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01-17-2012 City Council Study Session PacketCity of Grand Island Tuesday, January 17, 2012 Study Session Packet City Council:Mayor: Jay Vavricek City Administrator: Mary Lou Brown City Clerk: RaNae Edwards T u 7:00:00 PM Council Chambers - City Hall 100 East First Street Larry Carney Linna Dee Donaldson Scott Dugan Randy Gard John Gericke Peg Gilbert Chuck Haase Mitchell Nickerson Bob Niemann Kirk Ramsey Call to OrderCity of Grand Island City Council A - SUBMITTAL OF REQUESTS FOR FUTURE ITEMS Individuals who have appropriate items for City Council consideration should complete the Request for Future Agenda Items form located at the Information Booth. If the issue can be handled administratively without Council action, notification will be provided. If the item is scheduled for a meeting or study session, notification of the date will be given. B - RESERVE TIME TO SPEAK ON AGENDA ITEMS This is an opportunity for individuals wishing to provide input on any of tonight's agenda items to reserve time to speak. Please come forward, state your name and address, and the Agenda topic on which you will be speaking. MAYOR COMMUNICATION This is an opportunity for the Mayor to comment on current events, activities, and issues of interest to the community. Call to Order Pledge of Allegiance Roll Call Invocation This is an open meeting of the Grand Island City Council. The City of Grand Island abides by the Open Meetings Act in conducting business. A copy of the Open Meetings Act is displayed in the back of this room as required by state law. The City Council may vote to go into Closed Session on any agenda item as allowed by state law. City of Grand Island City Council Item -1 Update Concerning Lincoln Park Pool Tuesday, January 17, 2012 Study Session City of Grand Island Staff Contact: Steve Paustian City of Grand Island City Council Council Agenda Memo From: Steve Paustian, Park and Recreation Director Meeting: January 17, 2012 Subject: Lincoln Park Swimming Pool Item #’s: 1 Presenter(s): Steve Paustian, Park and Recreation Director Background Council authorized the rehabilitation/replacement of Lincoln Park swimming pool during the 2011-12 budget process. Based on a study provided by Olsson Associates, $1,421,000 would be required to renovate the existing pool. It was projected in the same study, to build a new pool the cost would be $2,371,000. Through a request for qualifications process, JEO Consulting was hired to develop the plans and specifications for the rehabilitation/replacement of the Lincoln Park swimming pool. Discussion JEO Consulting has provided an opinion that rehabilitation of the Lincoln Park swimming pool would cost $1,346,500. It is their opinion that a new pool can be constructed for an estimated cost of $1,550,000. This number was derived by JEO from recent projects that they have been involved with that are similar to the pool we want to construct. The $2,371,000 cost provided by Olsson Assoc. for new construction was a rough estimate and did not represent a detailed project analysis. New construction could provide several benefits over rehabilitation. New construction takes away any uncertainty as to the viability of the existing pool structures. The existing pool will operate this summer and allow for new pool construction to take place during the same time. By avoiding waiting until after this swimming season to start the rehabilitation process, we can avoid winter construction. Typically, winter construction is more expensive and less efficient. Starting construction this spring/summer will also guarantee that the new pool will be ready for the start of the 2013 swim season. New construction would also allow the 3 meter diving board to remain as an attraction. Because of NE State Health Department regulations, the 3 meter diving board will have to be taken out of service if the existing diving basin is just rehabilitated. Locating the new pool west of the existing pool may allow for the incorporation of the existing wading pool and picnic shelter into the new facility as well. Conclusion This item is presented to the City Council in a Study Session to allow for any questions to be answered and to create a greater understanding of the issue at hand. It is the intent of City Administration to bring this issue to a future council meeting for the awarding of a construction contract. PARKS & RECREATION Lincoln Park Pool Facility Evaluation Facility Evaluation and Recommendations City of Grand Island June 2009(updated 4/28/2011) PARKS & RECREATION Renovate Existing Bathhouse & Pool Basin Renovate Existing Bathhouse & Pool Basin Renovate Existing Basin and Bathhouse New Treatment Facility New Circulation System and Deck Zero Depth Entrance Remodel Bathhouse New Slide Total Opinion of Costs $1,421,000.00 PARKS & RECREATION Wading Pool IntegrationWading Pool Integration Lincoln Park Wading Pool Integration New Pool New Bathhouse New Slide Site Work Total Opinion of Cost $2,371,000.00 PARKS & RECREATION Wading Pool IntegrationWading Pool Integration PARKS & RECREATION Debt ServiceDebt Service Based on $200,000 annual income from CRA tax levy and 4% debt service 7.3 years to retire $1,400,000 8.0 years to retire $1,550,000 Item -2 Discussion Concerning Wastewater Treatment Plant Options Tuesday, January 17, 2012 Study Session City of Grand Island Staff Contact: John Collins, Public Works Director City of Grand Island City Council Council Agenda Memo From: John Collins, Public Works Director Meeting: January 17, 2012 Subject: Discussion Concerning Wastewater Treatment Plant Options Item #’s: 2 Presenter(s): John Collins, Public Works Director Background At the July 11, 2011 City Council meeting the Public Works Administration staff gave a presentation on contracting operations of the Wastewater Treatment Plant. Based on that discussion a Request For Qualifications (RFQ) was developed, with qualifications being submitted by four (4) qualified companies; Veolia Water of Naperville, Illinois; Severn Trent Services of Fort Washington, Pennsylvania; USW Utility Group of Sioux City, Iowa; and CH2M Hill of Englewood, Colorado. With the selection committee, which consisted of Terry Brown; John Collins; Scott Dugan; Randy Guard; John Henderson and Shannon Oster (replaced Mary Lou Brown), following the qualification criteria set forth in the RFQ Veolia Water was selected as the most qualified company for the contract management of the Wastewater Treatment Plant. At the November 15, 2011 Study Session City staff, along with staff from Veolia Water, presented information on the negotiated contract between the two for the possibility of contracting management of the Wastewater Treatment Plant. Discussion After the presentation of the contract management proposal for the Wastewater Treatment Plant it was the consensus of the City Council to take more time to study this issue. A presentation has been put together to provide more data regarding the contract management matter. Three choices have been put before the City Council on this topic and they are: Continue as we have historically (do nothing different); Contract Operations; or Initiate an alternate improvement plan. Conclusion This item is being presented to the City Council in a Study Session to allow for any questions to be answered and to create a greater understanding of the issue at hand. It is the intent of City Administration to bring this issue to a future council meeting for a formal vote on this subject. PUBLIC WORKS Recommendation to Wastewater Treatment Plant Customers Why we are having this community discussion PUBLIC WORKS Goal Meet the treatment requirements and citizen’s expectations in the most efficient cost effective manner PUBLIC WORKS Choices A. Continue as we have historically (i.e. Do nothing different) B. Contract Operations C. Initiate an alternate improvement plan PUBLIC WORKS Asset Condition Northeast Interceptor at an F rating since 2006 Other Interceptor lines nearing an F rating, as are other sanitary lines… Many components beyond design life and in poor condition: Headwork, valves, screen, etc… PUBLIC WORKS Rate Increases 4 scheduled 9% rate increases approved by Council; which equate to a more than 40% increase. $44 million rehabilitation initiative. Revised estimates are higher than those of the rate study. Example: Headwork Rate study estimate: $9.22 million Current estimate: $13.3 to $15 million PUBLIC WORKS Effect on Rate Payers Typical Medium Residential Monthly Fee Rises from $20.00 to 27.21 (Table 20 of Rate Study) Median Income Per Capita: $17,071/y or around $6.50/h take home (Wikipedia) Average rate payer works 3 hours per month to pay for sanitary service and will work more than an hour more each month to pay for the scheduled increases. PUBLIC WORKS Other Issues Consulting Contract Scope. Odor Declining Revenue PUBLIC WORKS Decisions The condition of equipment and historical cost indicate that the decision process does not work consistently. We are not performing as well as we should. Waste is effectively treated, it just cost more. Improving decisions may reduce the rate of increase in fees. PUBLIC WORKS Local Control and Ownership City retains ownership of plant and all assets City Council retains authority to set rates City Council approves all capital improvements Public Works continues to provide operational oversight and accountability PUBLIC WORKS Potential Results of Contracting Operations* Optimize plant operations by utilizing expertise gained through years of operating dozens or even hundreds of these facilities Reduce our operating costs Reduce long term costs by guiding our choices during the $44 million repair program. Continued odor reduction by optimizing operation * from July 7 Presentation PUBLIC WORKS History July 2011 –Presentation seeking Council support for a Request for Qualifications (RFQ) for contracting Wastewater Treatment Plant operations. July 2011–RFQ advertised. The Wastewater Superintendent conducted plant tours as requested by interested firms. August 2011–Submission of Qualifications (SOQ) from 4 firms. PUBLIC WORKS History August 2011 -Selection Committee evaluated each SOQ and selected Veolia. Committee included: Terry Brown, John Collins, Scott Dugan, Randy Gard, John Henderson, and Shannon Oster (replaced Mary Lou Brown). Veolia staff evaluated plant and staff over several weeks. PUBLIC WORKS History November 2011 -Negotiations Committee completed negotiations with Veolia. Committee included: Mary Lou Brown, Terry Brown, John Collins, Scott Dugan, Randy Gard, and Jaye Monter. November 2011–Veolia proposal presented to Council in study session PUBLIC WORKS Choices A. Continue as we have historically (i.e. Do nothing different) B. Contract Operations C. Initiate an alternate improvement plan PUBLIC WORKS Option A. -Do Nothing Default action Increasing rates are planned as approved by Council No change in risk –cost will remain higher than necessary. Asset condition will continue to vary. Public Works will continue to address efficiency and customer concerns. PUBLIC WORKS Option B. -Contract Operations Better recommendations to Council for decisions. Contract to deliver plant performance. Use of technical expertise from other facilities. Reduced supplier costs with quantity discounts. Known operational costs with fewer and smaller year over year spikes. PUBLIC WORKS Plant Staff Retain their current pay Receive more and better training Have more and better opportunities PUBLIC WORKS What Does Not Change Infrastructure rehabilitation Rehabilitation estimates are higher than rate study’s estimates Scheduled rate increases Ownership Rate setting Capital expenditures implemented PUBLIC WORKS Citizens’ Contract Compliance Committee Meet to ensure contract compliance Provides for accountability to the community Committee members would include representatives from the community, council, and City staff PUBLIC WORKS Option C. Internal Improvement Effort Cannot copy Veolia, but can develop an automation/efficiency plan Range of options, costs and time Administered by Public Works PUBLIC WORKS Methodology Internal Outline Lincoln Example The time and cost will vary depending on selection. PUBLIC WORKS Study Items Asset Management Monitoring and Automation Process Review (Treatment) Procurement Review Technical Skills Staff Utilization and Process Review (Activities) PUBLIC WORKS Asset Management Components and Sub Components Triggers: Expected Life, Level of Service, Reliability Preventative Maintenance, Replacement, or Use Until Failure Tracks all activity Automatically produces and aggregates work orders Estimated Setup: $150,000 to $500,000; excluding annual licensing and support; more than a year setup PUBLIC WORKS Asset Management Planned maintenance/replacement is much less expensive than when accomplished in a reactive mode PUBLIC WORKS SAMS Synergen Strategic Asset Management System Microsoft Access Database $150,000 to $180,000 installation Existing Antero work order application Strategic Asset Management System Oracle $500,000 minimum installation Audits(5): $65,000 WAM: $150,000 - $200,000 PUBLIC WORKS Monitoring and Automation Stand alone processes SCADA Cameras monitoring locations of interest Sensors (flow, levels, power, etc…) Testing PUBLIC WORKS Process Review Review the treatment process and determine the best treatment methods, regardless of existing components. Cost analysis to determine where change is possible. Develop plan for changes Note that this is part of the current rehabilitation project. PUBLIC WORKS Procurement Review Survey items regularly purchased to determine where savings may be gained through contract or partnering. Review acquisition process to determine where savings can be gained through changes (purchasing limits, changes in steps, etc.) Develop warehouse procedure. Note that this is currently underway. PUBLIC WORKS Technical Skills Catalog the skill sets needed as changes are implemented and compare to those available. Provide training and adjust staff to meet changing needs. PUBLIC WORKS Staff Utilization •General Procedural Review •Process Review where warranted •Set staffing levels and work hours according to the skill sets needed through each period. *Note that some employees are needed for operational purposes and some to meet regulatory requirements. PUBLIC WORKS Implementation Project would be broken into small achievable components to minimize cost and disruption Many infrastructure related items would be scheduled with normal life cycle repair/replacement Initial focus on automation and asset management PUBLIC WORKS Probable Cost & Time Setup: $500,000 –$10 million; 1 to 7 years Net annual cost: $200,000 (minimum) A detailed project scope would be necessary to develop accurate cost and time. PUBLIC WORKS Lincoln 2 Treatment Plants $105 million over 10 years 80% increase in residential rates (2002 –2012); PUBLIC WORKS Comparison Grand Island 40mgd 8mgd Lincoln Capacity: 105mgd Average: 24mgd Grand Island’s Plant has approximately 38% of the capacity of Lincoln’s, and usually processes 33% as much wastewater PUBLIC WORKS Lincoln Heavy use of SCADA for monitoring and remote control. Both plants are integrated and the level is increasing. Video monitoring. Asset Management; still in rudimentary stage. Contracting services; ‘contractors can handle some jobs cheaper and better.’ Staff reductions & staff changes. Fully automated processes that run without an operator. Power management Water management and reuse PUBLIC WORKS Lincoln Examples Staff Improvements: Operators maintain equipment, all staff can use SCADA… Lights: SCADA monitored, motion and Lux controlled, bulb selection… Thermostat: heating and cooling SCADA monitored with setting plan, rigid enforcement… PUBLIC WORKS Lincoln Results Realizing about 25% of potential savings Significant odor reduction Smoothing of year over year costs Fewer unexpected failures 10% Staff Reduction Note that improvements will continue as they develop their Asset Management database PUBLIC WORKS Summary of Choices (Estimated Incremental Rate Payer Cost or Savings) A. Do nothing: $0 B. Contract Operations: $500,000 annual savings C. Internal plan: Based on the Lincoln case study, cost $40 million over 10 years