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HomeMy WebLinkAbout09-22-2010 Board Agenda Packet AGENDA BOARD OF DIRECTORS ORANGE COUNTY SANITATION DISTRICT ADMINISTRATIVE OFFICE REGULAR MEETING September 22, 2010 — 6:30 P.M. INVOCATION AND PLEDGE OF ALLEGIANCE - (John Anderson — Yorba Linda) ROLL CALL PUBLIC COMMENTS REPORTS: The Chair and the General Manager may present verbal reports on miscellaneous matters of general interest to the Directors. These reports are for information only and require no action by the Directors. 1. Ratifying payment of claims of the District, by roll call vote, as follows: ALL DISTRICTS 08/15/10 08/31/10 Totals $7,856,272.98 $12,893,258.24 DIRECTORS: Pursuant to Government Code Section 84308, you are required to disclose any campaign contribution greater than $250 received in the past twelve months from any party to a contract involving OCSD. This requires that you identify the contributor by name. Further, you may not participate in the decision making process to award a contract to such party. For reference, you are directed to the Register of Warrants as to all current contractors/vendors with OCSD. For the specifics of Government Code Section 84308, please see your Director's Handbook or call the office of General Counsel. CONSENT CALENDAR Consideration of motion to approve all agenda items appearing on the Consent Calendar not specifically removed from same, as follows: 2. Approve the minutes for the regular meeting held on August 25, 2010. 09/22/10 Page 2 STEERING COMMITTEE 3. Order Steering Committee Minutes for the regular meeting held on August 25, 2010 to be filed. OPERATIONS COMMITTEE 4. Approve the minutes of the September 1 , 2010 Operations Committee meeting. 5. Authorize the General Manager to negotiate Amendment No. 6 to the Professional Services Agreement with Camp Dresser & McKee, Inc. for additional design services for the Rehabilitation of Odor Control Facilities, Project No. J-71-8. 6. a) Approve Plans and Specifications for the P2 Digester Gas Dryer Upgrades, Project No. FE07-20, on file at the office of the Clerk of the Board; b) Approve Addenda Nos. 1 and 2 to the plans and specifications; c) Receive and file bid tabulation and recommendation; d) Award a construction contract to Minako American Corporation dba Minco Construction for P2 Digester Gas Dryer Upgrades, Project No. FE07-20, for an amount not to exceed $897,000; and, e) Approve a contingency of $89,700 (10%). ADMINISTRATION COMMITTEE 7. Approve minutes of the September 8, 2010, meeting of the Administration Committee. 8. Authorize the General Manager to issue Revenue Refunding Certificate Anticipation Notes, Series 2010B, as one-year fixed-rate obligations, in an amount not to exceed $167.0 million to replace the $165.9 million Refunding Certificate Anticipation Notes, Series 2009B maturing on December 1, 2010. 9. Authorize the General Manager to issue up to $157 million in new fixed-rate Certificates of Participation (COP) debt, in one or more series. 10. Adopt Resolution No. OCSD 10-15, Declaration of Official Intent to reimburse certain of the District's Capital Reserve Funds for expenditures made in advance for Fiscal Year 2010-11 Capital Improvement Projects from proceeds of a future long-term financing. 09/22/10 Page 3 GWRS STEERING COMMITTEE 11. Receive and file minutes of the Joint Groundwater Replenishment System Steering Committee meeting held on September 13, 2010. CLOSED SESSION CLOSED SESSION: During the course of conducting the business set forth on this agenda as a regular meeting of the Board, the Chair may convene the Board in closed session to consider matters of pending real estate negotiations, pending or potential litigation, or personnel matters, pursuant to Government Code Sections 54956.8, 54956.9, 54957 or 54957.6, as noted. Reports relating to (a) purchase and sale of real property; (b) matters of pending or potential litigation; (c) employment actions or negotiations with employee representatives; or which are exempt from public disclosure under the California Public Records Act, may be reviewed by the Board during a permitted closed session and are not available for public inspection. At such time as the Board takes final action on any of these subjects, the minutes will reflect all required disclosures of information. Convene in closed session, if necessary 12. a. CONFERENCE WITH LEGAL COUNSEL RE. INITIATION OF LITIGATION (Government Code Section 54956.9(c)) Significant Exposure to Litigation and Potential Litigation That the District May File Number of Potential Cases: 2 1) Relating to EnerTech 2) Project No. 5-58, Newport Trunk Sewer and Force Main b. CONFERENCE WITH LABOR NEGOTIATORS (Government Code Section 54954.5 (f)) 1) Agency Designated Representatives: James D. Ruth, General Manager; Robert Ghirelli, Assistant General Manager; Lorenzo Tyner, Director of Finance and Administrative Services; Jeff Reed, Human Resources and Employee Relations Manager; and Paul Loehr, Human Resources Supervisor. 2) Employee Organizations: a) Peace Officers Council of California representing employees in the Professional Group and Supervisor Group. 09/22/10 Page 4 C. PUBLIC EMPLOYEE PERFORMANCE EVALUATION (Government Code Section 54957(b)(1)) Title: General Manager Reconvene in regular session Consideration of action, if any, on matters considered in closed session OTHER BUSINESS AND COMMUNICATIONS OR SUPPLEMENTAL AGENDA ITEMS, IF ANY ADJOURNMENT - The next Board of Directors regular meeting is scheduled for October 27, 2010, at 6:30 p.m. 09/22/10 Page 5 Agenda Posting: In accordance with the requirements of California Government Code Section 54954.2, this agenda has been posted in the main lobby of the District's Administrative offices not less than 72 hours prior to the meeting date and time above. All public records relating to each agenda item, including any public records distributed less than 72 hours prior to the meeting to all, or a majority of all, of the members of District's Board, are available for public inspection in the office of the Clerk of the Board, located at 10844 Ellis Avenue, Fountain Valley, California. Items Not Posted: In the event any matter not listed on this agenda is proposed to be submitted to the Board for discussion and/or action, it will be done in compliance with Section 54954.2(b)as an emergency item or because there is a need to take immediate action,which need came to the attention of the Board subsequent to the posting of agenda, or as set forth on a supplemental agenda posted in the manner as above, not less than 72 hours prior to the meeting date. Public Comments: Any member of the public may address the Board of Directors on specific agenda items or matters of general interest. As determined by the Chair, speakers may be deferred until the specific item is taken for discussion and remarks may be limited to three minutes. Matters of interest addressed by a member of the public and not listed on this agenda cannot have action taken by the Board of Directors except as authorized by Section 54954.2(b). If you wish to speak, please complete a Speaker's Form (located at the table outside of the Board Room)and give it to the Clerk of the Board. Consent Calendar:All matters placed on the Consent Calendar are considered as not requiring discussion or further explanation and unless any particular item is requested to be removed from the Consent Calendar by a Director,staff member or member of the public in attendance, there will be no separate discussion of these items. All items on the Consent Calendar will be enacted by one action approving all motions, and casting a unanimous ballot for resolutions included on the consent calendar. All items removed from the Consent Calendar shall be considered in the regular order of business. Members of the public who wish to remove an item from the Consent Calendar shall, upon recognition by the Chair, state their name, address and designate by number the item to be removed from the Consent Calendar. The Chair will determine if any items are to be deleted from the Consent Calendar. Items Continued: Items may be continued from this meeting without further notice to a Committee or Board meeting held within five(5)days of this meeting per Government Code Section 54954.2(b)(3). Meeting Adjournment: This meeting may be adjourned to a later time and items of business from this agenda may be considered at the later meeting by Order of Adjournment and Notice in accordance with Government Code Section 54955(posted within 24 hours). Accommodations for the Disabled: The Board of Directors Meeting Room is wheelchair accessible. If you require any special disability related accommodations, please contact the Orange County Sanitation District Clerk of the Board's office at(714)593-7124 at least 72 hours prior to the scheduled meeting. Requests must specify the nature of the disability and the type of accommodation requested. NOTICE TO DIRECTORS: To place items on the agenda for the Regular Meeting of the Board of Directors, items shall be submitted to the Clerk of the Board no later than the close of business 14 days preceding the Board meeting. The Clerk of the Board shall include on the agenda all items submitted by Directors, the General Manager and General Counsel and all formal communications. General Manager James D. Ruth (714)593-7110 iruth(a)ocsd.com Assistant General Manager Bob Ghirelli (714)593-7400 rghirelliCcDocsd.com Clerk of the Board Donna Terrones (714)593-7130 dterronesC@ocsd.com Director of Engineering Jim Herberg (714)593-7300 iherbergC@ocsd.com Director of Finance and Lorenzo Tyner (714)593-7550 ItynerC@ocsd.com Admin Services Director of Facilities Support Nick Arhontes (714)593-7210 narhontes(c�ocsd.com Services Director of Operations and Ed Torres (714)593-7080 etorresC@ocsd.com Maintenance :...General Counsel.............................................Brad Ho. !n......................................(714)..415-1006......bhogingwss-law.com..................................€ H:\dept\agenda\Board Agendas\2010 Board Agendas\20100922 agenda.docx SUPPLEMENTAL AGENDA BOARD OF DIRECTORS ORANGE COUNTY SANITATION DISTRICT ADMINISTRATIVE OFFICE REGULAR MEETING September 22, 2010 — 6:30 P.M. Agenda Posting: In accordance with the requirements of California Government Code Section 54954.2,this agenda has been posted in the main lobby of the District's Administrative offices not less than 72 hours prior to the meeting date and time above. All public records relating to each agenda item, including any public records distributed less than 72 hours prior to the meeting to all, or a majority of all,of the members of District's Board, are available for public inspection in the office of the Clerk of the Board, located at 10844 Ellis Avenue, Fountain Valley, California. Items Not Posted: In the event any matter not listed on this agenda is proposed to be submitted to the Board for discussion and/or action, it will be done in compliance with Section 54954.2(b)as an emergency item or because there is a need to take immediate action, which need came to the attention of the Board subsequent to the posting of agenda, or as set forth on a supplemental agenda posted in the manner as above, not less than 72 hours prior to the meeting date. Public Comments: Any member of the public may address the Board of Directors on specific agenda items or matters of general interest. As determined by the Chair, speakers may be deferred until the specific item is taken for discussion and remarks may be limited to three minutes. Matters of interest addressed by a member of the public and not listed on this agenda cannot have action taken by the Board of Directors except as authorized by Section 54954.2(b). If you wish to speak, please complete a Speaker's Form (located at the table outside of the Board Room)and give it to the Clerk of the Board. Consent Calendar:All matters placed on the Consent Calendar are considered as not requiring discussion or further explanation and unless any particular item is requested to be removed from the Consent Calendar by a Director, staff member or member of the public in attendance,there will be no separate discussion of these items. All items on the Consent Calendar will be enacted by one action approving all motions, and casting a unanimous ballot for resolutions included on the consent calendar. All items removed from the Consent Calendar shall be considered in the regular order of business. Members of the public who wish to remove an item from the Consent Calendar shall, upon recognition by the Chair, state their name, address and designate by number the item to be removed from the Consent Calendar. The Chair will determine if any items are to be deleted from the Consent Calendar. Items Continued: Items may be continued from this meeting without further notice to a Committee or Board meeting held within five (5)days of this meeting per Government Code Section 54954.2(b)(3). Meeting Adjournment: This meeting may be adjourned to a later time and items of business from this agenda may be considered at the later meeting by Order of Adjournment and Notice in accordance with Government Code Section 54955(posted within 24 hours). Accommodations for the Disabled: The Board of Directors Meeting Room is wheelchair accessible. If you require any special disability related accommodations, please contact the Orange County Sanitation District Clerk of the Board's office at(714)593-7130 at least 72 hours prior to the scheduled meeting. Requests must specify the nature of the disability and the type of accommodation requested. Other business and communications or supplemental agenda items, if any. 13. A) Receive and file Addendum No. 1 to the Final Environmental Impact Report for the Newport Trunk Sewer and Force Mains Replacement Project prepared by Environmental Science Associates; Page 2 of 2 B) Approve a project budget increase of $5,506,800 to Newport Sewer and Force Mains, Bitter Point to Coast Trunk Sewer, Contract No. 5-58, for a total budget of$31,389,800. C) Adopt Resolution No. OCSD 10-16, Authorizing Emergency Repairs to the Santa Ana River Levees and Ratifying the General Manager's Use of Emergency Purchasing Authority Pursuant to Delegation of Authority Resolution 07-04 Section 6.03(J), and finding a continuing need to: 1) Negotiate and award a contract to Geo-Solutions, Inc. to provide soil remediation services for said project, for an amount not to exceed $2,038,000; 2) Approve a contingency of$407,600 (20%); 3) Negotiate and award a contract to Jamison Engineering Contractors, Inc. to provide supporting construction services for said project, for an amount not to exceed $670,000; 4) Approve a contingency of$134,000 (20%); 5) Negotiate and award a professional design services agreement to Black and Veatch to provide engineering services for said project, for an amount not to exceed $1,200,000; and, 6) Approve a contingency of$120,000 (10%). Orange County Sanitation District MINUTES BOARD MEETING August 25, 2010 sANrrAT�o N� THE 'E ADMINISTRATIVE OFFICES 10844 ELLIS AVENUE FOUNTAIN VALLEY, CALIFORNIA 92708-7018 Minutes of Board Meeting 08/25/10 Page 2 of 5 ROLL CALL A regular meeting of the Board of Directors of the Orange County Sanitation District was held on August 25, 2010 at 6:30 p.m., in the Administrative Offices. Following the Pledge of Allegiance and invocation, the roll was called and the Clerk of the Board reported a quorum present as follows: ACTIVE DIRECTORS ALTERNATE DIRECTORS X Larry Crandall, Chair Steve Nagel Troy Edgar, Vice Chair X Ken Stephens X John Anderson Jim Winder X Charles Antos Gordon Shanks A Tom Beamish Rose Espinoza X Bill Dalton Andrew Do X Doug Davert John Nielsen X Jon Dumitru Denis Bilodeau X James M. Ferryman Bob Ooten X Cathy Green Jill Hardy X Phil Luebben Prakash Narain X Patsy Marshall Fred Smith X Roy Moore Ron Garcia X Joy Neugebauer Al Krippner X Janet Nguyen VACANT X Sharon Quirk-Silva Pam Keller X Brad Reese Bill Mac Aloney X David Shawver Carol Warren A Christina Shea Steven Choi X Harry Sidhu Lucille Kring X Sal Tinajero David Benavides X Constance Underhill Scott Nelson X Mark Waldman Henry Charoen X Don Webb Nancy Gardner X John Withers Douglas Reinhart STAFF MEMBERS PRESENT: Jim Ruth, General Manager; Bob Ghirelli, Assistant General Manager; Lilia Kovac, Associate Clerk of the Board; Nick Arhontes; Jim Herberg; Ed Torres; Lorenzo Tyner; Cindi Ambrose; Kim Erickson; Michael Gold; Norbert Gaia; Laura Maravilla; Jeff Reed; Juanita Skillman; Rob Thompson; Ryal Wheeler; Paula Zeller. Minutes of Board Meeting 08/25/10 Page 3 of 5 OTHERS PRESENT: Brad Hogin, General Counsel; Drew Kolosky; Bob Ooten PUBLIC COMMENTS There were no public comments. REPORTS Board Chair Crandall recognized Director of Engineering, Jim Herberg, who presented a 20 year service award to Wendy Sevenandt. Assistant General Manager, Bob Ghirelli, introduced Donna Terrones as the new Clerk of the Board of Directors. Ms. Terrones is scheduled to start August 30th in her new position. Chair Crandall, reported he had attended the CASA Conference in Monterrey, and reviewed the meeting schedule for September. General Manager, Jim Ruth, recognized Human Resources Specialist, Kim Erickson, who briefly presented the enhanced 457(b) Deferred Compensation Plan. It was reported that OCSD received two leadership awards from the National Association of Government Defined Contribution Administrators for its successful Plan Design and Administration, and Effective Communication. Mr. Ruth also presented an overview of the strategic plan "Beyond 2012," which is designed to realign current resources to match the future operational needs of the Sanitation District. Mr. Ruth also presented the year's Annual Report brochure highlighting OCSD's accomplishments. RATIFICATION OF PAYMENT OF CLAIMS 1. MOVED, SECONDED AND DULY CARRIED: Ratify payment of claims, as set forth on Exhibits "A" and "B", attached hereto and made a part of these minutes. ALL DISTRICTS 07/15/10 07/31/10 Totals $12,468,358.77 $52,292,800.07 Director Dumitru abstained from discussion and voting on warrant numbers 32017, 32021, and 32379. Directors Nguyen, Sidhu and Stephens abstained from discussion and voting on all warrants. Abstentions were pursuant to California Government Code Section 84308. Minutes of Board Meeting 08/25/10 Page 4 of 5 CONSENT CALENDAR 2. MOVED, SECONDED AND DULY CARRIED: Approve the minutes for the regular meeting held on July 28, 2010. 3. MOVED, SECONDED AND DULY CARRIED: Authorize the General Manager to negotiate and subsequently approve the cancellation of a Construction Contract with Engineering/Remediation Resources Group, Inc. for P1 Outfall Pipeline Disconnects at Scrubber Overflow, Project No. FE03-42, to include all associated cancellation costs. STEERING COMMITTEE Chair Crandall briefly reported that the committee had received a state and federal update, approved the minutes, and met in closed session on four matters. 4. MOVED, SECONDED AND DULY CARRIED: Order Steering Committee Minutes for the regular meeting held on July 28, 2010 to be filed. CLOSED SESSION CONVENE IN CLOSED SESSION PURSUANT TO GOVERNMENT CODE SECTION 54956.9(b)(c), and 54954.5(f). The Board convened in closed session at 7:02 p.m. to discuss three matters. Confidential Minutes of the Closed Session held by the Administration Committee have been prepared in accordance with Government Code Section 54954.5(f), and are maintained by the Clerk of the Board in the Official Book of Confidential Minutes of Board and Committee Closed Meetings. RECONVENE IN REGULAR SESSION: The Board reconvened in regular session at 7:25 p.m. General Counsel reported that the Board of Directors took the following action in closed session: 5a.1 The Board of Directors had approved a settlement with Shea Construction regarding Headworks Replacement Project, Job No. P2-66, in which Shea agreed to waive all delay and damage claims relating to the barscreen construction portion of the project. It was also reported that OCSD had agreed to extend the construction schedule, and commissioning of the barscreens to be complete 267 days after original bid date, and final project completion to be 328 days after the original deadline, and there will be no liquidated damages or extra compensation that will apply to these extensions. Minutes of Board Meeting 08/25/10 Page 5 of 5 ADJOURNMENT: The Chair declared the meeting adjourned at 7:26 p.m. Lilia Kovac Associate Clerk of the Board Orange County Sanitation District ADMINISTRATION COMMITTEE Meeting Date To Bd. of Dir. 09/08/10 09/22/10 AGENDA REPORT Item Number Item Number 2 8 Orange County Sanitation District FROM: James D. Ruth, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services GENERAL MANAGER'S RECOMMENDATION Authorize the General Manager to issue Revenue Refunding Certificate Anticipation Notes, Series 2010B, as one-year fixed-rate obligations, in an amount not to exceed $167.0 million to replace the $165.9 million Refunding Certificate Anticipation Notes, Series 2009B maturing on December 1, 2010. SUMMARY In March 2006, the Sanitation District issued $200 million of variable rate Certificates of Participation (COP), Series 2006 (2006 COPs). From inception through August 2008, the average variable rate on the 2006 COPs was 2.95% or 0.22% less than the SIFMA index (weekly market index of tax-exempt variable rate obligations). As the global financial crisis took hold in the late summer of 2008, there was a significant increase in the borrowing cost of the Sanitation District, including all municipal borrowers, as the 2006 COPs averaged 4.29% (or 1.56% above the SIFMA index) for the period between September 2008 and December 2008. A good deal of the increase in variable rate cost can be attributed to the weakened financial strength of the bank, DEPFA Bank plc, providing liquidity support on the 2006 COPs. In December 2008, the Sanitation District proactively refunded the 2006 COPs with the Refunding COP Series 2008C Certificate Anticipation Notes (the 2008C CANs) to reduce its exposure to higher variable rate costs. The yield on the 2008C CANs was 0.98% for a one-year period. The issuance of the 2008C CANs allowed the Sanitation District to redeem the 2006 COPs at an all-in cost of less than 1 .25% and avoid paying a bank rate of 4.75% which would have been effective starting in January 2009. As the 2008C CANs became due and payable in December 2009, the Sanitation District again conducted a refunding by issuing the $165.9 million of Revenue Refunding Certificate Anticipation Notes, Series 2009B (the 2009B CANs). The yield on the 2009B CANs is 0.37% for the one-year period ending December 1, 2010 and the all-in cost is 0.56%. The interest rate on the 2009B CANs was fixed for only one year and the entire $165.9 million plus interest becomes due and payable on December 1, 2010. The Sanitation District is responsible for the repayment of$169.2 million (includes interest) or the District could choose to refinance the 2009B CANs. Staff does not recommend the use of$169.2 million of cash to repay the 2009B CANs; therefore, there are a number of refinancing options available to the District. Page 1 PRIOR COMMITTEE/BOARD ACTIONS October 2009: Board adopted Resolution No. OCSD 09-16, Authorizing the Execution and Delivery by the District of an Installment Purchase Agreement, a Trust Agreement, and a Continuing Disclosure Agreement in connection with the execution and delivery of Orange County Sanitation District Revenue Refunding Certificate Anticipation Notes, Series 2009B, such Notes Evidencing Principal in an Aggregate Amount of Not to Exceed $181,000,000, Approving an Official Statement in Connection with the Offering and Sale of such Notes and Authorizing the Execution of Other Necessary Documents and Related Actions. November 2008: Board adopted Resolution No. OCSD 08-22, Authorizing the Execution and Delivery by the District of an Installment Purchase Agreement, a Trust Agreement, an Escrow Agreement, a Note Purchase Agreement, and a Continuing Disclosure Agreement in connection with the execution and delivery of Orange County Sanitation District Refunding Certificates of Participation, Series 2008C (Certificate Anticipation Notes), such Notes Evidencing Principal in an Aggregate Amount of Not to Exceed $198,000,000, Approving an Official Statement in Connection with the Offering and Sale of such Notes and Authorizing the Execution of Other Necessary Documents and Related Actions. ADDITIONAL INFORMATION Options Available to the Sanitation District 1. Refund the Maturing 2009B CANs with Fixed Rate Debt The issuance of long-term fixed rate refunding debt will eliminate market access risks (ability to issue debt to refinance maturing debt) and interest rate risk (additional costs if rates reset higher or are higher upon a future refinancing). After the issuance of fixed rate debt, the Sanitation District will not be exposed to changing market conditions. The issuance of long-term fixed rate debt in the current market would result in an average borrowing yield of approximately 4.08%. Fixed rate debt would also remove the interest rate hedge originally desired by the Sanitation District (in 2006) which was intended to insulate the District from changes in short-term interest rates as the variable rates on the 2006 COPs would be expected to move in tandem with the District's fluctuating investment portfolio earnings. The following is a current market cost summary (subject to changing market conditions) of Option 1 (Fixed Rate Debt) over the next year. 4.080% Assumed Average Fixed Rate 0.019 Costs of Issuance ($325,000 amortized over life of COPs) 0.050 Underwriter Costs ($863,000 amortized over life of COPs) 4.149% Fixed Rate Cost Page 2 2. Refund the Maturing 2009B CANs with Variable Rate Debt Current variable rates on California municipal debt are extremely low and attractive at approximately 0.20%. However, the availability of bank support continues to be limited and expensive in the current marketplace. In addition, the terms and conditions currently demanded by banks are more onerous than during the period prior to the global financial crisis. The following is a current market cost comparison (subject to changing market conditions) versus Option 1 (Fixed Rate Debt) over the next year. Variable% Average Variable Rate 0.60 Bank Liquidity Fee 0.100 Remarketing Fee 0.022 Costs of Issuance ($375,000 amortized over life of COPs) 0.012 Underwriter Costs ($200,000 amortized over life of COPs) 0.734% + Variable% or (3.415% less unknown variable rates) less than Option 1 3. Refund the Maturing 2009B CANs with a New CANs issue Since the issuance of the 2009B CANs, short-term interest rates have been relatively steady as the current market yield for CANs is approximately 0.32%. The issuance of refunding CANs will continue to allow the Sanitation District to accrue savings at a low fixed rate while further insulating the District from higher interest rates. The CANs structure will avoid the payment of high fees to liquidity banks and eliminate the risk of interest rates increasing from historic low levels over the next year. Although current variable rates are low (see Option 2. above), there is little room for rates to trend lower. The following is a current market cost summary (subject to changing market conditions) of Option 3 (CANs) over the next year: 0.320% Assumed One-Year Rate 0.191 Costs of Issuance ($300,000 amortized over one year) 0.025 Underwriter Costs ($39,000 amortized over one year) 0.531% or 3.618% less than Option 1 (equal to $5.7 million of savings) A comparison of the CANs refinancing structure to Option 2 above (Variable Rate Debt) shows that unknown variable rates must be less than zero for variable rate debt to generate a better economic result. The major risk with a CANs structure occurs if the Sanitation District does not have market access to remarket the CANs at maturity. However, the Sanitation District has a substantial amount of reserves that could (if the Board chooses) be used to redeem CANs if market access is not available. Staff intends to build in safeguards to avoid the use of Sanitation District reserves unless absolutely necessary: for example, beginning the process of refinancing well in advance of the maturity date of the CANs. To further reduce interest rate risk (additional costs if rates reset higher or are higher upon a future refinancing) the Sanitation District could establish an Accelerated Rate Page 3 Management (ARM) program with the one-year CAN refinancing debt issuance. The ARM program uses accrued savings (i.e., 0.37% yield on 2009B CANs) compared to a fixed rate assumption (i.e., 2006 fixed rate of 4.54%) to reducing the outstanding amount of debt on a periodic basis. As less debt is outstanding, the Sanitation District significantly reduces its interest rate risk (if higher interest rates occur, the net effect is less because the higher interest cost is calculated on less principal). The implementation of the ARM program since the issuance of the 2006 COPs has decreased the interest rate risk to the Sanitation District as the break- even rate (the average future interest rate for the remaining debt from the 2006 COPs issuance) is now over 6.6%. If the Sanitation District refinances the 2009B CANs with one-year CANs and current market conditions do not change, the break- even rate will increase to over 7.3%. In addition, the original variable rate structure of the 2006 COPs and the two past CANs refinancings have saved the District $15.7 million compared to the alternative of the District issuing fixed rate debt in 2006. Staff is recommending Option 3, the refunding of the 2009B CANs with a new one- year CAN that will again enable the Sanitation District to lock-in a low rate for approximately one year without (a) encumbering cash reserves; (b) exposing the District to relatively high bank liquidity costs associated with variable rate debt; and, (c) allowing for flexibility to continue to accrue savings while insulating the District from higher interest rates. If the Sanitation District pursues Option 3, the refunding CANs can be sold on a competitive basis in order to obtain the lowest financing cost possible. Staff and consultants will be available to make a brief presentation and provide an overview of the financing schedule at the Administration Committee meeting. Following is a chart listing the remaining steps to be completed for the issuance of the Revenue Refunding Certificate Anticipation Notes, Series 2010B debt issuance: ➢ Board approval of legal and disclosure documents October ➢ Financing Corporation approval of legal and disclosure documents ➢ Receive Ratings from Bond Rating Agencies November ➢ Receive competitive bids December ➢ Closing CEQA N/A BUDGET / DELEGATION OF AUTHORITY COMPLIANCE N/A Page 4 OPERATIONS COMMITTEE Meeting Date To 09/01/10 09/29/22/10/10 AGENDA REPORT Item Number Item Number 2 5 Orange County Sanitation District FROM: James D. Ruth, General Manager Originator: Jim Herberg, Director of Engineering CIP Project Manager: Steve Schock GENERAL MANAGER'S RECOMMENDATION Authorize the General Manager to negotiate Amendment No. 6 to the Professional Services Agreement with Camp Dresser & McKee, Inc. for additional design services for the Rehabilitation of Odor Control Facilities, Project No. J-71-8. SUMMARY The Rehabilitation of Odor Control Facilities, Project No. J-71-8, includes improvements to the odor collection and treatment system at Orange County Sanitation District's (Sanitation District) Headworks and Primary Treatment areas at Plant No.1 to meet the level of service included in the Strategic Plan. A Professional Services Agreement (PSA) was awarded to Camp Dresser & McKee, Inc. (CDM) in October 2003. CDM had completed the majority of the design work by December 2006. The Sanitation District deferred the bid and construction of this project in order to reduce budget expenditures, and in January 2007 requested CDM to suspend further work on this contract. At this time, staff would like to restart this project and complete the design with some new activities and some design elements removed. The Consultant's scope will include restart activities, design validation, and the inclusion of updated California Building Codes and Sanitation District Design Guidelines. PRIOR COMMITTEE/BOARD ACTIONS September 2006 — Approved Amendment No. 5 to Professional Services Agreement with CDM Inc. for $109,668, increasing the total amount not to exceed $5,028,372. March 2006 —Approved Amendment No. 4 to Professional Services Agreement with CDM Inc. for $327,172, increasing the total amount not to exceed $4,918,704. June 2005 — Approved Amendment No. 3 to Professional Services Agreement with CDM Inc. for $370,651, increasing the total amount not to exceed $4,591 ,532. November 2004 — Approved Amendment No. 2 to Professional Services Agreement with CDM Inc. for $645,674, increasing the total amount not to exceed $4,220,881. September 2004 — Approved Amendment No. 1 to Professional Services Agreement with CDM Inc. for $377,685, increasing the total amount not to exceed $3,575,207. Form No.DW-102 Revised: 01/11/10 Page 1 October 2003 — Awarded a Professional Services Agreement to CDM Inc., for a total amount not to exceed $3,197,522. ADDITIONAL INFORMATION The revised scope of work will complete the design for the Headworks Odor Scrubbers. This will include the following: updating the plans and specifications with respect to the new California Building Codes and the Sanitation District Design Guidelines; revisiting the expected radius of odor capture to confirm the design due to collection system air jumpers that were added; and initiating a sampling program to confirm the assumed odor concentrations are treatable with this design. The revised scope of work will also include activities to remove primary treatment odor control system from the design package. This work will be finalized "as is" so that the work can be referenced and/or utilized at a future date. Staff has determined that the Primary Odor Scrubbers will be rehabilitated/replaced in Project No. P1-114. CEQA This project was included in the 1999 Strategic Plan Program Environmental Impact Report prepared by ESA and certified on October 28, 1999. A Notice of Determination was filed on October 29, 1999. A Notice of Exemption was filed for this project on February 24, 2004. BUDGET/DELEGATION OF AUTHORITY COMPLIANCE This request complies with authority levels of the Orange County Sanitation District's Delegation of Authority. This item has been budgeted and the budget is sufficient for the recommended action. (FY 2010-11:1-ine Item Section 8, Page 11). Date of Approval Contract Amount Contingency 10/22/03 $3,197,522 $0 (0%) 09/22/04 $3,575,207 $0 (0%) 11/17/04 $4,220,881 $0 (0%) 06/22/05 $4.591,532 $0 (0%) 03/22/06 $4,918,704 $0 (0%) 09/27/06 $5,028,372 $0 (0%) JH:SS:eh:gc:cb http://sharepoint/gm/board/Published Board Agenda Packages/05.J-71-8 Neg Amndmt.docx Form No.DW-102 Revised: 01/11/10 Page 2 ADMINISTRATION COMMITTEE Meeting Date To 09/08/10 09/9/22/10 AGENDA REPORT Item Number Item Number 3 9 Orange County Sanitation District FROM: James D. Ruth, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services GENERAL MANAGER'S RECOMMENDATION Authorize the General Manager to issue up to $157 million in new fixed-rate Certificates of Participation (COP) debt, in one or more series. SUMMARY Approval of the recommended action above will direct staff to begin the $157 million fixed-rate competitive debt issuance process utilizing the assistance of the financial advisory firm of Public Resources Advisory Group, and the bond counsel firm of Fulbright & Jaworski. Depending on market conditions and the associated cost savings, all, or a portion, of the debt issuance may be offered as Build America Bonds (BABs). In accordance with the Sanitation District's Board-adopted Debt Policy, the District will restrict long-term borrowing to capital improvements that cannot be financed from current revenue. This policy will assist in the leveling out of user fee rates over time and avoid any spiked increases in the short-term. PRIOR COMMITTEE/BOARD ACTIONS March 10, 2010: Board approved the issuance of$80 million of new Certificates of Participation (COP) debt within the FY 2009-10 Adopted Budget, in support of the Sanitation District's Strategic Plan capital improvement program. ADDITIONAL INFORMATION Existing COP Financing Program The Sanitation District currently has nine series of non-subordinate COPs outstanding comprising a total par amount of$1 .21 billion. The following table describes each COP in detail. Page 1 Outstanding Interest Rate Par Amount* Mode Series 2010AM $ 80,000,000 Fixed Rate Series 2009B 165,865,000 Fixed Rate Refunding (2) (one-year) Series 2009AM 197,770,000 Fixed Rate Series 2008B 26,975,000 Fixed Rate Refunding (3) Series 2008A 30,535,000 Fixed Rate Refunding (3) Series 2007130) 290,130,000 Fixed Rate Series 2007A(4) 93,265,000 Fixed Rate Refunding Series 20030) 191,500,000 Fixed Rate Series 2000(5) 194,000,000 Daily Variable Rate Refunding Total $1,207,250,000 *As of September 1, 2010. (1) New money debt issue. (2) Series 2009B are fixed one-year certificate of anticipation notes(CANS)that refunded the Series 2008C CANS that were issued to refund the remainder of Series 2006 Daily Variable Rate that were supported by a weak liquidity facility bank. (3) Series 2008B and Series 2008A refunded the Series 1993 and Series 1992 Synthetic Variable-to-Fixed Rate Debt issues that were supported by a failing insurance provider. Series 1993 and 1992 refunded the Series 1986 and a portion of the Series"B"COPs. (4) Series 2007A refunded a portion of COP Series 2003 for debt service savings. (5) Series 2000 COPS refunded the Series A, B, and C issued between 1990 and 1992. The Series 2000 refunded the $179.7 million outstanding principal balance of the 1990-92 Series A, B, and C COP's and reimbursed the Sanitation District for improvements made to the wastewater treatment system. The 2007A Refunding COPS were issued to refund $95.1 million of the Series 2003 COPS. The Series 2008A refunded $77.2 million of the Refunding Series 1992 and Series 2008B refunded $27.8 million of the Refunding Series 1993. Both Refunding Series 1992 and 1993 synthetic variable-to-fixed rate issues had begun to demand high interest rate payments due to failing insurance providers. Series 2009B fixed one-year certificate of anticipation notes (CANS) were issued to refund the Series 2008C CANS. The Series 2008C CANS had been issued to refund the remaining $176 million outstanding on Series 2006 Variable Rate Debt that also began to result in high interest rate payments, due to the weak liquidity facility bank that was supporting the issue. Series 2003, Series 2007B, Series 2009A, and Series 2010A were all new money debt issuances. Page 2 The following table displays the combined gross debt service cash flows for the District's nine COPs through final maturity in 2040. Debt Service Structure* 120 100 - ❑Variable Rate so ■Fixed Rate 60 O 40 20 0 0#0 1 1 _ N C2 V 2 O f` 00 O O N M V 'Q O r` 00 O O N M V LO O r` 00 O O N N N N N N N N N N M M M CO CO CO Cl) CO CO CO O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N Fiscal Year End Series 2009B one-year Certificate Anticipation Notes is assumed to be amortized from 2022 to 2036.All variable rate obligations are assumed to have a per annum interest rate of 3%. Proposed Debt Issuance As shown above and in accordance with the Sanitation District's debt policy, the District currently has $194 million in variable rate debt outstanding and $1.076 billion in fixed rate debt outstanding (of which $165.865 million are one-year CANs). However, due to the relatively high fees requested by bank liquidity providers, staff believes that this new money debt issue should be again issued as fixed rate COPs. Staff is also proposing to issue this $157 million fixed-rate debt by competitive sale, in one or more series, as opposed to a negotiated sale due to PRAG's opinion that a competitive fixed-rate sale will be less costly to the Sanitation District. The American Recovery and Reinvestment Act of 2009 created a new financing product, BABs, for the municipal issuer. BABs are issued as higher interest cost taxable bonds; however, the U.S. Treasury provides a 35 percent subsidy on interest payments. The net cost, after accounting for the 35 percent subsidy payment, frequently results in lower net costs to the issuer, specifically in the maturity years beyond ten years. Based on current market conditions, a hybrid tax-exempt and BABs sale (tax-exempt for the short maturities and BABs for the long maturities), would save the Sanitation District 0.88% in average interest cost, equal to approximately $17.2 million on a present value base (or approximately 13.6% of the BABs par amount) which is well in excess of the savings the District would ever expect to achieve from a future refunding. If the Sanitation District would refund and restructure the BABs, it would be very costly; however, staff believes the future need to restructure the BABs is extremely remote. Effectively, by issuing BABs, the Sanitation District should consider to debt to be non-callable as it would otherwise be very expensive to optionally redeem. Although a relatively new financial product, over $124 billion of BABs have been sold by municipal issuers since the first issuance in March 2009. In addition, 25% Page 3 of the municipal bond volume in 2010 has been issued as BABs, including the Sanitation District's $80 million Series 2010A. A number of California issuers have already sold over a billion dollars of BABs, including the State of California, Los Angeles Unified School District, Bay Area Toll Authority, and University of California. California utility issuers that have issued BABs include The Metropolitan Water District of Southern California, Los Angeles Department of Water and Power, Sacramento County Sanitation Districts, San Diego County Water Authority, East Bay Municipal Utility District, and the San Francisco Public Utilities Commission. CEQA N/A BUDGET / DELEGATION OF AUTHORITY COMPLIANCE The FY 2010-11 Approved Budget included new money debt issuance of$157 million. JDR:LT:MW Page 4 OPERATIONS COMMITTEE Meeting Date To Bd.of Dir. 09/01/10 09/22/10 AGENDA REPORT Item Number Item Number 3 6 Orange County Sanitation District FROM: James D. Ruth, General Manager Originator: Jim Herberg, Director of Engineering Project Manager: Derek E. Davis GENERAL MANAGER'S RECOMMENDATION 1. Approve Plans and Specifications for the P2 Digester Gas Dryer Upgrades, Project No. FE07-20, on file at the office of the Clerk of the Board; 2. Approve Addenda Nos. 1 and 2 to the plans and specifications; 3. Receive and file bid tabulation and recommendation; 4. Award a construction contract to Minako American Corporation dba Minco Construction for P2 Digester Gas Dryer Upgrades, Project No. FE07-20, for an amount not to exceed $897,000; and, 5. Approve a contingency of $89,700 (10%). SUMMARY P2 Digester Gas Dryer Upgrades, Project No. FE07-20, will replace digester gas dryers at the Central Generation Building at Plant No. 2. The work generally consists of replacing two water-cooled gas dryers with two skid-mounted, air-cooled, refrigerated- type gas dryers. The project work also includes installing new motor operated inlet and outlet valves, and remote control connections to the Treatment Plant Computer Control System. The plans and specifications for P2 Digester Gas Dryer Upgrades, Project No. FE07-20, were completed in May 2010. Two sealed bids were received on July 1, 2010. The Orange County Sanitation District (Sanitation District) Bid Evaluation Team determined that Minako American Corporation dba Minco Construction, is the lowest "Responsible and Responsive" bidder. The Contractor's bid amount of $897,000 exceeds the approved construction budget of $600,000. The construction budget was based on the Engineer's Estimate of probable construction costs. Sanitation District staff investigated the discrepancy between the bid amount and the Engineer's Estimate. It was determined that the Engineer's Form No.DW-102.2 Revised: 01/11/2010 Page 1 Estimate did not include provisions for stainless steel materials. Stainless steel is required in this application due to the corrosive environment in the gas compressor building. The project budget has been increased to accommodate the bid amount and contingency. The CIP budget is able to absorb this increase amount without budget amendments. Sanitation District staff recommends awarding the contract to Minako American Corporation dba Minco Construction for $897,000. Summary information on the bid opening for P2 Digester Gas Dryer Upgrades, Project No. FE07-20, is as follows: Project Budget $ 1,500,000 Construction Contract Budget (FE07-20) $ 900,000 Engineer's Construction Estimate $ 575,000 Lowest, Responsive, Responsible Bid $ 897,000 High Bid $ 1,097,477 PRIOR COMMITTEE/BOARD ACTIONS N/A ADDITIONAL INFORMATION The contractor selection was conducted in accordance with the Sanitation District's adopted policies and procedures. The summary of bids is as follows: Bidder Amount of Bid Minco Construction $ 897,000 S. S. Mechanical Corporation $1, 097,477 CEQA A Notice of Exemption was filed for this project on May 5, 2008. BUDGET / DELEGATION OF AUTHORITY COMPLIANCE This request complies with authority levels of the Sanitation District's Delegation of Authority. This item has been budgeted (FY 2009-10 Budget Update: Line item 100, Page A-11, FE-P2) and the budget is sufficient for the recommended action. Date of Approval Contract Amount Contingency 09/22/10 $897,000 $89,700 (10%) JH:DD:aln:gc http://sharepoint/gm/board/Published Board Agenda Packages/06.FE07-20 CDM.docx Form No.DW-102.2 Revised: 01/11/2010 Page 2 ADMINISTRATION COMMITTEE Meeting Date To Bd. of Dir. 09/08/10 09/22/10 AGENDA REPORT Item Number Item Number 4 10 Orange County Sanitation District FROM: James D. Ruth, General Manager Originator: Lorenzo Tyner, Director of Finance and Administrative Services GENERAL MANAGER'S RECOMMENDATION Adopt Resolution No. OCSD 10-15, Declaration of Official Intent to reimburse certain of the District's Capital Reserve Funds for Expenditures Made in Advance for Fiscal Year 2010-11 Capital Improvement Projects From Proceeds of a Future Long-Term Financing. SUMMARY Adoption of the "Reimbursement Resolution" will allow the Sanitation District to use proceeds from the anticipated future long-term borrowing of up to $157 million to reimburse capital reserve funds which were used to fund District capital projects. A similar Resolution has been adopted in advance of previous "new money" debt issuances. PRIOR COMMITTEE/BOARD ACTIONS March 2010: Board adopted Resolution No. OCSD 10-04, Declaration of Official Intent to Reimburse Certain of the District's existing capital reserve funds for expenditures made in advance for Fiscal Year 2009-10, and in anticipation of, capital improvement expenditures, from proceeds of a future long-term borrowing. ADDITIONAL INFORMATION Under provisions of U.S. Treasury Regulation 1.150-2, local public agencies may use proceeds from long-term borrowings to reimburse those capital reserve funds which were advanced to fund preliminary expenditures, such as design, engineering and similar costs, for capital projects providing the public agency has declared its intent to do so prior to debt issuance. As part of preparations for a new capital financing program to support the Facilities Master Plan adopted in December 2009, it is necessary to update the Sanitation District's intent to reimburse reserve funds. Adoption of the "Reimbursement Resolution" will ensure that the Sanitation District can include monies in upcoming borrowings to reimburse reserve funds for expenditures made in advance of available COP proceeds. Pagel CEQA N/A BUDGET / DELEGATION OF AUTHORITY COMPLIANCE N/A ATTACHMENTS 1. Resolution No. OCSD 10-15 2. Exhibit A JDR:LT:MW Page 2 RESOLUTION NO. OCSD 10-15 DECLARATION OF OFFICIAL INTENT TO REIMBURSE CERTAIN OF THE DISTRICT'S CAPITAL RESERVE FUNDS FOR EXPENDITURES MADE IN ADVANCE FOR FISCAL YEAR 2009-10 CAPITAL IMPROVEMENT PROJECTS FROM PROCEEDS OF A FUTURE LONG-TERM FINANCING A RESOLUTION OF THE BOARD OF DIRECTORS OF ORANGE COUNTY SANITATION DISTRICT AUTHORIZING FUTURE CAPITAL EXPENDITURES TO BE REIMBURSED FROM FUTURE LONG-TERM FINANCING WHEREAS, the Board of Directors, by adoption of Resolution No. 94-81 on July 13, 1994; Resolution No. 97-28 on July 30, 1997; Resolution No. OCSD 98-32 on July 1, 1998; Resolution No. OCSD 99-08 on June 23, 1999; Resolution No. OCSD 00-15 on July 19, 2000; Resolution No. OCSD 01-17 on August 22, 2001; Resolution No. OCSD 02-20 on October 23, 2002; Resolution No. OCSD 05-28 on December 21, 2005; Resolution No. OCSD 07-12 on June 27, 2007; Resolution No. OCSD 08-18 on October 22, 2008, and Resolution No. OCSD 10-04 on March 24, 2010 previously declared its official intent to reimburse its then existing capital reserve funds and accounts for certain expenditures made in advance of and in anticipation of issuing indebtedness for capital improvements to be acquired, constructed, or paid for, by or on behalf of the District during the Fiscal Year; and, WHEREAS, the District ("Issuer") intends to acquire and/or construct, or otherwise improve, certain capital improvements during Fiscal Year 2010-11, and later, all as more particularly described on Exhibit "A," attached hereto and incorporated herein by reference (the "Project"); and, WHEREAS, Issuer expects to pay certain expenditures (the "Reimbursement Expenditures") in connection with the Project prior to the issuance of indebtedness for the purpose of financing costs associated with the Project, on a long-term basis; and, WHEREAS, the Issuer reasonably expects that the debt obligations, in an amount not to exceed $157 million, will be issued, and that certain of the proceeds of such debt obligations will be used to reimburse the Issuer for Reimbursement Expenditures. NOW, THEREFORE, the Board of Directors of Orange County Sanitation District, DOES HEREBY RESOLVE, DETERMINE AND ORDER: Section 1: That the Issuer finds and determines that the foregoing Recitals are true and correct. Section 2: That this Declaration is made solely for purposes of establishing compliance with the requirements of Section 1.150-2 of the U.S. Treasury Regulations. This Resolution Declaration does not bind the Issuer to make any expenditure, incur any indebtedness, or proceed with the Project. Section 3: That the Issuer hereby declares its official intent to use proceeds of indebtedness to reimburse itself for the Reimbursement Expenditures. PASSED AND ADOPTED at a regular meeting of the Board of Directors held September 22, 2010. Chair ATTEST: Clerk of the Board Exhibit A Orange County Sanitaiton District Capital Improvement Program Summary of Capital Requirements-Collection System Improvement Projects Project Total Est.Cost 2010.11 2011.12 Project Phase Project to Date Cashflow Cashflow Future Page Number 7/1110 Budget 6130110 Budget Budget Budget Number Collections Raitt and Bristol Street Sewer Extension 01-101 Planning 9,906,000 253,000 9,653,000 14 Santa Ana Trunk Sewer Rehab. 01-17 Planning 21,156,000 1,031,000 160,000 840,000 19,125,000 15 Santa Ana River Interceptor Realignment and Prot. 02-41 Design 11,404,000 8,686,000 744,000 956,000 1,018,000 16 Santa Ana River Interceptor(SARI)Inspection and Mitigation 02-41-7 Planning 900,000 500,000 200,000 200,000 17 Taft Branch Improvements 02-49 Planning 3,143,000 13,000 3,130,000 N/A Newhope-Placentia Trunk Grade Separation Replacement 02-65 Planning 2,392,000 82,000 138,000 2,172,000 18 Fullerton-Brea Interceptor Sewer Relief 02-71 Planning 2,287,000 30,000 2,257,000 19 Newhope-Placentia Trunk Replacement 02-72 Planning 66,696,000 66,696,000 N/A Yorba Linda Pumping Station Abandonment 02-73 Planning 9,566,000 9,566,000 N/A Rehabilitation of the Westside Pump Station 03-52 Design 11,668,000 10,190,000 1,226,000 252,000 20 Westside Relief Interceptor Relief 03-55 Planning 26,482,000 26,482,000 N/A Rehabilitation of Magnolia Trunk Sewer 03-58 Planning 26,721,000 2,526,000 17,723,000 3,448,000 3,024,000 21 Miller-Holder Trunk Sewer Relief 03-59 Planning 17,324,000 17,324,000 N/A Beach Trunk/Knott Interceptor Sewer Relief 03-60 Planning 25,055,000 25,055,000 N/A Miller-Holder and Knott Trunks Odor Control Project 03-61 Planning 1,795,000 1,795,000 N/A Seal Beach Pumping Station Upgrade and Rehabilitation 03-62 Planning 14,023,000 14,023,000 N/A Seal Beach Pumping Station Force Main Rehabilitation 03-63 Planning 11,032,000 152,000 10,880,000 N/A Rehabilitation of 3-6,3-8,and 3-21-1 Sewers 03-64 Planning 71,312,000 71,312,000 N/A Balboa Trunk Sewer Rehabilitation 05-47 Planning 8,514,000 1,056,000 416,000 2,190,000 4,852,000 22 Replacement of the Bitter Point Pump Station 05-49 Design 32,084,000 14,287,000 11,840,000 3,882,000 2,075,000 23 Replacement of the Rocky Point Pump Station 05-50 Design 20,360,000 11,758,000 7,183,000 565,000 854,000 24 Bitter Point Force Main Rehabilitation 05-58 Design 25,883,000 23,366,000 1,539,000 978,000 25 Newport Force Main Condition Assessment 05-60 Planning 22,591,000 1,619,000 1,072,000 633,000 19,267,000 26 Bayside Drive Improvement 05-61 Planning 3,415,000 3,113,000 302,000 27 Dover Drive Trunk Sewer Relief 05-63 Planning 13,346,000 1,788,000 1,099,000 9,120,000 1,339,000 28 Lido Pumping Station Upgrade and Rehabilitation 05-65 Planning 1,515,000 13,000 114,000 1,388,000 29 Crystal Cove Pumping Station Upgrade and Rehabilitation 05-66 Planning 7,379,000 7,379,000 N/A Bay Bridge Pumping Station Upgrade and Rehabilitation 05-67 Planning 46,852,000 46,852,000 N/A District 6 Trunk Sewer Relief 06-17 Planning 5,126,000 6,000 48,000 5,072,000 30 Southwest Costa Mesa Trunk 06-19 Planning 13,309,000 94,000 491,000 12,724,000 31 Gisler-Redhill System Improvements,Reach B 07-37 Design 9,622,000 1,675,000 406,000 6,869,000 672,000 32 Rehabilitation of College Ave.Pump Station 07-47 Planning 11,445,000 11,162,000 283,000 33 Browning Subtrunk Sewer Relief 07-60 Planning 11,172,000 11,172,000 N/A County Island Annexation and CEQA Documentation 07-61 Planning 300,000 259,000 41,000 34 Von Karman Trunk Sewer Relief 07-62 Planning 433,000 433,000 N/A MacArthur Pumping Station Upgrade and Rehabilitation 07-63 Planning 7,028,000 7,028,000 N/A Edinger/Bolsa Chica Trunk Improvements 11-25 Planning 6,030,000 6,030,000 N/A Coast Trunk Sewer Rehabilitation 11-26 Design 9,121,000 9,110,000 11,000 35 Wintersburg Channel Siphon Protection Project 11-32 Planning 75,000 75,000 36 Edinger Pumping Station Upgrade and Rehabilitation 11-33 Planning 11,474,000 11,474,000 N/A North County Collections Yard 15-04 Planning 12,270,000 6,950,000 4,709,000 16,000 595,000 37 Facilities Engineering Projects-Collections FE-Collect Planning 8,520,000 5,145,000 688,000 325,000 2,362,000 38 Replacement of the Ellis Ave.Pump Stn 1-10 Design 79,337,000 78,987,000 350,000 39 Siphon and Manhole Upgrade Feasibility Study SP-138 Planning 300,000 150,000 150,000 40 Total Collections Projects 700,363,000 193,062,000 50,624,000 31,397,000 425,280,000 Page 1 of 6 Exhibit A Orange County Sanitaiton District Capital Improvement Program Summary of Capital Requirements-Treatment System Improvement Projects Project Total Est.Cost 20010.11 2011.12 Project Phase Project to Date Cashflow Cashflow Future Page Number 711110 Budget 6130/10 Budget Budget Budget Number Headworks Headworks Rehab.and Expansion at Plant No.1 P1-105 Planning 43,404,000 485,000 42,919,000 NIA Headworks Expansion P1-120 Planning 222,804,000 222,804,000 NIA Headworks Rehabilitation/Refurbishment P1-71 Design 8,374,000 7,364,000 622,000 388,000 41 Headworks Improvements at Plant No.2 P2-66 Const.11mpl. 257,733,000 232,549,000 15,325,000 8,609,000 1,250,000 42 Headworks Total 532,315,000 239,913,000 15,947,000 9,482,000 266,973,000 Primary Treatment Primary Clarifiers 6-31 Evaluation and Optimization Study P1-116 Planning 150,000 92,000 58,000 43 Primary Effluent Pipeline Joint Repairs 131-118 Planning 3,246,000 3,246,000 NIA Primary Treatment Rehab/Refurb 132-80 Planning 38,923,000 38,399,000 330,000 194,000 44 Primary Treatment Area Rehabilitation Study SP-137 Planning 300,000 150,000 150,000 45 54-inch Primary Effluent Butterfly Valve Use Study SP-144 Planning 25,000 25,000 46 Primary Treatment Total 42,644,000 38,491,000 563,000 344,000 3,246,000 Secondary Treatment New Secondary Treatment System at Plant No.1 P1-102 Design 260,300,000 222,158,000 32,461,000 5,681,000 47 Activated Sludge Plant No.1 Upgrades P1-117 Planning 20,673,000 20,673,000 NIA Activated Sludge Plant Rehabilitation P1-82 Const.11mpl. 46,761,000 46,438,000 323,000 48 Trickling Filters at Plant No.2 P2-90 Design 223,238,000 197,943,000 19,551,000 233,000 5,511,000 49 Oxygen Plant Rehabilitation at Plant No.2 SP-129 Planning 2,500,000 92,000 458,000 1,562,000 388,000 50 Secondary Treatment Total 553,472,000 466,631,000 52,793,000 7,476,000 26,572,000 Solids Handling&Digestion Sludge Digester Rehabilitation at Plant 1 P1-100 Design 55,515,000 7,985,000 15,477,000 18,314,000 13,739,000 51 Sludge Dewatering and Odor control at Plant 1 131-101 Design 143,549,000 13,880,000 5,529,000 6,397,000 117,743,000 52 Digester Ferric Chloride System Rehabilitation 132-105 Planning 2,627,000 35,000 207,000 462,000 1,923,000 53 Demolition of Digesters A and B P2-110 Planning 4,756,000 4,756,000 NIA Solids Storage Silo Rehabilitation P2-114 Planning 37,604,000 37,604,000 NIA Solids Thickening and Processing Upgrades P2-89 Planning 61,135,000 5,082,000 3,425,000 1,919,000 50,709,000 54 Plant No.2 Primary Sludge Feed System Project P2-91 Const.11mpl. 26,524,000 25,943,000 244,000 337,000 55 Digester Rehabilitation at Plant No.2 P2-91-1 Planning 45,637,000 116,000 1,127,000 444,000 43,950,000 56 Sludge Dewatering and Odor Control at Plant 2 P2-92 Planning 63,183,000 75,000 259,000 570,000 62,279,000 57 Replacement of Drying Beds and Truck Wash at Plant P2-97 Planning 4,443,000 71,000 277,000 4,095,000 58 Food Waste Collection and Treatment Study SP-171 Planning 100,000 100,000 NIA Digesters 5 and 6 Conversion and Use Study SP-172 Planning 100,000 100,000 NIA Solids Handling&Digestion Total 445,173,000 53,187,000 26,268,000 28,720,000 336,998,000 Page 2 of 6 Exhibit A Orange County Sanitaiton District Capital Improvement Program Summary of Capital Requirements-Treatment System Improvement Projects Project Total Est.Cost 20010.11 2011.12 Project Phase Project to Date Cashflow Cashflow Future Page Number 711110 Budget 6/30110 Budget Budget Budget Number Ocean Outfall Systems Final Effluent Sampler and Building Area Upgrades J-110 Planning 2,661,000 52,000 78,000 331,000 2,200,000 59 Ouffall Land Section and OOBS Piping Rehabilitation J-112 Const.11mpl. 7,540,000 521,000 1,499,000 1,043,000 4,477,000 60 Ouffall Piping Rehabilitation Program Study J-113 Planning 370,000 36,000 80,000 80,000 174,000 61 Ocean Ouffall Booster Station Rehabilitation(Electrical) J-114 Planning 13,059,000 60,000 12,999,000 NIA 66-inch Interplant Effluent Pipeline Rehabilitation J-116 Planning 62,052,000 62,052,000 NIA Ocean Ouffall Booster Station Rehabilitation(Mechanical) J-117 Planning 4,559,000 4,559,000 62 Ouffall Beach Box Rehabilitation Evaluation J-119 Planning 330,000 50,000 280,000 63 Ocean Ouffall Easement Renewal SP-143 Planning 25,000 25,000 64 Outfall Pumping Cooling Water Bypass Study SP-154 Planning 25,000 25,000 NIA Alternative Effluent Disinfection Study SP-156 Planning 100,000 100,000 NIA Santa Ana River Flap Gates Access Study SP-159 Planning 50,000 50,000 NIA Interplant Effluent Pipeline Alternate Use Study SP-164 Planning 10,000 10,000 NIA Ocean Outfall Systems Total 90,781,000 719,000 1,962,000 1,479,000 86,621,000 Utility Systems Interplant Gas Line Rehabilitation J-106 Design 4,504,000 863,000 3,227,000 147,000 267,000 65 Cengen Cooling Water System Replacement J-109 Planning 10,023,000 1,061,000 1,093,000 2,739,000 5,130,000 66 Cengen Emissions Control Project J-111 Planning 30,279,000 2,381,000 27,898,000 67 UPS System Upgrades J-121 Planning 13,012,000 13,012,000 NIA Air Quality Improvements J-79 Const.11mpl. 11,668,000 10,385,000 1,114,000 169,000 68 Central Generation Automation J-79-1 Design 21,049,000 16,353,000 3,818,000 79,000 799,000 69 Electrical Power Distribution System Improvements J-98 Planning 9,773,000 9,773,000 NIA Power Building 3A Backup Power Reliability Project P1-111 Planning 502,000 80,000 35,000 64,000 323,000 70 Plant Water System Rehabilitation at Plant No.1 P1-112 Planning 3,344,000 32,000 210,000 138,000 2,964,000 71 Flare Addition P1-119 Planning 2,083,000 2,083,000 NIA Gas Compressor Upgrades P1-121 Planning 27,181,000 27,181,000 NIA Plant 166kV Substation P1-97 Design 15,153,000 15,151,000 2,000 72 Plant Water System Rehabilitation at Plant No.2 P2-101 Planning 3,659,000 34,000 232,000 294,000 3,099,000 73 Additional High Pressure Flare P2-103 Planning 1,993,000 1,993,000 74 15 kV Upgrades at Plant No.2 P2-108 Planning 3,238,000 11,000 394,000 2,833,000 75 Gas Compressor Upgrades P2-109 Planning 22,362,000 22,362,000 NIA SCE Feed Reliability Improvements P2-111 Planning 22,490,000 22,490,000 NIA Energy Load Management and Shedding System P2-112 Planning 16,517,000 16,517,000 NIA Gas Holder Demolition P2-113 Planning 1,026,000 1,026,000 NIA Secondary Area Cable Tray Upgrades P2-116 Planning 2,154,000 2,154,000 NIA Headworks Area Cable Tray Upgrades P2-117 Planning 3,015,000 3,015,000 NIA Fuel Cell Feasibility Study SP-132 Planning 100,000 35,000 65,000 76 Fuel Cell Hydrogen Gas Generation Research SP-134 Planning 600,000 360,000 240,000 77 Page 3 of 6 Exhibit A Orange County Sanitaiton District Capital Improvement Program Summary of Capital Requirements-Treatment System Improvement Projects Project Total Est.Cost 2010.11 2011.12 Project Phase Project to Date Cashflow Cashflow Future Page Number 7/1/10 Budget 6/30/10 Budget Budget Budget Number Utility Systems Projects(Continued.) Digester Gas Facilities Assessment SP-141 Planning 100,000 50,000 50,000 78 Utility Water Systems Study SP-146 Planning 475,000 200,000 275,000 N/A Plant Air System Master Plan SP-148 Planning 220,000 100,000 120,000 N/A Electrical System Base Map SP-149 Planning 220,000 100,000 120,000 N/A Uninterruptible Power System(UPS)Study SP-150 Planning 100,000 50,000 50,000 N/A Sidestream Pumping System and Water Characterization Study SP-155 Planning 170,000 170,000 N/A Standby Power Generation Study SP-158 Planning 100,000 100,000 N/A Communication Radio System Replacement SP-165 Planning 900,000 900,000 79 Power Outage Recovery Plan SP-170 Planning 100,000 100,000 N/A Potable Water Quality Study SP-175 Planning 25,000 25,000 N/A Utility Systems Total 228,135,000 44,394,359 10,997,000 6,905,000 165,879,000 Odor Control Related Projects Coyote Hills Golf Course Odor Control Station 02-74 Planning 8,365,000 8,365,000 N/A Rehabilitation of Odor Control Facilities J-71-8 Design 44,124,000 7,018,000 913,000 6,783,000 29,410,000 80 Trickling Filter Odor Control at Plant No.1 P1-113 Planning 5,182,000 337,000 628,000 4,217,000 81 Primary Scrubber Rehabilitation at Plant No.1 P1-114 Planning 41,732,000 41,732,000 N/A Solids Storage Building Odor Control Project 132-102 Planning 10,720,000 152,000 816,000 9,752,000 82 Chemical Scrubber Conversions and Piping System Improvements P2-106 Const./Impl. 3,261,000 100,000 625,000 2,032,000 504,000 83 Primary Treatment Odor Control Upgrades 132-98 Planning 35,691,000 2,844,000 32,847,000 84 Wastehauler Odor Control SP-140 Planning 100,000 50,000 50,000 85 Odor Control Master Plan SP-166 Planning 2,400,000 2,400,000 N/A Odor Control Related Projects Total 151,575,000 7,118,000 2,077,000 13,153,000 129,227,000 Process Related Special Projects Plant 0&M Manual&SOP Project-Phase I SP-53 Planning 3,750,000 2,455,000 1,295,000 86 Corrosion Management SP-68-1 Design 4,667,000 3,183,000 1,366,000 118,000 87 Special Projects:Biotrickling Filter(BTF) SP-90-7 Const./Impl. 29,000 5,000 12,000 12,000 88 Process Related Special Projects Total 8,446,000 5,643,000 2,673,000 130,000 Plant Automation&Computerization Power Monitoring and Control Systems J-33-3 Planning 12,013,000 2,852,000 943,000 5,382,000 2,836,000 89 Strategic Information Architecture(SIA) SP-03 Const./Impl. 1,995,000 730,000 250,000 250,000 765,000 90 Internet/Intranet Development SP-09 Const./Impl. 650,000 345,000 60,000 60,000 185,000 91 CMMS System Replacement SP-100 Const./Impl. 3,789,000 1,391,000 1,242,000 1,156,000 92 PDS2D Software Replacement SP-103 Planning 250,000 50,000 50,000 150,000 93 Geographic Information System SP-15 Const./Impl. 4,047,000 827,000 690,000 690,000 1,840,000 94 Process SCADA Modbus Ethernet Redundancy SP-160 Planning 1,055,000 1,055,000 N/A VAX Server Migration to Modbus Ethernet SP-161 Planning 1,146.000 1,146,000 N/A Network Equipment Upgrade SP-89 Const./Impl. 1,157,000 255,000 622,000 140,000 140,000 95 Plant Automation&Computerization Total 26,102,000 6,400,000 3,857,000 7,728,000 8,117,000 Page 4 of 6 Exhibit A Orange County Sanitaiton District Capital Improvement Program Summary of Capital Requirements-Treatment System Improvement Projects Project Total Est.Cost 2010.11 2011.12 Project Phase Project to Date Cashflow Cashflow Future Page Number 711110 Budget 6130/10 Budget Budget Budget Number Miscellaneous&Support Projects Facilities Engineering Projects-Joint FE-J Planning 23,910,000 3,844,000 1,310,000 1,290,000 17,466,000 96 Facilities Engineering Projects-Plant 1 FE-P1 Planning 20,910,000 10,429,000 1,135,000 1,127,000 8,219,000 97 Facilities Engineering Projects-Plant 2 FE-P2 Planning 20,910,000 7,032,000 788,000 757,000 12,333,000 98 Temporary Upgrades To Plant Security Barriers J-108 Planning 2,385,000 993,000 1,092,000 108,000 192,000 99 Emergency Operation Center J-115 Planning 100,000 100,000 100 Contracts and Purchasing Building Extension J-118 Planning 3,589,000 3,589,000 101 Operations Center Entrance/Building Repairs J-122 Planning 2,325,000 450,000 1,150,000 725,000 102 Title 24 Access Compliance Improvements at Plant No.1 P1-115 Planning 10,000,000 42,000 268,000 1,085,000 8,605,000 103 Plant No.2 Landscaping Project P2-96 Planning 545,000 90,000 255,000 200,000 104 Integrated Security Access Control System SP-128 Planning 450,000 90,000 90,000 270,000 105 2009 NPDES Permit Renewal SP-133 Planning 150,000 100,000 50,000 106 Software and Computer Equipment Replacement Project SP-135 Const.11mpl. 2,700,000 50,000 270,000 270,000 2,110,000 107 Land Records Information System SP-136 Planning 410,000 20,000 195,000 195,000 108 Roof Condition Assessment and Rehabilitation Study SP-142 Planning 75,000 39,000 36,000 109 Facility Assets Assessment SP-145 Planning 5,000,000 500,000 1,500,000 3,000,000 110 Administrative Facilities Master Plan SP-147 Planning 250,000 50,000 100,000 100,000 191 Laboratory Water Piping Replacement SP-153 Planning 1,005,000 13,000 112,000 880,000 112 Stormwater Master Plan SP-167 Planning 300,000 300,000 NIA Small Cap.Equip.Replacement Project SP-34 Const.11mpl. 11,700,000 1,500,000 1,700,000 1,700,000 6,800,000 113 Asset Management Program SP-68-2 Design 4,800,000 2,683,000 370,000 363,000 1,384,000 114 Warehouse Reinvention Project SP-77 Const.11mpl. 600,000 532,000 68,000 115 Miscellaneous&Support Projects Total 112,114,000 27,315,000 8,643,000 10,083,000 66,073,000 Water Management Projects Initial Expansion of the Groundwater Replenishment System SP-139 Design 300,000 100,000 100,000 100,000 116 Effluent Reuse Study SP-173 Planning 60,000 60,000 NIA Water Management Projects Total 360,000 100,000 100,000 160,000 Strategic&Master Planning Orange County Biosolids Production Siting Study SP-105 Planning 400,000 136,000 264,000 117 Uniform Level of Service Standards SP-151 Planning 80,000 40,000 40,000 NIA Climate Change Impact Study SP-152 Planning 100,000 50,000 50,000 NIA Plant No.2 Soil Liquefaction Study SP-177 Planning 250,000 250,000 NIA Strategic&Master Planning Total 830,000 136,000 264,000 90,000 340,000 Page 5 of 6 Exhibit A Orange County Sanitaiton District Capital Improvement Program Summary of Capital Requirements—Treatment System Improvement Projects Project Total Est.Cost 2010.11 2011.12 Project Phase Project to Date Cashflow Cashflow Future Page Number 711110 Budget 6/30/10 Budget Budget Budget Number Research&Development Process SCADA Replacement J-120 Planning 20,283,000 20,283,000 NIA Process SCADA Network Upgrades P2-107 Planning 8,697,000 8,697,000 NIA USBR Brine Management Grant Project SP-116 Planning 315,000 130,000 55,000 130,000 118 Research Strategic Plan SP-120 Planning 365,000 308,000 20,000 18,000 19,000 119 Superoxygenation of Primary Influent SP-121 Planning 850,000 360,000 245,000 245,000 120 Operational Research Projects(annual allocation) SP-125 Planning 10,040,000 250,000 1,000,000 1,000,000 7,790,000 121 Process SCADA Link to Pump Stations SP-157 Planning 100,000 100,000 NIA North County Yard Information Continuity SP-162 Planning 666,000 666,000 NIA Data Storage Addition SP-163 Planning 444,000 444,000 NIA Treatment Plant Hydraulic Assessment SP-168 Planning 300,000 300,000 NIA Information Systems Upgrades and Replacements SP-169 Planning 12,510,000 12,510,000 NIA Information Technology Data Center Replacement SP-174 Planning 2,566,000 2,566,000 NIA Information Technology Workroom Replacement SP-176 Planning 180,000 180,000 NIA Research&Development Projects Total 57,316,000 1,048,000 1,320,000 1,393,000 53,555,000 Total Treatment and Disposal Projects 2,249,263,000 890,995,359 127,464,000 87,083,000 1,143,761,000 Capital Equipment Purchases 16,000,000 1,000,000 1,548,000 1,442,400 12,009,600 Total Collection,Treatment and Disposal Projects $ 2,965,626,000 $ 1,085,057,359 $ 179,636,000 $ 119,922,400 $ 1,581,050,600 Page 6 of 6 OCSD NEWPORT TRUNK SEWER Addendum to the Newport Trunk Sewer And Force Mains Replacement Project EIR 20305116 Prepared for September 2010 Black&Veatch Corporation r ESA OCSD NEWPORT TRUNK SEWER Addendum to the Newport Trunk Sewer And Force Mains Replacement Project EIR Prepared for September 2010 Black&Veatch Corporation ESA 626 Wilshire Boulevard Suite 1100 Los Angeles,CA 90017 213.599.4300 www.esassoc.com Oakland Olympia Petaluma Portland Sacramento San Diego San Francisco Seattle Tampa Woodland Hills 208629 OUR COMMITMENT TO SUSTAINABILITY I ESA helps a variety of public and private sector clients plan and prepare for climate change and emerging regulations that limit GHG emissions.ESA is a registered assessor with the California Climate Action Registry,a Climate Leader, and founding reporter for the Climate Registry.ESA is also a corporate member of the U.S.Green Building Council and the Business Council on Climate Change(BC3).Internally,ESA has adopted a Sustainability Vision and Policy Statement and a plan to reduce waste and energy within our operations.This document was 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CONTENTS OCSD Newport Trunk Sewer Addendum to the EIR Paqe Introduction ............................................................................................................................. 1 RegulatoryBackground........................................................................................................... 1 Summaryof Effects.................................................................................................................2 ProjectDescription..................................................................................................................2 ConstructionMethods.............................................................................................................3 Construction Sequence / Schedule...................................................................................5 SedimentControl ....................................................................................................................5 SoilMixing Volume ...........................................................................................................5 Proposed Sediment Control Methods ...............................................................................6 TrafficControl ....................................................................................................................... 10 Non-Construction Traffic................................................................................................. 10 Construction Vehicles ..................................................................................................... 11 Figures Figure 1 Construction Site on the East Levee.....................................................................4 Figure 2 Construction Site on West Levee..........................................................................4 Figure3 Silt Fence..............................................................................................................7 Figure4 Concrete K-Rail ....................................................................................................8 Figure5 Soil Berm Barrier..................................................................................................9 Figure 6 Traffic Detour Pattern for Construction on the East Levee ................................. 10 Figure 7 Traffic Detour Pattern for Construction on the West Levee ................................ 11 Figure 8 Delivery and Disposal Truck Route to Main Highway......................................... 12 Tables Table 1 Approximate In-Situ Soil Mixing Volume for Phase 1............................................5 Table 2 Summary of Anticipated Phases 1 and 1A Truck Traffic..................................... 13 OCSD Newport Trunk Sewer I ESA/208629 Addendum to the EIR September 2010 Introduction The Orange County Sanitation District(OCSD)certified the Final Environmental Impact Report (EIR) for the Newport Trunk Sewer and Force Mains Replacement Project(SCH#203051126)on April 27,2005. The project began construction in October 6,2008 and was substantially complete on July 30,2010. Following installation of this sewer pipeline under the Santa Ana River, subsidence was observed on both river levees. OCSD has designed a remediation project to re- stabilize the levees. The purpose of this Addendum is to evaluate potential environmental impacts associated with the proposed project description modifications pursuant to the California Environmental Quality Act(CEQA)(Public Resources Code Sections 21000 et seq.) and State CEQA Guidelines(California Code of Regulations Sections 15000 et seq.,hereinafter referred to as Guidelines). OCSD's proposed remediation of the levees is to occur in two phases. This Addendum covers Phase 1 (including both Phases IA and 1B). Phase 2 is not covered in this Addendum but may be needed in the future. This Addendum describes the CEQA compliance requirements for an Addendum,provides the project description, and summarizes potential impacts of the project. The analysis concludes that no new environmental impacts would occur as a result of the modifications and an Addendum to the original Newport Trunk Sewer EIR is the appropriate CEQA compliance document for the proposed modifications. Regulatory Background According to Section 15164(a) of the Guidelines,the lead agency or responsible agency shall prepare an addendum to a previously certified EIR if some changes or additions are necessary but none of the conditions described in Section 15162 calling for preparation of a subsequent EIR have occurred. Section 15162 of the Guidelines lists the conditions that would require the preparation of a subsequent EIR rather than an addendum. These include the following: (1) Substantial changes are proposed in the project which will require major revisions of the previous EIR or negative declaration due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects; (2) Substantial changes occur with respect to the circumstances under which the project is undertaken which will require major revisions of the previous EIR or negative declaration due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects; or (3) New information of substantial importance,which was not known and could not have been known with the exercise of reasonable diligence at the time of the previous EIR was certified as complete or the negative declaration was adopted, shows any of the following: (A) The project will have one or more significant effects not discussed in the previous EIR or negative declaration; (B) Significant effects previously examined will be substantially more severe than shown in the previous EIR; OCSD Newport Trunk Sewer ESA/208629 Addendum to the EIR September 2010 (C) Mitigation measures or alternatives previously found not to be feasible would in fact be feasible, and would substantially reduce one or more significant effects of the project,but the project proponents decline to adopt the mitigation measure or alternative; or (D) Mitigation measures or alternatives which are considerably different from those analyzed in the previous EIR would substantially reduce one or more significant effects on the environment,but the project proponents decline to adopt the mitigation measure or alternative. OCSD has evaluated the environmental impacts of the proposed modifications,which are described in this Addendum, in light of the requirements defined under CEQA and the Guidelines. OCSD,acting as the Lead Agency,has determined that none of the above conditions apply and an Addendum to the certified EIR is the appropriate environmental documentation for the proposed modifications. Summary of Effects The proposed project modifications would generate concrete slurry spoils. Water quality control best management practices (BMPs) described in the project description would ensure that construction runoff would not enter the SAR or SAR Marsh and would not adversely affect water quality. Compliance with these County-approved BMPs would ensure that no new impacts to water quality would result form the project. The proposed project modifications would result in the need to temporarily divert bike path traffic during the construction activities. As a part of the project description modifications,bike traffic would be diverted to the opposite side of the river during construction activities. Both levee bike paths may be closed simultaneously for brief periods. During these periods,bike detours would be employed around the construction areas.As described in the project description below, OCSD would place signage to notify bike path users of the temporary detours. Following construction, the bike paths would be returned to pre-construction conditions. Implementation of the detour plans described in the project description would ensure that impacts to bike paths would not be significant. No new significant impacts would occur as a result of the proposed modifications.Nor would the project significantly increase the severity of previously identified impacts. As a result, an Addendum to the Newport Trunk Sewer EIR is the appropriate CEQA compliance document. Project Description The Orange County Sanitation District(OCSD) is proposing Phase IA and 1B of the Santa Ana River(SAR)Levee Stabilization Project in Huntington Beach and Newport Beach California. The levee stabilization is required to repair damages to the levees experienced from microtunneling of the Newport Trunk sewer pipeline. Phase 2 of this project is not covered by this Addendum. OCSD Newport Trunk Sewer 2 ESA/208629 Addendum to the EIR September 2010 Construction for Phase 1A and 1B is anticipated on the West and East Levees of the Santa Ana River near Treatment Plant 2 (Figure and Figure). The objective of the construction is to stabilize levee slopes that are experiencing settling due to the effects of a microtunnelling operation. The construction for Phase I will occur entirely on the levee above the ordinary high water mark of the river and SAR marsh area. The Orange County Flood Control District(OCFCD)owns the property to be affected by construction. OCSD will acquire an encroachment permit from OCFCD prior to construction.No additional permits will be necessary to complete Phase 1 of the project. Phase I is the first phase of the remediation. This phase needs to be installed immediately to ensure that the river levees maintain flood protection this winter(2010-2011). Phase 1B will follow after completion of Phase I in accordance with the Construction Sequence section below. Construction Methods The construction method of Phases IA and 1B consists of in-situ mixing of soil with a cement and water mixture added("soil mixing")in and near the settling zone. Soil mixing will be accomplished with an auger-type mixer mounted on a rig,producing a column of mixed soil 3 feet in diameter to 9-feet in diameter,depending on the contractor retained to complete the work. The rig will be a vehicle between 20 and 30 feet long.A series of these columns will be constructed overlapping each other and covering the construction area, as shown on the construction drawings. It is anticipated that these cured soil/cement columns will prevent further settling. The areas affected by soil mixing on the East and West Levees are shown in Figure 1 and Figure 2. The areas shaded green are where the actual soil mixing will occur. Areas within the boundary for"limit of work area"include space for the rig to maneuver. The areas designated Phase I are entirely within the level areas on the top of the two levees. These will be given the first priority for construction. The portion of Phase 1B will be constructed on the water side of the levees is well above the high water line. Construction on the East Levee will also avoid the adjacent marsh area. Rip rap in the construction area will be removed prior to soil mixing and then replaced after soil mixing is completed. Rip rap removal will leave a depression approximately 18 inches deep which will aid in containing debris and runoff. Sediment controls shall be implemented. Other than limited benching for installing sediment control,the slope of the levees will not be benched for the soil mixing process. The soil mixing process produces spoil that is approximately 20 percent of the volume of soil mixed.Plans are presented for preventing spoil from entering the Santa Ana River either as debris during construction or as sediment in runoff due to rain. OCSD Newport Trunk Sewer 3 ESA/208629 Addendum to the EIR September 2010 Mi crotu n n el Alignment 7-1 Phase IA t r_ t 4 SO ft Soil Mixing Area Figure 1: Construction Site on the East Levee Mi crotu n n el Alignment 1 p it Figure 2 Construction Site on West Levee OCSD Newport Trunk Sewer 4 ESA/208629 Addendum to the EIR September 2010 Construction Sequence / Schedule Construction for Phases IA and 113 will be conducted over approximately total of 12 weeks (6 working days per week, 10-hour workdays), during which access to the levees will be restricted and through traffic diverted. Phase IA will be completed first on the East Levee. Then work will shift to Phase I on the West Levee.Work will then be conducted on Phase I on the West Levee, and when completed,work will then move to Phase I on the East Levee. Plans for traffic diversion and separation of construction-related vehicles from non-construction vehicles are presented below.Also presented is the estimated number of truckloads for transporting supplies and equipment and for removing and disposing of excess spoil from the soil mixing operation. Sediment Control The goal of sediment control is to effectively minimize discharge of sediment and runoff from construction sites by application of relatively simple and cost effective Best Management Practices(BMPs). Sediment controls will be provided for the purpose of controlling erosion and containing sediment until construction is complete. General objectives for erosion and sediment controls are listed below: • Minimize the area disturbed by construction at any given time. Disturbed areas should be within the work limits shown on the drawings. • Contain exposed spoil within the disturbed areas and prevent spoil from spilling into the river and adjacent properties. • Contain any runoff within construction areas that results from construction activities or from rain. Prevent runoff from entering the river or adjacent property. • Trap eroded sediment within construction areas using temporary barriers. Soil Mixing Volume In Phase 1 of the project, an approximate total of 13,900 cubic yards of soil will be treated in-situ at the East and West Levee construction sites. Table 1 provides estimates of amount of soil will be treated in each section of the levee in the Phase 1 of the project. Only approximately 20 percent of that treated soil volume will become spoil that will be removed from the site for disposal. TABLE 1 APPROXIMATE IN-SITU SOIL MIXING VOLUME FOR PHASE 1. Phase 1: East Levee Phase 1:West Levee (cubic yards) (cubic yards) Phase 1A:Top of Levee 2,100 3,500 Phase 1 B: Land Side Slope 2,700 2,400 Phase 113:Water Side Slope 1,200 1,700 Total Soil Mix Volume 6,000 7,600 Spoil Produced 1,200 1,520 OCSD Newport Trunk Sewer rJ ESA/208629 Addendum to the EIR September 2010 Proposed Sediment Control Methods Three alternate methods of sediment controls are proposed. These methods are k-rail, silt fences, and soil berm. Hay bales are used in all three methods to control runoff from construction sites during rain events. The following sections describe alternatives of sediment control barriers. Sediment control barriers will be installed in two configurations. The first configuration will be used for sediment control during work on top and land side of the levee. Sediment control barriers will be installed on top and along edge of levee on the water side. The second configuration will be used for work on water side of the levee. Sediment control barriers will be installed five feet from the work limit in Phase 1 but above high water mark. In both configurations, sediment control barriers will be installed on the land side and along the bottom of the levee. In addition,hay bales will be installed along all sediment control barriers to control runoff from construction site. OCSD Newport Trunk Sewer 6 ESA/208629 Addendum to the EIR September 2010 Silt Fence Barrier. Silt fences (Error! Not a valid bookmark self-reference.)will be a minimum 14 inches high and will not exceed 36 inches in height measured from the installed ground elevation. A silt fence barrier consists of 4-foot posts installed every 3 feet along the barrier limit. The bottom of silt fence will be buried 12 inches below ground surface when installed on flat ground. Where a silt fence is installed on an incline,the bottom of the silt fence will be buried 24 inches below ground surface. The ends of the fence will be extended upslope to prevent water from flowing around the ends of the fence into the river. Error! Not a valid bookmark self- reference. illustrates installation of silt fences in the two configurations. WOOD POST SILT FENCES LENGTH 3'-0" 24" DEPTH HAY BALES IN GROUND SAIY rA ANA RIVER TOp LEVEE LAND SIDE LEVEE SILT FENCES HAY BALES WORK ON TOP AND LAND SIDE OF LEVEE SILT FENCES WOOD POST LENGTH 3'-0" 24" DEPTH HAY BALES IN GROUND SAN7q ANA R1vER RI vER slD E LE tpp E LEVCE LAND SIDE LEVEE HIGH WATER LEVEL SILT FENCES HAY BALES WORK ON RIVER SIDE OF LEVEE Figure 3: Silt Fence OCSD Newport Trunk Sewer 7 ESA/208629 Addendum to the EIR September 2010 Concrete K-Rail Barrier. Concrete k-rail barrier will be 32 inches high with 24 inches base. Ground at bottom of k-rail shall be benched to secured the k-rail in place. In addition,k-rail will also be secured with two anchors at each end. Where k-rails installed on an inclined surface,k- rail will have a slanted base or the k-rail will be placement will be on a benched portion of the slope. Figure 4 illustrates installation of concrete k-rails in two configurations. CONCRETE HAY BALES K - RAIL SANTA ANA RI DER TOP LEVEE LAND SIDE LEVEE HIGH CONRETE WATER LEVEL K - RAIL HAY BALES WORK ON TOP AND LAND SIDE OF LEVEE CONCRETE K - RAIL HAY BALES SANTA ANA RIVER TOP LEE LAND SIDE LEVEE HIGH CONRETE WATER LEVEL K - RAIL HAY BALES WORK ON RIVER SIDE OF LEVEE Figure 4: Concrete K-Rail OCSD Newport Trunk Sewer 8 ESA/208629 Addendum to the EIR September 2010 Soil Berm Barrier. Soil berm barrier will be 12 inches high with 12 inches base. Soil berm shall be well compacted and covered with plastic to prevent it from erosion during construction. Figure 5 illustrates installation of soil berm in two configurations. SOIL BERM HAY BALES SANTA ANA RIVER TOP L£V££ CANd Slp£ tfV££ HIGH WATER LEVEL SOIL BERM HAY BALES WORK ON TOP AND LAND SIDE OF LEVEE SOIL BERM HAY BALES SAN I R T ANA RIVER £ LE £ TOP L£vr£ LAND sio£ c£�,E£ HIGH WATER LEVEL SOIL BERM HAY BALES WORK ON RIVER SIDE OF LEVEE Figure 5: Soil Berm Barrier OCSD Newport Trunk Sewer 9 ESA/208629 Addendum to the EIR September 2010 Traffic Control Non-construction traffic consists includes pedestrian,bicycle, levee maintenance vehicles. Only the levee maintenance vehicles will need access to the entire levee affected by the construction. Pedestrian and bicycle traffic can be detoured away from the construction. Construction traffic includes the soil mixing equipment and trucks delivering cement and water and removing spoil. Non-Construction Traffic Because the levees are relatively narrow and because the machinery needed for the soil mixing work is relatively large,through traffic cannot be allowed when the soil mixing is in progress. There are two bridges relatively close to the construction sites, one upstream and one downstream. Bicycle and pedestrian traffic can be detoured away from the active construction at these bridges. The soil mixing work will be conducted on only one levee at a time, starting with Phase I on the East Levee. This will allow levee traffic to be diverted to the West Levee as shown in Figure 6. Then work will shift to the West Levee, and levee traffic will be diverted to the East Levee as shown in Figure 7. Once Phase lA work is completed on the West Levee, it will continue into the Phase 1B work on the West Levee. Then work will again shift to completing the remaining Phase 1B work on the East Levee with levee traffic diverted to the West Levee. Bicycle and Pedestrian Detour at Hamilton East Levee Construction Bicycle &s Pedestrians Maintenance Vehicles Construction Vehicles Bicycle and Pedestrian Detour at Pacific Coast Highway Figure 6: Traffic Detour Pattern for Construction on the East Levee OCSD Newport Trunk Sewer 10 ESA/208629 Addendum to the EIR September 2010 Bicycle and Pedestrian Detour at Hamilton OCSD West Levee Con M ction PI an t 2 KEY Bicycles&Pedestrian s Maintenance Vehicles •� Construction Vehicles Bicycle an d Pedestrian Detour t at Pacific Coast y Highway 1 mile Figure 7: Traffic Detour Pattern for Construction on the West Levee Pedestrian and bicycle traffic will be diverted at the bridge over the Santa Ana River at Hamilton Avenue and at Pacific Coast(West Coast Highway)using signs and barricades. Levee maintenance vehicles will be allowed onto the levee with construction but they will not be allowed to pass through the actual construction area and will have to turn around or carefully back up. Construction vehicles will take an access road for work on the East Levee and may have some interaction with levee maintenance vehicles.For the West Levee,they will take a path through OCSD Plant 2 property. Therefore,there will be no mixing of moving construction vehicle traffic with pedestrians,bicycles, or levee maintenance vehicles on the West Levee. Construction Vehicles Construction vehicles will consist of a soil mixing rig(similar to a rig used for drilling piles), bulk tank trucks delivering dry cement and water, dump trucks for removing spoil, and a backhoe for loading the spoil onto the dump trucks. It is anticipated that the contractor will establish a batch plant at each of the two levees for mixing cement with water onsite for injection into the soil during soil mixing. The construction vehicles will follow the street routes shown in Figure 8 to two possible main highways: Highway 405 (San Diego Freeway) or Highway 55 (Newport Freeway also known as the Costa Mesa Freeway). OCSD Newport Trunk Sewer 11 ESA/208629 Addendum to the EIR September 2010 To HWY 405 N West Levee Construction Site East Levee Construction Site � KEY - RouteAlternative 1 RouteAlternative 2 Site Access Route � y� GOOSIC Figure 8: Delivery and Disposal Truck Route to Main Highway Approximately 20 per cent of the 13,900 cubic yards of soil involved in the soil mixing(Phase 1) will end up as spoil that will be removed from the site. The spoil will be loaded using a backhoe into semi-trailer dump trucks with 20 cubic yard capacity and removed from the site for disposal. Cement will be delivered in bulk tank trucks as dry solid and transferred to the batch plant. For the East Levee,river water may be too brackish for use in mixing the grout. Therefore,tank trucks will provide fresh water for mixing. On the West Levee, OCSD Plant 2 will provide water via a hydrant, eliminating tank truck traffic at that location, These trucks will follow either of the two the routes shown to the main highways in Figure . Workers will be driving to the site daily. It is anticipated that there will be a crew of approximately 4 people in separate cars driving from home to the site and then leaving at the end of the shift. It is anticipated that only be a single day shift during the day. Work will be occurring on only one levee at a time to allow for pedestrian and bicycle detours. A summary of construction vehicle traffic is shown in Table 2. OCSD Newport Trunk Sewer 12 ESA/208629 Addendum to the EIR September 2010 TABLE 2 SUMMARY OF ANTICIPATED PHASES 1 AND 1A TRUCK TRAFFIC (12-week total construction period, 6 weeks per levee) East Levee West Levee East Levee Trucks West Levee Trucks Description Total Trucks per Work Day Total Trucks per Work Day Dump Trucks for Spoil Removal,(20 cu yd.capacity) Phase 1A 21 0.6 35 1.0 Phase 1 B 39 1.1 41 1.1 Bulk tanker(5,000 gal.)for Dry Cement Delivery Phase 1A 15 0.4 26 0.7 Phase 1 B 29 0.8 30 0.8 Water Trucks(5,000 gal.) Phase 1A 15 0.4 Ob 0 Phase 1 B 29 0.8 Ob 0 Totala 148 4.1 188 5.2 a Does not include soil mixing rig,backhoe,and batch mix plant which will be delivered once and removed once for each levee.Also does not include cars for 4 workers coming to and leaving the site. b Assumes water provided by hydrant at OCSD Plant 2. OCSD Newport Trunk Sewer 13 ESA/208629 Addendum to the EIR September 2010 RESOLUTION NO. OCSD 10-16 AUTHORIZING EMERGENCY REPAIRS TO THE SANTA ANA LEVEES AND RATIFYING GENERAL MANAGER'S USE OF EMERGENCY PURCHASING AUTHORITY PURSUANT TO DELEGATION OF AUTHORITY RESOLUTION 07-04 SECTION 6.03(J) A RESOLUTION OF THE BOARD OF DIRECTORS OF ORANGE COUNTY SANITATION DISTRICT FINDING THAT PROJECT 5-58 DAMAGED THE SANTA ANA RIVER LEVEES, AUTHORIZING EMERGENCY REPAIRS TO THE SANTA ANA LEVEES, AND RATIFYING GENERAL MANAGER'S USE OF EMERGENCY PURCHASING AUTHORITY PURSUANT TO DELEGATION OF AUTHORITY RESOLUTION 07-04 SECTION 6.03(J) WHEREAS, damage to the Santa Ana River Levees caused by Project 5-58 must be repaired before the rainy season begins in order to protect residences, habitat, and District facilities from flooding; and WHEREAS, the Levee damage is a sudden, unexpected occurrence that poses a clear and imminent danger to residences, habitat, and District facilities requiring immediate action to prevent or mitigate loss or impairment of life, health, property, and essential public services; and WHEREAS, the Levee damage constitutes an emergency within the meaning of Public Contract Code Sections 22050 and 1102, and the Delegation of Authority Resolution 07-04 Section 6.03(J); and WHEREAS, the General Manager utilized emergency purchasing authority to negotiate and award a contract to Geo-Solutions Inc. to provide Levee repair services for Newport Sewer and Force Mains, Bitter Point to Coast Trunk Sewer, Contract No. 5- 58 for an amount not to exceed $2,038,000; and WHEREAS, the General Manager utilized emergency purchasing authority to negotiate and award a contract to Jamison Engineering Contractors, Inc. to provide supporting construction services for Newport Sewer and Force Mains, Bitter Point to Coast Trunk Sewer, Contract No. 5-58 for an amount not to exceed $670,000; and WHEREAS, the General Manager utilized emergency purchasing authority to negotiate and award a professional design services agreement to Black and Veatch to 728494.1 provide engineering support services for Newport Sewer and Force Mains, Bitter Point to Coast Trunk Sewer, Contract No. 5-58 for an amount not to exceed $1,200,000; and WHEREAS, there is a need to continue proceeding with the emergency Levee repairs initiated by the General Manager; and WHEREAS, the environmental impacts of Project 5-58 were previously studied in the Environmental Impact Report for the Replacement of Newport Trunk Sewer and Force Mains, Contract No. 5-58, certified by the District's Board of Directors on April 27, 2005 ("EIR"); and WHEREAS, minor changes and additions are required in the previously certified EIR to address the environmental impacts of modifying Project 5-58 to include emergency repairs to the Santa Ana River Levees; and WHEREAS, the proposed modifications of Project 5-58 do not require the preparation of a subsequent EIR or negative declaration pursuant to Public Resources Code Section 21166 or CEQA Guideline Section 15162. NOW, THEREFORE, the Board of Directors of Orange County Sanitation District hereby resolves, determines, and orders: Section 1. The Board finds that the Levee damage constitutes an emergency within the meaning of Public Contract Code Sections 22050 and 1102, and the Delegation of Authority Resolution 07-04 Section 6.03(J). Section 2. The Board ratifies the General Manager's use of emergency purchasing authority to negotiate and award a contract to Geo-Solutions Inc. to provide Levee repair services for Newport Sewer and Force Mains, Bitter Point to Coast Trunk Sewer, Contract No. 5-58 for an amount not to exceed $2,038,000. Section 2. The Board ratifies the General Manager's use of emergency purchasing authority to negotiate and award a contract to Jamison Engineering Contractors, Inc. to provide supporting construction services for Newport Sewer and Force Mains, Bitter Point to Coast Trunk Sewer, Contract No. 5-58 for an amount not to exceed $670,000. Section 3. The Board ratifies the General Manager's use of emergency purchasing authority to negotiate and award a professional design services agreement to Black and Veatch to provide engineering support services for Newport Sewer and 728494.1 Force Mains, Bitter Point to Coast Trunk Sewer, Contract No. 5-58 for an amount not to exceed $1,200,000. Section 4. The Board finds a need to continue proceeding with the emergency Levee repairs initiated by the General Manager. Section 5. The Board finds that the modifications of Project No. 5-58 to include emergency repairs to the Santa Ana Levees do not require the preparation of a subsequent EIR or negative declaration pursuant to Public Resources Code Section 21166 and CEQA Guidelines Section 15162. The Board determines that an Addendum to the EIR is appropriate pursuant to CEQA Guideline Section 15164. Section 6. This resolution shall take effect immediately upon its adoption. PASSED AND ADOPTED at a regular meeting held September 22, 2010. Chair, Orange County Sanitation District ATTEST: Clerk of the Board 728494.1 BOARD OF DIRECTORS Meeting Date To Bd. of Dir. 09/22/10 AGENDA REPORT Item Number Item Number 13 Orange County Sanitation District FROM: James D. Ruth, General Manager Originator: Jim Herberg, Director of Engineering CIP Project Manager: Alberto Acevedo GENERAL MANAGER'S RECOMMENDATION 1. Receive and file Addendum No. 1 to the Final Environmental Impact Report for the Newport Trunk Sewer and Force Mains Replacement Project prepared by Environmental Science Associates; 2. Approve a project budget increase of $5,506,800 to Newport Sewer and Force Mains, Bitter Point to Coast Trunk Sewer, Contract No. 5-58, for a total budget of $31,389,800; and, 3. Adopt Resolution No. OCSD 10-16, Authorizing Emergency Repairs to the Santa Ana River Levees and Ratifying the General Manager's Use of Emergency Purchasing Authority Pursuant to Delegation of Authority Resolution 07-04 Section 6.03(J), and finding a continuing need to: A. Negotiate and award a contract to Geo-Solutions, Inc. to provide soil remediation services for said project, for an amount not to exceed $2,038,000; B. Approve a contingency of $407,600 (20%); C. Negotiate and award a contract to Jamison Engineering Contractors, Inc. to provide supporting construction services for said project, for an amount not to exceed $670,000; D. Approve a contingency of $134,000 (20%); E. Negotiate and award a professional design services agreement to Black and Veatch to provide engineering services for said project, for an amount not to exceed $1,200,000; and, F. Approve a contingency of $120,000 (10%). Page 1 of 5 SUMMARY This project installed an additional pipeline connection from the Bitter Point Pump Station to Plant No. 2 in order to improve the reliability of the Sanitation District's force main systems in the City of Newport Beach. A construction contract for this work was awarded to Haden Buntich Construction Co., Inc. and the contract work is substantially complete. A portion of the contract work included a tunnel section of pipeline. The soil above this tunneled section of pipeline has settled and created voids in the soil along the alignment including the Santa Ana River. Responsibility to repair the affected soils is under dispute. The Sanitation District has also notified the District's Owner Controlled Insurance Program (OCIP) insurance carrier that the property damage has occurred, but there has been no determination. The District will pursue cost recovery for these incurred costs. The soil settlement poses a risk to the levee system that must be repaired as soon as possible to mitigate these risks prior to the coming rainy season. A levee repair method has been designed using a phased approach with the most critical work (Phase 1) emergency repairs to the Santa Ana River Levees being implemented at this time. The limited schedule to perform the work will not allow for a typical procurement process. In order to expedite these repairs, Staff is requesting emergency authorization for agreements with three separate contracting parties using an emergency procurement authority. The requested budget increase includes contract costs as well as providing for an increase in staffing costs to support the extended project schedule during the implementation of this Phase 1 work. Additional repairs beyond the scope of this action are needed and are planned for a second project phase. The Sanitation District is planning to work with the tunneling contractor to complete these repairs. A plan will be developed to repair these areas, but these are not considered an emergency. Costs for these future repairs are not included in this action. Some changes and additions are required to the previously certified EIR to address modifications for the levee repairs. The modifications, however, do not result in any new or significant impacts that were not previously considered or addressed in the 2005 EIR. An Addendum to the EIR was prepared pursuant to CEQA Guideline. Page 2of5 PRIOR COMMITTEE/BOARD ACTIONS August 2008 — Awarded a contract with Mladen Buntich Construction Co. for the construction of the Newport Trunk Sewer and Force Mains, Bitter Point Pump Station to Coast Trunk Sewer, Contract 5-58, for a total amount not to exceed $18,512,931. July 2008 —Approved a Professional Consultant Services Agreement with Black & Veatch Corporation for Construction Support Services for an amount not to exceed $973,463. April 2007 - Approved Amendment No. 1 to the Professional Design Services Agreement with Black & Veatch Corporation for an additional amount of$120,082, increasing the total PSA contract amount not to exceed $1,138,989. April 2007 - Authorized staff to commence negotiations with Black & Veatch Corporation for support services during the construction, commissioning, and closeout phases of Contract No. 5-58. December 2003 - Approved Professional Design Services Agreement with Black & Veatch Corporation for an amount not to exceed $1,018,907. ADDITIONAL INFORMATION This project installed an additional pipeline connection from the Bitter Point Pump Station to Plant No. 2 in order to improve the reliability of the Sanitation District's force main systems in the City of Newport Beach. A construction contract for this work was awarded to Mladen Buntich Construction Co., Inc. and the contract work is substantially complete. A portion of the contract work included a tunnel section of pipeline beginning inside Plant No. 2 and routed under the Santa Ana River to the east side. The soil above this tunneled section of pipeline has settled and created voids in the soil along the alignment including the Santa Ana River. The Sanitation District's design consultants have concluded that the Contractor over excavated during the tunneling operations. The Contractor maintains that there were differing site conditions that caused the soil settlement. Responsibility to repair the affected soils is under dispute. In addition, the Sanitation District has notified the District's Owner Controlled Insurance Program (OCIP) insurance carrier that the property damage has occurred. The OCIP Insurance carrier has not yet determined if the damage is covered under the policy. The Districts will pursue cost recovery for these incurred costs. Page 3of5 The soil settlement poses a risk to the levee system that must be repaired as soon as possible to mitigate these risks prior to the coming rainy season. A levee repair method has been designed using a phased approach with the most critical work (Phase 1) emergency repairs to the Santa Ana River Levees being implemented at this time. This work involves soil remediation to improve the soil density of the east and west Santa Ana River Levee in the vicinity of the pipeline installation. This must be completed by a specialty contractor using soil mixing techniques with the addition of grout to the soil. The limited schedule to perform the work will not allow for a typical procurement process. In order to expedite these repairs, Staff is requesting emergency authorization for agreements with three separate contracting parties using an emergency procurement authority. There will be two construction contracts, one to retain the prime soil remediation construction work and a second for supporting construction work. A new Professional Design Services Agreement (PDSA) is necessary for engineering oversight to verify the installation and certify the work. The requested budget increase includes contract costs as well as providing for an increase in staffing costs to support the implementation of this Phase 1 work. Cost recovery for this work will be sought for this contracted work. These are being explored by risk management staff and counsel's office. Additional repairs beyond the scope of this action are needed and are planned for a second project phase. The Phase 2 repairs include work from inside the Santa Ana River as well as a portion of the Sanitation District's Ocean Outfall pipeline and adjacent areas inside Plant 2. The Sanitation District is planning to work with the tunneling contractor to complete these repairs. A plan will be developed to repair these areas in the future, but these are not considered an emergency. Costs for these repairs are not determined at this time and are not included in this action. Pursuant to the provision of the California Environmental Quality Act (CEQA), the Orange County Sanitation District (Sanitation District) Board of Directors (Board), as the lead agency and decision-making body, is required to consider Addendum No. 1 to the Final Environmental Impact Report (EIR) for the Replacement of Newport Trunk Sewer and Force Mains in compliance with CEQA. As a result of this action, the Board can proceed with approval and implementation of the project as presented herein. CEQA The Final Environmental Impact Report (EIR) for the Replacement of Newport Trunk Sewer and Force Mains, Contract No. 5-58, was certified by the Sanitation District's Board of Directors on April 27, 2005. The Notice of Determination was filed with the State Clearinghouse on April 28, 2005. Addendum No. 1 to the Newport Sewer and Force Mains EIR, as described herein, will be retained in the Sanitation District's official files for internal reference. Page 4 of 5 Some changes and additions are required to the previously certified EIR to address modifications in the Newport Trunk Sewer Project. The modifications, however, do not result in any new or substantially more severe significant impacts that were not previously considered or addressed in the 2005 EIR. In addition, no new information of substantial importance, that was not known or could not have been known at the time the EIR was certified, shows that the project would have any new or more severe impacts. None of the conditions described in Public Resources Code Section 21166 or CEQA Guideline Section 15162 requiring preparation of a subsequent EIR or negative declaration have occurred. On that basis, an Addendum to the EIR was prepared pursuant to CEQA Guideline Section 15164. The Addendum and related resolution and findings are attached hereto as Exhibit A. Pursuant to CEQA, an Addendum is the appropriate document to describe the minor modifications to the proposed projects. According to CEQA, no public circulation or review period is required for an Addendum prepared for a previously circulated and certified EIR. BUDGET/DELEGATION OF AUTHORITY COMPLIANCE This request complies with authority levels of the Sanitation District's Delegation of Authority. This item has been budgeted, but the budget is insufficient for the recommended action (Line item 05-58: Section 8, Page 8). The District will pursue cost recovery for the incurred costs. In the interim, required funds will be taken from anticipated savings from existing CIP projects. Date of Approval Contract Amount Continaency 09/22/10 $2,038,000 $407,600 (20%) 09/22/10 $ 670,000 $134,000 (20%) 09/22/10 $1,200,000 $120,000 (10%) ATTACHMENTS 1. Addendum No. 1 to the Final Environmental Impact Report for the Newport Trunk Sewer and Force Mains Replacement Project prepared by Environmental Science Associates. 2. Resolution No. OCSD 10-16, Authorizing Emergency Repairs to the Santa Ana River Levees and Ratifying the General Manager's Use of Emergency Purchasing Authority Pursuant to Delegation of Authority Resolution 07-04 Section 6.03(J) JH:DF:BRH h:\dept\agenda\board agenda reports\2010 board agenda reports\09\5-58 emergency levee repairs ar-092210.docx Page 5 of 5 t TOLLING AGREEMENT This Tolling Agreement("Agreement is entered into by and between the Orange County Sanitation District("OCSD")and Black&Veatch Corporation ("Consultant") (OCSD and Consultant are collectively referred to as"Parties"and individually as"Party"). RECITALS A. WHEREAS, this Agreement is made with reference to OCSD's project known as Newport Trunk Sewer and Force Mains, Bitter Point Pump Station to Coast Trunk Sewer, Contract No. 5-58 ("5-58 Project"); and B. WHEREAS, the Parties entered into a Professional Services Agreement dated December 17, 2003, for professional and technical services for the preparation of construction documents, construction support services, commissioning and close out services, and project support documentation for the 5-58 Project; and C. WHEREAS, the Parties entered into an agreement dated January 14, 2004, together with Amendment No. 1 dated April 25, 2007, for professional design services for the 5- 58 Project; and D. WHEREAS, the Parties entered into a Professional Consultant Services Agreement dated October or July 23, 2008, together with Amendment No. 1 dated October 5, 2010, for construction support services for the 5-58 Project; and E. WHEREAS, the Parties entered into a Professional Design and Construction Support Services Agreement dated September 15, 2010, for professional engineering design and support services for the design and construction of soil remediation in response to levee settlement resulting from the tunneling under the 5-58 Project; and F. WHEREAS, OCSD entered into a public works contract("Construction Contract") with Mladen Buntich Construction Co, ("MBCC" or"Contractor"), the general contractor, for the construction of the 5-58 Project; and G. WHEREAS, during the construction of the 5-58 Project by MBCC, subsidence and property damage resulted from microtunneling operations completed by MBCC's subcontractor in connection with the 5-58 Project ("Microtunneling Work"); and H. WHEREAS, the Orange County Flood Control Division and the United States Army Corps of Engineers required that OCSD immediately repair the property damage in and around the Santa Ana River Levees caused by the subsidence that resulted from the construction of the 5-58 Project; and I. WHEREAS, Contractor contends that it encountered differing site conditions which resulted in delays, extra work, and related damages, , and that other parties are responsible for those delays and additional costs. Contractor has submitted a number of claims to OCSD seeking compensation for the delays, extra work and related damages; and 775251.1 J. WHEREAS, the OCSD contends that the subsidence,property damages, delays, additional costs, and all damages arising therefrom are the result of acts or omissions by Contractor, Consultant, and/or other parties. OCSD has incurred, and continues to incur, substantial costs as a result of the subsidence and related property damage. OCSD further contends that OCSD is entitled to reimbursement from the responsible party or parties for all of these costs and damages; and K. WHEREAS, to the extent that Contractor is able to establish any liability on the part of OCSD for the alleged delay, extra costs and damages, OCSD contends that others are legally obligated to indemnify OCSD including Consultant and/or others; and L. WHEREAS, Consultant disputes any liability, fault, and/or indemnity obligation on its part, including but not limited to any allegations of defective plans, specifications and/or evaluations, and further disputes that either OCSD or Contractor have incurred, or will continue to incur damages because of or related to any acts or omissions of Consultant and/or its employees; and M. WHEREAS, all Parties dispute, in part or in full, the contentions of the others and no final determinations have been made concerning the contentions, claims and/or cross- claims of any party; and N. WHEREAS, the Parties agree that it is in their best interest to defer or avoid litigation of alleged claims, if any, of and/or by OCSD against Consultant, and of alleged claims, if any, of and/or by Consultant against OCSD arising out of the 5-58 Project; and O. WHEREAS, the Parties desire to toll the running of any statute of limitations and any other time-related defense with respect to any rights, claims, causes of action, counterclaims, cross-claims, and defenses that either Party may assert against the other Party arising out of the 5-58 Project(the"Claims"). AGREEMENT NOW,THEREFORE, in consideration of the mutual covenants and conditions set forth herein,the Parties hereto agree as follows: 1. Tolling of Claims. The Parties agree to toll any statute of limitations and any other-time related defense, if any, applicable to the Claims, for a period of time commencing on the Effective Date and continuing until this Agreement is terminated by either one of the Parties as provided in Paragraph 2 (Withdrawal from the Agreement)below(the "Tolling Period"). 775251.1 f (a) The tolling shall apply equally to all Claims arising during the term of this Agreement. (b) The Parties agree that the Tolling Period shall be excluded from all computations of any statute of limitations applicable to the Claims. The Parties agree that each shall not plead, assert, or otherwise raise any statute of limitations or any other time-related defense applicable to the Claims, to the extent the Claims are tolled by this Agreement, as a bar to or other limitation on any Claims. (c) The Parties agree that the Tolling Period shall not limit or otherwise affect the duty of a Party, if any, to mitigate losses, damages, or injury. (d) This Agreement shall not constitute a waiver or release of any defense of either OCSD or Consultant based on the running of time under an applicable statute of limitations or by way of estoppel, laches or other time related defense which arose, accrued, or would have barred any claim relating to the subject matter of this Agreement prior to the Effective Date, or which, in conjunction with other time periods not affected by this Agreement, would have or will bar such claims. Furthermore,by this Agreement, neither OCSD nor Consultant waive any right, position, defense, or objection to any claims related to the subject matter of this Agreement other than as expressly provided herein. Nothing in this Agreement shall limit or otherwise affect any defense available to a Party(a) as of the end of the day immediately preceding the start of the Tolling Period, (b) in any litigation brought by the other Party to this Agreement not involving the 5-58 Project, and/or(b) in any litigation brought by any other person or entity that is not a Party to this Agreement. (e) This Agreement constitutes a valid and effective written agreement to toll pursuant to Section 360.5 of the California Code of Civil Procedure. 2. Withdrawal from the Agreement. Either Party may, upon written notice to the other Party, sent by certified mail return receipt requested and properly addressed to the business offices of the other Party, elect to withdraw from this Agreement. Such withdrawal may occur irrespective of the consent of the other Party. The Tolling Period shall terminate thirty(30) days following receipt of the notice of withdrawal. 3. Alternative Dispute Resolution. Nothing in this Agreement prohibits the Parties from engaging in informal alternative dispute resolution, including, but not limited to, mediation. Any agreement by the Parties to engage in informal alternative dispute resolution during the terms of this Agreement does not affect the respective duties and obligations of the Parties. 4. No Waiver. This Agreement shall not constitute a waiver or release of any defenses of either Party based on the running of time under an applicable statute of limitations or other time related defense which arose, accrued, or would have barred any Claims prior to the Effective Date. Furthermore, by this Agreement, the Parties do not waive their rights to assert any other position, defense, or objection to any Claims other than as expressly provided herein. 775251.1 5. No Admission. Neither the execution of this Agreement nor anything contained in it is intended to be, nor shall be deemed to be, an admission of any nature by either party, including but not limited to, an admission of any liability or an admission of the existence of facts upon which liability could be based. 6. Interpretation. This Agreement shall not be construed against any party preparing it, but shall be construed as if both parties jointly prepared the Agreement and any uncertainty or ambiguity shall not be interpreted against any one party. 7. Notices. Any notice, request, demand, consent, approval or other communication required or permitted hereunder or by law shall be deemed given or made only if in writing and deposited in the United States mail, postage prepaid and addressed to the party for whom intended, addressed as follows, or to such other address as may, from, time to time, be designated by written notice to the other Parties: To OCSD: Orange County Sanitation OCSD Attn: Clerk of the Board 10844 Ellis Avenue Fountain Valley, CA 92780 With a Copy To: Bradley R. Hogin Woodruff, Spradlin& Smart 555 Anton Blvd. Suite 1200 Costa Mesa, CA 92626 To Consultant: Black&Veatch Corporation 800 Wilshire Blvd, Suite 600 Los Angeles, CA 90017 8. Governing L� This Agreement shall be governed by and construed under the laws of the State of California. 9. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed in original, but all of which together shall constitute one and the same agreement. 10. Breach. The Parties understand and agree that no breach of any provision or provisions of this Agreement can be waived unless done so expressly in writing. A waiver of one breach shall not be deemed a waiver of any other breach of the same or any other provision of this Agreement. 11. Severability. If any provision of this Agreement is determined to be unenforceable for any reason, it shall be adjusted rather than voided, if possible, in order to achieve the intent of the Parties. In any event, the remaining provisions shall be deemed valid and enforceable to the maximum extent possible. 775251.1 12. Authori . Each of the undersigned represents and warrants that he/she has the authority to bind the Party on behalf of whom he/she signs and that the other Party hereto is entitled to rely upon such representation for all legal purposes. 13. Parties Covered. This Agreement shall be signed by the Parties and shall inure to the benefit of the Parties' successors and assigns. 14. No Admission of Liability. Neither the execution of this Agreement nor anything contained in it is intended to be, nor shall be deemed to be, an admission of any nature by either Party, including but not limited to, an admission of any liability or an admission of the existence of facts upon which liability could be based. 15. Amendments and Modifications. This Agreement may be amended or modified only by a written agreement signed by the Parties to this Agreement. 16. Entire Agreement. This Agreement constitutes the entire understanding between the Parties hereto with respect to the subject matter set forth herein and supersedes any and all prior or other contemporaneous understandings, correspondence, negotiations, or agreements, written or oral,between them regarding the subject matter of this Agreement. No alterations, modifications or interpretations hereof shall be binding unless in writing and signed by the Parties. 17. Effective Date. This Agreement shall become effective ("Effective Date") as of the date it is last signed. [SIGNATURES ON THE FOLLOWING PAGE] 775251.1 IN WITNESS WHEREOF,the Parties hereto have caused this Agreement to be executed as of the day and year first above written. ORANGE COUNTY SANITATION DISTRICT By: 7 (3 A ate Its: er 1ayza� Date Its: --i- fir. ►-�1 Approved as to Form: 14. �4 A. OCSD ener 1 CoLksel BLACK& VEATCH CORPORATION By: T 7�///// Date Its: .,S.a-ry�i+— !�/LB �/�f/Q=��l 775251.1