City of Grand Forks Staff Report

Transcription

1 City of Grand Forks Staff Report Committee of the Whole November 14, 2016 City Council November 21, 2016 Agenda Item: Grand Forks Regional Water Treatment Plant (GFRWTP) Construction Phase Submitted by: Todd Feland, City Administrator Staff Recommended Action: 1) Accept CMAR GMP including Alternates No. 1A, No. 6, and No. 8 and award CMAR Construction Agreement for the GFRWTP (subject to review and approval by City Attorney and NDDH); 2) Approve Engineering Contract Amendment for Construction and Warranty Phase Services (subject to review and approval by City Attorney); 3) Resolution Authorizing Application with NDDH for a Loan Under the Clean Water Act; 4) Amend 2017 Water Rate Increase (2% to 9%) and Associated Budget Amendment; and 5) Approve Agreement for Cost Share Reimbursement between the ND State Water Commission and the City of Grand Forks (Subject to review and approval by the City Attorney). Committee Recommended Action: Council Action: BACKGROUND: The GRWTP Project has been part of an overall Water Concept Plan for the City of Grand Forks which was developed following the Flood of Since the 1997 flood, the City has completed over $52 million in water system improvements including a new raw water intake facility, a new 7 million gallon clearwell and high service pump station, dual 30-inch water transmission pipelines from the existing WTP site to the new clearwell, various distribution piping tie-back improvements, treatment residual handling facilities, and an additional $1.8 million in upgrades at the existing WTP to extend the life by 10 years. The GFRWTP is the last piece of the puzzle and has been the most recent key project of emphasis for the City of Grand Forks. Once completed, the new GFRWTP will address aging infrastructure, heightened regulatory requirements, and the expansion limitations of the current WTP site. The new facility will use advanced treatment technologies to provide high quality water at an increased capacity with provisions for plant expansion on a long-term water infrastructure site. In an effort to balance project cost with current water demand while providing a new water treatment facility that will meet the future needs of the City, the basis of design was developed as follows: Conventional treatment train was sized to treat 8 million gallons per day (MGD) with the hydraulic capacity to treat up to 10 MGD (8 to 10 MGD total); Page 1

2 Membrane treatment train was sized to treat 4 MGD through reverse osmosis (RO) membranes with 2 of 3 RO skids in service with an additional 4 MGD of RO system bypass flow (8 MGD total); With the installation of the additional ultrafiltration (UF) membrane equipment under Alternate 1A, the third RO skid could be operated to its rated capacity (2 MGD total); Based on the above treatment trains, the initial new WTP capacity will be 16 MGD firm (w/one RO skid out of service) and up to 18 to 20 MGD if required by operating the conventional train at 10 MGD and the third RO skid at its rated capacity; Because the membrane treatment equipment is modular, space was included within the new WTP layout to readily accommodate the installation of additional UF membrane equipment and up to 2 additional RO membrane skids (ie Alternates 1 and 2), which would provide a capacity of 20 MGD firm; By waiting to install a portion of the membrane equipment, the City will save the initial capital cost, maintenance costs will be reduced, and the equipment can be added when needed. The following is a brief summary of past and recent activities related the GFRWTP Project: December 2014 City Approved Final Design Agreement for Project with AE2S. April 2015 City Approved Construction Management at Risk (CMAR) Project Delivery Method. September 2015 City Approved CMAR Selection of Construction Engineers-Ulliman Schutte and CMAR Agreement for Preconstruction Services. September 27, 2016 Public Bidding Initiated by CMAR. November 1, 2016 Bid Opening Completed for Bid Packages 1 through 55 (less Electrical Bid Package). November 16, 2016 Bid Opening Completed for BP-26 Electrical. ANALYSIS AND FINDINGS OF FACT: The GFRWTP Project is now in position to move into the Construction Phase. The following action items require City Council approval to allow construction to begin in December 2016: Item 1: Accept CMAR GMP including Alternates No. 1A, No. 6, and No. 8 and award CMAR Construction Agreement for the GFRWTP (subject to review and approval by City Attorney and NDDH). Item 2: Approve Engineering Contract Amendment for Construction and Warranty Phase Services (subject to review and approval by City Attorney). Item 3: Resolution Authorizing Application with NDDH for a Loan under the Clean Water Act. Item 4: Amend 2017 Water Rate Increase (2% to 9%) and Associated Budget Amendment. Item 5: Approve Agreement for Cost Share Reimbursement between the ND State Water Commission and the City of Grand Forks (subject to review and approval of the City Attorney). Each of the above referenced Items is presented below. Page 2

3 Item 1: CMAR GMP and Construction Agreement Project was bid by CMAR beginning on September 27, Project was bid with a Base Bid which assumed revenue bond financing and with a DWSRF Funded Alternative. 55 Bid Packages were developed to divide work into smaller components in an effort to increase local contractor participation. Nine (9) Alternates and one (1) supplemental Alternate (No.1A) were bid for the project including: o Alternate No.1: Additional UF and RO Membrane Capacity (Step 1). Installing the 5 th UF Train and the 4 th RO Train. Increases plant design capacity from 16 MGD to 18 MGD firm. o Alternate No.1A: Additional UF Membrane Capacity w/o Additional RO Membrane Capacity. Installing the 5 th UF Train equipment and membranes without an additional RO membrane skid. Increases initial plant capacity from 16 to 18 MGD firm, or up to 20 MGD by operating the conventional train at 10 MGD. o Alternate No.2: Additional UF and RO Membrane Capacity (Step 2). Installing the 5 th RO Train and fully populating all five UF Trains. Increases the plant design capacity to 20 MGD firm. o Alternate No.3: Addition of a 3 rd Ozone Generator. Installing a 3 rd Ozone Generator for redundancy within the conventional treatment train. o Alternate No.4: High Service Pump Station Electrical Improvements. Electrical improvements to the existing High Service Pump Station located south of the new WTP including electrical service upgrade for compatibility with the new WTP SWGR building and the load shed program. o Alternate No.5: Addition of a 2 nd Electric Generator. Installing a 2 nd 2100 kw prime rated electrical generator for additional backup power supply. o Alternate No.6: Installation of a Redundant 30 Raw Water Pipeline. Installing a parallel 30-inch ductile iron raw water pipeline on the WTP site. Provides redundancy and eliminates future site work disturbances. o Alternate No.7: Epoxy Flooring Modifications. Deduct to remove proposed epoxy floor coatings from the Operations Floor Level. o Alternate No.8: Additional Cost for Utilizing DWSRF Funding. Includes all provisions to meet the program requirements for DWSRF. Major impacts include Federal requirements such as Davis Bacon wage rates, Federal reporting, and Buy American which requires iron and steel products to be manufactured in the United States. o Alternate No.9: Revised Electric Generator Sizing. Installation of two 1750kW generators in lieu of the single Base Bid 2100kW generator. CMAR advertised the bid process publicly per NDCC and also solicited 613 individual contractors and suppliers. CMAR opened bids on November 1, 2016 for all bid packages except the Electric Construction bid package. CMAR opened bids on November 16, 2016 for Electric Construction bid package. CMAR received a total of 166 bids for the project. Proposed GMP includes an Allowance for the Base Bid and for the DWSRF Funded Alternative Page 3

4 to include the Electrical Construction Costs and the potential use of a concrete admixture for shrinkage crack control. CMAR recommended and City concurred to the use of an Allowance in the GMP at this time to provide additional time to finalize the electrical scope of work and associated cost based on the Final Plans and Specifications which were issued on November 15, 2016 to eliminate bidding exclusions and provide more accurate Electrical Construction costs. Through the use of the Allowance it is the intent that the CMAR GMP will only decrease and any unused Allowance amount will be returned 100 percent to the City. Once final Electrical Construction amount is determined, the CMAR GMP for both the Base Bid and DWSRF Alternative will be decreased accordingly. The final CMAR Agreement will be prepared using the final City Council approved GMP less the unused Allowance for the Project. Bid amounts for the nine (9) Alternates and one (1) supplemental Alternate (No.1A) are included in the following table: Grand Forks Regional Water Treatment Plant Alternate Bid Price Summary November 21, 2016 Description Base Bid DWSRF Alt Alternate No.1 - Additional UF and RO Membrane Capacity (Step 1) $1,607,810 $1,607,810 Alternate No.1A - Additional UF Capacity w/o Additional RO Capacity $996,998 $996,998 Alternate No.2 - Additional UF and RO Membrane Capacity (Step 2) $1,026,013 $1,026,013 Alternate No.3 - Addition of a 3 rd Ozone Generator $529,556 $529,556 Alternate No.4 High Service Pump Station Improvements $121,995 $121,995 Alternate No.5 Addition of 2 nd Electric Generator $1,662,504 $1,662,816 Alternate No.6 Addition of Redundant Raw Water Line $255,114 $267,980 Alternate No.7 Eliminate Epoxy Floor at Operations Level ($64,832) ($64,832) Alternate No.8 Additional Base Bid Cost for DWRF Funding N/A $7,868,598* Alternate No.9 Revised Generator Sizing $1,155,112 $1,156,227 *Representative of Impact on GMP City Staff and CMAR reviewed the bids received for each Alternate and recommend Alternates No.1A and No.6 be accepted and implemented at this time due to the overall benefit they add to the Project from a capacity and redundancy standpoint and reasonable additional Project cost. CMAR reviewed bids received and identified responsive, low bid contractors for each bid package for use in developing the following CMAR GMP s for the Project: Page 4

5 Description Grand Forks Regional Water Treatment Plant CMAR GMP Summary November 21, 2016 Base Bid % of GMP DWSRF Alt Civil & Sitework $8,824,227 $9,339,256 Structural $23,288,226 $24,901,348 Building Enclosure $7,921,949 $8,061,625 Plumbing, Mechanical, & Process Piping $18,835,564 $23,034,001 Engineered Process Equipment $19,549,000 $19,573,000 Other Bid Packages $5,142,258 $5,250,009 Electrical and Concrete Admixture Allowance $18,200,000 $18,775,000 Alternate No.1A $996,998 $996,998 Alternate No.6 $255,114 $267,980 Total Bids Received w/allowance $103,013,336 $110,199,217 % of GMP General Requirements Subtotal $12,245, % $12,390, % Bonds & Insurance $2,319, % $2,465, % CMAR Staffing $8,157, % $8,157, % CMAR Site Facilities $1,767, % $1,767, % CMAR Fee $5,043,403 4% $5,358,712 4% Contingency Subtotal $5,782,552 $6,019,034 CMAR Construction Contingency $3,782,552 3% $4,019,034 3% Owner Construction Contingency $2,000,000 LS $2,000,000 LS CMAR GMP $126,085,080 $133,967,794 CMAR General Requirements (ie CMAR Staffing and CMAR Site Facilities) and CMAR Fee were negotiated at length. Completed review of the CMAR General Requirements and CMAR Fee by experts having CMAR experience with projects of similar size and complexity. The results of the expert reviews and their respective opinions regarding CMAR General Requirements and CMAR Fee resulted in the following ranges: CMAR General Requirements: CMAR Fee: Total: 8.0% to 12.0% of GMP 3.5% to 4.5% of GMP 11.5% to 16.5% of GMP Based on the results of the entity reviews and negotiations with the CMAR, City Staff recommend the following percentages for a project having the size and complexity of the GFRWTP: CMAR General Requirements: CMAR Fee: Total: 9.3% of GMP 4.0% of GMP 13.3% of GMP A copy of the proposed CMAR Agreement is included as Attachment A. Page 5

6 Local and State contractor participation in the Project were approximately as shown in the following table depending on the project funding mechanism: Grand Forks Regional Water Treatment Plant Local Participation Summary November 21, 2016 Description Base Bid DWSRF Alt Grand Forks Contractors Bid Package Count 23 (42%) 20 (36%) Grand Forks Contractors Bid Package Amount $46,260,472 (44%) $22,289,320 (20%) ND (Incl GF) Contractors Bid Package Count 45 (82%) 44 (80%) ND (Incl GF) Contractors Bid Package Amount $50,286,508 (48%) $35,666,874 (32%) The Construction Schedule for the Project is anticipated to be as follows: Receipt of Electrical Construction Bids November 16, 2016 Final CMAR GMP and Agreement Approval November 21, 2016 Notice of Award November 22, 2016 Groundbreaking Ceremony November 30, 2016 Notice to Proceed December 1, 2016 Construction Start December 6, 2016 Substantial Completion October 31, 2019 Final Completion June 30, 2020 Item 2: Engineering Contract Amendment for Construction and Warranty Phase Services Engineering Services to Date In December 2014, the City of Grand Forks approved the Engineering Services Agreement for design and bidding phase services with AE2S. AE2S and their subconsultants (JLG Architects, EAPC Architects Engineers, and Black & Veatch) completed the design and developed the Plans and Specifications for the Project and participated in the Bidding Phase through the development of addendum materials to the Plans and Specifications to address contractor questions and clarifications. The final Plans and Specifications were submitted to the NDDH and City of Grand Forks for review and approval. Amendment for Construction and Warranty Phase Engineering Services An amendment to the Engineering Services Agreement has been developed to add Construction and Warranty Phase Services to the current agreement that was initially written and approved through final design and bidding. During the Construction and Warranty Phases of the Project, AE2S will administer the Project as the City s engineering representative and provide on-site Resident Project Representative Services to observe construction as it is completed to ensure the Project is constructed according to the Plans and Specifications. A copy of Amendment No.1 to the Engineering Services Agreement is included as Attachment B and provides a detailed explanation of the Engineering services to be provided. Construction and Warranty Phase Services generally include the following: Document contractor compliance with labor and funding agency requirements. Receive, review, and determine acceptability of Project schedules and milestones. Review, evaluate, and respond to contractor requests for information. Review, prepare findings, conclusions, or recommendations related to notices from contractor of ambiguities or differing site conditions. Page 6

7 Evaluate, determine, and respond to the acceptability of substitute materials or equipment. Prepare and issue Field Orders and Work Change Directives. Review and approve or take other actions with respect to Shop Drawings, samples, mock-ups, and other submittals. Coordinate shop drawing distribution amongst project disciplines and subconsultants and coordinate w/cmar. Review Applications for Payment and required documentation and assist Owner with submitting to Funding Agency for reimbursement. Receive and review certificates of inspection, tests, and approvals. Receive, review, and transmit to Owner maintenance and operating instructions, schedules, guarantees, bonds, certificates of inspections, tests, and approvals, and Shop Drawings, samples, and other data. Receive and review annotated Record Documents received from Contractor. Visit site(s) daily and observe and document construction at times appropriate to stage, status, or progress of construction. Participate in weekly on-site project meetings. Prepare daily site observation notes. Document daily weather, events, and related delays. Provide daily Quality Assurance observations and document Work conformance with Plans and Specifications. Coordinate Quality Assurance observations with Contractor Quality Control services. Prepare monthly progress reports for Owner and State/Funding Agency requirements. Document work progress and site conditions using photographs and/or video. Observe, document, and report details related to test procedures and system start-ups. Provide Project commissioning and start-up assistance. Work with I&C technicians during SCADA system development. Work with I&C Technicians and Electrical Contractor during instrumentation start-up and calibration. Review training protocols and participate in equipment training sessions w/owner. Prepare punch lists for each Project discipline of items requiring completion or correction. Coordinate, participate in, and document Substantial and Final Completion walk-throughs and determinations. Work with Owner during Warranty Phase to address warranty repair items and coordinate with CMAR. Conduct end of Warranty Phase site visit(s), document warranty items, and coordinate correction prior to end of warranty period. The Engineering Services Amendment also includes the following constructed-related engineering services: Construction Surveying to generally include the following: Establish and stake construction limits and easement area boundaries, temporary roads, field office complex, and laydown areas as applicable for the Project. Establish site benchmark(s) for use by Contractor to locate water treatment facility building corners and as a vertical elevation reference. Establish a construction grid system per Contractor s general requirements including required off sets. Establish on-site line and grade stakes as required including required off sets for underground raw water, finished water, sanitary sewer, storm water, and distribution water main. Collect survey grade GPS coordinates of installed underground utilities prior to backfilling. Staking for storm water pond and associated inlet and outfall structures. Staking for site access road and parking lots required for construction including curb and gutter Page 7

8 staking with required off sets. Staking of site security fence and gate locations. Staking of miscellaneous site appurtenances. Stake pile locations and set elevations for pile cut off, and survey and record locations of piles. Stake demolition and removal limits for underground utility connection areas. Instrumentation & Controls Programming/Integration to generally include the following: Provide programmable logic controller (PLC), human machine interface (HMI), operator interface terminal (OIT), and supervisory control and data acquisition (SCADA) programming and development, database development, trending, and report generation for the main water treatment plant process control system. Configure Project supervisory control panel operator interface and integrate Project instrumentation with Project control components. ENGINEER will provide programming, data base development, trending, and operator interface services for incorporating and monitoring supplier-programmed systems into the main water treatment facility SCADA system. Participate in set up of instrumentation and control components with Contractor. Provide I/O checkout assistance and verify operation and control of water treatment equipment and related systems controlled by WTP SCADA system. Review field input/output schemes for proper operation. Set-up and start-up of operator interface computers, servers, switches, printers, work station monitors, display monitors, peripheral equipment, and related equipment. Acquisition assistance, installation, and configuration of required control system software. Assist with acquisition of required software licensing. Internal water treatment facility network configuration and communications with current City network system. Configuration of Project wireless telemetry and/or land-based telemetry system including radios, antennas, routers, switches, and related equipment. Provide development and programming of required HMI and OIT graphics for existing and new facilities, equipment, and systems required to be operated from the new water treatment facility. Modify existing SCADA system HMI and OIT graphics to function with new water treatment plant SCADA system. Provide database and reports programming for water treatment facility equipment and systems and related raw water and high service pumping systems and back-up power generation. The following table contains a general summary of the scope of services to be provided along with a schedule of estimated annual expenditures: Service Total Construction & Warranty Services $1,080,000 $1,300,000 $1,300,000 $1,020,000 $4,700,000 Construction Surveying $69,000 $69,000 $46,000 $46,000 $230,000 I&C Programming / Integration $170,000 $510,000 $680,000 $340,000 $1,700,000 Subtotals $1,319,000 $1,879,000 $2,026,000 $1,406,000 $6,630,000 Page 8

9 The proposed Construction and Warranty Phase services amount and the total project engineering fees were compared to two other recent projects of similar size being constructed in North Dakota for the City of Fargo and the City of Williston. The results of the comparison are shown in the table below. Project Construction Cost Design/Bidding Fee % of Constr Constr/Wnty Fee % of Constr Total Engineering Fees % of Constr Fargo WTP Addition $105MM $8,416, % $7,720, % $16,136, % GFRWTP $134MM $9,101, % $4,700, % $13,801, % Williston WWTP $103MM $3,350, % $5,285, % $ 8,635, % All proposed Construction and Warranty Phase Services, Construction Surveying, and construction phase Instrumentation and Controls Programming will be provided on an hourly basis plus reimbursable expenses to a maximum. Item 3: Resolution Authorizing Application with NDDH for a Loan under the Clean Water Act Based on the projected CMAR GMP including Alternates No.1A and No.6, the inclusion of Project Services Completed to Date and Other Anticipated Project Costs, and Amendment No.1 to the Engineering Services Agreement, the Total Project Cost for the Base Bid and the DWSRF Funded Alternative would be as shown in the following table: Grand Forks Regional Water Treatment Plant Total Project Cost Summary November 21, 2016 Description Base Bid DWSRF Alt PROJECTED CMAR GMP $126,085,080 $133,967,794 PROJECT SERVICES COMPLETED TO DATE $10,755,000 $10,755,000 Pre-Design Geotechnical Services $75,000 $75,000 CMAR Pre-Construction Services $700,000 $700,000 Final Design and Bidding Engineering Services $9,980,000 $9,980,000 CONSTRUCTION & WARRANTY PHASE SERVICES $6,630,000 $6,630,000 Construction and Warranty Phase Engineering Services $4,700,000 $4,700,000 Construction Surveying $230,000 $230,000 Instrumentation & Controls Programming/Integration $1,700,000 $1,700,000 OTHER ANTICIPATED PROJECT COSTS $828,000 $828,000 Owner s Allowance $600,000 $600,000 Nodak Electric Service $228,000 $228,000 TOTAL PROJECT COST $144,298,080 $152,180,794 The project bidding was designed to allow the City to compare costs between traditional revenue bond financing and a DWSRF financing alternative. While the DWSRF program provides below-market interest rates that can save project sponsors interest costs over the life of the loan, the program itself is not as flexible as revenue bond financing on the open market and comes with some additional cost drivers. Page 9

10 The main cost driver is the potential for increased costs associated with the Federal mandate to use American Iron and Steel in the project as well as maintain wages consistent with the Davis-Bacon wage requirements. By providing for a DWSRF alternative, the difference in costs was isolated in their entirety for use in comparing financing alternatives. The comparison of financing alternatives includes evaluating traditional revenue bond financing and the State sponsored DWSRF program financing. Additional financing scenarios with a combination of revenue bonds and other state-sponsored programs were considered, but through follow-up communications and meetings with State representatives, no other programs were deemed to be available as a financing source for this project. Revenue bond financing was modeled as three (3) separate bonds spread over three (3) years to comply with all IRS regulations on tax exempt financing. These bonds were estimated to have interest rates of 3 percent, 3.5 percent, and 4 percent for a term of 30 years. Traditional revenue bond financing allows the City to bond for additional costs of issuance and include all reserve requirements and bond advisory costs. DWSRF financing is at 2 percent interest for 30 years. The 30-year term starts at the end of construction with the City responsible for interest-only payments on the actual amount drawn during construction. Issuance costs are lower overall, but the program does not allow for bonding for reserve funding. Project costs to be bonded were assumed to be approximately ½ of total project costs. Legislative intent in funding bills along with the ND State Water Commission (NDSWC) have committed to paying 50 percent of eligible project costs through State Water Supply Cost-Share Funding. Through this cost-share funding, the City has received an initial $4.99 M grant during design phase engineering and another $30 M grant for the current biennium cost-share (see Item 5). Based on funding plans discussed at a meeting with the NDSWC on November 16, 2016 no objections were brought forth concerning a continued full 50 percent cost-share strategy for this project, even at higher DWSRF Alternative capital costs. The funding plan presented to the NDSWC is presented in the table below along with estimated projected bonding needs. Revenue Bond DWSRF Estimated Total Project Costs $144,298,080 $152,180,794 (less) State Water Commission Grant $72,149,040 $76,090, State Grant $4,990,000 $4,990, State Grant $30,000,000 $30,000, State Grant $30,000,000 $30,000, State Grant $7,159,040 $11,100,397 Remaining City Share (50 Percent) $72,149,040 $76,090,397 (less) City Costs Estimated through 2016 $5,378,000 $5,378,000 (less) 2017 & Beyond Cash Funded $8,300,000 $5,300,000 Anticipated Project Costs to Bond $58,471,040 $65,412,397 The comparison of the financing solutions focused on the average annual payment and the net present value difference in total costs over the course of the bond repayment period. The project costs noted above were used to calculate annual payments with the addition of issuance costs for traditional financing (approximately $4 M to include reserve funding). Based on this approach, while the DWSRF financing includes a higher overall project cost, the actual amount paid by residents and rate payers over the life of Page 10

11 the bond will be less than with traditional financing. In other words, interest rate savings with the DWSRF are more than the extra capital costs of a DWSRF compliant project. The table below shows the comparison of the two alternatives. Funding Alternative Total Project Cost NDSWC Cost-Share Project Cost Bonded Average Interest Rate Annual Payment (Mode) NPV Savings over Base Revenue Bond $144.3 M $72.1 M $58.5 M 3.5% $3.3 M N/A DWSRF $152.2 M $76.1 M $65.4 M 2.0% $2.9 M $6.0 M As a result of the increased cost savings, DWSRF financing is the recommended financing approach. Item 4: Amend 2017 Water Rate Increase (2% to 9%) & Associated Budget Amendment July 12, 2016 Council Work Session reviewed initial water rate projections for a six-year period. Initial water rate projections were made based on funding the City share of the new Water Treatment Plant and Red River Valley Water Supply Project through a sales tax measure. Alternative rate increases were presented at that time should voters decide not to pass the sales tax and fund identified water projects with water rates. Water rate increases over the six-year period are designed to step into the projected water rates necessary to fund debt service. o As part of the annual budgeting process, City Staff review and revise water rate recommendations as needed The sales tax measure did not pass on November 8, 2016; as a result, we are seeking to amend the water rate increase from 2 percent to 9 percent. Revised Water Fee Resolution is included as Attachment D. Item 5: Agreement for Cost Share Reimbursement between NDSWC and City of Grand Forks On October 12, 2016, the ND State Water Commission (NDSWC) approved a cost-share of $30,000,000 to reimburse the City of Grand Forks for 50 percent of actual eligible costs incurred for the GFRWTP project. As part of the formal approval process, the NDSWC prepared a document titled Agreement for Cost Share Reimbursement City of Grand Forks Water Treatment Plant. The document outlines the City s responsibilities, generally describes the Project, explains eligible costs and the payment reimbursement process, identifies specific indemnification and insurance requirements, and includes other contractual specifics. City Council approval of the Agreement is required to complete the cost-share process. A copy of the NDSWC agreement is provided in Attachment E. Page 11

12 RECOMMENDATION Accept CMAR GMP including Alternates No. 1A, No. 6, and No. 8 and award CMAR Construction Agreement for the GFRWTP (subject to review and approval by City Attorney and NDDH). Approve Engineering Contract Amendment for Construction and Warranty Phase Services (subject to review and approval by City Attorney). Approve resolution authorizing use of DWSRF loan funding strategy (contingent upon NDDH approval and ND State Water Commission negotiations). Amend 2017 Water Rate Increase (2% to 9%) and Associated Budget Amendment. Approve Agreement for Cost Share Reimbursement between the ND State Water Commission and the City of Grand Forks (subject to review and approval by City Attorney). ATTACHED SUPPORT MATERIALS: A. Proposed CMAR Agreement with a copy of the draft projected GMP B. Amendment No.1 to the Engineering Services Agreement C. Resolution Authorizing Application with NDDH for a Loan Under the Drinking Water State Revolving Loan Program D. Revised Water Fee Resolution E. Agreement for Cost-Share Reimbursement between the ND State Water Commission and the City of Grand Forks Page 12

13 Attachment A Page 13

14 AGREEMENT BETWEEN OWNER AND CONTRACTOR FOR CONSTRUCTION CONTRACT THIS AGREEMENT is by and between the City of Grand Forks, North Dakota ( Owner ) and Construction Engineers-US, a joint venture of Construction Engineers, Inc. and Ulliman Schutte Construction, LLC ( Contractor ). Owner and Contractor hereby agree as follows: ARTICLE 1 WORK 1.01 Contractor shall complete all Work as specified or indicated in the Contract Documents. The Work is generally described as follows: All Work identified with the Construction Documents for the Project identified in Article 2 dated November 15, 2016 and included Alternates. ARTICLE 2 THE PROJECT 2.01 The Project, of which the Work under the Contract Documents is a part, is generally described as follows: City Project No.7293 Grand Forks Regional Water Treatment Plant ARTICLE 3 ENGINEER 3.01 The Project has been designed by Advanced Engineering and Environmental Services, Inc The Owner has retained Advanced Engineering and Environmental Services, Inc. ( Engineer ) to act as Owner s representative, assume all duties and responsibilities, and have the rights and authority assigned to Engineer in the Contract Documents in connection with the completion of the Work in accordance with the Contract Documents. ARTICLE 4 CONTRACT TIMES 4.01 Time of the Essence A. All time limits for Substantial Completion, and completion and readiness for final payment as stated in the Contract Documents are of the essence of the Contract. B. Contract Times: Dates - The Work will be substantially completed on or before October 31, 2019, and completed and ready for final payment in accordance with Paragraph of the General Conditions on or before June 30, 2020, provided that a Notice to Proceed is issued not later than December 1, Liquidated Damages A. Contractor and Owner recognize that time is of the essence as stated in Paragraph 4.01 above and that Owner will suffer financial and other losses if the Work is not completed within the times specified in Paragraph 4.02 above, plus any extensions thereof allowed in accordance with the Contract. The parties also recognize the delays, expense, and difficulties involved in proving in a legal proceeding the actual loss suffered by Owner if the EJCDC C-525, Agreement Between Owner and Contractor for Construction Contract (Cost-Plus). Copyright 2013 National Society of Professional Engineers, American Council of Engineering Companies, and American Society of Civil Engineers. All rights reserved. Page 1 of 7

15 Work is not completed on time. Accordingly, instead of requiring any such proof, Owner and Contractor agree to the following liquidated damages for delay (but not as a penalty): 1. Substantial Completion: Contractor shall pay Owner $ 3, for each day that expires after the date (as duly adjusted pursuant to the Contract) specified in Paragraph 4.02.B above for Substantial Completion until the Work is substantially complete. Owner and Contractor agree that these Liquidated Damages are Owner s sole and exclusive remedy for any delays caused by Contractor. 2. Completion of Remaining Work: After Substantial Completion, if Contractor shall neglect, refuse, or fail to complete the remaining Work within the Contract Time (as duly adjusted pursuant to the Contract) for completion and readiness for final payment, Contractor shall pay Owner $ 2, for each day that expires after such until the Work is completed and ready for final payment. ARTICLE 5 GUARANTEED MAXIMUM PRICE 5.01 Contractor guarantees that the maximum amount payable by Owner for the sum of the Cost of the Work plus Contractor s fee under Article 7 (Guaranteed Maximum Price) will not exceed $, subject to increases or decreases for changes in the Work The sum of all Unit Price Work shall be included in the Guaranteed Maximum Price. The GMP Proposal shall include information sufficient for each separately identified item of Unit Price Work to establish the sum of Unit Price Work by multiplying the unit price times the actual quantity of that item. ARTICLE 6 COST OF THE WORK 6.01 Cost of the Work shall be determined as provided in Paragraph of the General Conditions. ARTICLE 7 CONTRACTOR S FEE 7.01 Contractor s fee shall be determined as follows: ARTICLE 8 SAVINGS A lump sum fee in the amount of $ which shall be subject to increases for changes in the Work as provided in Section 11 of the General Conditions At the completion of the Project any Savings shall be split between the Contractor and the Owner as follows: Initial Savings in an amount equal to 1% of the GMP shall accrue to the Contractor. Savings exceeding 1% of the GMP shall be divided 60%/40% between Owner and Contractor respectively. Owner shall pay Contractor any Savings due to Contractor within 30 days of Final Completion. ARTICLE 9 CHANGES IN THE GUARANTEED MAXIMUM PRICE 9.01 The amount of any increases or decreases in the Guaranteed Maximum Price which results from a Change Order shall be set forth in the applicable Change Order. EJCDC C-525, Agreement Between Owner and Contractor for Construction Contract (Cost-Plus). Copyright 2013 National Society of Professional Engineers, American Council of Engineering Companies, and American Society of Civil Engineers. All rights reserved. Page 2 of 7

16 ARTICLE 10 PAYMENT PROCEDURES Submittal and Processing of Payments A. Contractor shall submit Applications for Payment in accordance with Article 15 of the General Conditions. Applications for Payment will indicate the amount of Contractor s fee then payable. Applications for Payment will be processed by Engineer as provided in the General Conditions Progress Payments; Retainage A. Owner shall make progress payments on account of the Contract Price on the basis of Contractor s Applications for Payment as recommended by Engineer on or about the third Thursday of the month for each month during construction as provided in Paragraphs A.1 and A.2 below, provided that such Applications for Payment have been submitted in a timely manner and otherwise meet the requirements of the Contract. All such payments will be measured by the Schedule of Values established as provided in the General Conditions (and in the case of Unit Price Work based on the number of units completed) or, in the event there is no Schedule of Values, as provided elsewhere in the Contract Final Payment 1. For Cost of the Work: Progress payments on account of the Cost of the Work will be made: a. Prior to Substantial Completion, progress payments will be made in an amount equal to the percentage indicated below but, in each case, less the aggregate of payments previously made and less such amounts as Owner may withhold in accordance with the Contract: 1) 95 percent of the Cost of Work completed including stored materials (with the balance being retainage). There will be no retainage held on General Conditions Items, Insurance and Bonds. b. Upon Substantial Completion Owner shall pay an amount sufficient to increase total payments to Contractor in an amount equal to the lesser of (i) 98.5 percent of the Cost of the Work completed, or (ii) 100% of the Cost of the Work completed less two times the reasonable value of the punch list developed in accordance with the terms of Section of the General Conditions; and less such amounts set off by Owner pursuant to Paragraph E of the General Conditions. 2. For Contractor s Fee: Progress payments on account of the Contractor s fee will be made as follows: a. Contractor s Fee shall be paid based on a percentage of the Cost of the Work completed. There shall be no retainage held on Contractor s Fee. A. Upon final completion and acceptance of the Work in accordance with Paragraph of the General Conditions, Owner shall pay the remainder of the Contract Price as recommended by Engineer as provided in said Paragraph. ARTICLE 11 INTEREST A. All amounts not paid when due shall bear interest at the rate of 12 percent per annum. EJCDC C-525, Agreement Between Owner and Contractor for Construction Contract (Cost-Plus). Copyright 2013 National Society of Professional Engineers, American Council of Engineering Companies, and American Society of Civil Engineers. All rights reserved. Page 3 of 7

17 ARTICLE 12 CONTRACTOR S REPRESENTATIONS In order to induce Owner to enter into this Contract, Contractor makes the following representations: A. Contractor has examined and carefully studied the Contract Documents, and data and reference items identified in the Contract Documents. B. Contractor has visited the Site, conducted a thorough visual examination of the Site and adjacent areas, and become familiar with and is satisfied as to the general, local, and Site conditions that may affect cost, progress, and performance of the Work. C. Contractor is familiar with and is satisfied as to all Laws and Regulations that may affect cost, progress, and performance of the Work. D. Contractor has carefully studied all reports of explorations and tests of subsurface conditions at or adjacent to the Site and all drawings of physical conditions relating to existing surface or subsurface structures at the Site, if any, including any reports of Hazardous Environmental Conditions, if any, that have been provided to Contractor by the Owner or Engineer and which are specifically identified in the General Conditions. E. Based on the information and observations referred to in the preceding paragraph, Contractor agrees that it is not aware of the need for any further examinations, investigations, explorations, tests, studies, or data for the performance of the Work at the Contract Price, within the Contract Times, and in accordance with the other terms and conditions of the Contract. F. Contractor is aware of the general nature of work to be performed by Owner and others at the Site that relates to the Work as indicated in the Contract Documents. G. Contractor has given Engineer written notice of all conflicts, errors, ambiguities, or discrepancies that Contractor has discovered in the Contract Documents, and the written resolution thereof by Engineer is acceptable to Contractor. H. The Contract Documents are generally sufficient to indicate and convey understanding of all terms and conditions for performance and furnishing of the Work. I. The foregoing representations are subject to any limitations or conditions included in the GMP Proposal. ARTICLE 13 ACCOUNTING RECORDS Contractor shall keep such full and detailed accounts of materials incorporated and labor and equipment utilized for the Work consistent with the requirements of Paragraph E of the General Conditions and as may be necessary for proper financial management under this Agreement. Subject to prior written notice, Owner shall be afforded reasonable access during normal business hours to all Contractor s records, books, correspondence, instructions, drawings, receipts, vouchers, memoranda, and similar data relating to the Cost of the Work. Contractor shall preserve all such documents for a period of three years after the final payment by Owner. ARTICLE 14 CONTRACT DOCUMENTS Contents A. The Contract Documents consist of the following: EJCDC C-525, Agreement Between Owner and Contractor for Construction Contract (Cost-Plus). Copyright 2013 National Society of Professional Engineers, American Council of Engineering Companies, and American Society of Civil Engineers. All rights reserved. Page 4 of 7

18 1. This Agreement (pages 1 to, inclusive). 2. Performance bond (pages to, inclusive). 3. Payment bond (pages to, inclusive). 4. Other bonds. a. (pages to, inclusive). 5. General Conditions (pages to, inclusive). 6. Specifications as listed in the table of contents of the Project Manual. 7. the Drawings listed on the attached sheet index. 8. Addenda (numbers to, inclusive). 9. Exhibits to this Agreement (enumerated as follows): 10. The GMP Proposal dated XXXX including clarifications and assumptions. 11. The following which may be delivered or issued on or after the Effective Date of the Contract and are not attached hereto: a. Notice to Proceed. b. Work Change Directives. c. Change Orders. d. Field Orders. B. There are no Contract Documents other than those listed above in this Article 15. C. The Contract Documents may only be amended, modified, or supplemented as provided in the General Conditions. In the event of any conflict or ambiguity between any of the above referenced Contract Documents, the terms of the GMP Proposal shall prevail. ARTICLE 15 MISCELLANEOUS Terms A. Terms used in this Agreement will have the meanings stated in the General Conditions Assignment of Contract A. Unless expressly agreed to elsewhere in the Contract, no assignment by a party hereto of any rights under or interests in the Contract will be binding on another party hereto without the written consent of the party sought to be bound; and, specifically but without limitation, money that may become due and money that is due may not be assigned without such consent (except to the extent that the effect of this restriction may be limited by law), and unless specifically stated to the contrary in any written consent to an assignment, no assignment will release or discharge the assignor from any duty or responsibility under the Contract Documents Successors and Assigns A. Owner and Contractor each binds itself, its successors, assigns, and legal representatives to the other party hereto, its successors, assigns, and legal representatives in respect to all covenants, agreements, and obligations contained in the Contract Documents. EJCDC C-525, Agreement Between Owner and Contractor for Construction Contract (Cost-Plus). Copyright 2013 National Society of Professional Engineers, American Council of Engineering Companies, and American Society of Civil Engineers. All rights reserved. Page 5 of 7

19 15.04 Severability A. Any provision or part of the Contract Documents held to be void or unenforceable under any Law or Regulation shall be deemed stricken, and all remaining provisions shall continue to be valid and binding upon Owner and Contractor, who agree that the Contract Documents shall be reformed to replace such stricken provision or part thereof with a valid and enforceable provision that comes as close as possible to expressing the intention of the stricken provision Contractor s Certifications A. Contractor certifies that it has not engaged in corrupt, fraudulent, collusive or coercive practices in competing for or in executing the Contract. For the purposes of this Paragraph 16.05: 1. corrupt practice means the offering, giving, receiving or soliciting of anything of value to influence the action of a public official in the bidding process or in the Contract execution; 2. fraudulent practice means an intentional misrepresentation of facts made (a) to influence the bidding process or the execution of the Contract to the detriment of Owner, (b) to establish Bid prices at artificial non-competitive levels, or (c) to deprive Owner of the benefits of free and open competition; 3. collusive practice means a scheme or arrangement between two or more Bidders, with or without the knowledge of Owner, a purpose of which is to establish Bid prices at artificial, non-competitive levels; and 4. coercive practice means harming or threatening to harm, directly or indirectly, persons or their property to influence their participation in the bidding process or affect the execution of the Contract Joint and Several Obligations A. All Obligations of Construction Engineers Inc. and Ulliman Schutte Construction LLC hereunder are joint and several. EJCDC C-525, Agreement Between Owner and Contractor for Construction Contract (Cost-Plus). Copyright 2013 National Society of Professional Engineers, American Council of Engineering Companies, and American Society of Civil Engineers. All rights reserved. Page 6 of 7

20 IN WITNESS WHEREOF, Owner and Contractor have signed this Agreement. This Agreement will be effective on (which is the Effective Date of the Contract). OWNER: The City of Grand Forks, North Dakota By: Title: CONTRACTOR: Construction Engineers, Inc. By: Title: (If Contractor is a corporation, a partnership, or a joint venture, attach evidence of authority to sign.) Ulliman Schutte Construction, LLC By: Title: (If Contractor is a corporation, a partnership, or a joint venture, attach evidence of authority to sign.) Attest: Title: Address for giving notices: Attest: Title: Address for giving notices: (If Owner is a corporation, attach evidence of authority to sign. If Owner is a public body, attach evidence of authority to sign and resolution or other documents authorizing execution of this Agreement.) NOTE TO USER: Use in those states or other jurisdictions where applicable or required. EJCDC C-525, Agreement Between Owner and Contractor for Construction Contract (Cost-Plus). Copyright 2013 National Society of Professional Engineers, American Council of Engineering Companies, and American Society of Civil Engineers. All rights reserved. Page 7 of 7

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