BOARD OF DIRECTORS REGULAR MEETING AGENDA

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BOARD OF DIRECTORS

REGULAR MEETING AGENDA

Wednesday, April 7, 2021 at 6:30 p.m.

Consistent with the Governor’s Executive Orders N-25-20 and N-29-20 and the Contra Costa County Social Distancing Health Order, this meeting will not be physically open to the public and all Board Members will teleconference into the meeting via Zoom Video Conferencing.

The public can observe the meeting by accessing https://us02web.zoom.us/j/82000627290 or joining by phone +1 669 900 6833 Webinar ID 820 0062 7290

Public comments may be sent to the District Clerk via email at districtclerk@wcwd.org. Comments will be read into the record, up to 3 minutes per comment, subject to the Chair’s discretion.

This agenda and supporting documents are posted on the District’s website www.wcwd.org. Board meetings are video recorded.

Any member of the public who needs accommodations should email districtclerk@wcwd.org who will use their best efforts to provide reasonable accommodations to provide as much accessibility as possible while also maintaining public safety in accordance with the District’s procedure for resolving reasonable accommodation requests.

CALL TO ORDER ROLL CALL

PUBLIC COMMENT (ITEMS NOT ON THE AGENDA) CONSENT CALENDAR

1. MINUTES. Approve Regular Board Meeting Minutes of March 3, 2021.

2. PROCLAMATIONS. Approve the Proclamation Denouncing Hate Crimes Against Asian Americans and the Proclamations for April and May 2021.

3. EFFLUENT VALVE REPLACEMENT. Authorize the General Manager to Execute an Agreement with TCB Industrial, Inc., for the WQRRP Effluent Valve

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West County Wastewater

Board of Directors Meeting Agenda April 7, 2021

Page 2

4. SEWER REPLACEMENT PROJECT. Authorize the General Manager to Execute an Agreement with APB General Engineering, for the Chesley & Giaramita Sewer Replacement Project for a Total Amount Not to Exceed $531,684. 5. REVOLVING FUND APPLICATION. Authorize the General Manager to Execute

Amendment Number 5 totaling $125,681 with Carollo Engineering for the 3rd State Revolving Fund Application Phase 1 Support (Environmental) for a New Total Not to Exceed $965,243.

CLOSED SESSION

6. CONFERENCE WITH LABOR NEGOTIATORS (Government Code Section

54957.6.) Agency designated representatives: Charley Howard, Andrew Clough.

Employee Organization: AFSCME Public Employees Local 1 - Managerial Employees Unit.

PRESENTATION

7. BOND FINANCING. Receive a Presentation on Bond Financing. OTHER BUSINESS

8. Reports from Staff/General Manager/General Counsel 9. Directors' Comments/Meeting Reports

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DRAFT MINUTES

March 3, 2021 Board of Directors Meeting

The Regular Board Meeting of the West County Wastewater Board of Directors was held via virtual teleconference platform zoom.us.

CALL TO ORDER ROLL CALL

President Sudduth called the meeting to order at 6:31 p.m. Other members present included Vice President Zepeda and Directors Alvarado and Wiener.

Director Stanley was present without video and was not included on attendance per updated policy of meeting attendance.

Also in attendance were General Counsel Claire Collins of Hanson Bridgett, LLP; General Manager Malek-Zadeh; Deputy General Manager Clough; Administrative Services Department Manager Lovell; Infrastructure & Planning Department Manager Savannah; Water Quality & Resource Recovery Department Manager Winer; Secretary to the District/District Clerk Martinez and some members of the public.

PUBLIC COMMENT (ITEMS NOT ON THE AGENDA)

There were no public comments on items not on the agenda.

President Sudduth stated that Vice President Zepeda will be serving as Parliamentarian for the meeting.

CONSENT CALENDAR

There were no public comments on the Consent Calendar agenda items.

A motion was made by Director Alvarado and seconded by Director Wiener to approve Consent Calendar Agenda Items 1 through 4 as listed below.

Director Stanley was recused from the vote as she was not compliant with video attendance for the meeting.

The motion passed unanimously.

Ayes: Alvarado, Wiener, Zepeda, Sudduth Noes: None

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Board of Directors Meeting Minutes March 3, 2021

Page 2

1. MINUTES. Approve Regular Board Meeting Minutes of January 13, 2021 and January 6, 2021.

2. NOTICE OF COMPLETION/PAYMENT OF RETENTION. Accept Completion of the Headworks Valve Replacement Project, Authorize the General Manager to file a Notice of Completion, and Authorize the Payment of Retention totaling $37,959 to Aztec Consultants, Inc. 35 days after the date of recording of the Notice of Completion.

3. EFFLUENT PUMP SYSTEM. Authorize the General Manager to execute

Amendment No. 1 with Rain for Rent for an additional amount of $128,700 for a New Not-to-Exceed Amount of $628,700 for temporary effluent pump rental at the Water Quality and Resource Recovery Plant through May 3, 2021.

4. INVESTIGATIVE SERVICES PAYMENT. Authorize the General Manager to amend the agreement with the Law Office of Shannon Shrewsbury for an additional $5,000 for a New Not-To-Exceed Amount of $55,000 for investigative services. REGULAR CALENDAR

5. CSDA NOMINATION. Consider Making A Nomination for California Special Districts Association (CSDA) Board of Directors Seat A.

There were no public comments on this item.

A motion was made by Director Alvarado and seconded by Director Wiener to nominate President Cheryl Sudduth to the California Special Districts Association (CSDA) Board of Directors Seat A.

Director Stanley was recused from the vote as she was not in compliance with video attendance for the meeting.

The motion passed by the following vote: Ayes: Alvarado, Wiener, Zepeda, Sudduth Noes: None

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Board of Directors Meeting Minutes March 3, 2021

Page 3

President Sudduth updated the Board and public on the progress of Director Stanley's censure. She expressed extreme concern for Director Stanley's continued willful misconduct and stated that a continued update of the censure will be scheduled for the next Board meeting.

Director Stanley made public comment regarding her technological and other ongoing issues.

OTHER BUSINESS

7. REPORTS FROM STAFF/GENERAL MANAGER/GENERAL COUNSEL

There were no reports from Staff, General Manager or General Counsel. 8. DIRECTORS' COMMENTS/MEETING REPORTS

Director Wiener reported on his attendance at the El Sobrante Chamber of Commerce meeting.

Vice President Zepeda reported on his attendance at the City of Richmond Council meeting.

President Sudduth reported on her attendance at various meetings.

9. ADJOURNMENT

General Manager Malek-Zadeh shared information regarding recognition of Women's History month.

Director Alvarado made statement on wishing his brother a happy birthday.

President Sudduth made statement to do something to uplift the women in your lives. The meeting adjourned at 7:17 p.m.

PRESIDENT

VICE PRESIDENT

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TO: DATE: REPORT BY: SUBMITTED BY: AGENDA ITEM: Board of Directors

West County Wastewater April 7, 2021

Lisa Malek Zadeh, General Manager

Justin Lovell, Director of Administrative Services Dept. Brenda Martinez, Secretary of the District/District Clerk

Approve the Proclamation Denouncing Hate Crimes Against Asian Americans and the Proclamations for April and May 2021.

RECOMMENDED ACTION

Approve the Proclamation Denouncing Hate Crimes Against Asian Americans and the Proclamations for April and May 2021.

SUPPORTING DOCUMENTATION:

A. Proclamation Condemning and Combating Racism B. World Health Day Proclamation April 2021

C. Earth Day Proclamation April 2021

D. World Day for Safety & Health at Work Proclamation April 2021 E. Cinco De Mayo Proclamation May 2021

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Proclamation

West County Wastewater

Board of Directors

CONDEMNING AND COMBATTING RACISM, VIOLENCE, AND HATE CRIMES AGAINST ASIAN AMERICANS AND PACIFIC ISLANDERS

WHEREAS, West County Wastewater (“WCW”) is committed to justice, equity,

diversity, inclusion, access, and equality for people of all races, national origins, and ethnicities.; and

WHEREAS, Contra Costa County is home to an estimated 1,153,526 people,

approximately 18% of whom identify as Asian American or Pacific Islander (AAPI); and

WHEREAS, AAPI communities are immensely diverse, consisting of multiple

ethnicities and hundreds of languages and dialects; and

WHEREAS, Racism and xenophobia toward AAPI people in the United States has

resulted in policies such as the Chinese Exclusion Act of 1882, the Immigration Act of 1924 effectively banning all immigration from Asia; and Executive Order 9066 in 1942, which authorized the incarceration of Japanese Americans during World War II; and

WHEREAS, Stop AAPI Hate, a national coalition aimed at addressing anti-Asian

discrimination, has documented over 3,700 hate incidents targeting AAPI people from March of 2020 through February 28, 2021. As of February 28, 2021, Stop AAPI Hate received

reports of 503 hate incidents in 2021 alone; and

WHEREAS, Stop AAPI Hate has received reports of hate incidents from all 50 states,

with 1,691 hate incidents reported in California. Most recently, the mass shooting appearing to target Asian American women in Atlanta has raised these issues to national significance; and

WHEREAS, Hate incidents against AAPI people continue to occur in the Bay Area.

On March 13, 2021 in San Francisco, Army veteran Ron Tuason was beaten and told, "Go back where you came from, you caused this problem." Over the course of two weeks in February 2021, authorities recorded 18 crimes targeting Asian Americans in Oakland; and

2.A

Attachment

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WHEREAS, WCW by this proclamation officially condemns and declares its intent to

combat racism, xenophobia, intolerance, violence, and hate crimes against Asian Americans and Pacific Islanders.

NOW, THEREFORE, BE IT RESOLVED that WCW by this proclamation officially

condemns and declares its intent to combat racism, xenophobia, intolerance, violence, and hate crimes against Asian Americans and Pacific Islanders.

Dated: April 7, 2021

______________________________ ______________________________ Cheryl Sudduth, President Cesar Zepeda, Vice President ______________________________ ______________________________ David Alvarado, Director Sherry Stanley, Director

______________________________ Harry Wiener, Director

2.A

Attachment

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Proclamation

West County Wastewater

Board of Directors

RECOGNITION OF WORLD HEALTH DAY, APRIL 7, 2021 “BUILDING A FAIRER, HEALTHIER WORLD”

WHEREAS, April 7th of each year marks the celebration of World Health Day. From its

inception at the First Health Assembly in 1948 and since taking effect in 1950, the celebration has aimed to create awareness of a specific health theme to highlight a priority area of concern for the World Health Organization

WHEREAS, Climate change is impacting human lives and health in a variety of ways. It

threatens the essential ingredients of good health - clean air, safe drinking water, nutritious food supply, and safe shelter - and has the potential to undermine decades of progress in global health; and

WHEREAS, between 2030 and 2050, climate change is expected to cause approximately

250,000 additional deaths per year, from malnutrition, malaria, diarrhea and heat stress alone. The direct damage costs to health is estimated to be between USD 2-4 billion per year by 2030; and

WHEREAS, areas with weak health infrastructure – mostly in developing countries – will be

the least able to cope without assistance to prepare and respond. WHO supports countries in building climate-resilient health systems and tracking national progress in protecting health from climate change; and

WHEREAS, reducing emissions of greenhouse gases through better transport, food and

energy-use choices results in improved health, particularly through reduced air pollution. The Paris Agreement on climate change is therefore potentially the strongest health agreement of this century. WHO supports countries in assessing the health gains that would result from the implementation of the existing Nationally Determined Contributions to the Paris Agreement, and the potential for larger gains from more ambitious climate action; and

WHEREAS, this year’s theme of “Building a Fairer, Healthier World”.

NOW, THEREFORE, BE IT RESOLVED that the Directors of West County Wastewater hereby

proclaim recognition of World Health Day, April 7, 2021 themed “Building a Fairer, Healthier World” and encourages all employees, constituents and visitors alike to help reduce emission of greenhouse gases and improve our climate.

2.B

Attachment

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Proclamation

West County Wastewater

Board of Directors

RECOGNITION OF EARTH DAY, APRIL 22, 2021 “RESTORE OUR EARTH”

WHEREAS, Earth Day is recognized on April 22nd_{of every year and Earth Day began as a}

unified response to an environment in crisis – oil spills, smog, rivers so polluted they literally caught on fire; and

WHEREAS, on April 22, 1970 million of Americans – 10% of the U.S. population at the time –

took to the streets, college campuses and hundreds of cities to protest environmental ignorance and demand a new way forward for our planet; and

WHEREAS, the first Earth Day in 1970 launched a wave of action, including the passage of

landmark environmental laws in the United States. The Clean Air, Clean Water and Endangered Species Acts were created in response to the first Earth Day in 1970, as well as the creation of the Environmental Protection Agency (EPA). Many countries soon adopted similar laws; and

WHEREAS, Earth Day is an annual event celebrated around the world on April 22 to

demonstrate support for environmental protection; and

WHEREAS, this year’s theme of Earth Day 2021 is “Restore Our Earth”; and

WHEREAS, Earth Day 2021 is far more than a day. It is a historic moment when citizens of

the world rise up in a united call for the creativity, innovation, ambition, and bravery that is needed to meet climate crisis and seize the opportunities of a zero-carbon future. It is a day to demonstrate support for environmental protection.

proclaim recognition of Earth Day, April 22, 2021 themed “Restore Our Earth” and encourages all constituents and visitors alike to help build a unified global response for environmental protection. Dated: April 7, 2021

2.C

Attachment

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Proclamation

West County Wastewater

Board of Directors

RECOGNITION OF WORLD DAY FOR SAFETY & HEALTH AT WORK APRIL 28, 2021

WHEREAS, Every day, 6,300 people die as a result of occupational accidents or work-related

diseases more than 2.3 million deaths per year. 317 million accidents occur on the job annually; many of these resulting in extended absences from work. The human cost of this daily adversity is vast and the economic burden of poor occupational safety and health practices is estimated at 4 per cent of global Gross Domestic Product each year; and

WHEREAS, The World Day for Safety and Health at Work is an annual international campaign

to promote safe, healthy and decent work. It is held on 28 April and has been observed by the International Labour Organization (ILO) since 2003; and

WHEREAS, A national occupational safety and health culture is one in which the right to a

safe and healthy working environment is respected at all levels, where governments, employers and workers actively participate in securing a safe and healthy working environment through a system of defined rights, responsibilities and duties, and where the highest priority is accorded to the principle of prevention; and

WHEREAS, Each of us is responsible for stopping deaths and injuries on the job. As

governments we are responsible for providing the infrastructure — laws and services — necessary to ensure that workers remain employable and that enterprises flourish; this includes the development of a national policy and program and a system of inspection to enforce compliance with occupational safety and health legislation and policy. As employers we are responsible for ensuring that the working environment is safe and healthy. As workers we are responsible to work safely and to protect ourselves and not to endanger others, to know our rights and to participate in the implementation of preventive measures.

proclaim recognition of World Day for Safety & Health at Work, April 28, 2021 and encourages all constituents, visitors and employees alike to work safely and to protect ourselves and not to endanger others, to know our rights and to participate in the implementation of preventive measures.

2.D

Attachment

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Proclamation

West County Wastewater

Board of Directors

RECOGNIZING MAY 5, 2021 IN CELEBRATION OF CINCO DE MAYO

WHEREAS, Cinco de Mayo (Spanish for “Fifth day of May”) commemorates the

victory of Mexican forces over French forces in the Battle of Puebla on May 5, 1862; and

WHEREAS, in Mexico, Cinco de Mayo is primarily observed in the state of Puebla and

includes traditions such as military parades, reenactments of the Battle of Puebla and other festive events; and

WHEREAS, in the United States, Cinco de Mayo is widely interpreted as a

celebration of Mexican-American culture and heritage; and

WHEREAS, California has celebrated Cinco de Mayo annually since 1863.

NOW, THEREFORE, BE IT RESOLVED that the Directors of West County Wastewater

hereby proclaims recognizing May 5, 2021 in celebration of Cinco de Mayo and encourages all to recognize this day in honoring Mexican-American culture and heritage.

2.E

Attachment

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Proclamation

West County Wastewater

Board of Directors

RECOGNITION OF MEMORIAL DAY, MAY 31, 2021

WHEREAS, Memorial Day is an American holiday, observed on the last Monday of

May, honoring the women and men who died while serving in the U.S. military. Memorial Day 2021 will occur on Monday, May 31; and

WHEREAS, originally known as Decoration Day, it originated in the years following

the Civil War and became an official federal holiday in 1971. Many Americans observe Memorial Day by visiting cemeteries or memorials, holding family gatherings and participating in parades. Unofficially, it marks the beginning of the summer season; and

WHEREAS, our women and men in uniform have sacrificed their lives to maintain

the security of our great Nation and liberties we hold so dear; and

WHEREAS, we must pledge to never forget the women and men of the Armed Forces

who gave the ultimate sacrifice in defending our freedoms.

NOW, THEREFORE, BE IT RESOLVED that the Directors of West County Wastewater

hereby proclaims recognizing Memorial Day, May 31, 2021 and encourages all to recognize this day in honoring women and men of the Armed Forces who gave the ultimate sacrifice in defending our freedoms.

2.F

Attachment

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TO: Board of Directors

West County Wastewater

DATE: April 7, 2021

REPORT BY: Lisa Malek Zadeh, General Manager SUBMITTED BY: Keith Reynolds, Project Manager

AGENDA ITEM: Authorize the General Manager to Execute an Agreement with TCB Industrial, Inc., for the WQRRP Effluent Valve Replacement

Project for a Total Amount Not to Exceed $1,130,482. RECOMMENDED ACTION

Authorize the General Manager to Execute an Agreement with TCB Industrial, Inc., for the WQRRP Effluent Valve Replacement Project for a Total Amount Not to Exceed $1,130,482.

SUMMARY

WQRRP Effluent Valve Replacement Project (Project) will replace damaged and aging valves and piping within the Water Quality Resource Recovery Plant (WQRRP).

BACKGROUND

Through an analysis of all available information, staff identified illicit discharges steaming from a damaged and aging valve structure located in the effluent discharge facilities at the rear of the WQRRP. These valves are currently not fully functional. This project will consist of the installation of three (3) automated valves and pipe spools to repair and upgrade the damaged structure. These automated valves allow for safe operation of valves, ease of exercising valves, and control of the use of these valves from any Programmable Logic Controller (PLC) within the WQRRP by staff.

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West County Wastewater Board of Directors

April 7, 2021 Page 2

The Notice to Contractors Inviting Sealed Bids (Notice) was advertised on February 5, 2021, and on February 12, 2021. Plans and specifications were provided to Blue Book, the Golden State Builder’s Exchange, the California Builder’s Exchange and the

Peninsula Builder’s Exchange. WCW received three (3) responsive and responsible bids. The lowest responsive, responsible bidder was TCB Industrial Inc., of Modesto, California with a base bid price of $942,068. A bid summary is included as Attachment A.

The Project requires the Contractor to complete their work within twenty-four working Days (24) days of the date specified on the Notice to Proceed which will be issued by late-April 2021, with project completion in early October 2021. There is a 12 to 16-week lag time for automated valves to be purchased and delivered.

STRATEGIC PLAN COMPLIANCE

The recommended action supports WCW’s Strategic Goal #1: Adopt infrastructure maintenance and modernization strategies that maximize performance, reduce risk, and ensure reliable service in collaboration with local, regional and national partners to further the mission of the District. This project ensures appropriately sized sewer pipes are in place to efficiently serve this section of WCW service area.

ENVIRONMENTAL COMPLIANCE

This project is exempt from the California Environmental Quality Act (CEQA) as authorized under the California Code of Regulations, Title 14, Chapter 3, Section 15301 which provides exemption for minor alterations of existing public or private structures, facilities, mechanical equipment, or topographical features, involving negligible or no expansion of use beyond that existing at the time of the lead agency's determination. A Notice of Exemption for the project will be filed with the Contra Costa County Clerk-Recorder.

FISCAL IMPACT

The total not to exceed amount is $1,130,482. This includes a base price of $942,068 and a twenty percent contingency of $188,414 due to the potential for discovering unknown site conditions or deficiencies in infrastructure during construction.

The project is included in the Capital Improvement Plan (CIP) and there are sufficient funds available in the budget.

ALTERNATIVE(S)

The alternative is to reject the bid of TCB Industrial Inc, and re-bid the project. This alternative is not recommended because WCW did receive a reasonable bid and re-bidding would delay the project, increasing the risk that are associated with not having a functional effluent structure. There is no indication that a second Invitation to Bid would result in lower pricing or more bids.

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April 7, 2021 Page 3

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TABLE 1

3/11/2021 2:29 PM

WEST COUNTY WASTEWATER

SUMMARY OF BIDS

PROJECT: WQRRP Effluent Valve Replacement Project

DISTRICT PROJECT NO: 19PP503

BID OPENING: Thursday, March 11, 2021

ENGINEER'S ESTIMATE: $1,102,050

No. Bidders

City

Total Base Bid Total Bid Price

1

TCB Industrial Inc. Modesto $ 942,068

2

Saboo Inc. Brentwood $ 973,500

3

Valentine Corporation San Rafael $ 1,062,370

4

5

6

7

8

9

10

3.A Attachment A

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TO: Board of Directors

West County Wastewater

DATE: April 7, 2021

REPORT BY: Lisa Malek Zadeh, General Manager SUBMITTED BY: Keith Reynolds, Project Manager

Michael Savannah, Director of Infrastructure & Planning Dept. AGENDA ITEM: Authorize the General Manager to Execute an Agreement with APB

General Engineering, for the Chesley & Giaramita Sewer

Replacement Project for a Total Amount not to Exceed $531,684. RECOMMENDED ACTION

Authorize the General Manager to Execute an Agreement with APB General Engineering, for the Chesley & Giaramita Sewer Replacement Project for a Total Amount not to Exceed $531,684.

SUMMARY

The Project will replace damaged, aging, and undersized pipe segments on Chesley Avenue extending to Giaramita Avenue, and reduce Inflow and Infiltration (I & I) in the collection system.

BACKGROUND

Through an analysis of all available information, staff identified roughly 22,000 linear feet of damaged, aging, and broken sewer lines that needed to be addressed. The Project was divided into neighborhoods that will allow staff to deliver the projects simultaneously and rapidly. It also allows for less complex projects by breaking them into smaller geographical areas with similar conditions. This project includes the replacement of roughly 1,399 linear feet of sewer mains, 6 manholes, and the

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April 7, 2021 Page 2

The Notice to Contractors Inviting Sealed Bids (Notice) was advertised on February 5, 2021, and on February 12, 2021. Plans and specifications were provided to Blue Book, the Golden State Builder’s Exchange, the California Builder’s Exchange and the

Peninsula Builder’s Exchange. West County Wastewater (WCW) received six (6) responsive and responsible bids. The lowest responsive, responsible bidder was APB General Engineering, of Concord, California with a base bid price of $228,070. A bid summary is included as Attachment A. In addition to the four (4) item base bid, the contractor may complete all or a portion of the two additive line items which include additional individual lateral reconnections and open cut sewer main installation where requested by WCW. The two additional additive bid items, totaling $215,000, establish fixed prices should WCW choose to request a portion or all of the additive work from the successful bidder.

The Project requires the Contractor to complete their work within forty-five working Days (45) days of the date specified on the Notice to Proceed which will be issued by early-April 2021, with project completion in early July 2021.

The recommended action supports WCW’s Strategic Goal #1: Adopt infrastructure maintenance and modernization strategies that maximize performance, reduce risk, and ensure reliable service in collaboration with local, regional and national partners to further the mission of WCW. This project ensures appropriately sized sewer pipes are in place to efficiently serve this section of WCW service area.

ENVIRONMENTAL COMPLIANCE

This project is exempt from the California Environmental Quality Act (CEQA) as authorized under the California Code of Regulations, Title 14, Chapter 3, Section 15301 which provides exemption for minor alterations of existing public or private structures, facilities, mechanical equipment, or topographical features, involving negligible or no expansion of use beyond that existing at the time of the lead agency's determination. A Notice of Exemption for the project will be filed with the Contra Costa County Clerk-Recorder.

FISCAL IMPACT

The total not to exceed amount is $531,684. This includes a base price of $228,070, $215,000 for additive items and a twenty percent contingency of $88,614 due to the potential for discovering unknown site conditions or deficiencies in infrastructure during construction.

The Project is part of the FY 2020 – FY 2024 Capital Improvement Program (CIP) and there are sufficient funds in the budget to support this project.

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April 7, 2021 Page 3

ALTERNATIVE(S)

The alternative is to reject the bid of APB General Engineering, and re-bid the

project. This alternative is not recommended because WCW did receive a reasonable bid and re-bidding would delay the project, increasing the risk of Sanitary Sewer Overflows (SSOs). There is no indication that a second Invitation to Bid would result in lower pricing or more bids.

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TABLE 1

3/1/2021 4:55 PM

WEST COUNTY WASTEWATER

SUMMARY OF BIDS

PROJECT: Basin 7 I&I Pipes Replacement Project Chesley and Giaramita

DISTRICT PROJECT NO: 20CS201

BID OPENING: Monday, March 1, 2021

ENGINEER'S ESTIMATE: $ 580,000

No. Bidders

City

Total Base Bid Total Bid Price

1

APB General Eneering Concond $ 228,070 $ 443,070

2

Glosage Engeering Inc. Richmond $ 342,248 $ 567,748

3

Darcy Harty San Francsico $ 375,880 $ 512,880

4

WR Forde Associates Inc. Richmond $ 386,183 $ 583,183

5

Pacific Trenchless Inc. Oakland $ 386,446 $ 642,071

6

KJ Woods Construction South San Francisco $ 488,000 $ 983,000

7

8

9

10

4.A A

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Angela Andrews, Capital Portfolio Manager

Michael Savannah, Director of Infrastructure & Planning Dept. Authorize the General Manager to Execute Amendment Number 5 totaling $125,681 with Carollo Engineering for the 3rd State Revolving Fund Application Phase 1 Support (Environmental) for a New Total Not to Exceed $965,243.

Authorize the General Manager to execute Amendment Number 5 for $125,681 with Carollo Engineering (Carollo) for the 3rd State Revolving Fund (SRF) Application Phase 1 support for a new total not to exceed $965,243.

SUMMARY

Staff is requesting an amendment to the contract with Carollo for services that include professional engineering and environmental services provided by Carollo and subconsultant Environmental Science Associates (ESA) to support West County

Wastewater (WCW) on an as-needed basis to assist in securing a low interest loan through the State of California’s Clean Water State Revolving Fund (CWSRF).

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April 7, 2021 Page 2

BACKGROUND

Carollo started providing support to WCW for the 3rd_{SRF Application in February 2013,}

and an application was submitted to the State in the fall of 2018. The original scope included developing a strategy for the SRF application process to secure low interest loans for Capital Improvement Projects and completing a programmatic

environmental impact report (PEIR). The PEIR included TIER 1 environmental analysis which is required to meet the requirements of the California Environmental Quality Act (CEQA) as well as CWSRF Program. Because SRF funding has seen increased demand, the State implemented a new prioritization process to evaluate and

prioritize applications for funding. For 2018 and 2019, Carollo worked with WCW to

optimize the scoring of the 3rd_{SRF Application, and in May 2020, WCW was notified by}

the State that the 3rd_{SRF Application Phase 1 was selected for the fundable list for}

fiscal year 2020-2021. Additional effort is required to continue providing SRF and

environmental support services for both Phase 1 and Phase 2 of the 3rd_SRF

Application; this amendment includes additional SRF and environmental support services required to update the environmental package form for Phase 1.

Retaining Carollo for continuing SRF Application support services supports Strategic Goal #1: Adopt infrastructure maintenance and modernization strategies that maximize performance, reduce risk and ensure reliable service in collaboration with local, regional and national partners to further the mission of WCW’s innovation and responsible resource allocation for the organization

FISCAL IMPACT

There are sufficient funds in the FY 2021 Capital Improvement Program budget to cover the $125,681 in increased funding authorization being requested.

ALTERNATIVE(S)

WCW could solicit other engineering and environmental services firms. This action is not recommended as Carollo offers unique and specific experience as it relates to the SRF Application process and they have in-depth institutional knowledge of WCW. It would be inefficient to replace them with another firm.

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Justin Lovell, Director of Administrative Services Dept. Receive a Presentation on Bond Financing.

Receive a Presentation on Bond Financing SUMMARY

West County Wastewater’s financial advisor, NHA Advisors gave a presentation on the steps to issue bonds to finance capital projects to the Finance and Administration Committee on March 8, 2021. The presentation that will be given to the Board contains revisions based on the Committee’s questions.

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I

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April 7, 2021

7.A

A

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1. Introduction to Bonds

2. Strategies for Funding Capital Projects

3. Bond Cash Flow

4. Rate Covenant and Debt Service Coverage

5. WCW’s Debt Service Coverage

6. Typical Bond Issuance Process for a Public Offering

7. Bond Financing Professionals

8. Master Financing Timeline

9. Appendix/Additional Materials

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Introduction to Bonds

Purpose of Municipal Bonds



Bonds are an alternative to cash or bank

loans for funding projects



Funding infrastructure projects



Water, sewer, streets, bridges



Funding Capital Improvement Projects



Libraries, community centers, parks

Tax-Exempt Status



Often, municipal bonds are

tax-exempt

at the state and federal levels



Economic incentive for investors

to purchase municipal bonds

7.A

A

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Strategies for Funding Capital Projects

Available Cash

•“Pay-As-You-Go”

•Often used to fund small

and recurring projects, or

projects built slowly over

time

•Cashflow important to

avoid project expenditures

exceeding available funds

•Generational equity may

be policy concern

(ratepayers today pay for

improvements benefiting

future ratepayers)

•Easiest source of funding

Bond Financing

•Generally, used to fund

large capital expenditures

and acquisition projects

•Future revenues from the

project are available for

debt service

•Interest and financing costs

increase total project cost

•Staff resources required for

financing

•Can effectively balance the

costs and benefits of the

project for future

ratepayers. Future

Federal & State Grants or

Loans

•“Free” or cheap funding

source often with strings

attached

•May require oversight or

value engineering

•Application process can be

drawn-out and competitive

•Timing of funds uncertain

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Why Cash and SRF Funding are Not Ideal for Current Project



Cash-funding not ideal for current capital projects



Cash-funding planned projects would require larger than 45% annual rate increases



Over the last 10 years WCW has rates have averaged 10% annual increase due to

cash-funded nature of projects



SRF funding while having the benefit of a low interest rate, has material

drawbacks



Timing – drawn out due to additional SRF review steps, sometimes a 1-2 year process



Eligibility – Some items in the current financing plan are not eligible for SRF funding



Availability of Funds – limited amount of funds and large applicant pool

7.A

A:

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Draft Legal District Board Close

Comparison of SRF vs Bond Financing

SRF Financing Process

Bond Financing Process

Technical

Review Environmental Review Financial Review DocumentsDraft Legal District Board Approval FinancingClose

Often an iterative process

~12-24 Month Process

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Bond Sale

The bond issuer borrows

money from an investor

(bondholder), who holds

the bond as a promise of

repayment

Interest Payments

During the life of the bond,

the issuer pays interest to

the bondholder, usually

semi-annually

Principal Repayment

At the end of the bond’s

life, the issuer repays the

bondholder the amount it

originally borrowed

Basic Bond Cash Flows

Investor (Bondholder) Municipality (Bond Issuer) 7.A A:

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Rate Covenant and Debt Service Coverage



WCW’s current SRF loans require 110% debt service coverage



For every $100 in SRF Loan debt service, the WCW needs $110 in net revenues

available to pay that debt service



Debt service coverage calculation is defined in the bond covenants (see

below)

Standard Net Revenue Calculation

𝐍𝐍𝐍𝐍𝐍𝐍 𝐑𝐑𝐍𝐍𝐑𝐑𝐍𝐍𝐑𝐑𝐑𝐑𝐍𝐍𝐑𝐑 = 𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺𝐺 𝑅𝑅𝑅𝑅𝑅𝑅 𝑅𝑅𝑅𝑅 𝑅𝑅𝑅𝑅𝐺𝐺 − 𝑂𝑂𝑂𝑂𝑅𝑅𝐺𝐺𝑂𝑂𝑂𝑂𝑂𝑂𝑅𝑅𝑂𝑂 𝐶𝐶𝐺𝐺𝐺𝐺𝑂𝑂

𝐃𝐃𝐍𝐍𝐃𝐃𝐍𝐍 𝐒𝐒𝐍𝐍𝐒𝐒𝐑𝐑𝐒𝐒𝐒𝐒𝐍𝐍 = 𝑃𝑃𝐺𝐺𝑂𝑂𝑅𝑅𝑃𝑃𝑂𝑂𝑂𝑂𝑂𝑂𝑃𝑃 + 𝐼𝐼𝑅𝑅𝑂𝑂𝑅𝑅𝐺𝐺𝑅𝑅𝐺𝐺𝑂𝑂 𝑅𝑅𝑅𝑅𝑂𝑂𝑂𝑂𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑂𝑂𝐺𝐺

𝑁𝑁𝑅𝑅𝑂𝑂 𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝐺𝐺

• Gross Revenues: Money received

from ratepayers (except deposits)

• Operating Costs: Costs of

operating the system (Excludes

depreciation and intangible

expenses and replacement and

7.A At ta ch m en tI: In tr o d uc ti o n to B o n d Fi n At ta ch m en t A: In tr o d uc ti o n to B o n d Fi na nc in g Pr es en ta ti o n (B O N D FI N A N CI N G) an ci n g Pr es en ta ti o n

(33)

Current Debt Service Coverage and Impact on Bond Sizing



WCW’s Latest Coverage Calculation is over 340% (considered “very strong” coverage)



SRF Loans have a coverage requirement of 110%



Any New Bond Must Maintain or Exceed SRF Coverage Requirement



Example below of WCW debt service coverage and the impact to coverage after including

a $50,000,000 bond



Assumes conservative 3.5% interest rates for a 30-year financing and reflects estimated costs of

issuing new debt

Current WCW Profile (FY 2020)

Amount*

Net Revenues

$8,500,000

Total SRF Loan Debt Service

$2,500,000

Coverage Before Additional Debt

340%

*All figures rounded to the nearest $100,000 for the purposes of the example

Impact of Additional $50M Debt

Amount*

Net Revenues

$8,500,000

Total SRF Loan Debt Service

$2,500,000

Estimated Additional Debt on New Debt $2,700,000

Total Debt Service

$5,200,000

Coverage

After

Additional Debt

163%

7.A

A:

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Typical Bond Issuance Process for a Public Offering

Develop

Financing &

Rate Plan

Assemble

Financing

Team

Structure

the

Financing

Draft Legal

Covenants

and

Disclosure

Documents

Credit

Evaluation

and Rating

Process

Board

Approval of

Financing

Bond Sale

Bond

Closing

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Key Bond Financing Professionals



Issuer



Governmental Agency Authorized to issue tax-exempt bonds



Includes WCW Staff and Counsel



Municipal Advisor



Advisor to Issuer for strategic and policy decisions related to financing



Manages process for Issuer



Bond & Disclosure Counsel



Legal Counsel to Issuer on Tax Exempt Bonds



Prepares all Bond Documentation and Tax Exempt Opinion to Bondholders



Prepares Official Statement (offering memorandum to bondholders)



Underwriter



Financial Firm That Serves as Intermediary between Issuer and Investors

(bondholders)



Expertise in Structuring Bonds for Lowest Interest Rate

7.A

A:

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Master Financing Timeline

February

Prop 218 training & financing introduced

March

Rate study; CIP funding strategy; bond financing discussed

April

Bonds 101 Presentation to Board and Board approval of rate plan; introduction of Debt Management Policy (“DMP”)

May

Additional bond and disclosure training and DMP adoption

June

Approval of bond financing resolution; Prop 218 public hearing

July

New wastewater rates effective

July-September

Bond financing process

 

7.A

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Q

UESTIONS

?

7.A

A