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HomeMy WebLinkAbout1993-01-20 COUNTY SANITATION DISTRICTS OF ORANGE COUNTY, CALIFORNIA P.O. BOX 8127, FOUNTAIN VALLEY,CALIFORNIA 92728-8127 y 10844 ELLIS, FOUNTAIN VALLEY,CALIFORNIA 92708-7018 (714)902-2411 January 14, 1993 NOTICE OF ADJOURNED REGULAR MEETING DISTRICTS NOS, 3 6 7 WEDNESDAY, JANUARY 20, 1993 - 7:30 P.M. 10844 Ellis Avenue Fountain Valley, California Pursuant to adjournment of the regular meeting of January 13, 1993, the Boards of Directors of county Sanitation Districts Nos. 3 and 7 will meet in an adjourned regular meeting at the above hour and date. Assistant a d cretary BOARDS OF DIRECTORS ' County Sanitation Districts P.O. Box 8127• 10t144 Ellis Avenue .h o} Orange County, California Fountaln Valley,CA 92728-8127 Telephone:(714) 962-2411 DISTRICTS NOS. 3 g 7 AGENDA ADJOURNED REGULAR MEETING WEDNESDAY, JANUARY 20, 1993 - 7:30 P.M. In accordance with the requirements of California Government Code Section 54954.2, this agenda is posted not less than 72 hours prior to the meeting date and time above. All written materials relating to each agenda item are available for public inspection in the Office of the Board Secretary. In the event any matter not listed on this agenda is proposed to be submitted to the Boards for discussion and/or action, it will be done in compliance with Section 54954.2, or as set forth on a supplemental agenda posted not less than 72 hours prior to the meeting date. (1) Pledge of Allegiance and Invocation (2) Roll call ( 3) Public Comments: All persons wishing to address the Boards on specific items or matters of general interest should do so at this time. As determined by the Chairman, speakers may be deferred until the specific item is taken for discussion and remarks may be limited to five minutes. (4) DISTRICTS 3 & 7 (a) Verbal report of staff and counsel re fiberglass pipe force mains O1/20/93 • (5) DISTRICT 3 ONLY (a) Consideration of following actions re evaluation and determination of condition of Techite pipe force mains and viability of claim against pipe manufacturer; and Repair and Sampling of Westminster Avenue Force Mains, Units 1 and 2, Contract No. 3-36: (1) Consideration of motion authorizing Change Order No. 1 to Purchase Order No. 54292 to David R. Griffin, Attorney at Law, and/or his firm Byrum, Holland a Griffin, increasing the authorized amount from an amount not to exceed $25,000.00 to an amount not to exceed $85,000.00. (2) Consideration of motion authorizing the General Manager to issue a purchase order to Arnold Rummelsburg to provide supervision and forensic documentation in an amount not to exceed $5,000.00. ( 3) Consideration of motion authorizing the General Manager to issue a purchase order to Houser Labs, Boulder, Colorado, to conduct laboratory analyses in an amount not to exceed $10,000.00. (4) Consideration of motion authorizing the General Manager to issue a purchase order to Derrick \� Hull, Consultant, Cambridge, England, for laboratory analyses in an amount not to exceed $25,000.00. (5) Consideration of motion authorizing the General Manager to receive bids from qualified contractors for Repair and Sampling of Westminster Avenue Force Main, Units 1 and 2, Contract No. 3-36, and award contract to the lowest responsible bidder, in an amount not to exceed $125,000.00. (6) DISTRICT 3 O homer business and communications, if any (7) DISTRICT 3 Consideration of motion to adjourn (8) DISTRICT 7 Ott u—siness and communications, if any (9) DISTRICT 7 Considebation of motion to adjourn COUNTY SANITATION DISTRICTS ui ORANGE COUNTY. CAUFORNIA IW44 EWS AVENUE January 14, 1993 Rf190}9+:� FWWAJN VALLEY,CAUFORNiA 9212 127 n+m 99z-za.1 ADJOURNED DISTRICTS 3 AND 7 MEETING DATE JANUARY 20. 1993 AT 7:30 P.M. MANAGER'S REPORT DETERMINATION OF CONDITION AND REPAIR TO FIBERGLASS PIPE FORCE MAINS. Background Between 1967 and 1982, the Districts used Techite pipe as an alternative material for force main construction. Techite pipe was made from fiberglass layers bonded together with glue. In the past three years, the Districts have experienced failures in some of the Techite pipe force mains installed in District No. 3. Other pipe has been installed in Districts Nos. 5 and 7 and as a liner in an interplant line. The dates of installation and descriptions of the pipes are shown in the table below. Contract Date Quantity Gisler Trunk Sewer Contract No. 7-1C (From College Avenue P.S.) 1967 1,833 L.F. of 21" Navy Way Pump Station Contract No. 7-A-1 (in Edinger Avenue) 1969 2,603 L.F. of 16" Westminster Ave. Force Main First Unit, Contract No. 3-13 1970 14,308 L.F. of 30" Rehabilitation of PCH Plan 401 Sewer, Contract No. 5-19 1972 1,148 L.F. of 24" I.D. Liner Contract Date Quantity Westside Relief Interceptor �..- Contract No. 3-21-1 (From the Westside Lift Station) 1975 45 L.F. of 20" Westminster Ave. Force Main Second Unit Contract No. 3-13-1 1978 14,288 L.F. of 30" Rehabilitation of Ellis Avenue Force Main, Contract No. I-R-1 1982 6,494 L.F. of 33" I.D. Liner The Techite pipe in CSD 5 was installed as a liner. The pipe is deficient in capacity and plans are currently being prepared to replace the sewer (Contract No. 5-37)• The Techite pipe in the Ellis Avenue Force Main, Contract No. I-R-1, is also a liner in an older pipe. This force main is planned to be replaced with a larger pipe to increase flows into Plant No. 1 in the future. Westminster Avenue Force Main (District No. 3) The western portion of District No. 3 drains to a collection system served by the Seal Beach Pump Station located on the northeast corner of Seal Beach Boulevard and Westminster Avenue. Wastewater from this system is pumped easterly through a dual force main system to a gravity sewer located half-way between Boise Chica Avenue and Springdale Avenue. Both force mains are made of 30-Inch diameter Techite pipes. The first of these mains, the Westminster Avenue Force Main, First Unit, Contract No. 3-13, was installed in 1970, the Second Unit, Contract No. 3-13-1, in 1978. The most recent of several breaks in these lines occurred on August 19, 1991. The same line previously broke a few hundred feet away in March 1990 necessitating repairs at that time. Repair kits are becoming exceedingly hard to find because Techite pipe is no longer manufactured. The Districts are currently in possession of four repair kits for 30-inch pipe, five 20-foot lengths of 30-inch pipe, five 20-foot repair kits for 21-inch Techite pipe, and six 20-foot lengths of 21-Inch Techite pipe. These pieces represent the last repair kits in this region, any additional repair kits must be obtained from Ersigs, Incorporated in the State of Washington. While replacing the most heavily damaged 20-foot portion of the pipe from the August 1991 break, staff was able to view adjacent pipe sections on both sides of the broken pipe and found them cracked as well. Staff reported at the September 11, 1991 Board meeting that the entire line may need replacement. Staff estimated the cost to be approximately $5 to 6 million to replace both pipes. ...� The Board authorized staff to solicit proposals and negotiate a professional services agreement for design of Replacement of the Westminster Avenue Force Main (First Unit), Contract No. 3-36. Design for the Replacement of the Westminster Avenue Force Main (Second Unit), Contract No. 3-36, would follow the construction of the First Unit as a second phase via a separate contract. Staff reported to the Directors in December 1991 that information had been obtained indicating that the break may have been due to Techite pipe being inherently defective. Staff and General Counsel had a number of discussions with David Griffin, a Bakersfield lawyer specializing in pipe technology. He has represented public agencies with similar Techite pipe problems. Mr. Griffin has recovered seven large judgments and settlements against the Techite pipe manufacturers, losing only one case. Counsel and staff recommended, and the Boards concurred, retaining Mr. Griffin within staff authority to review the potential to recover costs from the manufacturers of Techite pipe. Mr. Griffin's report states that the Techite pipe manufacturer's claims regarding the pipe's inert properties and 50-year service life may be false. Mr. Griffin has indicated that the chances of recovery are good, and recommends proceeding with further testing. Testing of the pipe requires taking pipe samples for laboratory analysis. Based on potential results of the recommended testing and Mr. Griffin's findings, claims for fraud, breach of contract, negligence and misrepresentation are a distinct possibility, with recoveries for the cost of replacing the Districts' force mains plus legal fees minus depreciation expected. Punitive damages have also been obtained in past cases. Mr. Griffin's report has advised the Districts of some of the past histories of the Techite pipe manufacturers and the basis for a claim against the Techite pipe manufacturers. Mr. Griffin advises that the main items of evidence for this, or any such case, are the samples of the pipe analyzed by a laboratory proving that the pipe is deteriorating at an accelerated pace. The Districts videotaped 1300 feet of the newer Westminster Avenue Force Main, Contract No. 3-13-1, using a camera mounted to an electric motor and track system to determine if taking a sample was justified. The videotape showed a radial crack consistent with past Techite pipe failures. Videotaping lengths exceeding 1300 feet would require the Districts to cut access openings in the force mains at 2600 foot intervals. Staff has prepared plans for the removal of a segment of pipe from each of the Westminster Force Mains, First and Second Units, with one segment selected which will allow the repair of the cracked pipe that has been discovered on the Second Unit. The First Unit has had two recent failures in 1990 and 1991 and the Second Unit may fail at any time. The only other Techite force main in CSD 3 is the 45 L.F. of 20-inch used to relocate the force main from the Westside Lift Station to allow for the construction of the Westside Relief Sewer. This is a single-barrel force main and u therefore no samples can be taken from this line. Navy Way Pumo Station (District No. 7) Techite pipe was used in County Sanitation District No. 7 (CSD 7) at the Navy Way Pump Station and Force Main, and the College Avenue Pump Station and Force Main. No failures have happened on these systems. In July 1992, the Directors authorized construction of a gravity line to the Irvine Ranch Water District's Harvard Avenue Trunk in lieu of constructing a new force main for the Navy Way Pump Station force main. Plans are now being prepared for the abandonment of the Navy Way Pump Station and Force Main and most of the flows to the College Avenue Pump Station are being diverted to the Sunflower Trunk Sewer, greatly reducing the operating pressures in this line. Samples will be taken of the Navy Way Force Main as part of the Navy Way Pump Station and Force Main Abandonment and Construction of Gravity Sewer, Contract No. 7-20. Since the analysis for District No. 3 will precede District No. 7, no actions are recommended at this time. Laboratory analysis can be done within staff authority, if warranted. If laboratory analysis proves that the Navy Way Force Main is deteriorating at an accelerated pace, then this system could be included in the claim. Because the College Avenue Pump Station is also a single- �../ barrel force main, it is not recommended that samples be taken. Recommendations (District No. 3 only) Due to the fact that these samples will be used as evidence in a claim, staff recommends the removal of the pipes and selection of segments for laboratory analysis be supervised and documented by a third party with experience in removing the fragile sections of pipe. Mr. Arnold Rummelsburg, retired from the Wheeler Ridge Water Storage District, has experience necessary to supervise and provide forensic documentation of the removal. Corroborating laboratory analyses will also be required from two labs. Additionally, staff and General Counsel is recommending that Mr. Griffin's purchase order be increased from the staff- authorized $25,000.00 to $85,000.00 to cover consultation, compilation of past discovery and testimony, and preparation of a settlement brief. Finally, a contractor will have to be engaged to repair the cracked section(s) of pipe. Staff, therefore, recommends authorization for the General Manager to issue purchase orders in an amount not to exceed $250,000.00, to continue with this investigation, as follows: (1) Authorize Change Order No. 1 to Purchase Order No. 54292 to David R. Griffin, Attorney At Law, and/or his firm, Byrum, Holland & �./ Griffin, increasing the authorized amount for legal services from an amount not to exceed $25,000.00 to an amount not to exceed $85,000.00. (2) Authorizing the General Manager to issue a purchase order to Arnold Rummelsburg to provide supervision and forensic documentation in an amount not to exceed $5,000.00. (3) Authorizing the General Manager to issue a purchase order to Houser Labs, Boulder, Colorado, to conduct laboratory analyses in an amount.not to exceed $10,000.00. (4) Authorizing the General Manager to issue a purchase order to Derrick Hull, Cambridge, England, Consultant, for laboratory analyses in an amount not to exceed $25,000.00. (5) Authorizing the General Manager to receive bids from qualified contractors for Repair and Sampling of Westminster Avenue Force Main, Units 1 and 2, Contract No. 3-36, and award a contract to the lowest responsible bidder, in an amount not to exceed $125,000.00. # 444;21„00111- J. Wayne Sylvester General Manager JWS:TMD:jt \wpdoo\eno\committe\d3&7-193.m, Adjourned 01/20/93 7:30 p.cl. 3 6 7 MEETING GATE TIME DISTRICTS DISTRICT 1 JOINT BOARDS (BEYER) .......BARREN) ...... _ (SEVER) ......... BARRERA .....— — — LREAOE) .......FERRYMAN ..... — (DENES) ......... BELL .........— (LUTZ) .........RICHARDSON ... (MtDtANAHAN) .... CATLIN ....... (PONTIOUS) ....SALTAREW .... (SCOT1♦ ......... COWNS ...... — — (ROTH) ........STANTON ...... _ (WATT) .......... COX _ (NELSOM ........ WNLAP .... — DISTRICT 2 (PoCE) ........... EVANS .......— — (GULLASON)....WEDM ........ (REAGE) ......... — (BCOTT) .......cOWNS ....... (MANOMEY)....... FLOM........— — (BEYER) .......BANRERA ...... (BiOWM......... GRIFFIN _ (DENES) .......BELL .......... — (WEDAA) ......... GUWI®ON..... — (MkLIANAHAM ..CATLIN ........ _ (WARD) .......... HAMMOND ....— — (FLDM) .......MAHONEY...... (DEHAn ......... HART.........— — (ECI®IRODE)...MORENO.MARA — (AGE) ........... Kilm .......— — (PARIMM ......NELSON ....... — (ULVA) .......... LEPLB.......— — (DALn.........PICIQHi ....... (FORSfTHE) ...... LAZBW........ — (WR) .........PIIIIDO........ (Rio ARosoN) .... LUTZ ......... (ROTH) ........STANTON ...... _ (FLORA) ......... IMIRMIEY.....— — (SINGER)....... ........ — (UNN) ........... MINER........— — (ECIENRODE)..... MORENO,MARM— — DWmCT 3 (PUUDO)......... MORENO.TED — (MARRNE21.....SAPSiT1 ........ . C (PARIG:R) ........ NELSON ......— — (NELSON) ......DUNLAP ....... JL (DUNLAP) ........ PARXt-A — (MiCLANAW N) ..CATLIN ........ (OA Y)........... PIGBER ......— — (SCOTT) .......COWNS ....... JG (PUcIIETT) ....... POIIROUS ....— (RICE) .........EVANS ........ w ISALTARELLO ..... PUCNETT _— (MAHONEn.....FLORA ........ Of ILUTZ) ........... PUUDO .......— _ (BROWN).......GRIFFIN ....... t (LUTZ) ........... RICHARDSON (AGE) .........HEAR/ ........ (STANTON) ....... ROTH — (FORSYTHE) ....LASZLO........ (PORWAR ...... SALTAFEW ... — (RICHARDSON) ..WTZ.......... Rf, (DEBXY) ......... SANSONE .....— — (UNN) .........MNEA......... (MAR71MED....... SAREI ....... — — (DALn.........PMAG.ER ....... (ROBRAIUE) ..... ffiVA ........— — (ROBRAILLE) ...MW.. (ZLANET)......... SEBEI.......— — (L AWn .......SINGER............... (ROTH) .......... STANTON .....— _ (FO. ........STANTON ...... (MLLEM ......... SWAN ........— — (SAM)........SA.VM ........ r (BATES).......... mm .......— — (WA-M .......... TURNER ...:..— — )ISRTICT6 (PERRY) ......... WANNER......— — (�/WATT]........LAX .......... (GUWXSON)...... WEIR) .......— — (STANTON) .....ROTH ......... (ROBRAILLE) ..... WINCHELL.....— — (WATT) ........TURNER ....... — (SINGER)......... ZlAKET .......— DISTRICT STAFF OTHERS (PERRY) .......WANNER....... — SYLVESTER WOODRUFF (DEBAn .......HART ........• — BROWN ....— ANWAR.... — (STANTON) .....ROTA ......... _ ANDERSON. DEMR..... CLAWSON.. FLEMNO... — DISTRICT7 DAWES .... HOHENER.. (SALTAREILI) ...PUCMETT GORCZYCA. — HOUGH .... ...... HASENSTAB HOWARD .. — I I .........WANNER....... — (BEYER) .......BAPoiEN) ...... HOMES ... AUNT ..... PF (WARD) ........HAM omD ..... — UN E R .... LEEIQf .. .... (FVUDO) .......MORENO.TED .. Z UNDER ....— LEE ....... (STANTON) .....ipTH ......... 3 NEAOR ...— UNDSTROM (DEBAY) .......SANSOTE NICHOLS...— LYNCH .... OOTEN .... — SLAW ..... DISTRICT II SI)PSON .. WASW . ... (ROBR LL AILLE) ...WINCHE ..... SRR® ... YOUHG (SILVA) ........MFGG........ _ WNLFM...— D (ROTA) ........STANToN ...... — MNSPR DISTRICT 13 (WEDAA) .......GUWXSON..... _ STANTO �� . (BEYER) .......BARREN) ...... _ ( I ......RHEA ....... (OALn.........PIC4cER ....... DISTRICT OM .....ROTHT ......... — V 'Ml1EA) .......SWAN ......... PoTTTIom ..... — `...I�EYER) .......EMREM ...... — — (WARD) .... (STANTCM .....ROTH ......... Inzm 01/20/93 - ADJOURNED DISTRICTS 3 & 7 BOARD MEETING #4 - Staff Reoort TMD: Tonight we are going to talk about a certain type of pipe that the District has installed several times in the last 20+ years called Techite pipe. Techite pipe is a plastic reinforced fiberglass type of pipe. The District used has used it in force mains, that is to say that the pipes that are under pressure after sewage was left from lower elevations and pumped to higher elevations. Techite pipe in the late 60's and 70's found wide acceptance as a pressure pipe. Mainly it was used by water districts for all of their pipes are pressured, and they were the main users of techite pipe. It came in a larger diameter, that is to say 15" and higher and was used by many water districts for transmission mains and things of that sort. In the District's case it was bid as an alternate to other types of pressure pipe. In the cases to be discussed tonight it was the winner probably because it was the cheapest pipe. In all cases techite pipe, today techite pipe is no longer made and hasn't been made since 1984-85, and is failing all over. The Districts installed techite pipe in several locations. District 3 has the most of it, largely in a double- barreled force main which serves the Seal Beach pumping plant that is located on Seal Beach Boulevard and Westminster Avenue in the Navy weapons area. It is on the northeast corner of Seal Beach Boulevard. The force main from that pump station pumps all the way over to just about Springdale and Westminster, so it is nearly a 3-mile force main. Because it is a double-barreled pipe, we have 6 miles of that pipe in the ground. It was also used by the joint works in a pump station force main in Ellis Avenue. There it was used as a slip liner and that is to say it went inside of an old siphon, and it was grouted to the wall of the old pipe so it really became a carrier pipe. It was used as a very short force main for the West Side Pump Station. That is only 45 feet long. _ a force main in the College Avenue Pump Station, there is about 1600 feet in that. And, it was used in District 7. There is also a short section in District 5, again, as a slip liner. In total we have about 8 to 9 miles of techite pipe. I would like to briefly go through some of these charts. The Westside Relief Interceptor and the College Pump Station are planning to add second barrels at a later date. And we feel because of that we won't have to replace the two barrels that are in there. We will simply retire them as stand-by. The 1989 Master Plan that you adopted calls for that liability factor, to always 1 have a second barrel in a force main, rather than a single barrel. In the lines where it is used as a slip liner, in Ellis Avenue and down in Pacific Coast Highway, those lines are both slated for replacement because of hydraulic deficiencies. We wouldn't expect to do any repair on those lines. They'll be replaced in the future in accordance with our Master Plan. So the areas that we have to talk about are District 7 on their Navy Way Pump Station and large amount on the Westminster Avenue Force Main in District 3. Let's start In District 7. The District operates a pump station on Edinger Avenue just on the north side of the Tustin Air Station. After we found out that this techite pipe was in jeopardy, we made an analysis and presented it to the Directors two options. One was to build a new force main 2600' long, the other was to construct a gravity sewer from the pump station over to the Irvine Ranch Water District's HATS' Trunk (Harvard Avenue Trunk Sewer). But the construction of the gravity sewer costs more than the building of the force main but it allowed us to take the pump station out of service. So the Directors of District 7 approved that plan and we are now preparing the plans to build this force main in Edinger and take this out of service. Because of that we won't need to spend any money replacing or paralleling this force main. We're pleased to tell you that job is going very well. The developers in the Jamboree Plaza gave us a free 1500' easement so that we can make the necessary connection and we expect to advertise that job in about 4 or 5 months. District 7, for informational purposes only, we do plan to try to recover costs for the techite force main in District 7 and we are going to do that on the basis of the recommendations that we are making to you tonight on the force main in Westminster Avenue that serves the Seal Beach Pump Station. As I mentioned, the Seal Beach Pump Station is on the northeast corner of Seal Beach Boulevard. It is a dual 30" force main. The first of these force mains, as you look towards the east, was put in in 1970 with a bedding and no cover around the top other than just dirt. That was put in about 27' on the north side of the force main. At about that time the street hadn't been widened to that so it was put closer to the center line making ready for the second one which would be put even farther to the north and farther away from the center line. The second one was put in in 1978. That one, there was a cement slurry encasement put over the top to protect it. Now that was mainly added to protect it from a puncture because this type is very thin, about 1/4" thick. Since that time these pipes have operated in parallel, and, again, the reason for having two is daily pumping is used through both of them to lower the pumping requirements, to keep the energy requirements as low as possible. But if one of them should break their sides so that all of the water could be put in the other one and not lose any water. Force mains are a very vulnerable part of any pumping system and this dual force main 2 � I system has protected us very well. The first breaks occurred in 1974 by Harmond Avenue and Westminster. Then �..i they started coming more frequently. The second break occurred in 1990. The third break occurred in August 1991. When that break occurred in 1991 we had the opportunity, while fixing the pipe, to look in the pipe. We saw corrosion in the top of the pipe just like the pipe was being eaten out. (Pictures were passed around for Directors to view of damaged pipe.) The repairs are very difficult on these because it's a flexible pipe. We can't just go in there and put some bands on it. You have to get another piece of techite pipe. That is really hard to do because it's not made. We scouted around and we found some pipe near Bakersfield owned by the Maricopa County Water Storage District, and they agreed to sell us a repair kit. We sent some people up there to check this out. When we were up there they agreed to sell us five or six repair kits, all that they had left. We asked why and found out they spent thousands of dollars to replace all of the techite pipe. They told us their own horror story of how this stuff was breaking up one right after the other until finally they just replaced the whole pipe. We bought the repair kits and made the repair. One of the other things we learned in doing this was they sued Techite and sued successfully so they gave us the name of their attorney. We called the attorney, David Griffin of Bakersfield, and through him we found out that these failures are coming about because of chemical failure of the pipe. The pipe is literally erroding from the water. The glues in it after awhile dissolves and the fabric-wrap that it was made out of bursts and the pipe fails. We then decided to tv the pipe as best we could. Since this 3-mile pipe is a force main, we don't have any access parts or manholes to get into it. So we got a company to go in and with a little tractor camera run the camera up the pipe from both ends as far as they could go from both ends (about 1200-1300 feet). In the newer pipe, built in 1978, we did find another break. Consequently we-now have all the water going through the older pipe. We are going to show you the results of that tv. You'll be looking at the inside of a 30" techite pipe. John Dettle, our engineer working on this project, will describe what you are going to see. Mr. Griffin, our attorney, has told us some startling news. He told us that the older pipe, which we've had more breaks in, is a better quality pipe than the newer pipe. He told us on the newer pipe the company actually cheapened up on it and put sand in it instead of displaced resin so it has less of the resin than the older pipe. He is saying that now that we have 14 years on it, he expects it to start breaking at an alarming rate. He prepared quite a report on this. It is so unbelievable....United Technologies, a very large company. They are an American firm defense contractor and they were looking for ways to diversify when they 3 went into this business. Our attorney tells us that the resin in this pipe is very similar to the resin in Elmer's glue. He told us that in time it simply dissolves out. It is just incredible. The actions that we are going to be asking of you tonight in District 3 are to authorize us to bid the repair of this 1978 line and when we do that repair to take a sample. And then while we have the street tore up in Seal Beach, after we get the newer line repaired, we want to switch the water and take a sample out of the older line, both recommended by our attorney as absolutely necessary for our claim against United Technologies. The other actions that we are asking you to do are to allow us to hire some labs to run samples. The other action is to authorize us $40,000 to hire these labs. Now, we gave specific amounts in the Manager's Report. $10,000 to one, $25,000 to another and $5,000 for a forensic expert. We would like to slightly revise that to give us $40,000 to issue purchase orders to those three firms and individuals, but allow us to change mix. The attorney is now recommending that we do more testing in Boulder, CO and less testing in England. (Tape then restarted with John Dettle's narration) We know that that is a break and because of that we asked to have meet at this meeting to give us the authority to go ahead with the repair and with that repair to take the samples that we need for this case. I think General Counsel, Tom Woodruff, will now talk about our plans for the claim. TLW: There are several Directors who are new to this. Several who have had an initial briefing, possibly. About a year ago we did upon discovery of this information contact Dave Griffin, an attorney from Bakersfield with a firm that we subsequently learned has been involved with a number of matters involving UTC (United Technologies) and Amico, their successor, who are the manufacturers of the pipe. On behalf of a variety of public agencies from Fairbanks, Alaska to Hawaii and several in California throughout the West, John Shaw in my office has really been spending and putting most of the effort in on this with Tom and the staff. But going back about a year ago, the Boards approved and engaged Mr. Griffin to do a couple of things. One was, based on his experience of other cases, to review the data that we did have relative to the systems to determine whether they followed a pattern that they had found in the other matters where they had filed suit on behalf of other public agencies, and secondly to provide us legal analyses of where it would all develop and what the Districts' position might be if it saw fit to pursue this. We got those reports the middle of last year. His legal brief came back in 100 pages. I must tell you, it is extremely well done. We have been evaluating that in several respects since then and the staff and management has been viewing this and trying to-take into consideration a variety of factors. 4 Before the defects were discovered on video, we realized that just to get pieces of pipe to send to the lab meant the investment of a fairly considerable sum of money because we would have to go in, excavate, hire contractors, make appropriate cuts, not even really being sure where we were going to dig to be sure we were going to get some bad pipe, and then make the repair to the line and keeping it in service, it was going to be pretty costly so staff was trying to figure out the best way to approach that and they were doing a variety of engineering studies, looking at old records and what have you. Now we found these defects and staff is really convinced that those need to be repaired. We certainly don't want a major sewer break. Since we are going to be doing that and awarding a contract to do it, we know we are going to be opening up bad pipe so we've got the specimens we need to send to the labs. Even though it is bad news, the good news is we've got the hard data or material for laboratory work to proceed forward. We have met with Dave Griffin in my office for a few hours today and went through a variety of aspects on how to proceed on this. The recommendation that you see in your Manager's Report and agenda is to authorize a revision on the change order to Mr. Griffin and his law firm to undertake some additional work. What that basically would entail is several things. One is to coordinate with some engineers who will be involved in the laboratory and technical evaluation and analyses of the pipe that we send to them. They will also be looking at all of the old construction installation and inspection records, data that the District has going back to the 1970's when these lines were installed, developing essentially a legal stratagem so we can be sure that we have as much of the best data possible before we ask the Boards to ultimately say to file suit against Amaco and/or United Technologies and anybody else who supplied the pipe. There are also some expert witnesses that are out there who are available who have spent a great deal of time who have testified previously in other matters. There are engineers and scientists who have been involved in this process and know what this pipe is all about. It would entail the coordinating of efforts with them as well, trying more or less to get those folks briefed and "on our side". And lastly to prepare a package that we would put together to submit to the respective companies, Amaco and UTC, showing hard data, what we have in the form of bad pipe, laboratory results showing why its' bad and how it's bad, and how much we've got in the ground, what the costs are. There will be a cost evaluation for replacement. And present this to them at the time we would essentlally file a claim with them and a demand for reimbursement to us for these damages. Mr. Griffin believes quite strongly that if we are going to pursue this course that we really need to do a couple of things. One, strike forcefully in the claim and strike rather quickly. As he noted, and I concur, these are large Fortune 500+ corporations, they are going to come at us with a battery of 10-50 lawyers and try to paper us to death. But he's been through this and his firm has been through this a number of times and they have quite a few of the smoking guns relative to corporate memos and other reports showing that these manufacturers knew that they had material defects and that their own laboratory 5 work was flawed. He believes that we need to convey to them a message that we are very serious about pursuing the claim and not show them a lot of quarter. His advice, his recommendation is to try and do that with the hope that the case �..i settles either before litigation or at a very early stage, even recognizing to take it at a substantial discount. We've all just been through for the past year the Montrose litigation. You know what complex technical litigation can Involve and if we could go in and file a claim and settle it without the litigation on the basis of convincing them that we do have really good hard evidence and even taking it at a substantial discount, I would probably come to you as General Counsel and recommend that you settle it whether it was 50 cents on the dollar or whatever the number might be because it is money that we can use immediately towards the replacement of those lines and it avoids outrageous complex extended litigation where the costs go up. The offset to that is some of the public agencies, and what we would apparently do, is also file a claim on the basis of fraud. They have succeeded on the basis that the companies, in fact, knew that at the time they manufactured this pipe that their scientific data was flawed and they decided to go ahead with it in any event. Based on that, if you make the allegation and prove the fraud claim, you can get punitive damages. Mr. Griffin has, in fact, on behalf of a smaller water district, succeeded in getting a $4 million fraud claim established against them for punitive damages. This is premature and down the way but one of the things you will be hearing down the road. Mr. Griffin will be recommending to us. If, at such time as the Board is called upon to make a decision whether to litigate or not, which will be presented to the Board, will be a lot more definitive. Mr. Griffin's firm is capable of doing this. Whether we engage that firm to do the litigation is not something I have a recommendation on at this time. We may do it, one choice would be to have them do it exclusively; one of them do it in conjunction with my office or in conjunction with a local office here of some other firm; but one, we get the report back and see whether the facts and evidence merits pursuing this further, those are our recommendations that I will have for you on a precise basis. Any questions? Director Collins? COLLINS: A couple of quick ones. You mentioned smoking guns with documents. Wouldn't that be found liable judgments against specific pipe in other cases be almost a _ done deal? TLW: Yes and no. As I understand it, and as Dave was commenting yesterday, they were changing the formula on this pipe about every six months for a year. And so, as Tom commented, he now thinks, six months ago Dave Griffin opined that he didn't think we would have troubles with the 78 pipe and that we wouldn't have a claim. He said we might just as well ignore that. Let's focus on the 72 claim. Now we've got pieces of pipe showing stress corrosion on the top and failure and he's saying time-out. The 78 pipe is a far better claim and we've got some precedent on that and it's a question of when it was manufactured. But 6 there was a change in the formula so the answer is yes, but. COLLINS: Do we know what the one case that Mr. Griffin lost on? SHAW: Yes, we do. He was unsuccessful in two cases actually. The one he was specific on was a case in Hawaii. There they just couldn't convince the jury about causation as to what led to the crack. But, what he did tell us and we've done some double-checking on his work with a couple of his clients, he has been involved in at least 15 separate lawsuits and he has represented 13 have settled favorably. Two have been losers for him. With regard to the smoking gun issue, he's got thousands of documents and he has witnesses already pinned down that we can use in this case. But these cases that have settled are in effect sealed records and in fact he couldn't even relate to us what the settlements were. COLLINS: So they were settled by a judgement? SHAW: Right. Well, yes. There was one case that went to judgement and I think he represented and that eventually settled before the appeal got resolved. COLLINS: None of that would be admissible in our position? SHAW: That's right. However, the evidence would be available to us. And that's a real key resource for us. I also wanted to add that Mr. Griffin feels strongly that our demand probably is going to be in the range of about $10 million against these defendants. I think Tom estimates that if we had to construct all of this material now, we would be in the range of $12 million out-of-pocket and so Dave would go after most of that and I think he used a number of about $10 million. COLLINS: One of the things that was mentioned In the report was minus depreciation. Was that something that was out of the settlement because it doesn't seem fair to me that we would have to dig up this pipe much prior to the life expectancy. I know some of it might be good but we still have to dig it up and we're out of pocket. Why would there be depreciation? TLW: Well, it gets to be complex and it also gets to be argument. They will probably come around and say well, you lost 10 years of life and whatever, but we replace the pipe we don't get that extra 10 years until somewhere in the year 2040 and so we would put a present value on the cost of that in today's dollars so we would discount in effect the depreciation. It becomes a lot of mathematics. COLLINS: Is Mr. Rummelsburg, the forensic witness, accepted in the court in this manner? TMD: Mr. Rummelsburg is a retired civil engineer from the Maricopa County 7 Storage Water District. He has kind of affiliated himself with Mr. Griffin. Because he did so much of this in repairing his own lines he became an expert on this. Mr. Griffin is very concerned that when we take the samples that we do it properly so .�. we don't contaminate them or mess them up in any way and that we provide a very very viable chain of custody on how we take the samples, keep them and get them to the laboratory. We're recommending that you authorize us to hire him for that since that chain of custody in forensic work is something that we're not at all experienced with. COLLINS: So has he been accepted in court as a forensic witness? SHAW: Yes, I believe he was used in the Fairbanks pipeline failures. COLLINS: The request is to authorize the General Manager to issue purchase orders in the amount not to exceed $250,000.00 to continue the investigation. When I add up the five points I come up with $225,000.00. Is the other $25,000 the initial $25,000 or is there an additional $25,000 over and above that? TMD: It is the initial $25,000 because of the change order. COLLINS: Okay, so we are not issuing _ $25,000 has already been issued so we are really asking to approve an incremental issuing of purchase orders of $225,000. TMD: That's correct. COLLINS: Why England? Why Cambridge, England? TMD: I can tell you what I know about that. There is a professor over there who _ also made a name for himself in analysing this pipe. He's got some kind of technique which he can prove by test that the pipe is, classify it say when it was made, what was in it and what was wrong with it. He is a retired professor from the University of Cambridge and he is somebody that Dave Griffin recommends that we use and that's about all I can say. COLLINS: I understand your request is making the $40,000 pool and divvying it up, that's fine. But why is there an expected 250% difference between the laboratory costs in England and the other one in Colorado? TMD: In the original analysis from Mr. Griffin, he recommended more testing in England. Right now he has changed his mind and he is recommending that we do strength testing in Colorado and he wants to bring in this professor from England as an expert witness and to go over those results. 8 COLLINS: So the difference really is the type of testing that is being done. GRIFFIN: I would like to move the recommendation on 3, 4 and 5. JC: Alright, we've got a motion and a second. Further discussion? JWS: Mr. Chairman, does that motion include the recommended change in Items 2, 3 and 4 to just authorize a total of $40,000 of a mix to be determined later? JC: Yes. Do we have any opposition to the motion? Seeing none, it will be deemed approved. We don't need any action in District 7. If there's nothing further to discuss I will entertain a motion for adjournment. 9 v a BOUNTY SANITATION DISTRICTS NOS. 3 & 7 OF ORANGE COUNTY, CALIFORNIA MINUTES OF ADJOURNED REGULAR MEETING January 20, 1993 - 7:30 P.M. 10844 Ellis Avenue Fountain Valley, California Pursuant to adjournment of the regular meeting of January 13, 1993, the Boards of Directors of County Sanitation Districts Nos. 3 and 7 of Orange County, California, met in an adjourned regular meeting at the above hour and date. The Chairman called the meeting to order at 7:30 p.m. The roll was called and the Assistant Secretary reported a quorum present. DISTRICT 3: DIRECTORS PRESENT: Burnie Dunlap, Chairman pro tem, John Collins, James V. Evans, James H. Flora, Don R. Griffin, Gail Kerry, Frank Laszlo, Eva G. Miner, Earle Robitaille, Sheldon S. Singer, Roger R. Stanton, Charles E. Sylvia ...� DIRECTORS ABSENT: A.B. "Buck" Catlin, Thomas E. Lutz, Iry Pickier, Sal A. Sapien DISTRICT 7: DIRECTORS PRESENT: Fred Barrera, Barry Hammond, Ted Moreno, Don Roth DIRECTORS ABSENT: Charles E. Puckett, Phil Sansone, James A. Wahner STAFF MEMBERS PRESENT: J. Wayne Sylvester, General Manager, Penny Kyle, Assitant Board Secretary, Thomas M. Dawes, Gary G. Streed, John Dettle OTHERS PRESENT: Joint Chairman William Mahoney, Vice Joint Chairman Evelyn Hart, Director Carrey J. Nelson, Thomas L. Woodruff, General Counsel, John Shaw, Phil Stone ��.►� t t t t + a • a a a a t + t t t t t a a 01/20/93 Districts 3 & 7 DISTRICTS 3 & 7 Report of staff and counsel re fiberglass pipe force mains The Director of Engineering reported on the history of the Districts' use of Techite pipe as an alternative material for force main construction. Techite pipe was made from fiberglass layers bonded together with glue. He also reported that in the past three years, the Districts have experienced failures in some of the Techite pipe force mains installed in District No. 3. Other pipe has been installed in Districts Nos. 5 and 7 and as a liner in an interplant line. He also explained that the western portion of District No. 3 drains to a collection system served by the Seal Beach Pump Station located on the northeast corner of Seal Beach Boulevard and Westminster Avenue. Wastewater from this system is pumped easterly through a dual force main system to a gravity sewer located half- way between Bolsa Chica Avenue and Springdale Avenue. Both force mains are made of 30-inch diameter Techite pipes. The first of these mains, the Westminster Avenue Force Main, First Unit, Contract No. 3-13; was installed in 1970, the Second Unit, Contract No. 3-13-1 , in 1978. Mr. Dawes stated that the most recent of several breaks in these lines occurred on August 19, 1991 . The same line previously broke a few hundred feet away in March 1990 necessitating repairs at that time. The Director of Engineering noted that while replacing the most heavily damaged 20-foot portion of the pipe from the August 1991 break, staff was able to view adjacent pipe sections on both sides of the broken pipe and found them cracked as well. Staff reported to the Directors at the September 11, 1991 Board meeting that the entire line would possibly need to be replaced. Staff estimated the cost to be approximately $5 to $6 million to replace both pipes. The Board authorized staff to solicit proposals and negotiate a professional services agreement for design of Replacement of the Westminster Avenue Force Main (First Unit), Contract No. 3-36. Design for the Second Unit would follow the construction of the First Unit as a second phase via a separate contract. He noted that staff reported to the Directors in December 1991 that information had been obtained indicating that the break may have been due to Techite pipe being inherently defective. Staff and General Counsel have had a number of discussions with David Griffin, a Bakersfield lawyer specializing in pipe technology. Mr. Griffin has represented public agencies with similar Techite pipe problems. He has recovered several large judgments and settlements against the Techite pipe manufacturers for defective material. -2- 01/20/93 Districts 3 & 7 At that time General Counsel and staff recommended, and the Boards concurred, �..� retaining Mr. Griffin within staff authority to review the potential of recovering costs from the manufacturers of Techite pipe. It was further noted that based on potential results of the recommended testing and Mr. Griffin's findings, claims for fraud, breach of contract, negligence and misrepresentation are a distinct possibility, with recoveries for the cost of replacing the Districts' force mains plus legal fees minus depreciation expected. Punitive damages have also been obtained in past cases. Mr. Griffin has advised the Districts of some of the past histories of the Techite pipe manufacturers and the basis for a claim against the Techite pipe manufacturers. Mr. Griffin has indicated that the chances of recovery are good, and recommends proceeding with further testing. Testing of the pipe requires taking pipe samples for laboratory analysis. Mr. Griffin advises that the main items of evidence for this, or any such case, are the samples of the pipe analyzed by a laboratory proving that the pipe is deteriorating at an accelerated pace. The Districts videotaped 1300 feet of the newer Westminster Avenue Force Main, Contract No. 3-13-1, to determine if taking a sample was justified. The Directors viewed portions of that videotape which showed a radial crack consistent with past Techite pipe failures. Videotaping lengths exceeding 1300 feet would require the Districts to cut access openings in the force mains at 2600 foot intervals. Mr. Dawes also stated that staff has prepared plans for the removal of a segment of pipe from each of the Westminster Force Mains, First and Second Units, with one segment selected which will allow the repair of the cracked �.� pipe that has been discovered on the Second Unit, concurrently with it's use for laboratory analysis. The First Unit has had two recent failures in 1990 and 1991 . Mr. Dawes further reported that Techite pipe was used in District No. 7 at the Navy Way Pump Station and Force Main, and the College Avenue Pump Station and Force Main. No failures have happened on these systems. In July 1992, the Directors authorized construction of a gravity line to the Irvine Ranch Water District's Harvard Avenue Trunk in lieu of constructing a new force main for the Navy Way Pump Station force main. Plans are now being prepared for the abandonment of the Navy Way Pump Station and Force Main and most of the flows to the College Avenue Pump Station are being diverted to the Sunflower Trunk Sewer, greatly reducing the operating pressures in this line. Samples will be taken of the Navy Way Force Main as part of the Navy Way Pump Station and Force Main Abandonment and Construction of Gravity Sewer, Contract No. 7-20. Since the analysis for District No. 3 will precede District No. 7, no actions were being recommended at this time for District No. 7. -3- 01/20/93 ° Districts 3 & 7 Mr. Dawes concluded that due to the fact that these samples will be used as evidence in a claim, staff recommends the removal of the pipes and selection of �J segments for laboratory analysis be supervised and documented by a third party with experience in removing the fragile sections of pipe. Mr. Arnold Rummelsburg is an experienced consultant with the knowledge necessary to supervise and provide forensic documentation of the removal. Corroborating laboratory analyses will also be required from two labs. Also, staff and General Counsel are recommending that Mr. Griffin's authorization be increased from the staff- authorized $25,000.00 to $85,000.00 to cover consultation, compilation of past discovery and testimony, and preparation of a settlement brief. In addition, a contractor will have to be engaged to repair the cracked section(s) of pipe. DISTRICT 3 Actions re evaluation and determination of condition of Techlte pipe force mains and viability of claim against Dips manufacturer Authorizing Change Order No. 1 to Purchase Order No. 54292 Issued to David R. Griffin. Attorney at Law re Techite Ploe Moved, seconded and duly carried: ✓ That staff be, and is hereby, authorized to issue Change Order No. 1 to Purchase Order No. 54292 issued to David R. Griffin, Attorney at Law, and/or his firm Byrum, Holland & Griffin, increasing the authorized amount from an amount not to exceed $25,000.00 to an amount not to exceed $85,000.00, for services pertaining to evaluation and determination of condition of Techite pipe force mains and viability of claim against pipe manufacturer. Authorizing the General Manager to Issue a purchase order to Arnold Rummelsburn to provide aupervision and forensic documentation re Techite Pipe Moved, seconded and duly carried: That the General Manager be, and is hereby, authorized to issue a purchase order to Arnold Rummelsburg to provide supervision and forensic documentation in an amount not to exceed $5,000.00, for services pertaining to evaluation and determination of condition of Techite pipe force mains and viability of claim against pipe manufacturer. -4- 01/20/93 Districts 3 & 7 Authorizing the General Manager "a,.• to issue Purchase orders to Houser Labs and Derrick Hull re Techite Pipe Moved, seconded and duly carried that the General Manager be, and is hereby, authorized to issue the following purchase orders to conduct laboratory analyses for services pertaining to evaluation and determination of condition of Techite pipe force mains and viability of claim against pipe manufacturer, in a total amount not to exceed $35,000.00 for the two firms: . Houser Labs - Boulder, Colorado . Derrick Hull, Consultant - Cambridge, England Authorizing receipt of bids from qualified contractors for Repair and Sampling of Westminster Avenue Force Main, Units 1 and 2. Contract No. 3-36. and award contract to lowest responsible bidder Moved, seconded and duly carried: That the General Manager be, and is hereby, authorized to receive bids from qualified contractors for Repair and Sampling of Westminster Avenue Force Main, Units 1 and 2, Contract No. 3-36; and, FURTHER MOVED: That the General Manager be, and is hereby, authorized to award contract to the lowest responsible bidder, in an amount not to exceed $125,000.00. DISTRICT 3 Adjournment Moved, seconded and duly carried: That this meeting of the Board of Directors of County Sanitation District No. 3 be adjourned. The Chairman then declared the meeting so adjourned at 8:20 p.m., January 20, 1993. "s -5- 01/20/93 Districts 3 & 7 DISTRICT 7 Adjournment Moved, seconded and duly carried: That this meeting of the Board of Directors of County Sanitation District No. 7 be adjourned. The Chairman then declared the meeting so adjourned at 8:20 p.m., January 20, 1993. Assistant S etary card of Directors County Sani anon istricts Nos. 3 & 7 of Orange County, California -6- STATE OF CALIFORNIA) ) SS. COUNTY OF ORANGE ) Pursuant to California Government Code Section 54954. 2, I hereby certify that the Agenda for the Adjourned Regular Board Meeting of Districts Nos. 1, 2, 3, 5, 6, 7, 11, 13 and 14 held on 19" was duly posted for public inspection at the main obby of the Districts' offices on 4igm(aft 19ft. or or IN WITNESS WHEREOF, I have hereunto set my hand this d� day of 1913. 00 Penny Kyle, s ant Secretary o each of the o s of Directors of County Sanitation Districts Nos. 1 , 2, 3, 5, 6 , 7, 11 , 13 6 14 of Orange County, California t'