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Home My WebLink About2023-06-06; Municipal Water District; ; Accept Bids, Award a Contract to Houalla Enterprises Ltd. dba Metro Builders & Engineers Group Ltd., and Authorize an Additional Appropriation of Funds for Construction oCA Review GH Meeting Date: June 6, 2023 To: President and Board Members From: Scott Chadwick, Executive Manager Staff Contact: Dave Padilla, District Engineer dave.padilla@carlsbadca.gov, 442-339-2356 Neil Irani, Utilities Associate Engineer neil.irani@carlsbadca.gov, 442-339-2305 Subject: Accept Bids, Award a Contract to Houalla Enterprises Ltd. dba Metro Builders & Engineers Group Ltd., and Authorize an Additional Appropriation of Funds for Construction of the Recycled Water Phase III, D-4 Reservoir Project District: 3 Recommended Action Adopt a resolution accepting bids, awarding a contract to Houalla Enterprises Ltd. dba Metro Builders & Engineers Group Ltd. for construction of the Recycled Water Phase III, D-4 Reservoir and appropriating additional funds from the Recycled Water Connection Fund to Capital Improvement Program Project No. 5210. Executive Summary This project will construct a recycled water-storage reservoir and related site improvements on what is known as the D-tanks site on Black Rail Road south of Poinsettia Lane as shown in Exhibit 2. The D-4 Reservoir will be the fourth reservoir to be constructed on the site and is the last remaining component called for in the Recycled Water Phase III Plan. This reservoir will expand the distribution and storage capacity of the Carlsbad Municipal Water District’s (CMWD) recycled water system to meet the estimated recycled water demands in the 2012 Recycled Water Master Plan and its 2019 update. Additional storage will provide operational flexibility to better serve irrigation demands and reduce energy costs by increasing our ability to pump recycled water into the tanks when electricity rates are at their lowest. This action would award a construction contract to the lowest responsive and responsible bidder, Houalla Enterprises Ltd. dba Metro Builders & Engineers Group, Ltd., or Metro, in an amount not to exceed $4,835,764. An additional appropriation of $2,533,000 is required to fully fund the project. The CMWD Board needs to approve all formally bid contracts when the value exceeds $200,000, as required under Carlsbad Municipal Code Sections 3.28.080(C), 3.28.080(E) and 3.28.080(I)(6). June 6, 2023 Item #5 Page 1 of 9 Explanation & Analysis The 2019 Recycled Water Master Plan Update identified additional storage capacity needs in the recycled water distribution system. The D-4 Reservoir will add 1.5-million gallons of storage capacity to the 3.5 million gallons capacity provided by three existing recycled water storage tanks, two of which are located at the D-tanks site and a third tank located south of Lake Calavera. The D-4 tank will bolster the ability to meet storage requirements and daily maximum demands, while avoiding the need to pump recycled water into the distribution system during periods of peak energy use, thus avoiding peak costs. Other improvements to be constructed with the project will include site grading, new onsite piping for tank maintenance and recycled water distribution, paving, and electrical improvements for tank level and pressure sensing. A new stormwater detention basin and storm drain system will be constructed for the D-4 tank to mitigate stormwater runoff. Landscape and irrigation improvements will be constructed around the perimeter of the D-4 tank and in selected locations near the southern and eastern property boundaries to partially screen the tank from public view. On Nov. 8, 2022, the CMWD Board adopted Resolution No. 1687, authorizing staff to seek bids for construction. Staff advertised the project using the city’s formal bidding procedures. Three bids were received on April 13, 2023, ranging from the low bid of $4,835,764 to the high bid of $4,853,743. The bids are within 5% of the engineer’s estimate1 of $4,601,000, which included a construction contingency of $601,000. The narrow bidding range suggests competitive bids and consistent interpretation of the plans and specifications among the bidders. An additional appropriation of funds at the time of contract award was anticipated when the project was authorized for bidding. Staff reviewed the bid proposals and determined Metro to be a responsible bidder and its bid of $4,835,764 to be responsive. Staff recommend the CMWD Board accept the bids, award a construction contract to Metro and authorize additional appropriation of $2,533,000 to fully fund Capital Improvement Program Project No. 5210. Community Engagement Staff conducted an enhanced stakeholder outreach effort in conformance with Carlsbad Council Policy No. 84, Development Project Public Involvement Policy, to initiate communication with neighboring residents within 600 feet of the project site. An early public notice was mailed in September 2020, and a public notice sign was posted at the project site that October. Staff received 10 inquiries from adjacent or nearby property owners with questions or concerns regarding tank color and height, landscape screening, site lighting, work hours, construction duration, foul odor from existing tanks, inappropriate language from construction contractors, requests for notification of future hearings and potential aesthetic, noise, air quality and stormwater impacts. Staff responded to these inquiries with an informational letter. Staff shared additional project details in an informational mailer from November 2020, which included a site plan, architectural photo renderings and other project information. Staff notified residents again on July 20, 2022, prior to the Planning Commission hearing that day in which 1 The engineer’s estimate is the estimated cost for the construction of a project prepared by the engineer of record, who may be a consultant or city or CMWD staff. June 6, 2023 Item #5 Page 2 of 9 the project’s special use and coastal development permit amendments were approved. No public comment was received at the hearing and the project was unanimously approved. Staff will engage a consultant to provide communication and outreach services before construction to coordinate with nearby residents. The Executive Manager or designee will procure these professional services in accordance with existing master agreements and the authority provided in Carlsbad Municipal Code Section 3.28.060(D). Fiscal Analysis Project cost The total project cost of $6,342,164 is delineated in the table below. An additional $2,533,000 appropriation into the project Capital Improvement Project budget from the Recycled Water Connection Fund is required to fully fund the project. This requested appropriation is funded via the same mechanism as the overall project, through a combination of grants and a low- interest, 1% loan. The 20-year loan will equitably spread the cost of the project across ratepayers and over time. Additional funding sources This project will receive approximately $1.8 million in grant funding. Specifically, the CMWD, as a part of the North San Diego Water Reuse Coalition, obtained $800,000 for the CMWD from the U.S. Department of the Interior through a funding opportunity under the Water Infrastructure Improvements for the Nation Act. The CMWD was also awarded a State Integrated Regional Water Management Proposition 1 grant of $1 million dedicated to this project. The primary funding source for the Recycled Water Connection Fund is a 2014 low-interest State Revolving Fund loan, Agreement No. 14-820-550,2 for the Phase III Recycled Water Project. The original loan amount was $29.5 million, and of that, there is $11.4 million remaining. Staff successfully obtained grant funding to use towards the project, which reduces the amount of debt the CMWD would need to finance the larger project. The D-4 Reservoir is the final component of the Phase III project. 2 The CMWD Board of Directors approved this agreement through Resolution No. 1511 in 2015. Recycled Water Phase III, D-4 Reservoir Capital Improvement Program Project No. 5210 Total appropriation to date $4,300,000 Total expenditures and encumbrances to date -$490,128 Total available funding $3,809,872 Construction contract – Metro -$4,835,764 Construction contingency (15%) -$725,400 Construction management and inspection (estimated) -$600,000 Biological monitoring and reporting -$73,000 Community outreach during construction (estimated) -$40,000 State Revolving Fund loan labor compliance -$28,000 Engineering and administrative costs (estimated) -$40,000 Total estimated project costs -$6,342,164 June 6, 2023 Item #5 Page 3 of 9 Municipal Code sections 3.28.040(C)(5) and 3.28.090(B) authorize the Executive Manager or designee to approve change orders in an amount equal to the contingency set at the time of project award, which for this project is $725,400. Construction management and inspection services are necessary for the project. Staff plan to issue a task order for these services in an amount not to exceed $600,000 through the Executive Manager’s delegated authority under the Master Agreement for As-Needed Horizontal Construction Management and Inspection Services authorized by the CMWD Board in Resolution No. 1644. Options Staff provide the following options for the CMWD Board’s consideration: 1. Adopt a resolution accepting bids, awarding a construction contract to Metro in an amount not to exceed $4,835,764 and appropriating $2,533,000 from the Recycled Water Connection Fund to Capital Improvement Program Project No. 5210 Pros: • Metro has been determined to be the lowest responsible and responsive bidder • Much-needed recycled water storage capacity improvements can be completed at the earliest opportunity, further protecting potable water for potable use • Available grant funding and a low-interest loan will be used to fund project costs • Award of the contract complies with applicable Carlsbad Municipal Code sections, including Sections 3.28.080I and 3.28.080(I)(6) Cons: • Requires additional funding appropriation • Construction activities have the potential to create temporary impacts to aesthetics, noise, air quality and traffic. However, impacts will be insignificant with implementation of project design features and construction best management practices. 2. Reject all bids and re-issue the bid solicitation for the Recycled Water Phase III, D-4 Reservoir, Capital Improvement Program Project No. 5210 Pros: • None identified Cons: • Delays the completion of critical recycled water storage capacity • Potential increase in construction cost could occur • Conflicts with scheduled milestones for disbursement of the federal grant funding Staff recommend Option 1 for the CMWD Board’s approval. Next Steps Once the CMWD Board accepts the bids and awards the construction contract to Metro, staff will issue a purchase order, schedule a preconstruction meeting with the contractor and issue a notice to proceed for construction of the project, which is expected to commence in late summer 2023. Remaining balance -$2,532,292 Additional appropriation requested $2,533,000 June 6, 2023 Item #5 Page 4 of 9 Staff will engage the consultants for community outreach, construction management and inspection services, labor compliance and environmental and engineering services during construction upon execution of the agreements for those services. Construction will last an estimated 10 months, excluding rain days and change orders that may extend the contract duration, with an estimated completion in summer 2024. Upon successful completion of the project, a notice of completion to release bonds issued for the project will be recorded. Environmental Evaluation In 2012, the Board adopted Resolution No. 1455, approving the project’s initial study/mitigated negative declaration and mitigation monitoring and reporting program. (EIA 12-02, State Clearing House SCH# 2012091049) This storage tank project is a component of the Phase III Recycled Water Project and is subject to the mitigation measures that are identified in that mitigation monitoring and reporting program. An addendum to that declaration and program document approved by the Board on July 17, 2018, Resolution No. 1601, included an evaluation of potential environmental impacts associated with moving the storage tank 150 feet east of the original location that had been studied in the 2012 initial study/mitigated negative declaration. On July 20, 2022, the Planning Commission approved Resolution No. 7457, finding that the proposed project is within the scope of the prior environmental documents and no further environmental documentation is required under California Environmental Quality Act Guidelines Section 15162. The contractor will be subject to environmental mitigation measures as described in the approved initial study/mitigated negative declaration to mitigate potential environmental impacts to a level of insignificance. A completed and signed checklist for each mitigation measure will be submitted, fulfilling the city's monitoring requirements with respect to Assembly Bill 3180 (1988), Public Resources Code Section 21081.6. The city and the CMWD have also incorporated numerous project design features and construction measures in an effort to reduce the potential for environmental effects. The Phase III project components would incorporate the applicable project design features that are listed at the end of the mitigation monitoring and reporting program that is included in the project specifications. Exhibits 1.Carlsbad Municipal Water District Board resolution 2.Location map June 6, 2023 Item #5 Page 5 of 9 RESOLUTION NO. 1708 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE CARLSBAD MUNICIPAL WATER DISTRICT OF THE CITY OF CARLSBAD, CALIFORNIA, ACCEPTING BIDS, AWARDING A CONTRACT TO HOUALLA ENTERPRISES LTD. DBA METRO BUILDERS & ENGINEERS GROUP, LTD. FOR CONSTRUCTION OF THE RECYCLED WATER PHASE Ill, D-4 RESERVOIR AND APPROPRIATING ADDITIONAL FUNDS FROM THE RECYCLED WATER CONNECTION FUND TO CAPITAL IMPROVEMENT PROGRAM PROJECT NO. 5210 WHEREAS, the Carlsbad Municipal Water District, or CMWD, Board of Directors of the City of Carlsbad has determined it necessary, desirable and in the public interest to construct the Recycled Water Phase Ill, D-4 Reservoir Project, Capital Improvement Program, or CIP, Project No. 5210; and WHEREAS, on Nov. 8, 2022, the CMWD Board adopted Resolution No. 1687, approving plans, specifications and contract documents and authorizing staff to seek bids for construction; and WHEREAS, on April 13, 2023, three bids were received via electronic format for construction of the project; and WHEREAS, the lowest responsive bid was submitted by Houalla Enterprises Ltd. dba Metro Builders & Engineers Group, Ltd. in an amount not to exceed $4,835,764, and staff determined Houalla Enterprises Ltd. dba Metro Builders & Engineers Group, Ltd. to be a responsible bidder; and WHEREAS, Carlsbad Municipal Code, or CMC, Sections 3.28.080(() and 3.28.080(1)(6) require the CMWD Board to award all formally bid contracts when the value exceeds $200,000; and WHEREAS, CMC Section 3.28.040(C)(5) authorizes the Executive Manager or designee to approve change orders in the amount equal to the contingency set at the time of project award, which is $725,400 for the project; and WHEREAS, the project requires an additional appropriation of $2,533,000 from the Recycled Water Connection Fund; and WHEREAS, the Planning Commission adopted Resolution No. 7457 on July 20, 2022, approving Conditional Use Permit Amendment CUP 2020-0003, Coastal Development Permit Amendment CDP 2020-0021, and finding consistency with the previous Initial Study/Mitigated Negative Declaration approved in Board-adopted Resolution No. 1455, from 2012, and addendum to the IS/MND Exhibit 1 June 6, 2023 Item #5 Page 6 of 9 approved in Board-adopted Resolution No. 1601, from 2018; and WHEREAS, Planning Commission Resolution No. 7457, that was approved on July 20, 2022, found that the proposed project is within the scope of the prior environmental documents described above, and consequently, no further environmental documentation is required per California Environmental Quality Act Guidelines Section 15162. NOW, THEREFORE, BE IT RESOLVED by the Carlsbad Municipal Water District Board of Directors of the City of Carlsbad, California, as follows: 1.That the above recitations are true and correct. 2.That the bid in the amount of $4,835,764 submitted by Houalla Enterprises Ltd. dba Metro Builders & Engineers Group, Ltd. for construction of the Recycled Water Phase Ill, D-4 Reservoir Project, Capital Improvement Program Project No. 5210, is accepted, and the CMWD Board President is authorized to execute a contract with Houalla Enterprises Ltd. dba Metro Builders & Engineers Group, Ltd. 3.That the Executive Manager or designee is authorized to approve construction change orders up to $725,400. 4.That the Deputy City Manager, Administrative Services, is directed to appropriate $2,533,000 from the Recycled Water Connection Fund to CIP Project No. 5210. 5.That the award of this contract is contingent upon Houalla Enterprises Ltd. dba Metro Builders & Engineers Group, Ltd. executing the required contract and submitting the required bonds and insurance policies, as described in the contract, within 20 calendar days of the adoption of this Resolution. The Executive Manager may grant reasonable extensions of time to execute the contract and assemble the required bonds and insurance policies. June 6, 2023 Item #5 Page 7 of 9 PASSED, APPROVED AND ADOPTED at a Special Meeting of the Board of Directors of the Carlsbad Municipal Water District of the City of Carlsbad on the 6th day of June, 2023, by the following vote, to wit: AYES: NAYS: ABSTAIN: ABSENT: Blackburn, Bhat-Patel, Acosta, Burkholder, Luna. None. None. None. r KEIT�resident SHERRY FREISINGER, Secretary (SEAL) June 6, 2023 Item #5 Page 8 of 9 NOT TO SCALE LOCATION MAP S/Ti PACIFIC OCEAN PROJECT NAME RECYCLED WATER PHASE III,D-4 RESERVOIR DRAWN BY: SCOTT EVANS. CARLSBAD UTIUTIES DEPT. J/09/16 D: \UTIUTIES DEPARTMENT\LOCATION MAPS\AUTOCAD\5210.DltG PROJECT EXHIBIT NUMBER 2 5210 Exhibit 2 June 6, 2023 Item #5 Page 9 of 9