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Home My WebLink About05-13-16_AgendaPkt Metropolitan Wastewater Management Commission SPRINGFIELD i OREGON partners in wastewater management MWMC MEETING AGENDA Friday, May 13, 2016 @ 7:30 a.m. City of Springfield City Hall, Library Meeting Room 225 Fifth St., Springfield, OR 97477 Please Turn Off Cell Phones 7:30-7:35 I. ROLL CALL 7:35-7:40 II. CONSENT CALENDAR a. MWMC 4/08/16 Meeting Minutes Action Requested: By motion, approve the Consent Calendar 7:40 - 7:45 III. PUBLIC COMMENT 7:45 — 7:50 IV. REVENUE BONDS UPDATE . . . . . . . . . . . . . Katherine Bishop/Meg Allocco Action Requested: Information Only 7:50 — 8:00 V. FY 2015-16 SUPPLEMENTAL BUDGET#3 . . . . . . . . . . . . . . . Meg Allocco Action Requested: By motion, approve Resolution 16-08 8:00 — 8:15 VI. PROCUREMENT RULES UPDATE . . . . . . . . . . . . . . . . . . . . . .K.C. Huffman Action Requested: By motion, approve Resolution 16-09 8:15 — 8:30 VII. COGENERATION SYSTEM REPLACEMENT. . .Matt Stouder/Greg Watkins Action Requested: Information Only 8:30 — 8:40 VIII. PUBLIC INFORMATION PROGRAM UPDATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Loralyn Spiro/Amber Fossen Action Requested: Information Only 8:40 — 8:55 IX. LANDSCAPE MAINTENANCE — TRANSITION TO OPERATIONS-:-- UPDATE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . John Bonham Action Requested: Information Only 8:55 — 9:15 X. BUSINESS FROM COMMISSION, GENERAL MANAGER, AND WASTEWATER DIRECTOR 9:15 XI. ADJOURNMENT THE FULL PACKET IS POSTED ON THE WEBSITE www.m wmcpartners.orp AGENDA ITEM Ila. Metropolitan Wastewater Management Commission SPRINGFIELD s OREGON partners in wastewater management MWMC MEETING MINUTES Friday, April 8, 2016 @ 7.30 a.m. City of Springfield City Hall, Library Meeting Room 225 Fifth St., Springfield, OR 97477 President Pishioneri opened the meeting at 7:30 a.m. Roll call was taken by Kevin Kraaz. ROLL CALL Commissioners Present: George Brown, Doug Keeler (7:33), Walt Meyer, Joe Pishioneri and Faye Stewart Absent: Bill Inge and Hilary Loud Staff in Attendance: Meg Allocco, Jolynn Barker, Katherine Bishop, Michelle Cahill, Judy Castleman, Amber Fossen, Randy Gray, John Huberd, K.C. Huffman (attorney), Tonja Kling, Kevin Kraaz, Shawn Krueger, Troy McAllister, Todd Miller, Michelle Miranda, Josh Newman, Anette Spickard, Loralyn Spiro, Matt Stouder, Mark Van Eeckhout, and Greg Watkins STRATEGIC PLANNING — STAFF SURVEY RESULTS Loralyn Spiro and Amber Fossen, Communication Coordinators, made the staff presentation. Ms. Spiro stated that the survey was sent to Regional Wastewater Program staff that work on behalf of the MWMC. The survey was open from January 25 through February 12, 2016 and sent via email using Survey Monkey; hard copies were made available to Eugene staff. The response was great, 71% responded (industry standard is 20%); 25 responses via Survey Monkey and 39 via hard copies (64 total). The survey had a total of 15 questions. Ms. Fossen said that 80% of the respondents were Eugene staff and 20% were Springfield staff. The average number of years that staff has worked on behalf of the MWMC was 11.3 years; three employees had as high as 32 years. The chief areas of interest were water quality at 70%, facilities and operations at 67%, and leadership and decision making at 37.5%. In comparison, the Commission gave their chief areas of interest as public communications at 100%, water quality at 86%, and budget, leader and decision making at 71.5%. For the staff's survey, the "other" category had two themes emerge — environment and administration. Ms. Fossen stated the core Mission Statement currently is "to protect public health, safety, and environment by providing high quality wastewater management services to the Eugene/ Springfield metropolitan area." When staff was asked which best describes their view of the MWMC mission statement, 77% said the current mission statement reflects their view of the MWMC core purpose, 18% said the current mission statement would reflect their view of the MWMC Meeting Minutes April 8, 2016 Page 2 of 12 MWMC core purpose if modified slightly, and 2% said the current mission statement should be replaced. When asked what they would want to change, three themes emerged from suggested words or language — community, sustainable, and environment. Ms. Fossen stated that a Vision Statement is an aspirational description of what an organization would like to achieve or accomplish. The survey asked staff to pick five words/statements that reflect what they would like the MWMC to achieve in the future. The results were water quality at 59%, fiscally responsible at 57%, professional at 48%, efficient at 46%, and sustainable at 38%. Ms. Spiro stated that a list of values tells customers and employees where the organization stands and what it believes in. The survey asked staff to pick five words/statements that they believe drive the MWMC most. The major themes were environmental stewardship at 70%, regulatory compliance at 60%, quality service delivery at 41%, "public health is number one" at 40%, and "excellence in our work" at 33%. When staff was asked about the MWMC's current identity, Ms. Spiro stated that three high level themes emerged; "hidden under the radar", "not known but doing a good job", and "a mystery." These were very similar answers as what the Commission gave on their survey. When asked how would you rate the need to rename the organization, the average rating for the need was 2.65 at not very important on the scale 1-7 (1 = not important and 7 = very important). When asked why, the high-level theme was that they view it as unnecessary to change mostly due to the cost, time, and effort that would be needed to implement. Also notable is that some staff feels the name is accurate and established. In comparison, the Commission answered the same question with the average at 4. The high-level theme from the Commission's survey was the name could be changed but do people care. When staff was asked to rate the need to shape the MWMC's identity, the average rating was 3.59 putting it neutral on the scale (1-7). When asked why it needed to be shaped, there were several themes from the responses. The themes are general support and acknowledgement of the need; the need to improve awareness both internally and externally; gaps between agencies for knowledge of the MWMC and partnership; we are in good shape and doing what we need to be doing now; and the need to foster support from the public in the future for changes in behaviors. In comparison, 5.43 was the average rating when the Commission members answered the same question. The reason why was it would provide recognition to create a greater visibility to build community support for current and future endeavors. Ms. Fossen stated for strategic direction, there was an open ended question. A couple of high- level themes emerged from those responses. Some staff would like opportunities to learn more about the Commission. She and Ms. Spiro discussed this and thought that a simple way to get staff connected to the Commission is some level of recognition for years of service. The other theme was general support for community engagement and the value for it. Ms. Fossen stated the Commission had requested to get input from staff about the Commission and the job that they are doing. Staff was asked how often they interact with the Commission in a year. Staff that either doesn't interact with the Commission or only interacts 1 to 2 times per year was 69%; 17% of staff interacts with the Commission 3 to 6 times per year; and 14% of staff reported more than 7 times per year. When asked if the current Commission has the best interest of the MWMC, community, and staff in mind when making decisions, MWMC Meeting Minutes April 8, 2016 Page 3 of 12 81.5% said yes. There was 12% that had no opinion. In summary, though there is a general consensus the Commission is doing a good job, there is a lack of knowledge and connectivity between the Commission and staff. Ms. Spiro stated staff was asked for overall suggestions for the Commission. High-level themes that emerged are the following: general appreciation for the Commission, continue to do what's been working and don't change for the sake of change, and opportunities for connecting with staff and community. In the comments, staff gave the following examples of specific ways to have connectivity: • Rotate the meetings to different locations from time to time • Take a field trip together to see the operations in action • Have an annual Question and Answer/Suggestions meeting with all MWMC employees • Use a microphone at the Commission meetings each month so it is easier for the audience to hear what is being said. Ms. Spiro stated that for the next steps, staff recommends continuing the Commission's work on strategic planning; staff prepares drafts of mission, vision, and value statements based on results from both the Commission and staff surveys; and present draft documents at the June Commission meeting for consideration and discussion. Commissioner Keeler thanked Ms. Fossen and Ms. Spiro, stating their presentation was very thorough, he was impressed with the participation, and thought it was very insightful for President Pishioneri to request the feedback. He stated he is influenced by the feedback— if it isn't broken why fix it and feels that it was a good exercise to reevaluate our values and our messages. Commissioner Brown thanked staff for participating. He was thinking about the comments made on the MWMC's current identity, "hidden under the radar", "not known but doing a good job", and "a mystery." He said it is kind of like the comment made "if it isn't broken don't fix it"; people don't think about it because everything works. He stated that there is almost never public comment at the MWMC meetings and wonders if it is too early (7:30 AM) to expect the public to show up. Commissioner Stewart appreciates the comments on the meeting times. He said he has been on and off the Commission for the last twelve years. Early on when the MWMC had some really big changes like SDC rates because of updating the plant, the public hearings were held in the evenings and there was lots of public comment. He thinks that maybe we should have some different meeting times occasionally. He believes anyway the Commission can connect with the employees is important and likes the recognition idea. He also likes the suggestion to move around to different facilities and to go on tours with staff. He doesn't have a problem with the MWMC's name and logo. He does think it is important to have an up-to-date strategic plan for the organization. Commissioner Meyer said that having the public recognize the MWMC's name, know what it is, or having a new logo may not be all that important but he does believe that it is important that we do our job very well and to always look for ways to improve. He feels that public outreach is very important. Being able to reach more of our community's students, giving them a tour of the facilities, and help them understand wastewater treatment and water quality is critical because they are the future. He said that he gets to participate in ACWA and when he MWMC Meeting Minutes April 8, 2016 Page 4 of 12 does, he gets to see the staff from our Cities in action. He said that the staff is amazing — they stand out as exemplary staff. He is really proud of the employees and thinks that things the Commission can do to improve the relationship is important so that the staff will see that they are appreciated. He agrees with trying some of the examples given. He also believes that the MWMC should have a very clear mission. President Pishioneri appreciates the amount of participations and honesty on the survey. He is not stuck on changing the brand, he agrees with staff on that. He thinks the community outreach is very important and that there is nothing wrong in telling the public what a good job we are doing. If the public knows we are doing a very good job, it will help with understanding the rates (that they are getting a good bang for their buck). As far as the meetings, it doesn't matter about the time of meeting, because if a person is fired up they will be at the meeting. He said there are a lot of public comments available at both the cities' Council meetings and the Lane County Board of Commissioners' meetings. In regards to projection at meetings, he mentioned possibly using Springfield's City Council Chamber which has microphones, and a projector. As far as Commission contact with staff, he thinks it is really important. He would like to go on some "ride-alongs" because you can learn quite a bit by spending time with someone at their job. Tours are great too. Commissioner Keeler agrees that knowing the staff better is a good thing. He asked Mark Van Eeckhout if in the design for the O&M building there is public space where the Commissioners could stop by out at the plant. Mr. Van Eeckhout said that he will be showing some layouts later in the meeting and it could be discussed then. President Pishioneri asked if the staff has an annual barbeques. Michelle Cahill, Wastewater Director, answered that they have an annual employee recognition and safety event and that different work sections may have barbeques. President Pishioneri said that it may be an opportunity to share — if they would like to have the Commission present to send the word. Commissioner Keeler said that the two potable water suppliers in Springfield host customer appreciation days. So if there was an organization-wide event, it could be extended to the public. Ms. Cahill reminded the Commission that three years ago we had our 30-year celebration. We had a couple of open houses, one during the day on a weekend and one during the week in the evening. Only 10 people showed up at each of those events. President Pishioneri stated that the Sheriff's office has an annual staff and volunteer appreciation barbeque and about 300 show up. He thinks it depends on how it is put out there and maybe even the environment. Someone may not want to go to where they work for the day; they may want to go to an off-site area that is pleasant for their whole family. Matt Stouder, MWMC General Manager, stated he appreciated the Commission's feedback. Next month Ms. Fossen and Ms. Spiro will be giving a public information update. They will be coming back in June with the draft mission and values statements. He said he heard support from the Commission for the Communication Plan so staff will be moving forward with imaging shaping and communication. He asked the Commission about the name change. Commissioner Keeler replied that he is fine with working on the things that Mr. Stouder just mentioned and slow down on branding. Commissioner Brown said that he thinks the name is accurate but people don't know much about us. He said the MWMC is a great example of regional cooperation and planning. President Pishioneri said he was okay with slowing branding down. Commissioner Stewart said he was okay with that too. MWMC Meeting Minutes April 8, 2016 Page 5 of 12 CONSENT CALENDAR a. MWMC 3/11/16 Meeting Minutes MOTION: IT WAS MOVED BY COMMISSIONER STEWART TO APPROVE THE CONSENT CALENDAR. THE MOTION WAS SECONDED BY COMMISSIONER MEYER. THE MOTION PASSED UNANIMOUSLY 5/0. PUBLIC COMMENT There was no public comment. FY 2016-17 USER RATES, PUBLIC HEARING, AND ADOPTION Tonja Kling, ESD Management Analyst, stated that the purpose of the presentation was to hold two public hearings — one to adopt user rates and one to adopt the MWMC budget for FY 2016-17. The public hearing notice was published in the Register Guard on March 31 and since that time the budget documents and rates have been available for public review at both the front office and on the MWMC's website. The budget will be presented to the individual agencies in May for ratifications; on May 2nd at Springfield City Council, May 9th at Eugene City Council, and May 17th at Lane County Board of Commissioners and then back to the MWMC on June 10th for final adoption. The adopted Capital Budget amount is $36.9M and includes about $30.2M in carryover funds for projects that are currently in progress. The proposed budget plan includes an increase of 2% or about $351,000 when compared to prior year. Actual expenses at year-end are less. When looking back at the operating budget trend and comparing the proposed FY 2016-17 budget to the FY 2012-13 budget, the recent 4 years combined reflect a 9.4% increase resulting in an average annual budget increase of 2.3%. Ms. Kling reported there is a slight decrease in FTE due to reallocating staff time to the regional program. In terms of staffing, there is a 2% increase due to changes in salaries and employee related benefits. Materials and services remain close to level and capital outlay reflects fleet additions that are one time in nature. Katherine Bishop, ESD Program Manager, said the proposed rate change for FY 2016-17 is 2% effective July 1, 2016. The rate change would amount to an increase of $0.49 per month in an average residential household. The rate change would enable a transfer of $11.3M into the Capital Reserve to begin replenishing the reserve following the payoff and pay down of the Revenue Bonds. Ms. Bishop requested a public hearing and adoption of rates through Resolution 16-06. RESOLUTION 16-06: IN THE MATTER OF THE FY 2016-17 MWMC REGIONAL WASTEWATER SCHEDULE OF USER AND SEPTAGE CHARGES AND RECOMMENDING THEM TO THE GOVERNING BODIES MWMC Meeting Minutes April 8, 2016 Page 6 of 12 President Pishioneri opened the public hearing. There was no public comment. President Pishioneri closed the public hearing. MOTION: IT WAS MOVED BY COMMISSIONER MEYER WITH A SECOND BY COMMISSIONER STEWART TO APPROVE RESOLUTION 16-06. THE MOTION PASSED WITH A VOTE OF 5 FOR AND 0 AGAINST (2 absent: Inge, Loud). FY 2016-17 REGIONAL WASTEWATER PROGRAM BUDGET & CAPITAL BUDGET IMPROVEMENTS PROGRAM, PUBLIC HEARING, AND ADOPTION Ms. Bishop requested a public hearing and adoption of the regional wastewater budget through Resolution 16-07. RESOLUTION 16-07: IN THE MATTER OF ADOPTING THE FY 2016-17 MWMC REGIONAL WASTEWATER PROGRAM BUDGET AND CAPITAL IMPROVEMENTS PROGRAM AND RECOMMENDING THEM TO THE GOVERNING BODIES President Pishioneri opened the public hearing. There was no public comment. President Pishioneri closed the public hearing. MOTION: IT WAS MOVED BY COMMISSIONER KEELER WITH A SECOND BY COMMISSIONER STEWART TO APPROVE RESOLUTION 16-07. THE MOTION PASSED WITH A VOTE OF 5 FOR AND 0 AGAINST (2 absent: Inge, Loud). OPERATIONS AND MAINTENANCE BUILDING IMPROVEMENTS UPDATE Mark Van Eeckhout, Civil Engineer, gave an update on the Operations and Maintenance (O&M) Building Improvements Project (BIP). The O&M BIP was initiated in July 2014 and a contract was awarded to MWA Architects in November 2014. MWA presented three potential alternatives to the MWMC during the June 5, 2015 Commission meeting. Alternative 2 was selected and included upgrades and expansion of the Maintenance building, including additional locker and lunch/break room space. It included upgrades and expansion to the Administrative/Operations building, including expanded conference space, new Operations console space, and new lunch/break room. Another factor driving the project was the need to remove the Industrial Source Control (ISC) trailer where pretreatment staff and a couple of analysts reside. An upgraded Water Quality Lab is part of Alternative 2 as well. In November 2015 the layouts were discussed with all the WPCF supervisors. The 50% design package was ready in February 2016, was presented to staff and comments were received. The comment resolutions have been completed and will be included in the 90% design. Mr. Van Eeckhout stated that he continues to provide updates on the O&M project at WPCF staff meetings as it will impact staff greatly over the next several years. Sequencing of the project is being discussed because all three buildings can't be worked on at the same time given the operational requirements of the plant. Mr. Van Eeckhout presented renderings of the buildings and layouts for each building. He said originally the Maintenance building addition was going to be built to the east instead of south. However, during design, maintenance staff pointed out that it would be difficult for them to get MWMC Meeting Minutes April 8, 2016 Page 7 of 12 large equipment into the High Bay if it was built at that location. Therefore, the addition is proposed to be moved to the south. This move will result in the need to move existing process pipes, which has resulted in the projected construction cost to increase. Architectural Cost Consultants (ACC), a subcontractor to MWA acting as a third party, completed construction estimates on the 50% design package. ACC found that the construction estimates have increased about $1.5M over what was originally budgeted and estimated at the conceptual phase. The soft costs (design, project management, legal, and other things that are necessary to support a project) will likely increase as well and are currently being evaluated. Key factors driving the $1.5M cost increase are the following: • Back-up generator— Currently the lab has two power feeds from EWEB and initially it was thought this would be enough to provide the necessary backup power for the new lab. Subconsultant Glumac reported the way the backup generator is currently configured does not meet code. Glumac is proposing to put a fixed new generator to back-up the Water Quality Lab as well as the Operations portion of the Administrative building. • Additional utility work— The additional utility work to the south of the Maintenance building addition due to the switch in direction to accommodate large equipment. • Increased lab size — due to need. • Lab fume hoods— The consultant has informed staff that a significant portion of the fume hoods are in need of replacement, which was not anticipated in earlier design. Ideas for scope reduction were discussed to mitigate cost increases, including the following: • Eliminate proposed center Administrative conference rooms or bid it as an additive alternate • Reconfigure some office space to cubicles (instead of hard walls) • Consolidate Operations and Administrative/Lab restrooms/locker rooms (there are positives and negatives to this and it is not a significant savings) • Minimize lobby addition to the west of the entrance • Eliminate clearstories and replace with flat roof with skylights Next Steps are to: • Continue forward with the 90% design as contracted with MWA. There are going to be some changes along the way since plans are still only at the 50% design phase. • Finalize 50% design comment resolution with 90% design package • Initiate commissioning contract — in the process of looking at a third party commissioning agent, it will come before the Commission sometime in the next couple of months • Move forward with the design (90% and 100% with design review) • Plan temporary staff housing and phasing of the project • Bid construction contract — probably going out for bid in midwinter next year • Phase construction of project Commissioner Keeler asked what is meant by "commissioning contract." Mr. Van Eeckhout explained that this is the commissioning of the buildings. A third party is used to complete MWMC Meeting Minutes April 8, 2016 Page 8 of 12 items like testing and balancing the HVAC. The plan was to do an enhanced commissioning of the lab and a standard commissioning of the remainder of the buildings. Glumac actually does commissioning but standard practice is that someone outside of the mechanical, electrical, plumbing consultant does it. Commissioner Keeler asked if changing the maintenance building direction from east to south is the largest portion of the cost increase. He wondered if the equipment actually doesn't fit with that configuration or if staff may just need a spotter to get the large equipment into the High Bay. Mr. Van Eeckhout replied that the approximate cost increase for this is between $300,000 to $400,000. Commissioner Keeler said that since it was less than 1/3 the cost increase to relocate the utilities, it may be best to proceed with this design. Commissioner Brown asked what the cost of the backup generator is. Mr. Van Eeckhout said that the backup generator was based on a cost per kW hour and is estimated at $350,000, along with contingencies. Commissioner Brown confirmed that it was not anticipated. Mr. Van Eeckhout agreed. President Pishioneri stated that he is disappointed in the increase. He asked how much the list of options for reducing the cost increase added up to in savings. Mr. Van Eeckhout stated that the consultant said they added up to roughly a million dollars. President Pishioneri replied that it would cover 2/3 of the overrun. Mr. Van Eeckhout said the $1.5M increase is based on the construction budget and there will likely be increases in costs with design and project management that are being investigated. President Pishioneri said he would like to know what Plan B is; he is not happy with moving forward with that kind of overrun. He would like to know what the other Commissioners think. Commissioner Stewart said this increase is an estimate from one company. From his experience with the MWMC, we are very conservative with our cost estimates. He thinks the Commission should see where the bids come in at. He added that having said that, we are at a very different place than we were eight years ago because back then the contractors were more aggressively pursuing work. Now they are slammed with work. He said he appreciates the heads-up but will save his concern until the project is further along to decide if it is a go or no go. Mr. Van Eeckhout said he appreciated Commissioner Stewart's remarks and wanted to make the Commission aware that the bidding climate is not what it was five years ago. He added that recent projects for other large buildings in the region (schools for example) have been coming in over budget. His hope is to continue to look for other places in the project to bring the costs down, while remaining cautious in doing so. Commissioner Stewart asked if the project was going to be multi-year, he thought we were going to do phased components. Mr. Van Eeckhout said the project is one contract, but construction will be phased over several years. Commissioner Stewart added there is a possibility that phasing the project over time may be advantageous to the MWMC. Mr. Van Eeckhout said that he thinks the best course forward right now is to proceed with the 90% design as planned, however if factors change and/or it becomes more expensive, we can go back and redesign. MWMC Meeting Minutes April 8, 2016 Page 9 of 12 Commissioner Keeler recommended cubicles rather than offices because the cubicle arrangement facilitates communication among staff. Although you still need conference rooms to have those confidential conversations. Commissioner Meyer said that while he is interested in keeping the costs down he also thinks this is the first time in a long time that we are making an improvement to the lab and the facility. He believes the costs are much more influenced by the bidding climate than they are by how many square feet or if we need to add an additional generator, etc. The bidding climate has a huge impact on the overall costs. He is inclined to not want to start chipping away at the facility right now. He is inclined to wait to see how the bids come in with the understanding that it is better to do it right now than to come back and try to retrofit it. He believes the best chance at a good bidding climate will be to put the project out to bid in the early winter because that is when the contractors are looking for work for the following year. Mr. Van Eeckhout agreed that if a contractor can line up three years of work that they know is dependable they are more likely to bid the work aggressively. K.C. Huffman, MWMC's Legal Advisor, said that if the bids came in substantially higher than what the Commission wanted, we have the opportunity to pull it off the table. We don't have to move forward. Mr. Van Eeckhout said that by keeping the three buildings separate as chosen in Alternative 2 it allows us some flexibility, if we have some major overruns we can choose to go ahead and do certain scope items and not to do others. Mr. Stouder said that we are positioned pretty well right now. He has some concerns about the overall capital program and how this might come in as a bid. However, next month the co- generation project will be discussed and he is hoping it will impact this project positively. He added that what we are doing with our 2006 and 2008 Revenue Bonds should be a positive impact. Looking at the program overall, we are moving in a positive direction. President Pishioneri said that he might not be happy about the price but Mr. Van Eeckhout is doing a great job and he agrees with other Commissioners that we should move forward with the design. TEMPERATURE COMPLIANCE REGULATORY STATUS UPDATE Todd Miller, Environmental Management Analyst discussed the status of temperature regulations in Oregon and potentially facing the MWMC. What's New: The DEQ adopted in late 2015 trading rules and just recently adopted revisions to the Trading Internal Management Directive (IMD) which is what the DEQ permit writers use when writing permits. There is a biological opinion (BiOp) (more about this later). The Willamette Alliance is a new opportunity that the MWMC is partnering on with ACWA and contributing to a study to look at collective permitee compliance. What's Old: The ongoing permit backlog at the DEQ, the MWMC's administrative extended permit, and the fact that the TMDL is yet to be revised. MWMC Meeting Minutes April 8, 2016 Page 10 of 12 Overview of Timelines Permit Renewal: In 2002 the new temperature standard based on fish biology for Oregon was adopted. The MWMC's current permit is based on the 1996 standard and staff has been waiting for the 2002 standard to be implemented into our permit. In 2007 when our permit was due to be renewed, the DEQ was experiencing a permit backlog and the MWMC's permit has been in administrative extension since then. In 2012, the DEQ deferred permit renewals that were affected by the TMDL. Temperature TMDL: In 2006, the Willamette TMDL was adopted and is what gave the MWMC a projected waste load allocation of 93 MKcal/day. In 2009 the DEQ agreed to revise the TMDL starting 2013; that process still has not happened. In 2012, the Natural Conditions Criterion (natural thermal potential) was disallowed. Water Quality Trading: In 2003 the EPA Water Quality (WQ) trading guidelines came out. In 2009, the first IMD for WQ trading was published. In 2012, the MWMC started its first riparian sponsorship pilot projects. Then in 2015 WQ trading rules were revised and in 2016 the Trading IMD was updated. TMDL Elements Status. The 2002 Fish Use Designation — Oregon Standards, provides biological numeric criteria based on the cold water standards for protecting salmon. We have a 20°C migration standard, 18°C for spawning, and 13°C for rearing — depending on the time of year and section of the river. The Natural Conditions Criterion (NCC) was invalidated — so we are looking at the numeric criteria and how the DEQ will use that to determine how much thermal load availability there is in the river. Then there is the BiOp which was hanging out there after the invalidation of the NCC. The two agencies, US Fish and Wildlife Service (FWS) and Natural Marine Fishery Service (NMFS), together have the biological jurisdiction over fresh water and salt water environments. Since salmon are in both, each of these services have a role. Late last year the NMFS put out a BiOp which basically upheld the 2002 Standards as protective of the salmon ecology. There is a major caveat, the 20°C standard for migration is not considered protective enough unless there are cold water refugia and they are adequately protected. That really impacts the lower Willamette but can have a ripple effect for the MWMC upstream. The application of numeric standards is the basis at this point, in the absence of having a revision to the TMDL. DEQ is pointing us towards a point source mixing zone, looking at maximum increase of 0.3°C based on the Human Use Allowance (HUA), it gives much less capacity for thermal loading for the MWMC. BiOp and Cold Water Refugia Discussion: The salmon migration is not protected at 20°C without cold water refugia. It mainly impacts the lower Willamette (downstream of Albany). All of the Willamette is considered migratory for salmon. The Eugene region has the overlap of rearing (18°C) which trumps the 20°C. Now the DEQ has a 3-year timeframe that they are mandated to develop and implement a plan to protect these cold-water refugia by late 2018. This is important for the Willamette Alliance collaborative for larger scale river habitat restoration; ACWA is starting on a feasibility study to answer three questions. 1) What is the regulatory feasibility given the regulatory structure? 2) What is the organizational structure of the whole Willamette Alliance — how does it function, how does it work, who reports to the DEQ, and how do you get the credits? 3) What is the ecological system framework? ACWA has received a grant to work on the first question of regulatory feasibility. MWMC Meeting Minutes April 8, 2016 Page 11 of 12 Commissioner Stewart stated that he is aware of future projects at the Mount Pisgah area to continue restoration efforts like the Nature Conservancy lands there, and suggests staff look into joining those projects per the Willamette Alliance concept. Mr. Miller explained that the WQ Trading rules have a restriction on projects that are tied to public conservation dollars. There is one side that is arguing that you can't double dip — meaning you can't have public conservation dollars dedicated to restoring these areas and then get regulatory credits for it. But there are those types of partnerships that we can leverage even more by having a municipality come and provide even more ecological uplift. It is still unclear what impacts the rule prohibition will have on providing multiple-funding source flexibility. Water Quality Trading rules require a trading plan to be adopted and approved by the DEQ to be in the enforceable part of the MWMC permit. The Commission wants to be careful about what is in that trading plan and not over-specifying elements that would then be enforceable. Key issues out of the trading rules: 1) defining what the trading area is (geographic and fish use), 2) describing the baseline conditions (enforceable land use conditions), 3) implementation of a compliance schedule — that is, recognition that trading credit projects will take time to implement, and 4) ensuring it does not prohibit credit for projects implemented before an approved trading plan is in place, so long as those projects retrospectively meet all of the trading plan requirements. Willamette Basin Dams: The Corp of Engineers and the Water Resources Department are looking at the storage allocation of the dams. Last year's drought rekindled the thought process on how do we divide up the water for different uses as it goes downstream. Right now there is no clear allocation for municipalities or industry. As the area grows, the water has pretty much been allocated, so where do we get other water supplies other than conservation. Staff is monitoring these discussions and attending some of the stakeholder groups. The Willamette dams are known to affect the temperature on the river up to 6°C increase. The storage and release pattern alters natural flow and temperature regime of the river. The Corp is ordered to operate for fish benefits and is doing cooler water releases. As of right now, it doesn't look like allocating this storage capacity resource has any direct implications on when and how the water is released. DEQ Permit Issuance: In 2016 the DEQ put out a Permit Issuance Plan. The DEQ's emphasis is on permits not impacted by the TMDL; the MWMC is not on the list. Other News: The DEQ Director Dick Pedersen resigned and an interim director was appointed. They are recruiting for a new director. The DEQ hired MWH Global to help streamline their permit writing process; ACWA was involved in commenting on that process. EPA Region X is making motions to take over on delayed permits and water quality standards. The water quality standards EPA moved on are copper and cadmium aquatic life standards for Oregon. EPA recognizes that DEQ is working on it, but if the DEQ doesn't do it soon the EPA will impose its own standards. The fact is that the EPA is watching closely and poised to take action as the state process gets delayed. MWMC Meeting Minutes April 8, 2016 Page 12 of 12 BUSINESS FROM COMMISSION, GENERAL MANAGER, AND WASTEWATER DIRECTOR General Manager: • Springfield staff participated in a ratings call with Standard & Poor's Financial Services and Moody's Investors Services regarding the 2006 Revenue Bond payoff and the 2016 reissuance. Both agencies issued the MWMC an AA credit rating. They indicated they were very impressed by how our programs were run, the structure, and the affordability of our rates. When asked how we could nudge our rating higher, they said the only thing that would improve our rating is out of our control and that is if our community had a higher median income or there was a significant increase in development. • KLCC ran a story recently on pharmaceuticals in wastewater and pharmaceuticals in general. They interviewed several places locally, Oregon State, EWEB, and the MWMC. Michelle Miranda from the WPCF provided comments and did an excellent job. The story discussed concerns about how pharmaceuticals don't get treated in the wastewater process, ends up in the river, and are found in fish tissue. The key message was to not flush unused pharmaceuticals down the toilet and also to raise awareness. Mr. Stouder said he would forward the article to the Commission. • Commissioner Loud will be stepping down after ten years on the Commission. She has agreed to stay on until Eugene has found a replacement. The new person will most likely start in June. Wastewater Director: • There were a couple of interactions with the public that echoed Commissioner Keeler's accolades last month about the WPCF's landscape. The crews are keeping the landscaping up and people are noticing. • After twenty years, Janet Gillespie, ACWA's Executive Director, is moving on. Ms. Cahill is involved in the Executive Director Recruitment process. They are looking for a replacement before the summer conference in July. One series of interviews has been held and there are some strong candidates. Next week they will be doing a second round of interviews and then the Board will meet the candidates. ADJOURNMENT President Pishioneri adjourned the meeting at 9:10 a.m. The meeting location is wheelchair-accessible. For the hearing-impaired, an interpreter can be provided with 48-hours-notice prior to the meeting. To arrange for service, call 541-726-3694. All proceedings before the MWMC are recorded THE FULL PACKET IS POSTED ON THE WEBSITE www.m wmcpartners.orp AGENDA ITEM IV. Metropolitan 'Wastewater Management Commission SPRIPIG'FIELD r OREGON partners in wastewater management MEMORANDUM DATE: May 6, 2016 TO: Metropolitan Wastewater Management Commission (MWMC) FROM: Katherine Bishop, ESD Program Manager Meg Allocco, MWMC Accountant SUBJECT: Revenue Bonds Update ACTION REQUESTED: Informational ISSUE Staff is providing an update on the final outcome of the 2006 and 2008 revenue bond restructuring that resulted in the 2016 revenue bonds. BACKGROUND AND DISCUSSION Staff and the Commission discussed the payoff and/or restructuring of the 2006 and 2008 revenue bonds at regularly scheduled MWMC meetings. Background information is available in the MWMC meeting agenda packets for October 2015, November 2015, and February 2016. At the February meeting, the Commission adopted Resolution No. 16-02 authorizing the sale of regional revenue refunding bonds, for the purpose of debt service savings. The approach included paying off the 2006 revenue bonds, an advance refunding of the 2008 revenue bonds and closing on the 2016 bond sale within the current FY 2015-16. On March 16, 2016, credit rating reviews were held with Standard & Poor's (S&P) Financial Services and Moody's Investors Services. Both credit rating agencies affirmed the MWMC credit rating at AA and Aa2 respectively. The credit rating reports summarize the agencies view of the MWMC's positive financial position and outlook, including the Commission's strong enterprise risk profile and extremely strong financial risk profile. The updated credit reports (particularly S&P's report) added valuable context about the MWMC for prospective bidders to evaluate and consider. On April 12, 2016, the MWMC's 2016 revenue bond sale bid opening was held. The MWMC received 11 bids from major capital markets, with Citigroup Global Markets, Inc. submitting the lowest bid including a Bond Par Amount of $32,725,000, and a net interest cost at 1.537%. Memo: Revenue Bonds Update May 6, 2016 Page 2 of 2 On May 3, 2016, the bond transactions closed. Restructuring of the MWMC 2006 and 2008 revenue bonds resulted in a net savings of $14.94 million. This includes an early payoff of the 2006 revenue bonds that resulted in $8.94 million in interest savings, and the advanced refunding of the 2008 revenue bonds (becoming the 2016 revenue bonds at a lower interest rate), that will result in $6 million in interest savings over the next 10 years. In summary, the final net savings of $14.94 million exceeds original savings estimates by about $2 million. Staff appreciates the guidance the Commission has provided as we moved forward together through this process, and is pleased with the positive outcome. RECOMMENDATION This update is informational only. ACTION REQUESTED No action required. AGENDA ITEM V. Metropolitan 'Wastewater Management Commission SPRIPIG'FIELD r OREGON partners in wastewater management MEMORANDUM DATE: May 6, 2016 TO: Metropolitan Wastewater Management Commission (MWMC) FROM: Meg Allocco, MWMC Accountant SUBJECT: FY 2015-16 Supplemental Budget #3 ACTION REQUESTED: Approve Resolution 16-08 ISSUE The purpose of this memo is to request approval of Resolution 16-08 authorizing the proposed supplemental budget requests for FY 2015-16. Both of the supplemental budget requests are to adjust existing budget allocations where the split between interest, principal, and bond costs were estimated based on preliminary numbers. DISCUSSION • The previous supplemental budget#2, approved in February, allowed for the payoff of the 2006 revenue bond as well as the refinance of the 2008 revenue bond. • The first supplemental budget #3 item will adjust the provisions for bond sale costs, principal, interest expense and the necessary transfers between funds for accounting purposes. These adjustments account for the difference between preliminary estimates provided by the financial advisors in January, and the final numbers from the bond closing May 3rd • The second supplemental budget #3 item reconciles estimated debt service on SRF loan R64841 to the actual final debt schedule now that the entire loan has been finalized. Until now, we have estimated the budgeted debt service based on when staff believed it would begin. This supplemental budget increases the interest estimated on this loan to the actual amount due in FY16, and returns the budgeted principal payment to reserves. ACTION REQUESTED Approve, by motion, Resolution 16-08 authorizing the budget actions requested in this memorandum. ATTACHMENT 1. Resolution 16-08 METROPOLITAN WASTEWATER MANAGEMENT COMMISSION RESOLUTION 16-08 ) IN THE MATTER OF APPROVAL OF FISCAL YEAR 2015-16 SUPPLEMENTAL BUDGET#3 WHEREAS, the Metropolitan Wastewater Management Commission (MWMC) approved the FY 2015-16 Budget on April 10, 2015 pursuant to Resolution 15-04; WHEREAS, the MWMC adopted Resolution 16-02 and 16-03 on February 12, 2016 authorizing the sale of regional sewerage facilities revenue refunding bonds to be able to reduce its debt service expense; WHEREAS, an increase of$50,000 in bond sale expense transferred from the operating reserve is deemed appropriate to cover costs of the advance refunding of the 2008 revenue bonds; WHEREAS, a decrease of$267,071 in bond sale expense transferred to the 2008 revenue bond reserve is deemed appropriate to cover the costs of the advance refunding of the 2008 revenue bonds; WHEREAS, an increase of$267,071 in bond principal payment transferred from the 2008 revenue bond reserve is deemed appropriate to apply to the principal balance of the 2008 revenue bonds; WHEREAS, an increase of$20,000 in interest expense transferred from the 2006 revenue bond reserve is deemed appropriate to cover the final interest payment in escrow of the 2006 revenue bonds; WHEREAS, a decrease of$20,000 in principal payment transferred from the 2006 revenue bond reserve is deemed appropriate to contribute toward the retirement of the 2006 revenue bonds; WHEREAS, an increase of$20,000 in principal payment transferred from the capital reserve is deemed appropriate to complete the retirement of the 2006 revenue bonds; WHEREAS, a decrease of$279,000 in principal payments for SRF Loan R64841, with an increase of$25,000 to interest expense and a return of$254,000 to operating reserve is deemed appropriate to adjust to final debt schedule; WHEREAS, MWMC has appointed Anette Spickard as its duly authorized Executive Officer for efficient execution of the day-to-day administration of MWMC business. NOW, THEREFORE, BE IT RESOLVED BY THE METROPOLITAN WASTEWATER MANAGEMENT COMMISSION THAT: The FY 2015-16 Supplemental Budget#3 as presented to the MWMC on May 13, 2016, is hereby approved. ADOPTED BY THE METROPOLITAN WASTEWATER MANAGEMENT COMMISSION OF THE SPRINGFIELD/EUGENE METROPOLITAN AREA ON THE 13th DAY OF MAY, 2016. President: Joe Pishioneri ATTEST: Kevin Kraaz, MWMC Secretary Approved as to form: MWMC Legal Counsel: K.C. Huffman ATTACHMENT 1 RESOLUTION 16-08 Page 1 of 1 AGENDA ITEM VI. Metropolitan Wastewater Management Commission VELD---- vaE�vw partners in wastewater management MEMORANDUM DATE: May 6, 2016 TO: Metropolitan Wastewater Management Commission (MWMC) FROM: K.C. Huffman, Legal Counsel SUBJECT: MWMC Procurement Rules Update — 2015 Version ACTION REQUESTED: Approve Resolution 16-09 INTRODUCTION The purpose of this memorandum is i) to outline the substantive changes to the Model Public Contracting Rules (Model Rules) as made by the Attorney General in 2015 based on changes to the Public Contracting Code (the Code) made by the legislature in 2014 and 2015; and ii) to recommend the adoption of the Model Rules, with some modifications, for use by the MWMC as the "2015 Commission Rules." BACKGROUND In 2003, the Oregon legislature completely reorganized and revised the Code. In 2007, 2009, 2010, 2011, 2012, 2014, and 2015 the legislature made additional refinements to the Code. Pursuant to ORS 279A.065, the Oregon Attorney General is obligated to prepare model rules of procedure that guide implementation of the Code. As indicated above, these rules are known as the Model Public Contracting Rules. After each legislative session the Attorney General is required to review the Code and update the Model Rules, as needed. Because the Oregon legislature now meets annually, the opportunities for refinements to the Code have increased. As a local public contracting agency that has adopted procurement rules, MWMC is obligated, under ORS 279A.065(b), to review the revised Model Rules to determine whether the Commission's Rules should be modified to ensure compliance with the Code. 2015 Revisions to the Model Rules The 2015 revisions to the Model Rules correspond to the revisions made to the Code. The changes to the Model Rules were made to the sections listed in the table below. A more detailed explanation of the sections that had substantive changes is set forth after the table. Memo: MWMC Procurement Rules Update 2015 May 6, 2016 Page 2 of 5 137-046-0110 Definitions for the Model Rules 137-046-0140 Solicitation Document Templates; Contract Forms and Contract Templates; Accountability for Advice 137-046-0200 Notice to Governor's Policy Advisor for Economic and Business Equity 137-046-0210 Subcontracting to and Contracting with Emerging Small Businesses; Disqualification 137-047-0260 Competitive Sealed Proposals 137-047-0640 Rejection of an Offer 137-048-0220 Formal Selection Procedure 137-049-0120 Definitions 137-049-0370 Disqualifications of Persons 137-049-0390 Offer Evaluation and Award; Determination of Responsibility 137-049-0440 Rejection of Offers A. Substantive Changes to Division 046. 137-046-0140. This is a new rule that requires state agencies to use specific templates for procurement activities and also requires a project manager be named for all projects in excess of $150,000. This new rule only applies to state agencies and is included in this memo as a "heads up" for potential future action applicable to all public entities. 137-046-0200. Minor edits regarding how certain entities are to be referred to. Increased the reporting threshold to contracts over $10,000 (up from $5,000). Again, only applies to state agencies for now. 137-046-0210. Changes the verification requirements for certification of a disadvantaged business enterprise, a minority-owned business, a woman-owned business, an emerging small business, or a business that a service-disabled veteran owns. Now requires: i. a provision in the contract that the Contractor must maintain its certification throughout the term of the contract and any extensions if the Contracting Agency used the certification as a factor in or as a basis for the award of the Contract. ii. A provision that Contractors must include in their contracts with subcontractors the same provision as set forth above. iii. A provision that the Contracting Agency may require the Contractor to terminate a subcontract if the subcontractor fails to maintain its certification. Memo: MWMC Procurement Rules Update 2015 May 6, 2016 Page 3 of 5 B. Substantive Changes to Division 047. 137-047-0260. This rule clarifies the nature of the proposal evaluation criteria the Contracting Agency needs to acquire in order to properly compare the proposals. 137-047-0640. This rule adds two new categories Offerors are required to satisfy before being deemed to be a Responsible Offeror under ORS 2798.110. Only one of the new categories applies to the MWMC — compliance with the tax laws of the state of Oregon and of the political subdivisions of the state. The period the Offeror must attest to is not less than six (6) years from the date of Closing of the Award of Contract. C. Substantive Changes to Division 048. The changes to Division 048 were editorial in nature and not substantive. D. Substantive Changes to Division 049. 137-049-0440. This rule mirrors the change made in 137-046-0210 where contractors and subcontractors must prove they are certified as an entity that is either a disadvantaged business enterprise, a minority-owned business, a women-owned business, an emerging small business, or a business that a service-disabled veteran owns RECOMMENDATIONS We recommend adoption of the Attorney General Model Rules, including the newest revisions as generally set forth above, with the modifications set forth below, to be hereafter referred to as the 2015 Commission Rules. 1. The first recommended modification is to OAR 137-046-0100. The modification is retained unchanged from the 2008, 2010, 2012, and 2014 Commission Rules and adopts OAR 125-246-0360. Additionally, references to "Authorized Agency" in OAR 125-246-0360 shall mean the Metropolitan Wastewater Management Commission. 2 & 3. The second and third recommended modifications are to OAR 137-046- 0110(24) and (27) and are retained from the 2010, 2012, and 2014 Commission Rules. Subsection (24) is the definition for "Personal Services Contract" and it is amended to read: "(24) Personal Services Contract" or "contracts for personal services" means: contracts, other than a contract for the services of an architect, engineer, land surveyor or provider of related services as defined in ORS 279C.100, for which the primary purpose is to acquire specialized skills, knowledge and resources in the application of technical or scientific expertise, or the exercise of professional, artistic or management discretion or judgment, including, without limitation, a contract for the services of an accountant, physician or dentist, educator, broadcaster, marketing specialist, artist (including a photographer, filmmaker, painter, weaver or sculptor), or Consultant. Consultants are persons with whom Memo: MWMC Procurement Rules Update 2015 May 6, 2016 Page 4 of 5 an Agency enters into a contract for the purposes of consulting, conferring, or deliberating on one or more subjects, and this person provides advice or opinion." The 2010 Commission Rules added "marketing specialist" in the definition and the 2010 definition is retained. Subsection (27) is the definition for "Recycled Material' and it is amended to read: "(27) Recycled Material means any material that would otherwise be a useless, unwanted or discarded material except for the fact that the material still has useful physical or chemical properties after serving a specific purpose and can, therefore, be reused or recycled. Definition given in ORS 279A.010(1)(ee)." 4. The fourth recommended modification is to OAR 137-047-0000 and is retained unchanged from the 2008, 2010, 2012, and 2014 Commission Rules. The modification states, "Pursuant to ORS 2796.050(4), the Commission elects to award contracts for personal services under the procedures of ORS 2796.050 to 2796.085." 5. The fifth recommended modification is to OAR 137-047-0250. This rule implements the Source Selection, Feasibility Determination, and Cost Analysis requirements of ORS 2796.030, 2796.033, and 2796.036. The modifications are to designate to the Executive Officer or General Manager or either of their designees the authority to make the necessary determinations under the rule. It is beneficial to designate the authority to make the necessary decisions to the Executive Officer, General Manager or either of their authorized designees in order to not delay the decision making process until the next regularly scheduled Commission meeting. Similarly, the designation is beneficial so the Commission will not have to conduct special meetings each time this issue arises. 6. The sixth recommended modification is to OAR 137-047-0265(2) and is retained unchanged from the 2008, 2010, 2012, and 2014 Commission Rules. The modification would allow MWMC to amend a contract entered into using small procurement procedures, to a total contract amount of $8,000, rather than the $6,000 recommended by the Model Rules. This would allow MWMC greater flexibility in amending small existing contracts. 7. The seventh recommended modification is to OAR 137-047-0275 and is retained unchanged from the 2008, 2010, 2012, and 2014 Commission Rules. The modification designates the Executive Officer and General Manager to make awards of contracts for goods and services under this rule covering sole-source procurements without competition. 8. The eighth recommended modification is to OAR 137-047-0280 and is retained unchanged from the 2008, 2010, 2012, and 2014 Commission Rules. The modification designates the Executive Officer and General Manager to make emergency procurements pursuant to ORS 2796.080. 9. The ninth recommended modification is to OAR 137-047-0285R and is retained unchanged from the 2008, 2010, 2012, and 2014 Commission Rules. The modification is entitled "Commission Adopted Rule Regarding Special Procurements" and is intended to allow special procurements for the i) renegotiation and amendment of existing contracts with incumbent contractors when doing so is in the best interest of the public; ii) negotiation Memo: MWMC Procurement Rules Update 2015 May 6, 2016 Page 5 of 5 for equipment repair or overhaul contracts; iii) negotiation of contracts for price regulated items; and iv) negotiation of the purchase of used personal property. This additional rule is beneficial because it allows more prompt action without sacrificing the public interest. 10. The tenth recommended modification is to OAR 137-047-0295R and is retained unchanged from the 2008, 20107 2012, and 2014 Commission Rules. The modification relates to Insurance Contracts and sets forth the procedures by which contracts for insurance shall be procured. 11. The eleventh recommended modification is to OAR 137-049-0360(2)(b) and is retained unchanged from the 2008, 20107 2012, and 2014 Commission Rules. The purpose is to provide flexibility in the opening of bids. Under the Model Rules, MWMC must open and announce construction projects bids at the time of bid closing. The modification would allow MWMC to open bids at that time, or once first-tier subcontractor disclosure forms have been submitted. It is desirable to announce bids only after the disclosure forms have been submitted to prevent an apparent low bidder who, upon seeing the other bids decides its bid is too low and no longer wants the job, from backing out by simply not submitting the required disclosure form. The modification might also prevent problems if there is a defect in the apparent low bid. For example, if the second low bidder believes the contract will be awarded to someone else, it might not submit the required disclosure form. If a defect is discovered in the low bid, MWMC might have to award to the third low bidder because the second low bidder would be rejected for failure to submit the disclosure form. Obviously, this would result in MWMC paying a higher price for the same contract. This scenario could be avoided by not announcing the bids until all bidders have submitted the subcontractor disclosure form. 12. The twelfth recommended modification is to OAR 137-049-0460 and is retained unchanged from the 2008, 20107 2012, and 2014 Commission Rules. The modification allows the Commission in its discretion to waive the bid security requirements and performance bond requirements if the amount of the Public Improvement is less than $1007000. 13. We also recommend that MWMC continue its adoption of certain Department of Administrative Services (DAS) rules. These rules pertain to purchases through federal programs and life cycle costing and are not contained in the Model Rules. ACTION REQUESTED Legal counsel recommends the adoption of Resolution 16-09, authoring the 2015 Commission Rules, which is consistent with the information and recommendations made above. ATTACHMENT 1. Resolution 16-09 METROPOLITAN WASTEWATER MANAGEMENT COMMISSION RESOLUTION 16-09 ( IN THE MATTER OF ADOPTING ( REVISED PUBLIC CONTRACTING ( RULES —2015 COMMISSION RULES WHEREAS, in 1984 the Commission, acting in its capacity as local contract review authority, adopted Resolution 84-5 adopting the model rules governing competitive bidding exemptions for public contracts as then set forth in OAR Chapter 125, Divisions 300, 310, 320, 330 and 360 — Public Contract Exemptions, which had been previously adopted by the Oregon Department of General Services for use, in whole or in part, by any local contract review authority (Rules); WHEREAS, in 1994 the Commission adopted Resolution 94-2 updating the Rules to conform with amendments made by the Oregon Department of General Services; WHEREAS, in 1999 the Oregon Legislature amended ORS 279.049 (now ORS 279A.065) to provide, among other things, that the Oregon Attorney General must prepare and maintain model rules of procedure appropriate for use by all public contracting agencies and that such rules of procedure will apply to all public contracting agencies that have not established their own rules of procedure; WHEREAS, the Oregon Attorney General published a Model Public Contract Rules Manual containing Model Rules of procedure which were effective on January 17, 2001 (Manual); WHEREAS, in 2001, the Commission, acting in its capacity as local contract review board, adopted Resolution No. 01-02 repealing its Resolution No. 94-2 and adopting the Manual (with some exceptions) as its own rules of procedure; WHEREAS, the Oregon Attorney General made extensive revisions to the Manual and Model Rules (Model Rules), in 2001, 2003, 2005, 2007, 2009, 2011, 2012, 2014, and 2015 following changes to the public contracting code by the Oregon Legislature; WHEREAS, the Commission, acting in its capacity as local contract review board, made corresponding changes to its own rules of procedure in Resolutions 01-02, 03-01, 06-22; 08-18; 10-15; 12- 01; 14-05 (as amended by 14-05-A). WHEREAS, the 2014 and 2015 sessions of the Oregon Legislature made additional changes to ORS Chapters 279A, 279B, and 279C and the Oregon Attorney General made corresponding revisions to the Manual and Model Rules (Revised Model Rules) in 2014 and 2015; WHEREAS, the Commission, as a local contract review board, is obligated under ORS 279A.065(5)(b) to review its rules of procedure after the Oregon Attorney General modifies the Revised Model Rules; WHEREAS, the Commission desires to conduct procurement activities in substantial conformity with the Attorney General's Revised Model Rules; NOW, THEREFORE, BE IT RESOLVED BY THE METROPOLITAN WASTEWATER MANAGEMENT COMMISSION ACTING IN ITS CAPACITY AS LOCAL CONTRACT REVIEW AUTHORITY THAT: 1. The Commission's Resolutions Nos. 14-05 and 14-05-A are repealed. ATTACHMENT 1 Resolution 16-09 Page 1 of 6 2. The Commission adopts the Revised Model Rules, as set forth in OAR Chapter 137, Divisions 046, 047, 048, and 049, as the "2015 Commission Rules," with the following exceptions becoming part of the 2015 Commission Rules: 1) OAR 125-246-0360 is adopted, pursuant to the authority contained in ORS 279A.180(1). References to "Authorized Agency" in the rule shall mean the Metropolitan Wastewater Management Commission. 2&3) OAR 137-046-0110(24) and (27) shall read as follows: "(24) "Personal Services Contract' or "contracts for personal services" means: contracts, other than a contract for the services of an architect, engineer, land surveyor or provider of related services as defined in ORS 279C.100, for which the primary purpose is to acquire specialized skills, knowledge and resources in the application of technical or scientific expertise, or the exercise of professional, artistic or management discretion or judgment, including, without limitation, a contract for the services of an accountant, physician or dentist, educator, broadcaster, marketing specialist, artist (including a photographer, filmmaker, painter, weaver or sculptor), or Consultant. Consultants are persons with whom an Agency enters into a contract for the purposes of consulting, conferring, or deliberating on one or more subjects, and this person provides advice or opinion." "(27) "Recycled Material," pursuant to ORS 279A.010(ee), means any material that would otherwise be a useless, unwanted or discarded material except for the fact that the material still has useful physical or chemical properties after serving a specific purpose and can, therefore, be reused or recycled." 4) OAR 137-047-0000 shall read as follows: "Pursuant to ORS 279B.050(4), the Commission elects to award contracts for personal services as defined in 137-046- 0110(24) under the procedures of ORS 27913.050 to 279B.085." 5) OAR 137-047-0250 shall read as set forth in the Model Rules except that i) pursuant to ORS 279A.075, the Commission designates its Executive Officer or General Manager or either of their authorized designees to make all necessary determinations under the rule. 6) OAR 137-047-0265(2) shall read as follows: "Amendments. A Contracting Agency may amend a Contract awarded as a small procurement in accordance with OAR 137-047-0800, but the cumulative amendments may not increase the total Contract price to greater than one hundred twenty-five (125%) of the dollar amount stated in ORS 279B.065." 7) OAR 137-047-0275 (sole source procurement) shall include a provision, pursuant to the authority conveyed by ORS 279A.075, whereby the Commission designates its Executive Officer or General Manager, or either of their authorized designees, to make awards of contracts for goods or services without competition pursuant to ORS 27913.075. 8) OAR 137-047-0280 shall include a provision, pursuant to the authority conveyed by ORS 279A.075, whereby the Commission designates its Executive Officer or General Manager, or either of their authorized designees, to make awards of emergency contracts pursuant to ORS 27913.080. 9) OAR 137-047-0285R is created and shall state: ATTACHMENT 1 Resolution 16-09 Page 2 of 6 (A) Renegotiations of Existing Contracts with Incumbent Contractors. (i) Authorization. The Commission grants approval of a special procurement to renegotiate and amend existing contracts with incumbent contractors, only if it is in the best interest of the public. (ii) Process and Criteria. The Executive Officer or General Manager may renegotiate various items of the contract, including but not limited to: price, term, delivery and shipping, order size, item substitution, warranties, discounts, on-line ordering systems, price adjustments, product availability, product quality, and reporting requirements. The Executive Officer or General Manager must meet the following conditions in renegotiations with incumbent contractors: (a) Favorable Result. The Executive Officer or General Manager must determine that, with all things considered, the renegotiated contract is at least as favorable to the Commission as the original contract and document this in the procurement file. For example, the Executive Officer or General Manager and the contractor may adjust terms and conditions within the original contract to meet different needs; (b) Within the Scope. The supplies and services provided under the renegotiated contract must be reasonably related to the original contract's solicitation. For example, the Executive Officer or General Manager may accept functionally equivalent substitutes for any supplies and services in the original contract's solicitation. (c) Market. In order to avoid encouraging favoritism or diminishing competition, the Executive Officer or General Manager may research the accepted competitive practices and expectations of offerors within the market for the specific contract(s) or classes of contracts to be renegotiated (Market Norm). If the Executive Officer or General Manager researches the Market Norm, then the Executive Officer or General Manager must document the results in the procurement file. Based upon this information, the Executive Officer or General Manager may confirm that, if the Executive Officer or General Manager follows the Market Norm, favoritism is not likely to be encouraged, competition is not likely to be diminished, and substantial cost savings may be realized. The Executive Officer or General Manager may not accept or follow any Market Norm that likely encourages favoritism or diminishes competition, even if it is accepted or expected in the market. (B) Equipment Repair and Overhaul. (i) Authorization. The Commission grants approval of a special procurement for equipment repair and overhaul, as described in this Rule. (ii) Conditions. The Executive Officer or General Manager may enter into a public contract for equipment repair or overhaul without competitive bidding, subject to the following conditions: (a) Service or parts required are unknown and the cost cannot be determined without extensive preliminary dismantling or testing; or (b) Service or parts required are for sophisticated equipment for which specially trained personnel are required and such personnel are available from only one source. ATTACHMENT 1 Resolution 16-09 Page 3 of 6 (c) Process and Criteria. The Executive Officer or General Manager must use competitive methods wherever possible to achieve the best value and must document in the procurement file the reasons why a competitive process was deemed to be impractical. The resulting contract must be in writing and the procurement file must document the use of this special procurement rule to identify the sourcing method. (C) Contracts for Price Regulated Items. (i) Authorization. The Commission grants approval of a special procurement for price regulated items, as described in this Rule. The Executive Officer or General Manager may, regardless of dollar value and without competitive bidding, contract for the direct purchase of supplies and services where the rate or price for the supplies and services being purchased is established by federal, state, or local regulatory authority. (ii) Process and Criteria. The Executive Officer or General Manager must use competitive methods wherever possible to achieve best value and must document in the procurement file the reasons why a competitive process was deemed to be impractical. The resulting contract must be in writing and the procurement file must document the use of this special procurement rule by number to identify the sourcing method. (D) Purchase of Used Personal Property. (i) Authorization. The Commission grants approval of a special procurement for used personal property, as described in this Rule. Subject to the provisions of this Rule, the Executive Officer or General Manager may purchase used property or equipment without competitive bidding and without obtaining competitive quotes, if, at the time of purchase, the Executive Officer or General Manager has determined and documented that the purchase will (i) be unlikely to encourage favoritism or diminish competition; and (ii) result in substantial cost savings or promote the public interest. "Used personal property or equipment" means the property or equipment which has been placed in its intended use by a previous owner or user for a period of time recognized in the relevant trade or industry as qualifying the personal property or equipment as "used," at the time of the Commission's purchase. "Used personal property or equipment" generally does not include property or equipment if the Commission was the previous user, whether under a lease, as part of a demonstration, trial or pilot project, or similar arrangement. (ii) Process and Criteria. (a) For purchases of used personal property or equipment costing not exceeding $150,000, the Executive Officer or General Manager must, where feasible, obtain three (3) competitive quotes, unless the Executive Officer or General Manager has determined and documented that a purchase without obtaining competitive quotes will result in cost savings to the Commission and will not diminish competition or encourage favoritism. (b) For purchases of used personal property or equipment exceeding $150,000, the Executive Officer or General Manager must obtain and keep a written record of the source and amount of quotes received. If three (3) quotes are not available, a written record must be made of the attempt to obtain quotes. ATTACHMENT 1 Resolution 16-09 Page 4 of 6 (c) Process and Criteria. The Executive Officer or General Manager must use competitive methods wherever possible to achieve best value and must document in the procurement file the reasons why a competitive process was deemed to be impractical. The resulting contract must be in writing and the Procurement File must document the use of this Rule to identify the sourcing method. 10) OAR 137-047-0295R is created and shall state: Contracts for insurance where either the annual or aggregate premium exceeds $5,000 must be let by formal competitive bidding or by one of the following procedures: (A) Agent of Record: The Commission may appoint a licensed insurance agent (Agent of Record) to perform insurance services in connection with more than one (1) insurance contract. Among the services to be provided is the securing of competitive proposals from insurance carriers for all coverage for which the agent of record is given responsibility: (i) Prior to the selection of an Agent of Record, the Commission shall make reasonable efforts to inform known insurance agents in the competitive market area that it is considering such selection. These efforts shall include a public advertisement in at least one (1) newspaper of general circulation in the area where the contract is to be performed. The advertisement shall generally describe the nature of the insurance that the public contracting agency will require. If the amount of the annual premium for insurance is likely to exceed $10,000 per year, such notice shall also include a public advertisement in at least one (1) insurance trade publication of general circulation in the state. (ii) Any appointment period shall not exceed three (3) years. Agents of Record may serve more than one (1) appointment period. The appointment period may be automatically renewed without further publication on an annual basis subject to the right of either the Commission or the Agent of Record to terminate the contract by giving the other party at least 90 days notice before the next scheduled renewal date; (iii) In selecting an Agent of Record, the Commission shall select the person(s) most likely to perform the most cost-effective services. (B) Specific Proposals for insurance contracts: The Commission may solicit proposals from licensed insurance agents for the purpose of acquiring specific insurance contracts subject to the following conditions: (i) The Commission shall make reasonable efforts to inform known insurance agents in the competitive market area of the subject matter of the contract, and to solicit proposals for providing the services required in connection with the contract. Such efforts shall include public advertisements in at least one (1) newspaper of general circulation in the area where the Commission is located. If the amount of the annual premium for insurance is likely to exceed $10,000 per year, such notice shall also include a public advertisement in at least one (1) insurance trade publication of general circulation in the state. (ii) The Commission shall select an agent on the basis of the most competitive offer, considering coverage, premium cost, and service to be provided. ATTACHMENT 1 Resolution 16-09 Page 5 of 6 11) OAR 137-049-0360(2)(b), shall read as follows: "(b) Open bids either immediately after the Bid Closing or immediately after the deadline for submission of first-tier subcontractor forms, whichever is specified in the ITB; and" 12) OAR 137-049-0460, pursuant to the authority conveyed by ORS 279C.390(1), shall have added to it, in a new subsection 5, the following: "(5) The Commission may, in its discretion, waive the bid security requirements and performance bond requirements if the amount of the Public Improvement contract is less than $100,000." 13) OAR 125-247-0170 regarding life cycle costing is adopted as part of the Commission Rules. ADOPTED BY THE GOVERNING BODY OF THE METROPOLITAN WASTEWATER MANAGEMENT COMMISSION ACTING IN ITS CAPACITY AS LOCAL PUBLIC CONTRACT REVIEW AUTHORITY on the 13th day of May, 2016. Joe Pishioneri, President ATTEST: Kevin Kraaz, MWMC Secretary Approved as to form: K.C. Huffman, MWMC Legal Counsel ATTACHMENT 1 Resolution 16-09 Page 6 of 6 AGENDA ITEM VII. Metropolitan Wastewater Management Commission SPRINGFIELD OREGON partners in wastewater management MEMORANDUM DATE: May 6, 2016 TO: Metropolitan Wastewater Management Commission (MWMC) Matt Stouder, MWMC General Manager FROM: Greg Watkins, Project Manager SUBJECT: Cogeneration System Replacement ACTION REQUESTED: Informational Only ISSUE Regional wastewater program staff has been evaluating replacement of the existing combined heat and power (cogeneration system) at the Water Pollution Control Facility (WPCF), which is scheduled to reach the end of its operating life in the spring of 2017. BACKGROUND A triple bottom line analysis was performed to determine how to best utilize the MWMC's biogas. The alternative receiving the highest overall score combined rebuilding the existing 0.8 megawatt (MW) engine-generator system with new facilities to convert the remaining biogas, which is currently flared, to Compressed Natural Gas (CNG) for sale as a vehicle fuel. However, after a prospective agreement with Northwest Natural Gas to purchase the biogas stalled, it was determined that building a new 1.2 MW engine-generator was the MWMC's next best option based on economic, social and environmental factors. During project design, the engineering consultant cost estimates for construction of the 1.2 MW engine were higher than what was assumed in the earlier study. In addition, the Eugene Water and Electric Board (EWEB) notified staff of proposed electrical rate structure changes that would negatively impact payback for the project. Staff discussed these concerns with the Commission at the January 8, 2016 Commission meeting, and has engaged in several conversations with EWEB to determine the best financial information available. DISCUSSION After obtaining the best financial information available from EWEB, staff re-evaluated alternatives for the biogas cogeneration system replacement, including: • Building a new 0.8 MW engine • Building a new 1.2 MW engine • Rebuild the existing 0.8 MW engine Memo: Cogeneration System Replacement May 6, 2016 Page 2 of 3 In addition to a re-look at the project financial analysis, staff also considered external factors, such as: • The overall status of the FY 2016-17 Capital Improvement Program, including: o Increasing budget needs for Operations and Maintenance Building Improvements (P80085) and Increase Digestion Capacity Projects (P80084) o Impacts associated with payoff of the 2006 revenue bonds and reduced capital reserves o User rate implications • Environmental aspects of the options Factors associated with the three re-evaluated options are discussed below. New 0.8 MW Engine Early in the project re-evaluation, it became clear that a new 0.8 MW engine would not provide a project payback, nor provide any additional environmental benefit over a new 1.2 MW engine or a rebuilt 0.8 MW engine. For these reasons, the new 0.8 MW engine option was not further analyzed. New 1.2 MW Engine The approximate capital cost associated with a new 1.2 MW engine is $5.3 million. The re-evaluation indicates a modest project net present value (NPV) at the end of the useful life of the engine (18 years), including full award of the Oregon Department of Energy (ODOE) grant ($1.5 million). The ODOE grant is structured as a pass-through tax credit, and there are fees associated with applying for the grant (8% of total grant amount). This option does allow the MWMC to utilize nearly all of the biogas created onsite, and mostly eliminates flaring to the atmosphere. Other factors associated with a new 1.2 MW engine include: • Requires a Balancing Authority Area Service Agreement (BAASA) with the Bonneville Power Administration (BPA) o The MWMC would become regulated by the BPA and be responsible for oversight and administration associated with the BAASA. • Significantly reduces the financial viability of Compressed Natural Gas (CNG) opportunities for the life of the project (approximately 18-years) Rebuild of existing 0.8 MW Engine The capital cost of rebuilding the existing 0.8 MW engine is approximately $700,000, which provides a payback in the near term. If additional rebuilds were to occur, expenses are deferred and the cumulative NPV could be significant over an 18-year period. In addition, EWEB has indicated they will provide the MWMC with a grandfathered power rate for the next five years (a more favorable rate) for this option only. This option does continue the existing practice of flaring approximately 35% of the biogas produced onsite. Other factors associated with a rebuild of the existing 0.8 MW engine include: Memo: Cogeneration System Replacement May 6, 2016 Page 3 of 3 • Allows time for emerging trends in the power and vehicle fuel markets to become more certain • Preserves future diversity of options including CNG • Does not require a BAASA with BPA • Softens the fiscal impact to the overall Capital Improvement Program, capital reserves and userfees • Extends the life of a useful asset RECOMMENDATION Considering the above factors, including revised economics, environmental aspects, the impact to the MWMC Capital Improvement Program, and preservation of flexibility in future biogas utilization options, staff has determined rebuilding the existing 0.8 MW cogeneration engine to be the preferred alternative. ACTION REQUESTED This memo is informational only; staff welcomes discussion from the Commission. AGENDA ITEM VIII. Metropolitan 'Wastewater Management Commission SPRIPIG'FIELD r OREGON partners in wastewater management MEMORANDUM DATE: May 6, 2016 TO: Metropolitan Wastewater Management Commission (MWMC) Amber Fossen, Communications Coordinator FROM: Loralyn Spiro, Communications Coordinator SUBJECT: Public Information Program Update ACTION REQUESTED: Informational Only ISSUE Staff will provide an update to the Metropolitan Wastewater Management Commission regarding the public information program, which is guided by the updated MWMC Communication Plan developed in 2015 and the FY16-17 Budget. A presentation will be delivered at the May 13th Commission meeting detailing mid-year progress made toward the goals and strategies set in both documents. BACKGROUND Objectives, strategies, and tactics for the MWMC Communication Plan updated in 2015 were set by observing Commission Goals and particularly those objectives set within Key Outcome #5 —Achieve and maintain public awareness and understanding of the MWMC, the regional wastewater system, and MWMC's objectives of maintaining water quality and a sustainable environment. The Communications Plan contains four overarching strategies: 1. Increase community understanding of the connection between well-managed wastewater services and a healthy local environment. 2. Raise awareness of the MWMC as a leader in water resources management, specifically in wastewater treatment practices and expertise. 3. Increase community understanding of how their behavior and practices affect the health of local waterways and what they can do to help protect our environment. 4. Strengthen communications by evaluating the effectiveness of strategies/tactics implemented. ACTION REQUESTED This memo is informational; no specific actions or decisions are being requested from the Commission at this time. AGENDA ITEM IX. Metropolitan 'Wastewater Management Commission SPRIPIG'FIELD r OREGON partners in wastewater management MEMORANDUM DATE: May 6, 2016 TO: Metropolitan Wastewater Management Commission (MWMC) FROM: John Bonham, Facilities Maintenance Supervisor SUBJECT: Landscape Maintenance —Transition to Operations - Update ACTION REQUESTED: Information Only ISSUE This informational item includes a presentation at the Commission meeting and will review the current status of the new landscaping and efforts and resources being used to maintain it. Beginning in early 2015 the City of Eugene assumed operational responsibility for all landscape maintenance at the Water Pollution Control Facility (WPCF). This included the MWMC investment of approximately $1.6 million in recent years for major landscaping improvements to the WPCF (Landscape Master Plan— P80060). The P80060 contract included a 2-year maintenance agreement with the contractor (Rexius) that expired in December 2014. BACKGROUND Prior to the Master Landscape Project P80060 improvements, landscape maintenance requirements were relatively low at the plant. Most areas around process buildings and parking areas were unplanted and filled with river rock. The open public area outside the fence line consisted mostly of turf, meadows, and trees. Staff provided little maintenance along the greenway besides seasonal rough mowing for fire suppression. P80060 improvements provided an aesthetic landscape for neighbors, the general public, the interior of the WPCF, and were incorporated into the terms and conditions of the conditional use permit for the major construction and upgrades of the treatment facility. The goals and guiding principles of the Landscape Master Plan included: 1) sustainable design, 2) water conservation and reuse, 3) safety and security, 4) aesthetic design, 5) stormwater design, 6) habitat protection and enhancement, and 7) public education. The improvements consist of more than 10 acres of plant beds, 20 acres of lawn area, 11.5 acres of riparian restoration, more than an acre of planted earthen berms, and three stormwater bio-swales. Plantings across these areas included approximately 150 trees and 70,000 shrubs. Memo: Landscape Maintenance —Transition to Operations - Update May 6, 2016 Page 2 of 2 DISCUSSION The requirements associated with the new landscaping include, but are not limited to, weed control, fertilizing, disease and pest control, pruning, edging, and irrigation system maintenance. Staff did some modification to the landscaping for safety, security and access to process controls as well as to minimize the use of pesticides. In the FY 2014/15 and subsequent budgets, funding was included in the operating budget for temporary help and Sheriff's work crew time as a solution to address the increase in needs. This allows time to evaluate the amount of required work, the philosophy about the state to maintain the landscaping, and the best approach to address the required work. Comparing labor and cost from January—December of 2014 and the same period for 2015, the MWMC nearly doubled the use of the Sheriff's work crew and experienced a 20% increase in cost for grounds maintenance by the City of Eugene's own facility crew. In addition, Eugene's Environmental Management System targets have focused on reducing pesticide use, and staff has realized that use of pesticide is still necessary with manual weeding to contain labor costs of landscape maintenance. In 2015, a full-time limited duration (24 months) position was filled, and seasonal full- time temporary employees were used at 75% time towards grounds maintenance. No professional services have been used at this time, but may be in the future to pay for landscape professional consultant services to assist in selecting the most appropriate pesticides. Currently, the landscaping looks very nice and it is expected to look even better as staff is trained on specific landscaping practices and becomes more skilled at the critical timing of tasks that will maximize efficiencies of this type of maintenance. The Sheriff's work crew is a huge resource for landscape maintenance, and without this resource the MWMC would need to contract with a landscape maintenance service or hire additional full time staff. Staff continues to evaluate best options to maintain the investment made in landscaping at the WPCF. Additional work related to landscaping in general (excluding new landscaping) is as follows: clearing and cleanup of the riparian area near the Owosso Bridge, winter tree trimming, and plans to clear the brushy area located east of the WPCF fence line to discourage illegal camping. ACTION REQUESTED This agenda item is provided for information only. No action is requested.