MINUTES MONTEREY PENINSULA WATER AUTHORITY (MPRWA) TECHNICAL ADVISORY COMMITTEE (TAC) Special Meeting 3:00 PM, Thursday, May 23, 2013

MONTEREY PENINSULA WATER MANAGEMENT DISTRICT 5 HARRIS COURT MONTEREY, CALIFORNIA Members Present: Members Absent: Staff Present: CALL TO ORDER Chair Burnett called the meeting to order at 3:10 p.m. ROLL CALL PLEDGE OF ALLEGIANCE REPORTS FROM TAC MEMBERS Chair Burnett requested switching the order of the agenda items for those that were at the Governance Committee meeting preceding this meeting which discussed this item. TAC members agreed. Chair Burnett invited reports from TAC members and had no requests to speak. He then reported that Cal Am is continuing to look at a revised location for the test wells to reduce the concern over the snowy plover habitat and avoid conflict with the US Fish and Wildlife service. Congressman Sam Far, on behalf of the MPRWA, submitted a letter seeking guidance on finding a less controversial location. PUBLIC COMMENTS Chair Burnett invited public comments for items not on the agenda and had no requests to speak. AGENDA ITEMS 1. Review and Provide Direction Regarding Term Sheet for Power Sales Agreement from the Monterey Regional Waste Management District to Cal Am for Powering Desalination Facilities (Reichmuth) Action: Continued Review and Provide Recommendations Regarding Draft Request for Proposal for Design-Build Services for the Monterey Peninsula Water Supply Project (Cal Am Representative) Action: Discussed and Provided Recommendations Israel, Riley, Riedl, Burnett Huss, Narigi, Stoldt, Clerk, Executive Director, Legal Counsel

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MPRWA TAC Minutes

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Chair Burnett reported on the Governance Committee meeting which took up this item and indicated that this meeting was an opportunity for the TAC to provide comments to the Authority on the draft request for proposal, and if agreed, return to the Governance Committee to provide to Cal Am. He reported that his meeting was off schedule because of the tight turnaround time stipulated in the Governance Committee agreement. The final recommendations will be due on Tuesday, May 28, 2013 at 2:00 to the Governance Committee. The final RFP will be released to the public on June 17, 2013. Chari Burnett spoke to the analysis of the draft RFP conducted by SPI Consultants, at the Authority’s request. Copies were provided to the TAC and the public. He then reported on concerns that were raised during the Governance Committee meeting to request the TAC to weigh in on. Concerns were as follows: • • • • • Concern that the document has been made to be too prescriptive and does not allow room for design modifications for a design build RFP. Questioned if it is appropriate to equally weight the scores on the different size plants Should the facility be evaluated at a 20 or a 30 year NPV valuation Is evaluation criteria of 40% on technical merits and 60% on cost appropriate Discussion of the penalty for late delivery and inclusion of a bonus for early delivery

Eric Sabolsice spoke representing Cal Am and described how the RFP was developed; the expertise utilized to develop, and discussed the level of prescription to be able to do a valid comparison of the submissions. He then spoke to concerns expressed about being too prescriptive. The goal was to be able to compare the proposals but leave enough flexibility to use their experience and knowledge they have developed, and include cost savings. This will also be to enable a baseline comparison. He then answered questions from TAC members. Member Riedl spoke to concerns about limiting the amount of salt in the waste water, and comments in the document about adding additional chemicals to reduce corrosion the distribution system. Mr. Sabolsice acknowledged it will be a problem and is willing to entertain suggestions to balance the non-aggressive water and will share with the technical team. The water that will be traveling from the plant to the Seaside Basin will be corrosive. Water leaving the facility needs to be potable as well as not cause issues from the plant to the distribution system. Member Riley questioned how many firms or teams responded to the Request for Qualifications and how many will be allowed to submit for the RFP. Mr. Sabolsice responded that nine are being considered and expected to respond to RFQ, and staff hope the RFP yields five responses. Member Riley then questioned what the implications are if the Cease and Desist deadline is missed and if there is no penalty, there is no need for an incentive bonus. Chair Burnett clarified there is a penalty for delay in the RFP, but no bonus for earlier delivery but is encouraging early deliver as a way to petition good faith, and reduce the potential penalties opposed. Mr. Sabolsice responded that the document was written strategically to allow the bidders to present the best price and the best schedule, and from there a bonus could be determined. He also noted that the contract has provisions for delay not under the contractor’s control (such as permitting issues or legal stays) and companies may be compensated.

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MPRWA TAC Minutes

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Member Israel questioned the process for disposal of water that did not meet specifications. Mr. Sabolsice responded that it would be discharged as waste to the Monterey Regional Pollution Control Agency. Mr. Israel suggested it could be used for agricultural uses. He then spoke to the significant level of inversion occurring in the proposed location and the fact it is likely higher than the bidding firms are accustomed to. Because of the unique environment, this should be clarified for warranty provisions and design modifications. Legal Counsel Freeman agreed and urged Cal Am to include the uniqueness of the atmosphere as it will affect the warranty period. Dave Stoldt arrived at 4:46 p.m. Chair Burnett requested the TAC agree upon a list of recommendations to report on to the Authority directors for their meeting at 7:00 p.m. The TAC agreed to the below list of recommendations: • Support advocating for Net Present Value (NPV) valuation be based on 30 years, not 20 years. Recommend the document to be modified to allow more creativity in design and allow more consideration be given to creativity within the scoring criteria as well. Rate of corrosion and inversion layer in excess of other marine environments needs to be factored in Consideration of an early completion incentive or bonus. Recommendation would based on the CPUC and the CDO penalties.

Mr. Sabolsice agreed that Cal Am would reconsider and revising the document as a way to not stifle creativity. Member Riedl spoke again to the issue of salt management and the fact there is a local issue with too much salt in the waste water. If the Cal am project changed their process it would save a lot of money down stream in salt mitigation. ADJOURNMENT Executive Director Reichmuth requested that Item 1 that was moved to the last agenda item, be tabled until a future meeting and the TAC agreed. With no further business to come before the TAC, Chair Burnett adjourned the meeting at 5:23 p.m. Respectfully Submitted, Approved,

Lesley Milton, Committee Clerk

President MPRWA

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