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HomeMy WebLinkAbout25C - AGMT - STORMWATER STUDYREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: JULY 16, 2019 TITLE: APPROVE AN AMENDMENT TO THE AGREEMENT WITH STANTEC IN THE AMOUNT OF $45,620 TO CONDUCT A STORMWATER FUNDING FEASIBILITY STUDY, FOR A TOTAL AGREEMENT AMOUNT NOT TO EXCEED $230,620 (NONGENERAL FUND) (STRATEGIC PLAN NO. 6, 1H) CITY MAWAGER RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 11 Reading ❑ Ordinance on 2n' Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER Authorize the City Manager and Clerk of the Council to amend the Scope of Work for the agreement with Stantec which commenced on July 3, 2018 and is scheduled to terminate on July 2, 2021 with provision for two 1-year extensions, in order to conduct a stormwater funding feasibility study and increase the compensation by an amount not to exceed $45,620, for a total agreement amount not to exceed $230,620 in the Water Admin/Engineering fund, subject to non -substantive changes approved by the City Manager and City Attorney. DISCUSSION On July 3, 2018, at the conclusion of a competitive bid process, the City entered into an agreement with Stantec to perform a cost of service study for the water and sewer enterprises in an amount not to exceed $158,000. Their primary tasks were to create a financial plan for each enterprise, perform a cost -of -service analysis, and provide a recommended five-year rate structure for City Council consideration. On February 5, 2019, the City Council approved an amendment to expand the initial scope to include a capacity charge study, in an amount not to exceed $27,000, to evaluate charges assessed on new developments. Throughout the course of the studies, a need to assess the feasibility of providing stormwater funding to improve, expand, and maintain the City's flood protection and stormwater conveyance systems was identified. Currently the only funding available for these type of improvements exists via the General Fund and through Drainage Area Impact Fees, which are charges assessed on new developments for the construction of storm drainage systems. Drainage Area Impact funds take many years to build up and are insufficient to meet the City's storm drain improvement needs, as identified by the recent Stormwater Master Plan. 25C-1 Approve an Amendment to Agreement with Stantec to Include a Stormwater Funding Feasibility Study July 16, 2019 Page 2 Staff recommends that the existing agreement with Stantec be amended to expand their scope of work to include a stormwater funding feasibility study. Stantec will be able to provide this service within a cost-effective and expedient time frame due to work already performed for the cost of services studies. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's Infrastructure, Objective #1 (establish and assets), Strategy H (complete water/waste capture critical long-term capital needs). ENVIRONMENTAL IMPACT efforts to meet Goal #6 - Community Facilities & maintain a Community Investment Plan for all City water rate study to ensure adequate resources to There is no environmental impact associated with this action. FISCAL IMPACT Funds are budgeted and available in the Water Administration and Engineering Account (No. 06017645-62300) for expenditure in Fiscal Year 2019-20: Fiscal Year Accounting Unit — Account # Fund Description Accounting Unit, Account Description Amount Water Admin/Engineering, FY19-20 06017645-62300 Water Revenue Contract Services- $45,620 Professional AMENDMENT TOTAL: $45,620 Fuad S. �weiss, PE, PLS ExecutivgaDirector Public W ks Agency FSS/NS/RR Exhibit: 1. Amendment to Agreement APPROVED AS TO FUNDS AND ACCOUNTS: l/ Q-t-v - Kathryn Down , CPA Executive Director Finance && Management Services Agency 0- 25C-2 EXHIBIT 1 SECOND AMENDMENT TO AGREEMENT TO PERFORM COST OF SERVICE STUDY FOR WATER AND SEWER ENTERPRISES THIS SECOND AMENDMENT to the above -referenced agreement is entered into on July 16, 2019, by and between Stantec ("Consultant"), and the City of Santa Ana, a charter city and municipal corporation organized and existing under the Constitution and laws of the State of California ("City"). RECITALS A. The parties entered into Agreement No. A-2018-172, dated July 3, 2018, by which Consultant agreed to perform a cost of service study for the City's water and sewer enterprises ("Agreement"). B. On February 5, 2019, the parties entered into First Amendment No. A-2019-019, by which the Agreement was amended to include the performance of a capacity charge study and to increase the maximum expenditure under the Agreement to compensate for these additional services. C. The Agreement remains in effect through July 2, 2021, with provision for extension, and the parties now wish to further amend the Agreement to expand the scope of services and to increase the maximum expenditure under the Agreement to compensate for the additional services. The Parties therefore agree: 1. Section 1, Scope of Services, is amended to include the performance of a stormwater funding feasibility study, as described in Exhibit A. 2. Section 2.a., Compensation, is amended to increase the total sum to be expended under the Agreement by $45,620 to cover the cost of the stormwater funding feasibility study, as reflected on Exhibit A. 3. Except as modified by this Second Amendment, and all prior amendments, all terms and conditions of the Agreement shall remain in full force and effect. IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment to the Agreement on the date and year first written above. NORMA MITRE KRISTINE RIDGE Acting Clerk of the Council City Manager - signatures continue on next page - Page 1 of 2 EXHIBigC-3 APPROVED AS TO FORM SONIA R. CARVALHO City Attorney By: J084N M.FUNK Assistant City Attorney RECOMMENDED FOR APPROVAL FUAD S. SWEISS, PE, PLS Executive Director Public Works Agency CONSULTANT Name: —0,,, Title: 7r t r� Page 2 of 2 25C-4 EXHIBIT A 5ta11teC HILCONSUL71NO D March 25, 2019 City of Santa Ana Attn: Rudy Roses Public Works Agency, City Corporation Yard 215 South Center Avenue, Building A Santa Ana CA 92703 Re: Stormwater Funding Feasibility Study Dear Mr. Rosas, On behalf of Stantec Consulting and Hildebrand Consulting, we are pleased to submit the attached scope of work and fee to conduct a Stormwater Funding Feasibility Study for the City of Santa Ana. The purpose of this project is threefold: (1) develop an understanding of the City's stormwater program financial requirements, (2) evaluate the City's funding options to meet the stormwater program's needs, and (3) work with City staff to develop an action plan for seeking the funding necessary to sustain the desired levels of service from the stormwater program. The City currently funds a portion of its stormwater program indirectly through water and sewer rates. The feasibility of sustaining this funding source or creating a new funding source will require further exploration. Obtaining new funding for stormwater utilities in California is notoriously difficult compared to water, wastewater, and solid waste utilities since stormwater services are not designated as a °property -related" service in Proposition 218 (California Constitution, Article XIIID). As such, increasing or creating new stormwater feesttaxes generally require some form of voter approval. While the recently adopted Senate Bill 231 (SB 231) has promised to make stormwater funding easier by amending the Government Code Section 52750 to define the term 'sewer" to include stormwater utilities, this approach is legally tenuous, and the use of this approach has no known precedent at this time. Case in point, in spite of the passage of SB 231, Los Angeles County recently opted to use a parcel tax to fund their Stormwater program (see Measure W) rather than 'test the waters" of (the ostensibly easier approach of) assuming that stormwater services are 'property -related" that are subject to Proposition 218. As such, once we have defined the City's stormwater program and anticipated future funding requirements, we will explore the City's specific circumstances with respect to existing revenue sources and utility operations to develop Ideas regarding potential alternative funding sources. Paged of 4 25C-5 Stantec Consulting Proposed Scope of Work Stormwater Funding Feasibility Study Proposal Based on our understanding of the City's requested services, we propose to complete the following tasks. Task 1 — Project Initiation & Data Collection To initialize the study, we will submit a data request to the City. Shortly thereafter, we will conduct a Project Kickoff conference call with staff to: • Discuss key issues, roles and responsibilities • Confirm study objectives and further explore project drivers • Confirm data requirements and discuss the data already received • Finalize the project schedule, including key milestone dates and deliverables Prior to the Kickoff conference call, we will provide an initial data request list. We may already have some of this information from our existing work. Upon receipt we will review all data received to confirm its completeness. • Kickoff Meeting Task 2. Stormwaler Program [valuation & Financial Plan In Task 2 we will develop an understanding the City's existing and planned stormwater program and, among other things, how @ relates to the rest of the City's utility operations. As part of this task, our team will evaluate the stormwater program from an organizational perspective in order to seek opportunities that may better align and integrate stormwater management with any other related utility services provided by the City. This organizational alignment also may shed light on intra-City funding opportunities. We will be seeking to understand the stormwater program's current and planned level of maintenance activities and capital spending. Known historic capital and operating expenses associated with stormwater activities will be used to extrapolate spending projections over the long term, in order to better understand long-term funding requirements. We will also gather information on all current and projected revenue sources for the stormwater program. We will review prior studies, master plan documents, capital plans, and service agreements (as applicable). We will also evaluate the availability of data needed for the development of equitable stormwater fees, such as GIS data sets of impervious area. Follow-up calls with staff will be made to ensure full understanding of the reviewed information. Task 3 will also be the bulk of our financial analysis, during which we will Identify funding requirements of the stormwater operations and capital spending. We will develop a 10-year financial plan for the stormwater program which will include: • Evaluation of historic costs; • Projection of expenses using cost escalation factors; • Evaluation of historic revenues including arrangements with other city programs and general fund transfers; • Capital spending scenarios; and • Development of operating, capital, and financial reserve policies/goals. The financial plan will consider the viability of obtaining loans (state revolving loan, bonds, etc.), transfers (general fund or other city departments) and grants, as well as scenarios that explore the financial implications of a new Pagw2 of 4 25C-6 Stantec Consulting Stormwater Funding Feasibility Study Proposal rate revenue stream (using fees, taxes, or other mechanisms that will be explored in Task 3). Our team will work interactively with City staff to validate our financial planning findings during a Financial Planning Workshop. 'financial Planning Workshop 'reliminary revenue requirement results as presented in workshop tandouts Task 3. Stormwater Enlorprise Funding Assessment In Task 3 our team will assess the stormwater funding options available to the City and work with staff to evaluate the best path forward given the availability of data, ease of implementation, and what is most appropriate given the needs and characteristics of the City. As previously discussed, there is no 'obvious' solution for stormwater funding. Some approaches are easier to Implement but perhaps subject to legal challenges. Other approaches are legally robust but less certain to succeed (such as passing a stormwater tax). Addressing stormwater funding for a city first requires an assessment of the city's specific stormwater program and how it affects (and is affected by) other city services. In some Instances, innovative funding solutions (or partial solutions) can be found through "out of the box' thinking. Examples include arrangements with the street sweeping program to recognize the impact of street trash on total maximum daily loads (TMDLs); water conservation fees that provide funding for reducing irrigated runoff; and Low Impact Development (LID) ordinances fees for developments in which permeable surfaces are replaced with non - permeable surfaces. To this end, our team will develop a whitepaper that will address multiple feasible stormwater funding options, which may Include interfund transfers, property taxes; utility/user fees; special assessments; special taxes, and development fees. As part of this effort, our team will also research the stormwater funding mechanisms utilized by neighboring communities and the rate structure utilized to fund their stormwater programs. A draft Stormwater Funding White Paper will be submitted to the City for review and comment, then will be finalized based on City input. r Meetings Conference calls, as needed Task, 3 Deliverables Draft and Final Stormwater Funding White Paper Task 4. Stonnwater Funding Implementation I'lon Following Task 3, the City will decide which stormwater funding strategy to pursue. Based on this decision, our team will develop an implementation plan for executing the funding strategy. This implementation plan will include a Road Map which will define the process that needs to be followed and milestone dates associated with those steps. Given the wide range of possibilities for the stormwater funding, the scope of work and budget for Task 4 will be developed at a later time. For example, one funding approach may require a cost -of -service analysis and protest hearing process, while another may require a tax initiative and vote campaign. Task 4 Meetings & Deliverables Pager3 of 4 25C-7 Stantec Consulting Stormwater Funding Feasibility Study Proposal Price Proposal We propose to complete Tasks 1 through Task 3 on a time and materials basis as detailed in the table below. Invoices will be sent monthly. 1 Project Initiation & Data Collection 5 10 10 2 27 $5,96! 2 Stormwater Program Evaluation & Financial Plan 14 42 48 3 107 $23.341 3 Stormwater Enterprise Funding Assessment 8 32 26 2 68 $15,114 4 Stormwater Funding Implementation Plan (to be determined) Phase I Total: 27 84 84 7 202 $44,420 Direct Expenses: $1,200 Project Team We propose to staff this project with the same team as the current 2019 Water, Recycled Water and Sewer Rate Study project. Mark Hildebrand (of Hildebrand Consulting) will be the Project Manager with Matthew Freiberg as the Lead Consultant. David Hyder will serve as the Project Director in an advisory and a quality control capacity. Stantec has additional staffing resources should the need arise. Please let us know if you have any questions or comments regarding this proposal. We appreciate the opportunity to be of continued service to the City. Sincerely, David Hyder Principal, Financial Services Signing Authority Page4 of 4 Mark Hildebrand Hildebrand Consulting, LLC Project Manager 25C-8