AGENDA CAPTION:
Title
Consider approval of Resolution 2020-02R, approving the second extension of an agreement for operation and maintenance of the San Marcos Wastewater Treatment Plant with Operations Management International, Inc., now operating as Jacobs Engineering Group, Inc. for an additional five years, together with associated cost adjustments as provided in the original contract; authorizing the City Manager or his designee to execute the second extension on behalf of the City; and declaring an effective date.
Body
Meeting date: January 7, 2020
Department: Public Services - Water/Wastewater, Tom Taggart, Director (by Lynda Williams, Purchasing Manager)
Amount & Source of Funding
Funds Required: FY 2021 funds required - $2,868,131
Account Number: 22006335 52355 & 22006335 52340
Funds Available: Estimated FY 2021 funds available - $3,334,461
Account Name: WWTP O&M - OMI Contract & WWTP Power Cost - OMI Contract
Fiscal Note:
Prior Council Action: Initial contract approved October 1, 2005, first renewal approved February 3, 2015.
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Background Information:
On October 1, 2005 the City entered into a service contract with Operations Management International, Inc. (OMI), now Jacobs, for the operations and maintenance of the Wastewater Treatment Plant. The service contract’s initial term was for 10 years and allows renewal of two additional five-year terms. The contract was renewed for the first additional 5-year term in February 2015.
As part of Jacob’s request to exercise the second 5-year renewal option, they are proposing a 5% increase in the first-year base fee (FY 2021), an additional full-time employee to support continuing maintenance initiatives, and an increase in the “Guaranteed Maximum Chemical Utilization” of $110.88 to $143.88 per million gallons of treated wastewater. The “Guaranteed Maximum Chemical Utilization is a pass-through cost component of the contract in which the City pays for chemical costs up to the amount established in the contract. Any chemical costs above the Guaranteed Maximum Chemical Utilization amount are paid by Jacobs. This component provides incentive to keep chemical usage optimized to provide high quality treatment while maintaining costs. Jacobs has provided, and staff has reviewed, chemical usage and costs data to substantiate the request. Staff concurs the increase will provide a fair and reasonable reimbursement of the costs for chemicals.
Based on review of the facts as stated above, the successful performance in the operation of the Wastewater Treatment Facilities over the past 15 years and the positive integration of Jacobs in on-going projects, staff recommends approving the amendment and extending the contract for the second additional five-year term, until February 2025.
Council Committee, Board/Commission Action:
Approve contract extension and amendment
Alternatives:
Start search for alternate plant operator
Recommendation:
Staff recommends approval of the amendment to increase the annual amount as well as extend the contract until 2025.