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HomeMy WebLinkAboutStaff Report 4.C 02/06/2017Agenda Item #4.0 QVI DATE: February 6, 2017 TO: Honorable Mayor and Members of the City Council through City Manager FROM: Dan St. John, F.ASCE — Director, Public Works and Utilities Larry Zimmer, P.E. — Deputy Director, Public Works and Utilities SUBJECT: Resolution to Dispense with Formal Bid per Public Contract Code Section 3400, and Petaluma Municipal Code Section 4.05.050 for Acquisition of Bio- methane Processing Equipment and to make a Sole Source Finding for the Equipment Acquisition in Conjunction with the Biomass -to- Biofuel Project at Ellis Creek Water Recycling Facility RECOMMENDATION It is recommended that the City Council adopt the attached Resolution to Dispense with Formal Bid per Public Contract Code Section 3400, and Petaluma Municipal Code Section 4.05.050 for Acquisition of Bio- methane Processing Equipment and to make a Sole Source Finding for the Equipment Acquisition in Conjunction with the Biomass- to- Biofuel (B2B) Project at Ellis Creek Water Recycling Facility. BACKGROUND The City's Ellis Creek Water Recycling Facility ( ECWRF) has been in operation since early 2009 and currently processes an average dry weather daily flow of 4.8 million gallons per day. As described in previous Council meetings, wastewater loading increases and the need for process redundancy require the City to add a second anaerobic digester and other ancillary improvements. The second anaerobic digester at the ECWRF is currently under construction with a projected completion in summer 2017. The California Energy Commission (CEC) grant program, the Alternative and Renewable Fuel and Vehicle Technology Program for Pilot -Scale Advanced Biofuels Production Facilities (PON- 13 -609), promotes the development of new California -based biofuel production facilities that can sustainably produce low carbon transportation fuels. The anaerobic digestion of biosolids produces biogas that can be cleaned to produce biomethane, which can be compressed to create compressed natural gas (CNG) which can be used to fuel vehicles. In March 2014, the City submitted an application for a $3 million grant to the CEC for the design and construction of a biomethane production facility, a CNG fueling station, and related site improvements at ECWRF. The funding required a minimum 50% match from local funds. The total cost of the B2B improvements, including the anaerobic digester and appurtenant facilities, CNG production facilities, and the high strength waste facilities, is $15,300,000. In November 2015, the City was advised the 13213 project had been selected for funding. On January 4, 2016, the City Council approved Resolution N.C.S. 2016 -008 authorizing the City Manager to execute all necessary application documents and to negotiate and execute a financial assistance agreement with the CEC and any amendments or change orders thereto. On March 9, 2016, the City was awarded a $3 million grant by the CEC for the 13213 project. With the addition of a second digester, ECWRF will have sufficient excess capacity to receive high strength waste feedstock from local food and beverage industries to produce additional biomethane that can be used for beneficial purposes. The goal of the 13213 project is to use anaerobic digestion and state -of- the -art RNG production technology to produce CNG to fuel City vehicles, specifically, the refuse and recycling trucks that service the City. The design work is currently underway with the 50% design submittal received and under review by City staff. After extensive research of the capabilities of this developing industry and application of the project design parameters, only one manufacturer, Unison Solutions, Inc., has been identified that makes appropriate biogas scrubbing equipment of the capacity and capability needed for this project. Even though Petaluma is a charter city, and has the power to adopt local regulations governing City contracts that conflict with state law, the City has not exercised its charter power regarding City contracts very extensively. As a result, City public works contracts are generally subject to state public contracting laws, including provisions of the Public Contract Code that limit the ability of local agencies to specify materials and goods being procured by brand name. Public Contract Code Section 3400, subdivision (b) prohibits state and local agencies and their officials from issuing bid specifications for public works projects that limit bids to particular firms or designate items being acquired by brand name, unless bidders are permitted to propose items equal to those specified by brand name. However, Section 3400, subdivision (c) includes an exception that permits designating a material, product or service by brand or trade name in certain specified circumstances, including when the product is unique and there is no known competing product. For the exception to apply, the awarding agency or its designee must make a finding that is described in the bid invitation or request for proposal that a material, product or service is designated by brand or trade name for one of the reasons permitted under subdivision (e). The City's public works contracts and equipment purchases are also subject to the requirements of the City Charter, which require competitive bidding for acquisitions above $24,600, according to bidding procedures specified in the purchasing chapter in the Municipal Code. However, , similar to the state public works law discussed above, Section 4.04.050 of the Municipal Code allows dispensing with formal bidding when a commodity can be obtained from only one vendor. In addition, the common law recognizes a bidding exception for circumstances where competitive bidding of public contracts otherwise required by statute may be excused, including circumstances where the contract is such that competitive proposals would be unavailing or would not produce an advantage, and the advertisement for competitive bid would thus be undesirable, impractical, or impossible. Government contracts for goods and services only available from a single source have been held to fall within the exception. Graydon v. Pasadena Redevelopment Agency (1980) 104 CA3d 631. Because the City intends to purchase the biomethane scrubbing and processing equipment that will work within the constraints of the 13213 2 Project, and this equipment is available from only one vendor, it is necessary to obtain a sole source finding prior to completing the request for proposal and negotiating a contract and price with the vendor. DISCUSSION The 13213 project requires a biogas treatment system with the capability to remove contaminants in the biogas produced at the ECWRF to produce renewable natural gas (RNG). The RNG needs to comply with Society of Automotive Engineers Standard for CNG Vehicle Fuel — SAE J1616. Producing RNG from biogas and compressing the RNG for use as vehicle fuel requires relatively new and innovative methods, which are not widely manufactured. In fact, the innovative gas treatment system designed and manufactured by Unison Solutions Inc. (Unison) is the only known biogas treatment system that has a proven track record to successfully produce RNG at the relatively low biogas flow rates of 100 cubic feet per minute (cfm) or less, needed for the 13213 project. For that reason, the City included Unison Solutions on its project team in its grant application to the CEC as the vendor to design and furnish the gas treatment system. Since being awarded the CEC grant, further research has confirmed that the Unison biogas treatment system is the only proven system that fits the 13213 project design parameters. With this determination, and given that the CEC grant is anticipating the use of the Unison biogas treatment system, it is recommended that the City negotiate a sole source contract with Unison to furnish and install its biogas treatment system. This contract would lock in a negotiated price for furnishing, installing, and commissioning the equipment. The negotiated contract would then be presented to City Council for approval prior to award. Added benefits of directly contracting with the manufacturer include avoiding general contractor mark -ups on the equipment and reducing risk of project delays, as the equipment has a long lead -time. A similar approach was recently taken by the City of San Mateo with Unison to provide the same equipment at their wastewater treatment plant. For these reasons, it is recommended that the Council make the findings for sole source of the biomethane to CNG processing equipment to Unison. FINANCIAL IMPACTS Funds to purchase for the Unison biogas treatment system equipment are budgeted in Capital Improvement Project number C66501518 for the 13213 project. The CEC grant for the project will partially cover the costs of this equipment. There is no projected fiscal impact of the recommended action. ATTACHMENTS 1. Resolution 2. Location Map 3. Unison BioCNG 100 product information sheet Attachment 1 RESOLUTION TO DISPENSE WITH FORMAL BID PER PUBLIC CONTRACT CODE SECTION 3400, AND PETALUMA MUNICIPAL CODE SECTION 4.05.050 FOR ACQUISITION IN CONJUNCTION WITH THE BIOMASS -TO- BIOFUEL PROJECT AT ELLIS CREEK WATER RECYCLING FACILITY WHEREAS, California Public Contract Code Section 3400, subdivision (b), generally prohibits state and local agencies and their officials from issuing bid specifications for public works projects that limit bids to particular firms or designate items being acquired by brand name, unless bidders are permitted to propose items equal to those specified by brand name; and WHEREAS, Section 3400, subdivision (c) includes an exception that permits state and local agencies and their officials to designate a material, product or service being procured by brand or trade name in certain specified circumstances, including to obtain a necessary item that is only available from one source; and WHEREAS, for the exception in Section 3400, subdivision (c) to apply, the awarding agency or its designee must make a finding that is described in the bid invitation or request for proposals that a material, product or service is designated by brand or trade name for one of the reasons permitted under that subdivision; and WHEREAS, Section 4.04.050 of the Petaluma Municipal Code allows formal bidding procedures to be dispensed with when the commodity can be obtained from only from one vendor; and WHEREAS, the common law recognizes a bidding exception for circumstances where competitive bidding of public contracts otherwise required by statute may be excused, including circumstances where the contract is such that competitive proposals would be unavailing or would not produce an advantage, and the advertisement for competitive bid would thus be undesirable, impractical, or impossible (Graydon v. Pasadena Redevelopment Agency (1980) 104 CA3d 631); and WHEREAS, the Petaluma Biomass -to- Biofuel project requires a biogas treatment system with the capability to remove contaminants in the biogas produced at the Ellis Creek Water Recycling Facility to produce renewable natural gas that complies with Society of Automotive Engineers Standards for Compressed Natural Gas Vehicle Fuel- SAE J1616; and WHEREAS, producing vehicle fuel from biogas is a relatively new and innovative approach, and based on this, the City was successful in winning a $3 million grant from the California Energy Commission for the Petaluma Biomass -to- Biofuel project; and M WHEREAS, an innovative gas treatment system manufactured by Unison Solutions, Inc. is the only known biogas treatment system that has a proven track record to successfully produce RNG at the relatively low biogas flow rates, 100 cfm or less, needed for the Petaluma Biomass - to-Biofuel project; and WHEREAS, the City included Unison Solutions, Inc. on its project team in its grant application to the CEC as the vendor to furnish the gas treatment system; and WHEREAS, staff has recommended that the City negotiate a sole source contract with Unison Solutions, Inc. to furnish and install its biogas treatment system; and WHEREAS, after negotiations with Unison Solutions Inc., the award of the contract will be brought forth for City Council approval in a future resolution. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Petaluma as follows: 1. The City Council finds in accordance with California Public Contract Code Section 3400, subdivision (c), Section 4.04.050 of the Municipal Code, and the holding in Graydon v. Pasadena Redevelopment Agency (1980) 104 CA3d 631 that Unison Solutions, Inc. is the only known manufacturer of gas treatment equipment that will meet the requirements of the City's Petaluma Biomass -to- Biofuel project. 2. City Staff are hereby authorized and directed in accordance with California Public Contract Code Section 3400 Section 4.04.050 of the Municipal Code, and the holding in Graydon v. Pasadena Redevelopment Agency (1980) 104 CA3d 631 to develop documents necessary to enter into a contract with Unison Solutions, Inc. to furnish and install its biogas treatment system for the Petaluma Biomass -to- Biofuel project. 3. This resolution shall become effective upon its adoption. 4. If any section, subsection, sentence, clause, phrase or word of this resolution is for any reason held to be unconstitutional, unlawful or otherwise invalid by a court of competent jurisdiction or preempted by state legislation, such decision or legislation shall not affect the validity of the remaining portions of this resolution. The City Council of the City of Petaluma hereby declares that it would have adopted this resolution and each and all provisions thereof irrespective of the fact that any one or more of said provisions be declared unconstitutional, unlawful or otherwise invalid. Attachment 2 CNG FUELING STATION ELLIS CREEK LOCATION MAP lkl- A� (y41- IN, PROJECT SITE z 41 �sQ 0 Date :January 23, 2017 City of Petaluma Public Works and Utilities Department M� 0 lil►if►Y�1'�i► �143 Itie'll d ENGINEERING SERVICES AND DESIGN Unison Solutions' biogas conditioning systems are custom engineered and fabricated based on site specific data. All biogas conditioning systems are built with a Class I, Division 1 or 2 rating, depending on the application. Each of our systems is extensively tested before leaving our facility. We provide detailed 0 &M manuals to insure that any operator will quickly become comfortable with the operations and maintenance of our equipment. Our engineers are highly experienced in biogas applications. They understand the science of gas behavior and its thermal properties; we have proven success in areas that have challenged others. BIOGAS TESTING AND MEDIA Knowing the quality of biogas is an important first step in the system design process. Biogas testing is also used to monitor systems after they are operating. Unison has teamed up with environmental laboratories to offer the following biogas tests: Major constituents, Siloxane testing by species, Sulfur by species, and VOC testing. Once gas testing is complete, our experts will evaluate the results and determine the proper equipment and filtration media for each specific system. We inventory large quantities of our media products to provide quick delivery to our customers. U@ L AUTOMATION AND CONTROLS Unison Solutions' automation and controls team works jointly with engineering and fabrication to produce the highest quality and safest biogas conditioning equipment on the market. Our in- house, UL -508A, UL -698A, and UL -1203 panel shop gives us the flexibility to design and build custom control panels that meet the specifications of each individual biogas system installation. Innovative thinking makes our control equipment the most reliable and easiest to use. • Each system undergoes a full test run at our production facility before shipment. All mechanical and electrical system components are rigorously checked for quality and performance. • Only the highest quality industrial control products are used in the construction of Unison Solutions' control panels. • Our experienced staff of programmers has developed an extensive library of PLC code utilizing Allen - Bradley, GE Intelligent Platforms, Modicon, Factory Talk, Wonderware, Win911, and XL Reporter. Combined with Unison's comprehensive experience in the biogas industry, it is easy to see why our systems are the safest on the market. • Unison Solutions' systems seamlessly integrate with existing facility equipment through the use of optional communication interfaces; Including but not limited to Ethernet /IP, Modbus RTU, Modbus TCP, DH +, DH485, RS485, RS232, DFI, HART and Fiber Optics. Tft OVERALL DATAn 1 Ls tat 'f FS 101 n ENCLOSURE)7ATA P41P 101 IV7 :1® Ca.. Fi eT�f lll� .10f 1111301 ®'t I.. 4N •F %LEL ®I.WC :111.11401 { 11 "MUF. Accua� piping end­ P® FAN402 oN camponani layavt may m0et. l� PSI VIA 351 E PI7]71 71.311 3 K OPEN I LT 1.s 1 , fit: TE 001 HX L I KbJ3 ® "f �L5�2 NN.NN SILUKAIIL Iit140VA1. f 1 I LT } LS 75i VS 711 i'MI' JII T6111 [0] 563.585.0967 0 unisonsolutions.com 8 COMPRESSOR SYSTEMS Using technology from the sour gas industry, Unison Solutions has developed gas compression systems that resist the destruction caused by biogas. These systems are used on turbine, fuel cell, and biogas pipeline projects. • Skids designed for any gas flow at pressures up to 200 psig • Two stage condensate removal • Particulate free delivery with relative humidity less than 25% DRYING SYSTEMS If compression is not required, the same level of gas conditioning for use with an existing blower or compressor can be provided. Whether filtration, condensate removal, or heat transfer is required, we can build a system for the specific application. Unison Solutions can also provide passive drying systems for process gases that are not related to biogas. BLOWER SYSTEMS Low pressure blower systems are designed to treat gas for use in boilers and internal combustion engines such as CAT, GE Jenbacher, GE Waukesha, Cummins, MWM, Liebherr, MAN, and Guascor. • Skids designed for any gas flow and for vacuum or positive inlet pressures • Rotary lobe or multi -stage centrifugal blowers • Conditioning options available such as after - cooling and drying CUSTOM SYSTEMS Unison Solutions can develop your custom concept into an effective system, even if it is not related to biogas. We utilize our in -house engineering, design, automation and controls and fabrication departments to create unique, custom solutions. Examples include: • VOC Extraction from vent gas • NOX Reduction from flue gas [0],563.585.0967 n unisonsolutions.com 9 VESSELS AND CUSTOM FABRICATION Unison Solutions offers custom vessel design and fabrication services. We are a certified ASME manufacturing shop in compliance with the ASME Section VIII, Division 1, Code U & R Stamp, using The Hartford Steam Boiler Company as our authorized inspector. Unison Solutions specializes in stainless steel fabrication and offers the following services and products: • Pressure Vessels up to 12' • Plate Rolling diameter 0 Scrubber Vessels • Moisture & Oil Separators • Straight Seam Welding • B31.3 Process Piping ENCLOSURES Unison Solutions' custom enclosures are as varied as our customers. No matter what the final location or application, we will design and build each enclosure to meet your specific requirements. Some of the enclosures we've incorporated for systems range from fabricated panels to modified shipping containers, all designed to meet each site's unique needs. For biogas applications, we still maintain a Class I, Division 1 environment. HYDROGEN SULFIDE REMOVAL Hydrogen Sulfide (HZS) and organic sulfur removal from biogas is often necessary to prevent corrosion, decrease maintenance of downstream equipment and lower SO), emissions. H2S can also inhibit the effective removal of siloxanes. Unison Solutions offers several different sulfur removal technologies depending on the concentration levels and application. Technologies range from "scavenger- type" media based systems to biological systems. SILOXANE REMOVAL Nearly all digester and landfill gas contains one or more species of siloxanes. These are chemicals used extensively in industrial products such as lubricants and in personal care products. When biogas containing siloxanes is combusted in gas turbines, boilers, fuel cells, or internal combustion engines, deposits of solid silica (Si02) collect within the equipment. Damage inflicted by siloxane deposits can be profound, causing more frequent maintenance and lower generation capacity. [0] 563.585.0967 rj unisonsolutions.com 10 Unison Solutions' patent pending BioCNG11 conditioning C system economically produces a biogas -based fuel to power vehicles designed for compressed natural gas (CNG). These systems utilize either landfill or digester gas and provide purification of the biogas to meet SAE J1616. How does it work? m Biogas is piped to the BioCNG11 System from the anaerobic digester or landfill to Hydrogen Sulfide (1-12S), Moisture (H2O), Siloxanes, Volatile Organic Compounds (VOC) and Carbon Dioxide (CO2) are removed Ei Fuel is piped to a CNG fueling system and compressed for use in CNG vehicles Model Biogas Inlet Flow (scfm) Fuel Production (GGE /day) Fuel Production (DGE /day) BioCNG` 50 50 185 -300 160 -260 BioCNGT"' 100 100 370 -600 320 -520 BioCNGT"' 200 200 740 -1,200 640 -1,040 BioCNG'm 400 400 1,480 -2,400 1,280 -2,080 What is GGE? Gasoline Gallon Equivalent (GGE) defines the amount of alternative fuel needed to equal the energy content of 1 liquid gallon of gasoline. • Converts biogas to BioCNG11 with a quality of methane to meet SAE J1616* • Production cost of $0.70 to $1.25 * /GGE, with the potential for renewable fuel credits (RIN's) • Can be supplemented or paralleled with natural gas • The vehicle fueling system (compression, storage, and fuel dispensers), can be customer supplied or included with the Unison BioCNGT1 system *Dependent on inlet Biogas quality R iUJ 563.58!).U96/ W unisonsolutions.com Unison Solutions also offers the following services: • Gas testing and consultation 0 Remote monitoring and troubleshooting • Design and fabrication of custom technologies 0 On going maintenance services • Capstone turbine sales and maintenance 0 Start -up, commissioning, and training • HZS and siloxane removal media www.unisonsolutions.com U.1,11 T I 5451 Chavenelle Road Dubuque, IA 52002 USA SOLUTIONS Telephone: 563 - 585 -0967 E -mail: sales @unisonsolutions.com Unison Solutions, Inc., founded in 2000, is an industry leader in biogas conditioning, BioCNG11 and distributed generation. To date, Unison has provided over 230 systems to the biogas marketplace in sizes that range from 20 scfm to 8,000 scfm. Located in Dubuque, Iowa, Unison is uniquely positioned in the industry to provide all facets of a renewable energy project including equipment, engineering and design, fabrication, automation and controls, and ongoing maintenance support. Unison's systems are installed around the world at landfills, wastewater treatment facilities, industrial digesters, dairies, and food processing plants.