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HomeMy WebLinkAboutStaff Report 5.B 07/11/2016Agenda Item #5.B DATE: July 11, 2016 TO: Honorable Mayor and Members of the City Council through City Manager FROM: Dan St,. Jhn SCE — Director, Public Works and Utilities Larry Zimmer, P.E. — Deputy Director, Public Works and Utilities Leah Godsey Walker, P.E. — Environmental Services Manager SUBJECT: Resolution Authorizing the City Manager to Execute a Reimbursement Agreement with Kaiser Permanente for the Recycled Water System Extension Project — Oakmead Business Park Phase 1 Project. RECOMMENDATION It is recommended that the City Council Adopt the Resolution Authorizing the City Manager to Execute a Reimbursement Agreement with Kaiser Permanente for the Recycled Water System Extension Project — Oakmead Business Park Phase 1 Project. BACKGROUND The City of Petaluma delivers recycled water to urban users within the City at parks, open spaces, golf courses, and schools and outside the City limits to agricultural customers. Historically, the water delivered to agriculture and golf courses was secondary treated wastewater. The opening of the Ellis Creek Water Recycling Facility (ECWRF) in 2009 allowed the City to produce tertiary recycled water, which is suitable for irrigation of parks, schools, and open space. After operating two recycled water systems for several years, in 2013 the City connected the tertiary system to the "purple pipe" recycled water distribution system and began delivering tertiary treated recycled water for urban uses. Distribution of secondary recycled water was ceased and golf courses and agricultural customers were converted to tertiary recycled water. Through the adoption of the General Plan 2025 (Resolution 2008 -085 N.C.S.), City Council gave direction to implement the Water Recycled Expansion Program (WREP). The WREP is an essential component of the water resources element of the General Plan because water recycling provides potable water offset. The Environmental Impact Report for the WREP conceptually identified purple pipeline locations and areas of use for recycled water (Resolution 2008 -206). Spurred by the recent drought, the City sought to identify customers with high potable water use for irrigation and determine areas where recycled water could be delivered as a substitute. On November 16, 2015, an updated Recycled Water System Master Plan was presented to Council, highlighting the planned expansion of the City's Urban and Agricultural recycled water systems. The Urban Recycled Water Master Plan and Agricultural Recycled Water Master Plan identified near term and future projects to expand the City's recycled water system. The Oakmead Business Park Phase 1 Project was identified in Phase 1 of that revised Recycled Water Master Plan. DISCUSSION The Oakmead Business Park -Phase 1 Project includes the extension of a recycled water main from the entrance to ECWRF into the directly adjacent Oakmead Business Park. The project is expected to offset potable water use by up to 8.9 million gallons per year. The project will make recycled water available for irrigation to several local businesses along Cypress Drive and Pine View Way including the Kaiser Permanente campus. This 2,250 -foot pipeline recycled water will meet the irrigation demand for businesses in the Oakmead Business Park area with Kaiser Permanente medical facility being the highest potable water user in the area. In June of 2015, City staff met with a representative from Kaiser Permanente (Kaiser) to discuss construction of a pipeline to deliver recycled water to the Kaiser campus. Since Kaiser would use approximately sixty -five percent of the amount of recycled water delivered through the pipeline, Kaiser agreed to pay for sixty -five percent of the construction cost of the pipeline. The City agreed to bear the remaining construction costs and the cost of design and construction management for the project. The proposed reimbursement agreement specifies that Kaiser will reimburse the City for construction cost of the recycled water pipeline, with a not to exceed amount of $400,000. Construction costs are anticipated to be $525,000 with Kaiser's portion being approximately $340,000 plus their fair share of contract change orders. The remaining project costs for construction, design, planning, environmental, construction management and related items will be funded by the City's Wastewater Capital Fund. The City is seeking additional funding through Proposition 1 administered by the State Water Resources Control Board (SCWRB). Should this be approved by SWRCB, additional actions by City Council will be covered in a future City Council agenda item. Construction is scheduled to begin in July 2016 and to be completed by September 2016. Designing, construction management and inspection is being conducted by City staff This action is consistent with General Plan 2025 Goal 8 -G -3: "Maximize the use of recycled water as a potable water offset to manage water demands, and to meet regulatory requirements for wastewater discharge." FINANCIAL IMPACTS The total approved FY 16/17 project budget for the Recycled Water System Extension — Oakmead Business Park Phase 1 Project (C66501633) is $720,000. Approval of the proposed agreement will allow Kaiser Permanente to fund sixty -five percent of the construction costs only. Current funding sources are as follows, however Proposition 1 funding is being sought. 2 ATTACHMENTS 1. Resolution 2. Reimbursement Agreement 3. Location Map Approved CIP Budget Wastewater Capital Fund $ 343,000 Kaiser Permanente $ 377,000 Total $ 720,000 ATTACHMENTS 1. Resolution 2. Reimbursement Agreement 3. Location Map Attachment 1 RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE A REIMBURSEMENT AGREEMENT WITH KAISER PERMANENTE FOR THE RECYCLED WATER SYSTEM EXTENSION PROJECT — OAKMEAD BUSINESS PARK PHASE 1 PROJECT WHEREAS, the City of Petaluma General Plan 2025 recognizes the use of recycled water as a potable water offset and to meet regulatory requirements for wastewater discharge; and . WHEREAS, the City of Petaluma desires to expand its recycled water system to reduce wastewater discharges and provide additional potable water offset; and WHEREAS, on November 3, 2008, the Council, by Resolution 2008 -206, certified the Program Environmental Impact Report for the Water Recycling Expansion Program of which this project is conceptually included and therefore CEQA compliant; and WHEREAS, the Recycled Water System Extension — Oakmead Business Park Phase 1 project is part of the updated Recycled Water System Master Plan as presented to City Council on November 16, 2015; and WHEREAS, the City successfully negotiated a Reimbursement Agreement with Kaiser Permanente to fund sixty -five percent of the construction cost for the Recycled Water System Extension — Oakmead Business Park Phase 1 Project;and WHEREAS, the necessary funds are available in the 2016/2017 CIP Wastewater Capital Funds. NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of Petaluma hereby approves and authorizes the City Manager to execute the attached Reimbursement Agreement with Kaiser Permanente for sixty —five percent of the construction costs of the Recycled Water System Extension — Oakmead Business Park Phase 1 Project, with a not to exceed amount of $400,000. 11 Attachment 2 REIMBURSEMEN`ll" AGREEMENT This Reimbursement Agreement ( "Agreement ") is made this 5th day of Nlay, by and between the City of Petaluma, a municipal corporation and Charter City ( "City ") and Kaiser Permanente ("Kaiser"), RECITALS This Agreement is made with respect to the following facts: A. Kaiser desires to extend recycled water service for landscaping purposes to the Kaiser facility located at 3000 Lakeville Hwy, Petaluma CA( "Kruser Facility "). B. The City owns and operates an existin__ recycled water pipeline a reasonable distance from said faeility. C. City is willing to construct an extension of the recycled water pipeline fi•om the current terminus at Cypress Drive to the Kaiser facility as shown on Exhibit A (referred to herein as "Project"), wllich would provide recycled water service to Kaiser and other potential RIWIV customers provided Kaiser pays for its fair share of construction of the Project. D, Kaiser is willing to pay for its lair share of the cost of construction of the Project. AGREEMENT NOW, THEREFORE, in consideration of the following mutual promises and agreements, City and Kaiser agree as follows: I. Incorporation of Recitals. The parties agree that the Recitals constitute the factual basis which the City and Kaiser have entered into this Agreement. The City and Kaiser each acknowledge the accuracy of the Recitals and agree that the Recitals are incorporated into this Agreement as though fully set i "orth at length. 2. Design. 2.1. The City shall provide the design services tier the Project, which includes providing design services that may result from or be caused by a change order during construction of the Project. Payment of all costs for design services shall be the sole responsibility of the City. 2.2, Tlie City reserves the right, in its sole discretion, to amend the scope of work for the design services for the Project as it decors necessary and appropriate where such amendments are reasonably necessary, as determined in the City's sole and reasonable discretion. 3. Construction. 3.1, Bidding: The City shall bid construction ofthe Project pursuant to applicable state and local regulations. Upon opening of the bids pursuant to applicable procedures, the City shalt promptly notify Kaiser of the costs of the bids, as well as staffs recommendation for award oil ' the construction contract (`'Staff's Recommendation "). Reimbursement Agreement Page 2 3.2. Award or Contract: The City reserves the right to reject all bids. If tile City decides to award a contract for construction of the Project, such award shall be to the lowest, responsive, responsible bidder as determined by the City Council in accordance with applicable state and local law ("Contractor "), 3.3. Construction: The City agrees to be solely responsible for managing and inspecting construction of the Projecl. In the City's sole discretion, titre City may issue change orders to the Contractor, 3.4. Payment: 3.4. I . "rhe City shall pay the Contractor for all worked performed ( "Paid Amount ") as required by the terms and conditions of the agreement between the City and the Contractor ( "Construction Contritet "), as may be amended by the City and the Contractor through change orders and applicable lavv. 3.4.2.Kaiser agrees that it shall reimburse the City 1'61' sixty -Five percent (65%) of the Paid AnrOUnt ht it total amount not to exceed $400,000.00 (four hundred Thousand Dollars). City may invoice Kaiser for partial payments or the Amount Paid, in which Kaiser agrees to pay said invoice within ninety (90) days. 3.43.Kaiser agrees to cooperate in good Kith with the City and Contactor. 4, Delivery of Recycled Water. The City shall not be obligated to deliver recycled water unless and until Kaiser Fulfills its obligations render Section 3.4 of this Agreement and executes a Recycled Water Services Agreement with the City. Upon such execution of a Recycled Water Services Agreement between Kaiser and the City, the parties' recycled water delivery rights and obligations will be solely as provided in such agreement. 5, Term or_Agreement and Termination 5, I. 'file term of this Agreement shall commence on the date orexecution of this Agreement and continue until the parties have fulfilled their responsibilities or this Agreement is terminated pursuant to this paragraph. 52. City Termination: 5.2. I .The City may terminate this Agreement upon written notice at any time, with or without cause, provided Kaiser has not made any payment, whether whole or partial, as required under this Agreement. 5.2.2,The City may terminate this Agreement For cause upon failure of Kaiser to satisfy its obligations under Section 3,4 ofthis Aggreement regardless of whether or not Kaiser has made any payment as required under this Agreement. 5.3. Kaiser Termination: if the proposed cost for Staff's Recormnendation exceeds $615,000, upon providing written notice at least 72 hours prior to the City Council awarding the Construction Contract, Kaiser may terminate this Agreement. If the project is not awarded by City Council by July I, 2017, Kaiser may terminate this Agreement by written notice. Kaiser may not unilaterally terminate this Agreement once the City Council awards the Contract. 6. Non Giver of 4ti "hts or Remedies. 0 Reinibursennent Agreement Paue 3 The railure 01',l party to exercise any one or more of its rights or remedies under this Agreement shall not constitute a waiver orthat party's right to enforce that right or seek that remedy in the future. No course of conduct or aet of forbearance oil any one or more occasions by any party to this Agreement shall preclude that party from asserting any right to remedy available to it in the future. No course of conduct or act or forbearance Un any one or more occasions shall be deemed to be an implied modification of the terms ofthis Agreement. 7. Assignability. This Agreement may not be assiencd by either party without the prior and express written consent orthe other party, which consent shall not be unreasonably withheld. In determining whether to approve a request by Kaiser to assign this Agreement, the City may consider, among other things, the proposed assignee's Imancial status and commitment to the Project. Any attempted assignment of this Agreement not in compliance with the terms of this Agreement shall be null and void and shall confer no rights or benefits upon the assignee. S. No Oral tVfodifications. This Agreement represents the entire understanding of the City and Kaiser and supersedes all other prior or contentporaneous written or oral agreements pertaining to the subject matter of this Agreement. This Agreement may be modified only in writing signed by the authorized representatives of both the City and Kaiser. 9. Binding U, -oil Successors. This Agreement and each of its terms shall be binding upon the City, Kaiser and their respective officers, elected officials, employees, agents, contractors, and permitted successors and assigns. 10, Attorneys' Fees. In the event that any action or proceeding, including arbitration, is commenced by either the City or Kaiser against the other to establish the validity of this Agreement or to enforce any one or more or its terms, the prevailing party in any such action or proceeding shall be entitled to recover from the other, in addition to all other legal aid equitable remedies available to it, its actual attorneys' fees and costs of litigation, including, without limitation, filing fees, service fees, deposition costs, arbitration of costs and expert witness fees, including actual costs and attorneys' fees on appeal. 11. ,Jurisdiction and Venue. This Agreement is executed and is to be performed in the City of petalunna, and any action or proceeding brought relative to this Agreement shall be heard in the appropriate court in the County of Sonotna, Calil'ornia, The City and Kaiser each consent to the personal jurisdiction orthe court in anv such action or proceeding. 12. Time is orthe Essence. Except as otherwise expressly stated, time is of the essence in the performance of each and ever), action required pu•sr -rant to this Agreement. 13. Covenant of Further Assurances. Reimbursement Agreement Page 4 The City and Kaiser shall take all other actions and execute all other documents, which are reasonabh, necessary to effectuate this Agreement. 14. Interpret rtion, 14.1. The City and Kaiser agree that this Agreement is the product of mutual negotiations and is an arms - length transaction.' Each party has negotiated this Agreement with the advice and assistance of legal counsel of its own choosing. 14.2. It is further agreed that the terms of this Agreement shall be construed in accordance with the meaning, of the language and shall not be construed for or against either party by reason of authorship and the rule that ambiguities in a document shall be construed against the drafter of the document shall have no application to this Agreement. III construing and interpreting; this Agreement, the finder of fact shall give effect to the mutual intention of the City and Kaiser, notwithstanding such ambiguity, and may refer to the facts and circumstances tinder which this Agreement is made and such other extraneous evidence as may assist the finder of tact in ascertaining the intent of the City and Kaiser. 15, Severability. If any term or provision of this Agreement is found to be invalid or unenforceable, the City and Kaiser both agree that they would have executed this Agreement notwithstanding the invalidity of such term or provision. The invalid terra or provision may be severed from the Agreement and the remainder of the Agreement may be enforced in its entirety. 16, Headin,—,s. The headings or each suction of this Agreement are for the purposes of convenience only and shall not be construed to either expand or limit tile express terms and language of each section.. 17. Representations old Authority. Each party signinc, this Agreement on behalf ol'a party which is not a natural person hereby represents and warrants to the other party that all nccessary legal prerequisites to that party's execution Of this Agreement have been satisfied and that he or she has been authorized to sign this Agreement and bind the party on whose behalf he or she signs. 18. Notices. Notices required wider this Agore.ement shall be sent to the following: If to the City: City of Petaluma Attn: Larry Zinnuer, Deputy Director Public Works and Utilities 202 N. Mc Dowell BOLIlevard Petaluma, CA 94954 If to Kaiser: Kaiser Foundation Hospitals Attn: Jodie Clay, MSA Capital Projects 'team tManager 100 Smith Ranch Road, Suite 200 San Rafael, CA 94903 Reimbursement Agreement _ Notices given pursuant to this Agreement shall be deemed received as follows: Ifsent by United States Mail — five (5) calendar days after deposit into the United States Mail, first class postage prepaid. It' by express courier service or hand delivery — on the date of receipt by the receiving party, The addresses to notices set forth in this section may be changed upon written notice o1 °such change to either the City or Kaiser, as appropriate. Dated: CITY OF PETAIMNIA A Charter City (the "City ") A'TT'EST: Claire Cooper, City Clerk APPROVED AS TO FORM: City Attorney Dated �-I- APPROVED AS TO FORM: t,31A Legal Counsel for Kaiser Permanente By: KAISER PERNIANTE Attachment 3 RECYCLED WATER MAIN EXTENSION - OAKMEAD BUSINESS PARK PHASE 1 1261, 6 Al LOCATION MAP 770J Date :JULY 11, 2016 . N p, City of Petaluma �, PROJECT SITE w E Public Works and Utilities S Department 10