibility Study\Agreements-Contracts-RFPs\AECOM\Amendment No. 1\AECOM Contract Amendment 3_Exhibit A
AECOM
401 West A Street
Suite 1200
San Diego, CA 92101
www.aecom.com
619 610 7600 tel
619 610 7601 fax
March 17, 2015
Rod Posada, PE and Lisa Coburn-Boyd
Chief of Engineering and Environmental Compliance Specialist
2554 Sweetwater Springs Road
Spring Valley, CA 91978-2004
Otay Mesa Conveyance and Disinfection System Project CIP P2451
Scope of Work Augmentations: Project Management, Environmental Documentation,
Schedule
Dear Otay Water District:
We appreciate your consideration to process a third amendment to the Agreement allowing
the AECOM team to continue efforts and support of the Project until October 31, 2015,
including the Scope of Work augmentations, consisting of project management,
environmental documentation, and specifically, coordination efforts and expenses during
2014 and projected expenses into fall 2015.
The Otay Mesa Conveyance and Disinfection System Project’s (Project) original schedule
anticipated the preliminary design reports (PDRs) and Environmental Impact
Report/Environmental Impact Statement (EIR/EIS) would be completed in 2011. It is currently
anticipated that the draft EIR/EIS will be complete in mid-2015. It is also anticipated that the
Final EIR/EIS will be complete by October 31, 2015, pending any unforeseen reasons outside
of our or the District’s control.
The Project start was delayed by nearly two (2) years as the District waited for key information
and progress in Mexico. Calendar year 2013 was productive with significant progress made on
the Pipeline PDR and the draft EIR/EIS, including the individual field and technical studies
that support the draft EIR/EIS. During calendar year 2014, Project progress slowed as the
District again waited for information and progress in Mexico. The AECOM team worked with
the District, resource agencies, and extensively with the Department of State on the both the
Presidential Permit, and the approach and format for the draft EIR/EIS. The District approved
Amendment No. 1 to the Existing Agreement, which included $30,000 for Project Management
during the period from April 2014 through September 2014. We were able to slightly underrun
the $5,000 per month budget, but have been out of project management budget for several
months now (elapsed time now at the sixth month). Amendment No. 2 to the Existing
Agreement was also processed; which was a removal of the construction support services
($364,774) and executed in October 2014. Our request for Amendment No. 3 includes
augmentations to three (3) Scope of Work tasks:
Task 1 – Project Management and Administration
Project Management and Administration work will continue until October 31, 2015 and will
consist of DLM Engineering and AECOM’s time to provide general support for the Project and
the District as the work progresses. It also includes the time commitment for Project/District
meetings, agendas and minutes, scheduling, monthly progress reporting and status updates,
project controls, and coordination associated with executing the Project. Continuation of
Project Management and Administration is limited to $39,498. Also, a similar continuation of
the EIR/EIS and environmental documentation is discussed and is accounted for below.
Task 7 – Environmental Documentation [Delay, Coordination, and Continuation]
The Agreement listed a schedule of completion following the Notice to Proceed (NTP) for the
Administrative Draft Environmental Impact Report / Environmental Impact Statement
(EIR/EIS) in 240 days (September 22nd, 2013). For various reasons outside of our or the
District’s control, this deliverable date was unachievable. We are now nearly 24 months into
the Project and yet have managed to coordinate the environmental documentation and
progress the Project without additional compensation. However, an authorization is needed
to continue to coordinate this effort until its completion. It will consist of AECOM and Atkins’
time previously expended, as well as through completion of the EIR/EIS work. It also includes
the time commitment for Project/Client environmental meetings, coordination efforts with
Department of State, and management of environmental activities. See our previous
discussion of this matter in letter dated February 2014. The collective amount for this work is
$57,008.
Significant Tasks That Have Impacted Work
Over the course of the Project as it’s developed, mostly in the Environmental Documentation
task thus far, there have been a number of specific issues that have required Project support.
Below is a brief list of such quantitative and qualitative support efforts:
Federal Lead Agency for NEPA determined to be the U.S. Department of State
U.S. Department of State’s Organizational Conflict of Interest (OCI) Statement and On-
Going Obligations Forms for:
o AECOM Technical Services, Atkins North America, Brand New Box, Geocon, and
VRPA
Additional Support for the Presidential Permit and Supplemental Documentation
Additional Coordination for the Public Scoping Meeting and Presentation(s)
U.S. Department of State directed certain efforts for federal agency coordination:
o Weekly Telephone Conference Calls, Meeting Minutes, and Action Items
o Multiple Site Visits and Project Meetings
Consultation with Mexico
Deletion of the Western Delivery Point, Removal of the Alta Road Alignment Alternative
Addition and Introduction of New Alignment Alternative to Environmental
Documentation and necessary updates to the following technical reports:
o Biological
o Cultural
o Geotechnical
o Hazardous Materials
o Water Quality
o Noise and Vibration
o Traffic
o Air Quality and Climate Change
o Transboundary Impacts
Mexican Environmental Documentation Translation into English from Spanish
Outfall Structure for Non-Spec Potable Water
Addition and Introduction of New ‘Additional Project Infrastructure’ and necessary
updates to the following:
o EIR/EIS Document
o Biological Technical Report
o Cultural Report
o Water Quality Evaluation
Amended Budget Request Associated with Scope of Work Augmentations
Task Number and Description
Current
Authorized
Budget
Amended
Budget
Revised
Authorized
Budget
Task 1 – Project Management (Continuation) $105,807 +$39,4981 $145,305
Task 7 – Environmental Documentation $758,379 +$57,0082 $815,387
Current Authorized Tasks (Total) $1,773,374 $96,506 $1,869,880
Amended Budget Amount Breakdown:
1 – Task 1 Project Management and Administration requires an additional $39,498 and the
amount consists of the following:
$3,750 for DLM Engineering for October 2014 thru February 2015.
$9,750 for DLM Engineering for March 2015 thru October 2015; limited to 50 hours.
$8,406 for AECOM for overages through January 2015.
$3,154 for AECOM for February 2015.
$14,438 for AECOM for March 2015 thru October 2015; limited to 2.5 hours per week.
2 – Task 7 Environmental Documentation requires an additional $57,008 and the amount
consists of the following:
$32,240 for AECOM for 12 months additional support (2014); estimated 4 hours per
week.
$17,888 for Atkins for 12 months of additional support (2014); estimated 2 hours per
week.
$6,880 for Atkins for March 2015 thru October 2015; limited to 40 hours.
Please note that this Amendment request does increase the current authorized budget for
Task 1 Project Management and Administration and Task 7 Environmental Documentation, as
well as the overall budget due to Scope of Work augmentations.
Thank you for your consideration. Please let us know if you have any questions or comments
and look forward to continuing support of the District and this Project.
Sincerely,
Don MacFarlane, PE
Project Manager
Jason Caprio, PE
AECOM Project Manager
Alberto Vela
Vice President
STAFF REPORT
TYPE MEETING: Desalination Committee MEETING DATE: April 8, 2015
SUBMITTED BY: Bob Kennedy
Engineering Manager
CIP./G.F. NO: P2451-
001101
DIV. NO. ALL
APPROVED BY:
Rod Posada, Chief, Engineering
German Alvarez, Assistant General Manager
Mark Watton, General Manager
SUBJECT: Informational Update for the Rosarito Desalination Plant and
the Otay Mesa Conveyance and Disinfection System Projects
GENERAL MANAGER’S RECOMMENDATION:
No recommendation. This is an informational item only.
COMMITTEE ACTION:
Please see Attachment A.
PURPOSE:
To update the Otay Water District (District) Board of Directors
(Board) on the progress of the Rosarito Desalination Plant and
the Otay Mesa Conveyance and Disinfection System Projects
(Project)(see Exhibit A for Project location).
ANALYSIS:
This item was last presented to the Desalination Committee
(Committee) at a meeting held on October 9, 2014. The updates
or significant milestones that have been reached since the last
update to the Committee include:
Project Direction
Since the last update, the project has taken a new direction.
In early November 2014, the State of Baja California approached
NSC Agua (NSCA) with a proposal to purchase the plant’s entire
production. The State would then sell directly to the District
the requested amount of desalinated water.
2
The State of Baja California is also interested in indirect
water transfer of Colorado River Water. Mexico’s water from the
Colorado River that is delivered to Tijuana and Rosarito would
remain in Lake Mead. The Mexican water that is not delivered
would be monetized and a portion of that revenue would offset
the cost of desalinated water.
The State of Baja California has also appointed Rodney T. Smith,
Ph.D., as the point of contact between the State of Baja
California and any interested party in the United States who may
wish to purchase desalinated water from the Rosarito Plant. Dr.
Smith is the President/CEO of Baja Norte Water Resources, LLC
(BNWR). The District is in receipt of a letter from Dr. Smith,
dated November 4, 2014, exploring how BNWR can work with the
District in acquiring desalinated seawater from Mexico (see
Exhibit B).
District staff met on November 14, 2014 with Dr. Smith, State of
Baja California officials, representatives from Metropolitan
Water District, and representatives from Southern Nevada who are
direct stakeholders on many related Colorado River matters.
Staff also met with Dr. Smith and his team on April 7, 2015, to
discuss the new path of negotiations.
The State of Baja California recently passed legislation to
approve Public-Private Partnerships (PPPs) or (APPs in Spanish).
These PPPs allow for the direct negotiations of the State with
private companies such as NSCA.
In conformance with the PPP requirements, NSCA submitted a
Letter of Interest to the State of Baja California and on
March 27, 2015 submitted a formal proposal. NSCA expects a
response before the 180 days allowed by the law.
Public vs. Private Project Proposal staff is still waiting for an
official pronouncement from CILA and CONAGUA about what project
they will support. Expectations are that CILA/CONAGUA will
support the Private Project Proposal (NSCA’s proposal).
Staff is recommending to continue the Presidential
Permit/CEQA/NEPA process and curtail any other activity until
the State of Baja California process becomes more definite and a
pronouncement is made in support of NSCA project from
CILA/CONAGUA. Staff anticipates that it would take up to one
(1) year for the negotiations between the State of Baja
California and NSCA to be concluded. Staff will be following
negotiations of the State of Baja California with federal
agencies on both sides of the border and with the Colorado River
stakeholders.
3
Rosarito Beach Desal Project in the News
The drought has been a constant topic in the national, state,
and local news. Projects that provide a new supply of water
have been mentioned including the Rosarito Beach Desalination
project. The March 30, 2015 publication of the Water
Desalination Report mentioned this project under the heading
“Mexico – SWRO Project Progress Acknowledged” (Exhibit C).
Public Outreach Efforts
On January 20, 2015, the General Manager met with Carlo
Bonfante, Secretary of Economic Development, and the point
person for the Governor of Baja California on the desalination
project. Also, on January 21, 2015, the General Manager met
with Diputado Juan Gastelum, who represents Tijuana in the
Federal Legislature, to discuss the project.
The General Manager also attended the Colorado River Users
Conference in December 2014 and met with various Federal and
State representatives from the United States and Mexico.
NSCA Environmental Report
NSCA received MIA approval for the Desalination Plant on
January 29, 2015. This is a significant achievement. NSCA
expects that the MIA for the pipelines will be approved by the
beginning of spring 2015.
Division of Drinking Water (DDW) Permitting (formerly CDPH)
NSC Agua continues the source water testing at the power plant
intake and outlet structures that began on September 18, 2014.
The results continue to be transmitted to DDW.
On October 24, 2014, DDW responded to the White Paper, “Permit
Approval Road Map,” submitted in January 2014. This letter (see
Exhibit D) is in response to the District’s request for feedback
regarding DDW’s project requirements and concerns with the
project strategy. One positive comment was DDW stated they
intend to directly conduct inspections without the use of third
parties and with the cooperation of District staff.
Subsequent to DDW’s letter, a meeting was held on October 28,
2014 between DDW, NSCA, and District representatives to review
comments on the “White Paper” and to review testing results of
the source water testing.
4
Presidential Permit
The State Department requires that there be coordination with a
Mexican Federal Agency for the Presidential Permit Process and to
review the associated environmental documents. It was initially
suggested that SEMARNAT be that agency. The State Department has
indicated that they would not be opposed to having CILA instead
of SEMARNAT as the project sponsor in Mexico.
The first step in the preparation of the EIR/EIS document in
support of the Presidential Permit process was the District and
State Department publication of the Notice of Preparation/Notice
of Intent on November 14, 2014. This document is available for
viewing on the project web site address www.owd-
desalconveyance.com. On December 2, 2014, the scoping meeting
for the CEQA/NEPA document was held in the District’s Board Room.
The next step is the preparation of the draft EIR/EIS. All of
the technical studies in support of the document have been
prepared and the EIR/EIS chapters describing the impacts of the
project are being written. The document must be reviewed and
approved by the District and the State Department before going
out for a 45 day public review period. The draft EIR/EIS is
tentatively scheduled to be ready for public review by May/June
2015. After public review, comments received during that review
must be responded to and changes made to the EIR/EIS, as
necessary. Once the final EIR/EIS is complete, the State
Department will use the findings of the environmental document
and a range of other factors that include energy security,
cultural, and economic impacts, foreign policy, and compliance
with relevant federal regulations in order to determine whether
the project would serve the national interest. The State
Department will then issue the Presidential Permit if it
determines that the project would serve the national interest.
Based on the current schedule, the Presidential Permit
determination could occur in early 2016.
FISCAL IMPACT: Joe Beachem, Chief Financial Officer
No fiscal impact as this is an informational item only. See
Attachment B - Budget Detail.
STRATEGIC GOAL:
This Project supports the District’s Mission statement, “To
provide high value water and wastewater services to the
customers of the Otay Water District in a professional,
effective, and efficient manner” and the General Manager’s
5
Vision, “A District that is at the forefront in innovations to
provide water services at affordable rates, with a reputation
for outstanding customer service.”
LEGAL IMPACT:
None.
BK/RP:jf
P:\WORKING\CIP P2451 Desalination Feasibility Study\Staff Reports\Board 05-06-15\Informational
Update for April 8, Committee Meeting\Committee 4-08-15 Staff Report Desal Update (BK-RP)_LCB
Edits-1.doc
Attachments: Attachment A – Committee Action
Attachment B – Budget Detail
Exhibit A – Location Map
Exhibit B – Letter from Baja Norte Water
Resources, November 4, 2014
Exhibit C - “Mexico – SWRO Project Progress
Acknowledged” Water Desalination
Report, March 30, 2015
Exhibit D – DDW Response to Otay Water District
Rosarito Desalination White Paper,
October 24, 2014
ATTACHMENT A
SUBJECT/PROJECT:
P2451-001101
Informational Update for the Rosarito Desalination
Plant and the Otay Mesa Conveyance and Disinfection
System Projects
COMMITTEE ACTION:
This item was presented to the Desalination Committee
(Committee) at a meeting held on April 8, 2015.
ATTACHMENT B – Budget Detail
SUBJECT/PROJECT:
P2451-001101
Informational Update for the Rosarito Desalination Plant
and the Otay Mesa Conveyance and Disinfection System
Projects
Level Title Committed Expenditures Outstanding
Commitment
Projected
Final Cost
Vendor
$98,577.34 $98,577.34 $0.00 $98,577.34 CAMP DRESSER & MCKEE
$13,311.19 $13,311.19 $0.00 $13,311.19 CPM PARTNERS INC
$380,200.00 $380,200.00 $0.00 $380,200.00 HECTOR I MARES-COSSIO
$71,530.09 $71,530.09 $0.00 $71,530.09 MARSTON+MARSTON INC
$4,172.90 $4,172.90 $0.00 $4,172.90 SALVADOR LOPEZ-CORDOVA
$267,066.00 $188,355.05 $78,710.95 $267,066.00 SILVA SILVA INTL
$26,700.00 $26,700.00 $0.00 $26,700.00 REA & PARKER RESEARCH
Meals/Travel/
Incidentals
$20,121.05 $20,121.05 $0.00 $20,121.05 STAFF
Printing $60.59 $60.59 $0.00 $60.59 MAIL MANAGEMENT GROUP
$162,041.07 $162,041.07 $0.00 $162,041.07 GARCIA CALDERON & RUIZ
$12,155.04 $6,534.50 $5,620.54 $12,155.04 BROWNSTEIN HYATT FARBER
$43,174.50 $43,174.50 $0.00 $43,174.50 SOLORZANO CARVAJAL
GONZALEZ Y
$25,312.31 $25,312.31 $0.00 $25,312.31 STUTZ ARTIANO SHINOFF
$290.30 $290.30 $0.00 $290.30 S.D. DAILY TRANSCRIPT
$685.20 $685.20 $0.00 $685.20 SAN DIEGO UNION-TRIBUNE
$49,000.00 $29,213.02 $19,786.98 $49,000.00 (W)RIGHT-ON
COMMUNICATIONS INC
$39,500.00 $39,500.00 $0.00 $39,500.00 BUSTAMANTE & ASSOCIATES
$875.00 $875.00 $0.00 $875.00 LEONARD VILLARREAL
$500.00 $500.00 $0.00 $500.00 REBECA SOTURA NICKERSON
(Interpretor)
Standard Salaries $1,009,853.63 $1,009,853.63 $0.00 $1,009,853.63
Total $2,225,126.21 $2,121,007.74 $104,118.47 $2,225,126.21
$5,108.75 $5,108.75 $0.00 $5,108.75 MARSTON+MARSTON INC
$28,770.00 $28,770.00 $0.00 $28,770.00 MICHAEL R WELCH PHD
$5,000.00 $5,000.00 $0.00 $5,000.00 ATKINS
$8,818.00 $8,818.00 $0.00 $8,818.00 CPM PARTNERS INC
$3,681,932.00 $1,079,832.41 $2,602,099.59 $3,681,932.00 AECOM TECHNICAL SERVICES
$96,506.00 $96,506.00 $96,506.00 AECOM TECHNICAL SERVICES
AMENDMENT NO. 3
$3,952.00 $3,952.00 $0.00 $3,952.00 AIRX UTILITY SURVEYORS
Professional
Legal Fees
$7,761.19 $7,761.19 $0.00 $7,761.19 STUTZ ARTIANO SHINOFF
Meals/Travel/
Incidentals
$3,174.39 $3,174.39 $0.00 $3,174.39 STAFF
$114.08 $114.08 $0.00 $114.08 REPROHAUS CORP
$342.80 $342.80 $0.00 $342.80 SAN DIEGO UNION-TRIBUNE
Standard Salaries $150,288.25 $150,288.25 $0.00 $150,288.25
Total $3,991,767.46 $1,293,161.87 $2,698,605.59 $3,991,767.46
Standard Salaries $329.48 $329.48 $0.00 $329.48
Total $329.48 $329.48 $0.00 $329.48
Budget $30,000,000.00
$6,217,223.15 $3,414,499.09 $2,802,724.06 $6,217,223.15
March 23, 2005 through February 28, 2015
TOTAL
Consultant
Contracts
Professional
Legal Fees
Service Contracts
Design
Construction
Planning
Consultant
Contracts
Service Contracts
571-1RESERVOIR
870-1RESERVOIR
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Baja Norte Water Resources
November 4,2014
VIA EMAIL
Mark Watton
General Manager
Otay Water District
2554 Sweetwater Springs Blvd.
Spring Valley,CA 91978
RE:Acquiring Desalinated Seawater from Mexico
Dear Mr.Watton:
I'm President/CEO of Baja Norte Water Resources,LLC ("BNWR")and an affiliated
Mexican entity Baja Infrastructure Resources S.de R.L.de C.V.("BIR").My purpose in
contacting you is to explore how BNWR can work with Otay to achieve its objective of
acquiring desalinated seawater from Mexico.To provide you context for my request,let me
share some background.
State of Baja Plans for Desalination Plant at Rosarito Beach
Mexican plans are proceeding to construct a 100,000 acre-foot per year desalination plant
at Rosarito Beach.This project has become a high priority for the State of Baja.To that end,the
State of Baja is assembling interested parties into a project consortium that would build,operate
and finance the desalination plant.The State of Baja plans to enter into a contract with a
desalination consortium and purchase the plant's entire water production.A portion of the
plant's output will be used in Mexico.The balance would be assigned to BIR to market the
water to U.S.water users.The State of Baja anticipates that the project could start operations by
2018.
MOU between BIR and the State of Baja
The State of Baja has entered into a Memorandum of Understanding with BIR.Under
the MOU,the State of Baja would assign up to 50,000 acre-feet per year of desalinated seawater
to BIR for delivery to U.S.water users.The State of Baja consents to assignment of the water
available to BIR to BNWR to enter into agreements with U.S.water users.The final
determination of the quantity of desalinated seawater is anticipated to be made by October 2015.
BNWR is interested in commencing discussions and entering into negotiations with U.S.
water users desiring to include desalinated seawater from Mexico in their water supply
portfolios.The State of Baja wants BNWR to assemble the group of interested U.S.water users
as it finalizes its negotiations with the desalination consortium at Rosarito Beach.
1490 N.Claremont Blvd,Suite 203 Claremont CA 91711 (909)626-2221
I'm confirming our meeting for Friday,November 14 at 10:00 am at your offices.At this
meeting,I can share the MOU signed by COMJSION ESTATAL DEL AGUA DEL ESTADO DE
BAJA CALIFORNIA ("CEA")and SECRETARIA DE DESARROLLO ECONOM1CO
("SEDECO")and the structure of a potential transaction that could provide Otay with assurances
of contractual performance mostly under U.S.law.My objective is that we sit down and
determine how BNWR,in its role recently conferred by the State of Baja,can assist Otay in the
completion of their plans.
To this end,I suggest that we develop a schedule of follow-on meetings and subject
matter to implement this opportunity in an expeditious and diligent manner.Our objective is to
use the next 12 months in a cooperative effort to definitely define related infrastructure and
operations,conditions from necessary regulatory approvals,a defined pathway for securing those
approvals and financial terms of a long-term agreement that Otay can reasonably rely to provide
a reliable water supply for many decades.With these and any other matters specified in an
agreement between Otay and BNWR by October 2015,the State of Baja will have the
information required to finalize its agreement with BIR that will set the final quantity of
desalinated water available to U.S.water users and finalize its agreement with the desalination
consortium.
I'm generally aware of Otay's impressive commitment to acquire desalinated seawater
from Mexico. I'm confident that we can build upon the many years you and I worked together
on Colorado River matters to successfully make the use in the United States of seawater
desalinated in Mexico a reality.
Sincerely,
Rodney T.Smith,Ph.D.
President
Baja Norte Water Resources,LLC
Baja Infrastructure Resources S.de R.L.de C.V.
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