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MWMC MEETING AGENDA
Friday, July 13, 2018 @ 7:30 a.m.
City of Springfield City Hall, Library Meeting Room
225 Fifth St., Springfield, OR 97477
Turn off cell phones before the meeting begins.
7:30 – 7:35 I. ROLL CALL
7:35 – 7:40 II. CONSENT CALENDAR
a. MWMC 6/8/18 Minutes
Action Requested: By motion, approve the Consent Calendar
7:40 – 7:45 III. PUBLIC COMMENT
Request to speak slips are available at the sign-in desk. Please present request slips to
the MWMC Secretary before the meeting starts.
7:45 – 8:05 IV. RNG CONSULTANT AGREEMENT AMENDMENT . . . . . . . . . . . . . . . . . . . . . . . Josh Newman
Action Requested: By motion, approve Resolution 18-11
8:05 – 8:20 V. MWMC FINANCIAL PLAN ASSET MANAGEMENT #4 . . . . . . Meg Allocco/ John Huberd
Action Requested: Provide staff with direction to accept or amend proposed policy
language.
8:20 – 8:45 VI. BIOSOLIDS MANAGEMENT PROGRAM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Randy Gray
Action Requested: Information only
8:45 – 9:00 VII. BUSINESS FROM COMMISSION, GENERAL MANAGER, & WASTEWATER DIRECTOR
9:00 VIII. ADJOURNMENT
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.
MWMC MEETING MINUTES
Friday, June 8, 2018 at 7:30 a.m.
City of Springfield City Hall, Library Meeting Room
225 Fifth St., Springfield, OR 97477
President Ruffier opened the meeting at 7:30 a.m. Roll call was taken by Kevin Kraaz.
ROLL CALL
Commissioners Present: Pat Farr, Bill Inge, Doug Keeler, Walt Meyer, Joe Pishioneri, and Peter Ruffier
Absent: Jennifer Yeh
Staff Present: Meg Allocco, Todd Anderson, Katherine Bishop, Dave Breitenstein, John Huberd, Laura
Keir, Tonja Kling, Kevin Kraaz, Shawn Krueger, Troy McAllister, Todd Miller, Brian Millington (attorney),
Josh Newman, Trail Smith, Loralyn Spiro, Matt Stouder, Mark Van Eeckhout, Greg Watkins, and Dawn
Williams.
Guest: Ron Cutter, Brown and Brown NW (conference phone)
CONSENT CALENDAR
a. MWMC 5/11/18 Minutes
b. Ratification of the Regional Wastewater Program Budget and Capital Improvements Program for FY
2018-19
MOTION: IT WAS MOVED BY COMMISSIONER KEELER WITH A SECOND BY COMMISSIONER
PISHIONERI TO APPROVE THE CONSENT CALENDAR. THE MOTION PASSED UNANIMOUSLY
6/0.
PUBLIC COMMENT
There was no public comment.
PROPERTY INSURANCE RENEWAL– EFFECTIVE JULY 1, 2018
Katherine Bishop, Environmental Services Program Manager, introduced Ron Cutter, MWMC’s Agent of
Record, who was on the conference phone. Ms. Bishop showed an earthquake analysis that was
performed on MWMC owned properties by Mr. Cutter’s company, Brown and Brown NW. The “ground
up” loss (above ground) for MWMC assets was an estimated $14M in damages for the 500-year
earthquake and about $30M in estimated damages for the 1000-year earthquake. The deductible loss for
a 500-year earthquake is estimated at $2.5M and $2.9M for the 1000-year earthquake. The reason the
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June 8, 2018
Page 2 of 16
deductible varies as you go up in losses/damages is because the earthquake deductible is based on 2%
of the damaged assets’ value. It increases as the damage increases.
Ms. Bishop went over the regional partner’s earthquake coverage levels, which ranged from 13%-15% of
property values for the cities of Eugene and Springfield, and Lane County, while the MWMC earthquake
coverage at $100M was 31% of property values.
Ms. Bishop provided the following three options for property coverage.
Insurer & Coverage
Option 1
$100M Earthquake
Premium Amount
Option 2
$75M Earthquake
Premium Amount
Option 3
$50M Earthquake
Premium Amount
Starr Tech /ACE America All Risk
Property Insurance includes $50M
earthquake
$213,435 $213,435 $213,435
DIC Earthquake at $50M $56,895 - -
DIC Earthquake at $25M - $26,205 -
Total Premium $270,330 $239,640 $213,435
Commissioner Inge asked what is recoverable through FEMA and how does that relate to the insurance.
Ms. Bishop replied FEMA will reimburse 75% of the deductible amount and if the damage/loss is more
than what the insurance covers, it will pay 75% of that. Commissioner Inge asked if that is taken into
consideration when deciding what level of coverage the MWMC should have. Mr. Cutter said that you
can go broke buying earthquake coverage so you pick an earthquake limit that you are comfortable with
and know if you exceed that limit, there is a high probability that the event will be declared a disaster.
Once that occurs, then FEMA will have funds available to reimburse you.
Commissioner Inge stated that he didn’t see the need for the supplemental insurance with DIC for
$25M. He would like to see the Insurance Reserve built up with the annual $26,205 premium savings so
that the MWMC can take more of its own risk. He does not want to see all this money being paid out for
insurance.
Commissioner Pishioneri said FEMA is the MWMC’s backstop as far as to make up the difference with
the gap between its insured maximum and actual damage. He asked if FEMA has a history of coming
through or failing to do that. Mr. Cutter answered pre-Katrina FEMA was very difficult to work with, very
slow, and not responsive; post Katrina they are vastly different, much more responsive. Mr. Cutter stated
historically, the MWMC has been conservative insurance buyers, purchasing a lot of coverage. In his
opinion, he would be very comfortable reducing the earthquake limit at least $25M less.
President Ruffier asked about coverage of underground pipes. Mr. Cutter replied that the primary
insurance does cover the underground infrastructure.
President Ruffier said he concurs with Commissioner Inge that we are over insured, particularly if FEMA
is the backstop to cover the difference.
Commissioner Pishioneri agreed that the MWMC is over insured and needs to look at reducing the
coverage. He is comfortable with the $50M coverage Option 3.
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June 8, 2018
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Commissioner Keeler stated for counter point, he is feeling a little bit more conservative. If the MWMC
experienced an earthquake at the catastrophic level, which he keeps hearing is going to happen, the
Commission is going to look back at $56,895 (DIC’s supplemental insurance premium for $50M) and say
what a bargain that would have been. But, he is okay with whatever option the Commission chooses.
Commissioner Meyer asked if we have any information about DIC’s exposure. Mr. Cutter replied when
we buy excess earthquake coverage it is all reinsured, there are layers of reinsurance. He doesn’t have a
concern that DIC has a capacity issue; they are financially strong and A rated.
Ms. Bishop added the MWMC has been with Starr Tech for the last 5 years and they are an excellent fit for
the MWMC and are excellent to work with. They are not overstretched with coverage in this area and
they tend to work on machinery, equipment, and boilers such as those at the plant. Currently, the
MWMC is in its second year of a two-year locked rate. In the past when the MWMC has gone out to
attract potential insurers, it finds that many insurers cannot cover the MWMC because of its size and the
asset values. There are usually gaps and holes in what can be provided. Ms. Bishop and Mr. Cutter feel
good about Starr Tech because they are able to close every gap.
Commissioner Inge asked if there is a possibility to renew this year and get an additional price lock
going forward next year. Ms. Bishop replied that those discussions have already taken place and asked
Mr. Cutter what his opinion was on this. Mr. Cutter stated that he did not think it would be possible,
because what he is seeing in the property market is an average increase of 7.5% to about 9% which is
due largely to the hurricanes, flooding, and wildfires from last summer and fall. The reinsurance market
took a real hit in property losses and as a result the property insurance rates are going up. He added the
property rate lock really served the MWMC well this year because it is saving 7.5 to 8% on its premium.
He is fairly positive that Starr Tech will not want to extend that because of the market conditions.
Commissioner Inge said that you are positive yet you have not asked. Mr. Cutter said he will ask.
Ms. Bishop stated that Starr Tech sends out their engineers every other year to make sure what their risk
is and that the MWMC is properly covered; she appreciates that collaboration.
Commissioner Inge stated that he would go with Option 2 because it takes a somewhat aggressive but
still conservative approach. But he would also like to consider whether or not we can we take the
additional $30,000 savings and put it in the Insurance Reserve. Commissioner Pishioneri said that it
sounded like a good plan to him.
Commissioner Meyer asked regarding the key losses analysis, based upon MWMC’s assets for a 1 in 500
year event, what is the anticipate loss. Ms. Bishop replied the deductible would be about $2.5M. Mr.
Cutter added it would be just under $15M in losses. When he is determining an insurance coverage limit
for earthquake, he is looking around the 1000-year event. But the Commission has been conservative
insurance buyers, so with the component of the underground pipes that are being insured, he doesn’t
think it is a bad idea to look more at the 5000-year event at the $75M range. It makes logical sense to
him. Commissioner Meyer asked if the loss of the Cascadia subduction zone earthquake had somewhere
around a 1 in 350 year return period and if the return periods shown in the analysis are consistent with
that. In other words, if the Cascadia subduction earthquake has a return period of 1 in 350 years, is this
the loss that we should expect that is shown on this chart or is it going to be higher than that? Ms.
Bishop replied that no one knows. Mr. Cutter agreed, and said he did not want to speak to that.
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June 8, 2018
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Ms. Bishop stated that staff is recommending Option 2, going with the $75M earthquake coverage as
opposed to the $100M coverage.
Mr. Stouder said in regards to the key losses analysis, the subduction zone quake occurs every 300 years
or so. His understanding is that the earth’s plates will not allow an earthquake larger than magnitude 9.
He thinks the conservative approach of $75M is probably prudent given what we know to expect of an
earthquake of that magnitude.
Commissioner Inge asked where we are in the 350 year cycle. The reply was 318 years. Mr. Stouder
added that the average is approximately every 300 years.
MOTION: IT WAS MOVED BY COMMISSIONER PISHIONERI WITH A SECOND BY COMMISSIONER INGE
TO AUTHORIZE THE GENERAL MANAGER TO ENTER INTO AGREEMENTS TO SECURE
PROPERTY INSURANCE COVERAGE TO INCLUDE $75 MILLION IN EARTHQUAKE COVERAGE
FOR THE PERIOD OF JULY 1, 2018 THROUGH JUNE 30, 2019. THE MOTION PASSED
UNANIMOUSLY 6/0.
PURE WATERS PARTNERS IGA
Todd Miller, Environmental Management Analyst, stated that staff is requesting the Commission to
approve Resolution 18-10 to enter into an Intergovernmental Agreement (IGA) with Eugene Water
Electric Board (EWEB) for the Pure Water Partners (PWP) collaborative. The IGA is a step in the process
toward a MWMC Riparian Shade Credit Program. This step will formalize MWMC’s access to outreach to
landowners and start recruiting landowners through the PWP Program. It is a step to prepare for the
MWMC’s permit renewal, to be set up and ready to go and perhaps ready to even start implementing
projects pre-permit.
Background: The MWMC participated in three pilot projects conducted by The Freshwater Trust (TFT))
under the Sponsorship Pilot Project Implementation from 2010 thru 2017. That is when staff learned
what it takes to recruit landowners, the different parts that are involved for on the ground restoration,
and how the credit accounting and verification process works. It took many hours of work with DEQ and
EPA on the whole process in setting up the foundation for an acceptable trading program. Parallel to
this, EWEB was looking to protect the McKenzie Watershed drinking supply and piloted the McKenzie
Volunteer Incentive Program (VIP). Staff between the two agencies started collaborating, recognizing
that there was mutual interest; one to protect and one to restore. In January 2015 the MWMC entered
into a Memorandum of Understanding (MOU) for McKenzie Watershed Restoration with EWEB. The MOU
was to develop an understanding of resource and funding requirements associated with integration of
EWEB and MWMC interest in order to aid in the formation of an IGA. In December 2017, staff presented a
draft IGA to the Commission for direction of the program.
Commissioner Pishioneri asked in regards to MWMC’s obligation in the IGA of $15,000 annually in a 5-
year funding commitment, how $15,000 was decided upon. Mr. Miller replied that it is an approximation
of the MWMC’s overall contribution of benefit to the program. It roughly works out to 20-25% of the
total cost of the program.
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June 8, 2018
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Commissioner Farr asked if the McKenzie Watershed included the upper Willamette watershed or
strictly the McKenzie. Mr. Miller replied that it is just the McKenzie because that is where EWEB’s program
is focused. We did an assessment of the total shade production value of the entire upper Willamette
which includes the Coast Fork and the Middle Fork Willamette watersheds. At the time, EWEB was
looking toward developing their second source water intake downstream of the confluence of the
Middle Fork and Coast Fork, which would have included the entire watershed region but right now the
multi-partner outreach is focused on the McKenzie. There are other partners besides the MWMC and
EWEB that are interested across the other watersheds. As PWP builds, the intent is to become a
standalone entity that would cover all the different partners’ interests. The MWMC could then tap that
resource to go into the Coast Fork and the Middle Fork if we needed to.
The IGA Purpose: To formalize the MWMC’s relationship with the PWP program for water quality
protection and enhancement. Benefits to the MWMC include access to landowner outreach and
recruiting, access to the StreamBank database (shade credits and other environmental attributes
available on those properties), and access to the landowner agreements simplified through single PWP
relationship.
The IGA Obligations: EWEB’s obligation is the formal recognition of the MWMC’s shade credit interests in
program outreach and assessment. Without the MWMC stepping in and contributing, there is no reason
for them to look out shade crediting interests. MWMC’s obligation is to provide annual funding of
$15,000 for program administration. That pays for the MWMC’s portion of the outreach and database
structure. The other part of the MWMC’s obligation is to establish our own relationships and protocols
for fiscal management and credit implementation.
Commissioner Pishioneri asked regarding EWEB not needing shade credits, if they are not obligated to
have the thermal load on the river to be mitigated or decreased in temperature through the Salmon
habitat requirements. Mr. Miller replied that he is not familiar with that and could not say if they are or
not. His understanding is EWEB’s main interest is for the PWP to engage the landowners and protect the
riparian function – it is part of their Source Water Protection program.
Commissioner Farr asked if the Corp of Engineers played into this partnership. Mr. Miller replied the
Corp of Engineers has their own program.
Mr. Miller showed Exhibit 1 from the IGA which is a diagram giving a visual of the overall PWP structure.
The IGA secures the relationship between EWEB and the MWMC with the understanding that they are
both contributors to the Watershed Conservation Fund (501(c)3) which is the financial backbone to the
PWP. Monies from that fund help pay for the landowner outreach assessment process that benefits all of
the cooperative agencies. The other agencies include the Forest Service and Soil & Water Conservation
District. What the IGA does not cover is the funding for restoration. That is where the MWMC will
separately fund payments for restoration through PWP.
Commissioner Pishioneri stated that he does not like another layer of government. He said that this
sounds like the same thing that the McKenzie Watershed Council is supposed to be doing. Is this
something different or is McKenzie Watershed Council going to be receiving money for work they are
already doing? Mr. Miller said it is funding for their staff to go out on the ground to do this work for PWP.
Commissioner Pishioneri said they are already well funded, so is there a need for funding them. Mr.
Miller replied yes. He said he cannot speak to the McKenzie Watershed Council’s ledgers specifically but
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June 8, 2018
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as a former watershed council coordinator, he can guess that they are funded for a bunch of individual
programs; the money they have for a particular outreach they are doing is for a particular program and
outcomes. This outcome for PWP is not something that they are otherwise currently funded for.
Commissioner Meyer asked if a stretch of the McKenzie or a tributary is slated for some improvement,
do you anticipate that funding from this fund could be used not just for shade credits for us but also for
others for general improvement of the watershed. Mr. Miller said absolutely. We are not talking about a
single landowner relationship but polygons within landowners. The landowner only has one relationship
with the PWP and could have on their property five different funding sources coming in for different
outcomes. There is no double dipping of funds to to do the same thing on the same land. But we might
segregate a portion, saying this polygon of land is for the riparian shade, this polygon of land is for
carbon credits, this polygon of land is for floodplain restoration. The landowner doesn’t need to know all
the mechanics of that, they just need to know that they are getting some incentive payments to
participate in the program. That is where the Conservation Fund and structure identifies the proper
funds that are going for each of the outcomes on the ground.
Commissioner Meyer stated in regards to getting shade credits the DEQ’s guidance for obtaining credits
has very specific criteria. He asked if there is anything in the IGA that would give us an assurance that
PWP will be using those criteria when doing the restoration. Mr. Miller replied that is a separate
relationship between the MWMC and the Credit Production Manager. The PWP is solely for the
landowner outreach, property assessment, and recruitment. The MWMC will separately set up the shade
credit accounting process and the protocols in which that is done. The Credit Production Manager that
will be overseeing the MWMC’s funds will make sure they are only paying for that element of the
program and done in ways that meet the DEQ’s requirements for shade credits.
President Ruffier asked if the landowners see the program as separate and distinct from EWEB or a
subsidiary of EWEB. Mr. Miller replied that it will be seen as separate. EWEB is one of many logos of the
PWP program. After we sign the IGA, MWMC’s logo will also be on the program information. They (the
PWP stakeholder group) are working on a separate web page interface and all the landowner
agreements are with PWP. They are working on a governance structure to make that happen.
Administrative Cost: The total annual administrative cost right now is $70,200; EWEB is currently funding
this portion. The breakdown of the cost are as follows: Insightly, the landowner interaction tracking
software at $1,200; StreamBank, the environmental attribute tracking database at $14,000; LCOG, for
taking the information into a geo-database with GIS service tools to help prioritize where outreach
should be done and which properties are the most beneficial at $15,000; and the McKenzie Watershed
Council and Upper Willamette Soil and Water Conservation District, who provide the on-site riparian
assessment and scoping services at $40,000. The total annual contribution by MWMC is $15,000.
Mr. Miller said that part of the benefit to the PWP agencies is the staff from these organizations already
has a lot of good local relationships on the ground that they have been building over the years. There is
a lot of trust and insight there so we are tapping into that.
Commissioner Inge questioned if the cost for Insightly and StreamBank was annual rather than a
onetime fee. Mr. Miller replied it is the annual fee. Commissioner Inge replied that it must be for the
administration of them rather than the purchase of them. Mr. Miller replied that all the information he
has is that it is the annual cost for the maintenance of them.
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June 8, 2018
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Commissioner Pishioneri asked about the McKenzie Watershed Council and Upper Willamette Soil and
Water Conservation District receiving $40,000 for work that they are already doing. Mr. Miller stated his
understanding is this is additional work, they already have the capacity and know how to do it but they
are not funded to do it. Commissioner Pishioneri asked if they are going to do the work with current
staffing or are they going to be hiring additional staffing. The reason he asks is that if they are already
getting paid to do 100 hours of work and we start this new program and kick in another $40,000 and
they are still working 100 hours, someone is getting less for their money or we are paying for something
that has already been done. Todd Anderson, Equipment Maintenance Supervisor, stated that he is on
the Upper Willamette Soil and Water Conservation District’s Board of Directors and the additional money
goes towards a part-time employee becoming a full-time employee in order to do the added duties.
Commissioner Pishioneri said that was the answer he was looking for.
Commissioner Farr stated that this goes in support of other agencies that are already doing the work
and this enhances the work that they are currently doing. It is brand new and very few people are
participating at this point in time, we are one of the early participants. Our participation will probably
make it more attractive to others to participate. He is fully in favor of it; we leveraged our money really
well with this.
Commissioner Meyer said the IGA has no term or condition for withdrawal, shouldn’t there be
something that addresses pullout. Commissioner Keeler stated the term is 5 years but it is stated in the
Resolution not in the IGA. Mr. Miller said that it would be added to the IGA. Mr. Miller added that the IGA
would not be necessary if the PWP takes on its own governing structure. Then EWEB would be just a
partner like the MWMC.
President Ruffier asked if Mr. Miller knows what the metric for production is, in terms of outcome.
$40,000 for onsite riparian assessment gets what – how many assessments? Mr. Miller replied that he
does not know.
Modeled Credit Benefit: The IGA states the MWMC’s annual contribution is $15,000; this will get the
MWMC access to the landowner outreach and the database structure. The ultimate outcome that staff is
looking for is the shade credits that will benefit the MWMC on its next permit. A modeled credit benefit
study that MWMC contracted for with The Freshwater Trust (TFT) shows the regulatory offset need is 93
million kilocalories per day (93 Mkcal/day). That was the mitigation need taken from the 2006
Temperature TMDL that still remains in effect and it is probably the low bar for what MWMC’s
obligations will be in the next permit. The regulatory need is calculated out at 2:1 (the standard trading
ratio with the DEQ) plus 10% for risk factors in implementation. That makes the anticipated shade credit
need 204.6 Mkcal/day. Given that target, TFT scoped out the entire Coast Fork and Middle Fork of the
Willamette River and the McKenzie River to see what the total capacity would be in potential planting
acres. If you restored everything, it would be over 5 billion kcal/day. We are looking for 204.6 Mkcal/day.
TFT estimated, depending on which property owners participate, between 5 to 12 properties, between 7
to 17 acres (because the density of shade production depends upon the landscape). The projected cost
comes in somewhere below a million to close to $2M. That calculates out to less than one cent per
credit. Before the PWP, when staff calculated the cost of shade credits they came out to three cents per
credit, which was still more cost effective then other ways to mitigate the temperature TMDL. So tapping
into the PWP outreach access really drives down the overall costs.
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June 8, 2018
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Mr. Stouder asked if Mr. Miller knew what the new regulatory offset would be (93 Mkcal/day was from
the 2006 TMDL). Mr. Miller replied the DEQ came out in March 2018 with a memo stating how they will
calculate the thermal load limits in permits that are under the TMDL scenario. The TMDL was challenged
in the courts so the DEQ has to redo them eventually which will probably be a decade long process.
Meanwhile, the DEQ says the existing TMDLs are in place and there is another numeric standard that
they would apply. That has not been modeled out yet because it is more recent information. Regardless,
it will not be less than 93 million, and likely more.
Commissioner Pishioneri (looking at the Modeled Credit Benefit slide) stated that when you use the
average projected cost and then take the maximum properties multiplied by the maximum acres, the
cost per acre comes out to more than the cost of the land. Mr. Miller replied that the cost of doing
riparian shade credit is very high compared to standard restoration. It is because of the 20 years of
monitoring and reporting multiple verification process and it is part of what we have hashed out
through the riparian pilot project. Commissioner Pishioneri said it is not a cheap investment but the
outcome is amazing, but keep in perspective what this program is costing.
Commissioner Keeler asked if the cost of this approach is about 1/3 of the cost of the other alternatives
that the Commission reviewed in the triple bottom line analysis. Mr. Miller replied that the PWP cost
assessment is 1/3 of what we thought shade credits were going to cost several years ago. It is even less
than what the recycled water programs would be.
Commissioner Meyer said the 62 river miles and the 450 acres (on the chart Mr. Miller displayed) don’t
seem to jive if you think about a 60 foot corridor for shade credit. He thinks the math is wrong. He said
the penny per credit is much lower than anything that he has heard from The Freshwater Trust. It is
worth checking. Commissioner Meyer said he is for the partnership; it is a wise way to go.
President Ruffier said that component (shade credit cost) is outside the scope of the IGA. The funding
for working with actual restoration and the credit manager would be separate from the IGA. Mr. Miller
said the process he is envisioning is to recruit the Credit Program Manager, someone like TFT or an equal
entity. Say MWMC needs 200 Mkcal of credit produced over the next five years. The credit manager
would present a proposal of what that cost would be and it would be up to their efficiency to do that.
We would then have that agreement with PWP that they will be working with the PWP structure. We are
paying into the fund and funds are getting released as the credits are getting produced. We are buying
the completed product and we stay out of the restoration business. President Ruffier confirmed that the
PWP is an administrative function and the MWMC still needs to come up with the funding for the actual
restoration and capturing state credits. Mr. Miller said yes.
President Ruffier said the process allows the MWMC to hedge a little in terms of delay against the
regulatory uncertainty. The Commission will discuss, at some point, the funding level for actual
restoration work. At that point, we could do a risk assessment on the potential for regulatory certainty,
regulatory impact, and make a decision about how aggressive we want to be at that point.
Mr. Stouder stated that the MWMC has money in the 5-year Capital Plan under Thermal Load that is
earmarked for this type of work and thermal load compliance.
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June 8, 2018
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Mr. Miller said there is flexibility in this program. We don’t have to go in for the full amount; we could say
let’s produce a million kcal of credit in the first couple of years and see how that goes and how the
regulatory environment is.
RESOLUTION 18-10: IN THE MATTER OF INTER-GOVERNMENTAL AGREEMENT WITH EUGENE WATER &
ELECTRIC BOARD – PURE WATER PARTNERS COOPERATIVE
Discussion: Commissioner Pishioneri said the motion needs to include editing the IGA with the terms.
President Ruffier asked Mr. Miller if he had a list of clarification/edits that need to be made to the IGA.
Mr. Miller replied yes. President Ruffier said it is his understanding that if the Commission approves
Resolution 18-10 to go forward with submitting the IGA to EWEB then it will come back to the
Commission with clarification on the questions that have been raised. Commissioner Meyer asked if the
$15,000 would go up as it says not less than $15,000. Mr. Stouder replied that the “not less than” was
removed , it is $15,000 annually.
MOTION: IT WAS MOVED BY COMMISSIONER KEEELER WITH A SECOND BY COMMISSIONER FARR TO
ADOPT RESOLUTION 18-10 DEPENDENT UPON THE TERMS OF THE IGA ARE ADDED TO THE
IGA (5-YEARS) AND THAT THE ANNUAL FUNDING IS CORRECTED TO STATE $15,000 (strike the
“not less than”). THE MOTION PASSED UNANIMOUSLY 6/0.
Commissioner Pishioneri added he would like some sort of monitoring model of the outcomes of this
program so he can see if it is working and if the money is worth this investment or if we need to look
elsewhere.
MWMC FINANCIAL PLAN RESERVES #3
Ms. Bishop and Meg Allocco, MWMC Accountant, went over the proposed revisions to reserve policy
language in the 2005 Financial Plan plus the proposed addition of an Insurance Liability Reserve policy.
Ms. Bishop stated these are very minor adjustments and in many cases they are adjustments to bring the
policy language in-line with our current practices which have evolved over time (since 2005).
Working Capital Reserve: Currently the policy sets the Working Capital Reserve at $200,000 for the City
of Springfield and $500,000 for the City of Eugene. The proposed change is to revise Eugene from $500K
to $700K and change the wording to “set at a minimum of”.
Commissioner Inge asked if the MWMC has historically gone over either the $200K or $700K. Ms. Allocco
replied that the bill Springfield receives from Eugene for reimbursement of MWMC’s expenses usually
runs about $1M. Springfield reimburses Eugene as fast as it can and the $700K covers the gap.
Operating Reserve: The current policy says that 8—10% of the annual operating expenditure budget be
kept in the Operating Reserve. Staff has been more conservative than that and has been using 10-15%
for the reserve. The proposed change is based on the industry standard of a minimum 2 months of
operating expenses which runs around 16-17% of annual operating expense.
President Ruffier asked if we have ever drawn from the Operating Reserve. Ms. Allocco replied that we
do with Supplemental Budgets but it is not very often. It would take something like losing a large
industrial client or something similar. President Ruffier stated in the incidence of losing Hynix, we have
established a Rates Stability Reserve that we could use. Ms. Allocco said generally we have the Operating
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June 8, 2018
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Budget based on GFOA (Government Finance Officer Association) standards and guidelines. We have
been pretty good in budgeting and not having to use it.
Commissioner Inge said that in real terms there is no limit on this reserve. It says the minimum of two
months but, as it is written, you could make it any number you want to. Is there a reason to have that
much flexibility? Mr. Stouder said the revenues come into the Operating Reserve and then they get
distributed out to the other funds. There is a need for a set minimum amount so we can distribute out,
but not a need to cap it. Commissioner Inge said he understands what it is intended to do, but could
you allow it to keep climbing year after year? Ms. Allocco said collectively the Commission could.
Commissioner Inge said so it is a budget item issue at that point. Ms. Allocco replied that is correct and
added that it would have to be approved by the Commission as part of the budget or with a
supplemental budget. At the end of the year, any money that we do not spend gets carried over and
goes into the Operating Reserve as part of Supplemental Budget #1. If the Operating Reserve is already
at its budgeted amount, the Commission could decide to put the money into the Capital Reserve or
elsewhere.
Commissioner Meyer said he agrees with Commissioner Inge’s point. The word “minimum” could be
scratched from the policy to say instead of a minimum of two months of the annual operating
expenditure budget, say two months of the annual operating expenditure.
Commissioner Farr said two months seems prudent.
Capital Reserve: The current policy states to not fall below $1M. In April this year, the Capital Reserve
balance was at $60M. Staff proposed to change the $1M to $3M although they felt it was still particularly
low. They asked if the Commission had a number that makes more sense for the long-term future, to
please offer it. Mr. Stouder said to keep in mind that the last time the MWMC had a permit issued (2004),
the associated cost of the capital improvements was $196M. We know we will have significant project
work to do with a new permit, the thermal load that we just talked about, and a number of other issues.
Commissioner Keeler said the last sentence (in the policy) says, “In no year shall the Capital Reserve be
allowed to fall below $3 million.” He is fine with the amount but the language indicates you cannot
touch the $3M although the reason we have the reserves is in case we need the money. He suggested
changing it to “maintain a target minimum of $3M” instead of saying shall not be allowed to fall below.
Equipment Replacement Reserve: Ms. Allocco explained that the language of the equipment
replacement reserve came from the original grant funding. It pre-dates current staff. Commissioner
Meyer replied that it was an EPA stipulation of the grant that you have a replacement fund based on 20
years life of the asset. Ms. Allocco said the grant has been paid off so we are free to make the language
whatever the Commission is comfortable with. There is currently $12.5M in equipment replacement
reserve which would fund approximately the assets that are coming up over the next 10 years. Staff is
proposing replacing the original 20-year language with 10-years to align with current practice.
Commissioner Pishioneri clarified that the fund is enough to cover whatever comes up in the next ten
years.
Ms. Allocco added the Asset Management Plan will be adding some additional assets into the reserve
and changing some expected life spans. This reserve can be reevaluated when the Asset Management
Plan is done.
MWMC Meeting Minutes
June 8, 2018
Page 11 of 16
President Ruffier asked if we are still on track for the end of the year for the Asset Management Plan.
John Huberd, Finance and Administrative Manager, replied that staff plans to have the Asset
Management Plan developed by September for the budget process.
Commissioner Inge asked how the interest earnings are handled. Ms. Allocco replied that the interest
goes into each of the individual funds based on their balance. The interest for the City is distributed to all
the funds according to each fund’s balance. So the $60M that is in Capital Reserve will get its portion.
Commissioner Inge asked if the reserves continue to grow based on the interest. Ms. Allocco said that is
correct they are growing with both the interest and what is contributed to the reserve.
Mr. Breitenstein said in regards to the Asset Management Plan, he doesn’t expect it will have a
significant impact on the Equipment Replacement Program in September in terms of additional assets.
The Asset Management Plan will include assets like roads and infrastructure which fall outside the
definition of the Equipment Replacement Program.
Insurance Liability Reserve: There is no policy language for the Insurance Liability Reserve. Currently the
reserve’s balance is $515,000. As previously discussed, the savings from the insurance premium, around
$35,000, will be added to this reserve to bring it up to $550,000. Staff is proposing to have a minimum of
$1.5M reserve set in the adopted budget to be used for any type of loss, payment, liability, property. So if
there was some type of risk or lawsuit, it could be a place to go for initial funds to address it. The basis
for the $1.5M came from the potential deductible in case of an earthquake. It would probably sit there
and be carried forward in each budget.
Commissioner Inge said that would mean we would need to transfer a million dollars in the adopted
budget. Mr. Stouder replied it would be a Commission decision. He referred back to the earthquake
analysis’ probable loss model which shows as the size of the quake went up the deductible got more.
The 500-year earthquake was around $2.5M deductible and was the base for the reserve; however, we
could borrow from the funds as needed. He asked for direction from the Commission - if they want to
increase this reserve.
President Ruffier said the deductible on property, outside of an earthquake, is $250,000. Ms. Bishop
replied it is $250,000 with the exception of two pump stations that are in the flood zone. One is
Glenwood Pump Station and the other is Good Pasture Willakenzie; they are each $500,000. President
Ruffier said the chances are if there was a flood significant enough to impact one station it would hit
them both. Commissioner Meyer said so we are looking a $1M for the two stations. President Ruffier
added a flood of that magnitude would fall under FEMA. Ms. Bishop stated from our experience with
FEMA in 2016, we spend our funds to restore and they reimburse us at a later date. In the end it works
out well but we need our funds up front.
Commissioner Inge asked if the $1M would be transferred out of Operating Reserve. Ms. Bishop replied
that we would come back with Supplemental Budget #1 or wait until we are done with all the policies
and do it all at once. It would be a transfer from one fund to another.
Commissioner Meyer said he supports that because we have quite a bit of deductible hanging out there.
But he would change the language from saying a minimum to target.
MWMC Meeting Minutes
June 8, 2018
Page 12 of 16
President Ruffier said that he is uncomfortable with that amount because we seem to be compounding
our conservatism. We have $75M on the earthquake insurance which is significantly more than the
projected loss based on the modeling. We have a Capital Reserve, a Rate Stability Reserve, and other
funds that could be applied in the case of some of these emergency situations. If it is short term
borrowing, we can certainly borrow from Capital until we get reimbursed from FEMA or something like
that.
Commissioner Pishioneri said it is good to look at our minimums, etc. but have we assessed the impact
of these changes to the rate payers? Ms. Bishop replied that we are not actually increasing the balances
we are realigning the existing Reserves. We care about the rate payers. We look at how our rating
agencies rate our credit rating. We have a high credit rating because we have firm policies. That
framework is what provides for future financing at a much better interest rate. Commissioner Pishioneri
responded that you are looking out for the rate payer’s best interest by doing that to get a better rate.
The mindset needs to always be how it is going to benefit the rate payer not how it is going to benefit
the MWMC. It sounds redundant, but from a rate payer’s perspective we should always keep that goal.
President Ruffier commented the MWMC is currently pay-as-you-go and not borrowing so the credit
rating doesn’t come into play. Ms. Bishop stated it was because of the credit rating that we were able to
refinance the revenue bonds and saved about $10M. Commissioner Pishioneri said that was nice to be
able to report back to Council about that.
Commissioner Inge said that we are not taking any additional money; we are just taking money from
this bucket and putting it into that bucket. From his perspective, to have money specific to insurance
allows us more flexibility as we continue down this road. Because we have made some prudent decisions
relative to insurance in the last five years (increased deductible and lowered premiums), we have saved
over several hundred thousand dollars. Since we are not increasing the cost, just moving money from
one fund to another, he is good with that and likes the idea of having at least that much money in this
particular reserve and maybe even more.
Commissioner Meyer said the single thing that affects our rates is our ability to borrow less long term. If
you look at MWMC’s rates compared to other agencies, we are a little bit lower than the middle of the
pack. That is primarily because we have borrowed less than those like the City of Portland have. The ones
at the low end have not borrowed anything, they have gone pay-as-you-go. So as long as we manage
the reserves prudently to meet future Capital needs and keep our rates low, we will be ahead in the long
term. The goal is to keep rates low for the long term.
Commissioner Keeler asked what the MWMC is earning right now on all this capital. Ms. Allocco replied
about 3%; overall investments are about 2.3%. Three years ago it was about a ½ percent; it has increased
in the last few months.
Commissioner Inge said it would be good to think about a way to utilize the interest on the reserves to
give back to the rate payer. He doesn’t know if it is enough to do that but it is something to be thinking
about.
President Ruffier stated he is interested in what the cumulative effect of these proposals would be on all
the reserves. He asked for the chart that shows the reserves and the balances be updated and provided
to the Commission, at some point, so they can see the direction we are going. He also appreciates a
MWMC Meeting Minutes
June 8, 2018
Page 13 of 16
continuation on the discussion on reserves. He thinks that there is still some duplication on the Rate
Stability funds, the two that we have, and some of the other in terms of what we are trying to cover for
risk purposes. His concern is that we are carrying significant balances in the reserves that we have not
had a history of using. He thinks it does ultimately have a rate impact. He would like to have some
clarification on that. Ms. Allocco stated that two bond reserves did go away when we refinanced the
bonds.
Commissioner Inge asked how many bonds are remaining. Ms. Allocco replied we just have the 2016
Revenue Bonds which is about $32M in principal.
Ms. Bishop said the next step is to bring before the Commission the policies associated with Asset
Management. There are four to five policies and they also tie in with reserves.
BUSINESS FROM COMMISSION, GENERAL MANAGER, AND WASTEWATER DIRECTOR
Commission
President Ruffier attended the rate hearing for wastewater and stormwater rates in the City of Eugene.
John Brown, the current chairman for EWEB, raised some issues and questions in regards to the rate
setting process, about the rates, and efforts at reducing costs. President Ruffier had a discussion with
him after he made his presentation. It is pretty clear there are some misunderstandings and a lack of
knowledge of what the MWMC does and how we approach things, particularly in comparison to what
EWEB has done with regards to their budget, policies, and their philosophy about rate rebates and rate
structures. The City of Eugene is preparing a response to his questions. Hopefully the Commission can
get a copy of their response to see how that went. It made him think about MWMC’s relationship with
EWEB. During the RNG discussion, there was a note that some of EWEB’s policies are kind of antithetical
to some of MWMC’s conservation efforts and interest in generating more power. Some of their rate
structures can be detrimental to MWMC’s interests. At some point he would like staff to bring back to the
Commission information about what policies EWEB has and how they affect or influence some of the
Commission’s decisions and some of MWMC’s ability to consider conservation measures for energy or
something like that. It also made him wonder about having a joint meeting with EWEB to discuss items
of mutual interest or concerns since MWMC is kind of hooked to EWEB because of PWP and they do our
billings, plus a number of other issues that kind of align.
Mr. Stouder asked in regard to the rate hearing, if the testimony given was specific to Eugene and
MWMC or Eugene only or MWMC only. President Ruffier answered that it was nonspecific. It was about
the rates that Eugene specifically was proposing, 4%, but a component of that was MWMC. Mr. Brown’s
comments were directed to the process and budgeting which is really our responsibility.
Commissioner Inge said it makes sense to give them some history relative to where the MWMC has been
with rates. Such as all the years we went with no rate increases, the regulatory changes that have
mandated changes at the treatment facility and what the cost of those were, the why and how these
rate changes have come about, and philosophically the decisions the Commission has made. He thinks
there is a lack of knowledge on their part on what the MWMC has done and why we have done what we
have done in the last few years, things like paying off the revenue bonds and saving money.
President Ruffier added he took from the presentation and conversation that Mr. Brown was justifiably
proud of EWEB’s budget management, reduction, and efforts to be responsive to their rate payers. But
MWMC Meeting Minutes
June 8, 2018
Page 14 of 16
he thinks it is a bit of apples to oranges to compare EWEB’s operations to MWMC’s. He agrees with
Commissioner Inge that it is a lack of understanding the MWMC’s operation.
Commissioner Keeler stated that he can’t even begin to formulate a response until he knows exactly
what the comments were. He asks to have Mr. Brown’s comments emailed to the Commission or sent in
the Communication packet.
Commissioner Meyer said EWEB made significant cuts in FTEs to give a small rate reduction. It will be
interesting to see over a 20 year period what their FTEs were compared to the MWMC’s which have been
absolutely flat.
Mr. Breitenstein suggested being cautious and waiting to see what Mr. Brown’s comments were. The
rate hearing was only about the local Eugene rate not the regional rate. So unless Mr. Brown was specific
about regional or the MWMC, it seems like it would be awkward for the MWMC to respond. President
Ruffier replied he wasn’t proposing a specific response at this point. Mr. Brown’s comments triggered
some questions in his mind about EWEB’s and MWMC’s relationship and the fact that we haven’t really
met with them.
Commissioner Pishioneri said that before we have a joint meeting, he wants a lot more information and
what the hoped-for outcome is of a joint meeting. President Ruffier agreed with Commissioner
Pishioneri, he just wanted to raise the issue of some of their policies and see if it is worth having a joint
meeting. Commissioner Pishioneri said it (Mr. Brown’s comments) could have absolutely no basis for
MWMC’s involvement and if it does, how does it involve Springfield and Springfield Utility Board. It could
be a can of worms that is not worth the outcome at this point until we get more information.
Commissioner Farr disagreed with Commissioner Pishioneri about the meeting with EWEB. The MWMC
has similar duties, responsibilities, and rate payers and coordinating our actions is a responsible thing to
do.
Commissioner Inge said he isn’t suggesting that we respond to them either. He thinks that we need to
get the information for ourselves so that we have an understanding. The other piece is that Mr. Brown is
a Eugene rate payer so maybe we have not done as good a job in the education of our constituents as
we may need to. We need to take a look at that. After we get all the information, we can formulate where
we want to go from there.
President Ruffier said there has certainly been confusion between the local rates and the regional and
MWMC’s responsibilities. Seeing his comments might help provide some illumination to that question
and issue and whether or not we need to have any kind of response. It also highlights the difficulties
with the whole budget process and the way we go about it because we are so intergovernmental. We
formulate our budget, submit it for review and approval to the councils and the County Commission and
then we do a rate hearing. So if they don’t approve the rates, we don’t have revenue to support the
budget.
Commissioner Farr thanked Greg Watkins for taking him on his first tour of the facility since 1995. It was
an impressive tour.
MWMC Meeting Minutes
June 8, 2018
Page 15 of 16
General Manager:
MWMC received a Platinum Peak Performance Award from NACWA; it is our 11th in a row. NACWA is
going to do a multi-media presentation highlighting agencies that received the award this year.
They asked the award winners from around the country to send photos in of their employees at the
plant. Laura Keir sent an invitation out to staff and the Commissioners. Commissioner Meyer,
Commissioner Pishioneri, and Commissioner Farr attended.
The City of Eugene is embarking on a Climate Action Plan in order to reduce greenhouse gases in the
Community; it is a Eugene City and Council driven initiative. They identified large leverage
stakeholders in the community who were invited to participate in a process with the City of Eugene.
The stakeholders include MWMC, EWEB, University of Oregon, LCC, LTD, Lane County, NW Natural,
and the school districts among others. They had an initial meeting to talk about the project and
David Breitenstein and Mr. Stouder attended on behalf of the MWMC and the City of Eugene. Staff
from Eugene has reached out to the Eugene MWMC Commissioners to identify what the project is
about and inform them. Ultimately Eugene is looking to have stakeholder engagement in the
process. Mr. Stouder thinks it would be important for the MWMC to participate along with other
stakeholders. Eugene is developing a Charter to outline the process and goals and are seeking
stakeholder’s signature. Right now, Mr. Stouder is not comfortable signing the charter until we see
the final version and he would like the Commission to have a chance to give input before we sign it.
President Ruffier stated the Eugene representatives on the MWMC Commission met with City of
Eugene staff to talk about the issue. He agrees with Mr. Stouder that at this time we just track what
they are doing and not have any specific commitments at this stage. If it looks like it will develop
further, we will come back to the Commission with the proposals or ideas.
Wastewater Director:
Introduced Trail Smith as the new Facilities Maintenance Supervisor. He was promoted last month.
He has been with the plant for eight years and the last four years he was the lead operator at the
Biosolids Management Facility (BMF). The lead operator position at the BMF was filled by Matt Hays
who was a lead operator at the plant.
In assisting with the capacity evaluation of the Glenwood Pump Station, there was some concerns
about one of the under river lines. It was a 12” diameter line which appeared to have a restriction.
Eugene staff tried to clean the line out but was unsuccessful. A contractor was hired to use some
newer technology - ice pigging of that line. Pigging is where you typically move a dense foam object
through the line and it pushes all the debris out, the concern with that is it can get stuck. This was an
ice pig which is basically dense ice slush. It was effective in clearing the debris from that line which
allowed Eugene’s camera crew to inspect it. The good news is the line is in good condition.
Staff completed cleaning the second digester using the new digester cleaning station. It took less
time than anticipated so staff is getting better experience with those pumps. The process worked
fairly well which makes staff more comfortable with it being the standard method of cleaning.
Commissioner Inge asked for an update on the property the MWMC purchased out by the Biocycle
Farm. Mr. Stouder stated the property is being managed by staff. The fate of the mobile home has not
been decided yet. He will bring back information regarding it in either a Communication packet or an
update at the meeting. The sale is complete; the MWMC has owned it for approximately 10 months.
MWMC Meeting Minutes
June 8, 2018
Page 16 of 16
Mr. Newman introduced Dawn Williams, Administrative Specialist, who filled retired Judy Castleman’s
position. She was 12 years at the City of Irvine in their Community Development Department. She was in
the US Armed Forces and served as the assistant to the Inspector General, as well as a variety of private
sector positions.
ADJOURNMENT
President Ruffier adjourned the meeting at 9:37 a.m.
Submitted by: Kevin Kraaz
______________________________________________________________________________
M E M O R A N D U M
DATE: July 5, 2018
TO: Metropolitan Wastewater Management Commission (MWMC)
FROM: Josh Newman, Managing Civil Engineer
SUBJECT: Renewable Natural Gas (RNG) Consultant Agreement Amendment
ACTION
REQUESTED:
Approve Resolution 18-11 authorizing staff to execute an amendment to the
Consultant Services Agreement with Kennedy/Jenks Consultants for additional
design and construction services
ISSUE
Staff requests Commission approval of Resolution 18-11 (Attachment 1), authorizing the MWMC
Executive Officer to execute a contract amendment with Kennedy/Jenks Consultants for the addition of
design services and services during construction in support of the MWMC’s Renewable Natural Gas
(RNG) Upgrades Project P80095.
BACKGROUND
At the May 11, 2018 Commission meeting, staff presented findings and recommendations resulting from
assessments performed by Kennedy Jenks Consultants informing the Commission on the risks and
opportunities associated with the proposed RNG Upgrading project. After discussion and careful
consideration, the Commission directed staff to fully implement the RNG project. This included
amending the original Agreement with Kennedy Jenks Consultants to add the needed design services
and services during construction to the contract Scope of Work.
DISCUSSION
At the July Commission meeting, staff will do the following:
Provide a brief update on the RNG project
Discuss the proposed Consultant Agreement amendment
Outline the next steps for the RNG Upgrades project
The original Consultant Agreement with Kennedy Jenks Consultants was structured to include only tasks
necessary in order to provide revised project cost estimation, risk analysis, and financial scenario
assessment for review and discussion with the Commission. This information was provided to inform the
Memo: Renewable Natural Gas (RNG) Consultant Agreement Amendment
July 5, 2018
Page 2 of 2
Commission’s decision whether to fully implement the RNG project. It was anticipated that if the
Commission approved full implementation, then the Agreement would be amended to add the
necessary scope and fee needed to provide consultant design services and services during construction.
Given the Commission’s direction at the May 11, 2018 meeting, staff and Kennedy Jenks Consultants
jointly developed and negotiated a Scope of Work for design services and services during construction
(Attachment 2). The original Agreement not-to-exceed (NTE) amount, the change in NTE amount
associated with the proposed amendment, and the resulting total amended Agreement NTE amount are
summarized in Table 1.
Table 1 – Summary of Agreement Amended Value
Description Consultant NTE Fee ($)
Original Agreement $ 440,000
Proposed Amendment No. 1 $1,076,000
Proposed Total Amended Agreement $1,516,000
ACTION REQUESTED
Staff requests approval of Resolution 18-11 authorizing staff to execute an amendment to the original
Consultant Services Agreement with Kennedy/Jenks Consultants for an additional Not-to-Exceed (NTE)
amount of $1,076,000. This will bring the amended Agreement NTE up to $1,516,000.
ATTACHMENTS:
1. Resolution 18-11
2. Final Draft RNG Agreement Amendment No. 1 – Design Services and Services During
Construction Scope of Work
ATTACHMENT 1
Resolution 18-11
Page 1 of 2
METROPOLITAN WASTEWATER MANAGEMENT COMMISSION
RESOLUTION 18-11 ) IN THE MATTER OF CONTRACT AWARD
) OF ENGINEERING CONSULTING SERVICES )
MWMC PROJECT P80095 – RENEWABLE )
NATURAL GAS (RNG) UPGRADES
WHEREAS, the Metropolitan Wastewater Management Commission (MWMC) approved
the Regional Wastewater Program Budget that includes $7,050,000 for Project P80095 –
Renewable Natural Gas Upgrades;
WHEREAS, the MWMC has followed the procedures for Formal Selection set forth in
MWMC’s Procurement Rule 137-048-0220;
WHEREAS, MWMC advertised an RFP for the Renewable Natural Gas (RNG) Uprades
Engineering Services contract on October 18, 2017;
WHEREAS, the RFP was structured to solicit services in a two-phase Consultant Services
Agreement (hereafter “Agreement”), with both phases described in suffiecient detail in the RFP
and that would allow the MWMC to procure the second phase following completion of the
original contract Work through direct appointment to the selected Proposer through a later
contract amendment as allowed in MWMC Rule 137-048-200(d);
WHEREAS, MWMC received seven (7) proposals for technical services from qualified
respondents on November 13, 2017;
WHEREAS, an interagency evaluation committee from Springfield Environmental
Services Division and Eugene Wastewater Division (Evaluation Team) evaluated the proposal
pursuant to the criteria in the RFP and applicable law and determined that Kennedy/Jenks
Consultants scored favorably across all criteria;
WHEREAS, pursuant to MWMC Rule 137-048-0240, the MWMC awarded the Agreement
for the first phase of Work to Kennedy/Jenks Consultants with the provision that the contract
would be later amended to provide for the second phase of work in the event that the
Commission elected to fully implement the RNG project, which would include design and
construction of RNG facilities;
WHEREAS, following a discussion and consideration of findings from the first phase of
the Work under the Agreement on May 11, 2018, the Commission directed staff to fully
implement the RNG Upgrades project;
WHEREAS, the consultant services required for full implementation of the project now
require that the Agreement be ameded to add the required design and construction
management support services and associated Consultant compensation.
ATTACHMENT 1
Resolution 18-11
Page 2 of 2
NOW, THEREFORE, BE IT RESOLVED BY THE METROPOLITAN WASTEWATER
MANAGEMENT COMMISSION THAT:
Tom Boyatt, as the duly authorized Executive Officer of the MWMC, is hereby authorized
to: (1) designate qualified staff to negotiate and execute a directly appointed Agreement
Amendment with Kennedy/Jenks Consultants for an authorized amount not-to-exceed (NTE)
value of $1,076,000 as allowed under MWMC’s Procurement Rule 137-048-0220(d); and (2)
delegate performance of project management functions including, but not limited to, issuance
of notices to proceed, contract amendments not to exceed a cumulative Agreement total of
15% of the initial contract amount, and management of the contract to ensure deliverables and
services meet the contract requirements.
ADOPTED BY THE METROPOLITAN WASTEWATER MANAGEMENT COMMISSION OF
THE SPRINGFIELD/EUGENE METROPOLITAN AREA ON THE 13th DAY OF JULY 2018.
___________________________________________
PRESIDENT: Peter Ruffier
ATTEST:
_______________________________________
Secretary: Kevin Kraaz
Approved as to form: _________________________
MWMC Legal Counsel: K.C. Huffman
ATTACHMENT 2 Page 1 of 1
AGREEMENT
AMENDMENT TO THE Click to enter Project Name
Kennedy/Jenks Consultants and the Metropolitan Wastewater Management Commission
(MWMC) entered into an AGREEMENT effective December 29, 2017. The parties now desire
to amend the Agreement as set forth in this Amendment No. 1. This Amendment No. 1 shall
become a part of that AGREEMENT as fully and completely as all original provisions. All
provisions of the AGREEMENT not modified herein shall remain in full force and effect.
SCOPE OF SEVICES, COMPENSATION & SCHEDULE
1. The scope of services described in Exhibit A of this Amendment shall be added to the
Work under the amended Agreement
2. Consultant fees shown in Exhibit B of this Amendment shall be added to the
Consultant’s Compensation under the amended Agreement, and
3. Exhibit D of the Original Agreement shall be replaced by Exhibit C of this Amendment
Compensation Component Consultant Not-to-Exceed Fee
Original Agreement $ 440,000
Amendment No. 1 $1,076,000
Total Amended Agreement $1,516,000
METROPOLITAN WASTEWATER CONSULTANT
MANAGEMENT COMMISSION Kennedy/Jenks Consultants
By: By:
Tom Boyatt Mark Cullington
Title: MWMC Executive Officer Title: Principal-in-Charge
Date:
Date:
____________________________________________________________________________
After this amendment is approved and accepted by both parties, copies with attachments will be sent to:
Consultant
Project File
MWMC Legal Counsel
AMENDMENT NO. 1
RNG UPGRADES PROJECT – MWMC PROJECT P80095
EXHIBIT A – SCOPE OF WORK
Scope of Work for Phase 2 ATTACHMENT 2 Page 1 of 11
Metropolitan Wastewater Management Commission
Renewable Natural Gas (RNG) Upgrades Project – Phase 2
6/26/18
Scope of Work
The Metropolitan Wastewater Management Commission (MWMC) is proceeding with detailed
design of the renewable natural gas (RNG) upgrade facility and pipeline to be located at its regional
Water Pollution Control Facility (WPCF) initiated as part of Phase 1. Primary tasks for this phase
include:
Assist in reviewing bids received from equipment manufacturers as a result of Phase 1 early
procurement task.
Provide ongoing negotiation support in finalizing NW Natural and Trillium CNG agreements.
Provide engineering services for 60% design, 90% design, 100% design, and Final Bid
documents of the RNG facility and pipeline.
Provide bid period support services.
Provide construction support and testing/startup support services.
The following scope of work includes Phase 2 detailed design, bid support, and construction
support services. Kennedy/Jenks will perform the work tasks and develop deliverables as
described below.
Phase 2: Detailed Design
Task 1 – Project Management
Kennedy/Jenks’ Project Manager (Luke Werner) will be the single point of contact for the MWMC
Project Manager and will be referred to as the “Designated Contact.” Kennedy/Jenks’ Project
Manager will not be changed without prior written approval by the MWMC’s Project Manager.
Kennedy/Jenks will utilize the MWMC ConstructwareTM tool for all official communications and
document transfer for this project.
Specific project management tasks that Kennedy/Jenks will provide include:
Project Meetings. Meetings will include up to two (2) MWMC public meetings to discuss the
bid results from both equipment procurement as well as the general construction package
with Commissioners (based on project needs and as directed by the MWMC Project
Manager). Technical meetings are included in Tasks 5 through 10 below.
Schedule. Kennedy/Jenks will develop a project schedule using the critical path method
and will provide monthly updates (more frequently if needed to respond to changes in the
project). Microsoft Project 2010 scheduling software will be used.
Project Updates. Kennedy/Jenks Project Manager will provide weekly progress reports to
the MWMC Project Manager in email format that will include: 1) work completed during the
prior week, 2) tasks to be completed in the current week, 3) issues related to the scope of
work or schedule, and 4) information needed from the MWMC. Additional regular
communication with the MWMC Project Manager will be done via phone, ConstructwareTM,
and in person on a bi-weekly basis.
Invoicing. Kennedy/Jenks will provide monthly detailed invoices in coordination with the
MWMC Project Manager via Constructware. Invoices will be accompanied by updated
schedules.
AMENDMENT NO. 1
RNG UPGRADES PROJECT – MWMC PROJECT P80095
EXHIBIT A – SCOPE OF WORK
Scope of Work for Phase 2 ATTACHMENT 2 Page 2 of 11
Quality Plan (QP). Kennedy/Jenks will prepare a Quality Plan at the start of the project.
This plan will outline QA/QC reviews and specific technical protocols and methods for
preparing work products. QA/QC review effort is distributed across Tasks 5 through 10.
o Description - At a minimum, the QP shall:
Identify the QA/QC team members.
Describe the roles, responsibilities, and budget (level-of-effort) for each team
member.
Provide a QA/QC schedule identifying QA/QC milestones.
Describe each deliverable requiring QA/QC including technical memoranda,
material take-off estimates, cost estimates, equipment sizing and design
data, plans and specifications, and all associated calculations.
Include constructability review during design development.
o Deliverables:
Project-specific QP for review by MWMC staff (PDF electronic document
saved on the Constructware™ system)
Updates to the QP as required.
Follow up and key correspondence from QP personnel to the MWMC Project
Manager regarding implementation of the plan.
Constructability review comments and responses during design development.
Task 5 – Contract Negotiations Assistance
The return on investment for the RNG Upgrades Project is heavily dependent upon attaining
environmental attributes available through government programs. In order to connect to the
natural gas distribution system and attain these attributes MWMC must first effectively
negotiate an interconnection agreement with the natural gas utility (NW Natural) and the
offtaker (Trillium CNG). Kennedy/Jenks will team with Blue Source LLC, who assisted during
Phase 1, to review the updated contracts and help the MWMC navigate the potential risks and
benefits of these agreements. Information that will be provided to support this process will
include:
NW Natural Negotiation Assistance. Provide negotiation assistance for contract with NW
Natural beyond the scope of Phase 1. Assistance includes primarily technical review,
including gas testing and quality requirements, shutoff conditions, and receipt point facility
connection requirements. Comments from review of NW Natural contract will be provided in
tabular form.
Trillium Negotiation Assistance. Provide negotiation assistance for contract with Trillium
CNG beyond the scope of Phase 1. Assistance will be primarily business-related support
from Blue Source LLC based on their experience with other similar offtaker contracts, with
minimal effort from Kennedy/Jenks. Comments from review of draft and final contracts will be
provided in tabular form.
Meetings. Assume Kennedy/Jenks staff will attend two (2) meetings for each of the
contracts (NW Natural and Trillium) and Blue Source LLC will participate via telephone for
two (2) Trillium meetings. Meeting notes will be provided in WORD format on
Constructware to document information presented and decisions made.
Task 6 – Equipment Procurement Support
As part of Phase 1, Kennedy/Jenks prepared bidding documents for early procurement of packaged
biogas upgrade equipment. Phase 2 services includes reviewing bids received from prospective
equipment manufacturers, reviewing submittals and RFIs from the selected manufacturer, and
development of potential change orders associated with minor modifications to the equipment
AMENDMENT NO. 1
RNG UPGRADES PROJECT – MWMC PROJECT P80095
EXHIBIT A – SCOPE OF WORK
Scope of Work for Phase 2 ATTACHMENT 2 Page 3 of 11
package based on developments in the detailed design of the project (Task 7), as these two tasks
will occur in parallel. Equipment procurement support will include:
Equipment Procurement Bid Review. Kennedy/Jenks will meet with the MWMC
staff to review the bids.
Equipment Submittal Review. Submittal documents will be reviewed and a formal
shop drawing review letter will be provided to the MWMC for review prior to issuance to
the manufacturer. Assume up to three (3) submittals, including resubmittals. One (1)
meeting will be held to review the results of the initial submittal review with the MWMC
staff.
Equipment RFI Review. It is anticipated the equipment manufacturer will issue
requests for information (RFIs) regarding the details of the procurement package that will
need to be reviewed and responded to in a timely manner. Assume up to three (3) RFIs.
RFI responses will be issued to the MWMC for forwarding to the manufacturer.
Equipment Change Orders. It is anticipated potential modifications during the detailed
design phase may necessitate that minor changes be made to the equipment package
already procured. Assume up to two (2) equipment change orders at 20 hours each.
Task 7 – Construction Bid Document Preparation
Kennedy/Jenks will prepare plans, specifications, opinion of probable construction costs, and other
design related documents while preparing the bid documents for public bidding of the project. The
project plans will describe the biogas upgrading facility, RNG pipeline, and connection details with
the NW Natural point of receipt facility. It is assumed that the proposed biogas upgrading equipment
will be housed in an FRP or pre-engineered metal structure that will not be designed by
Kennedy/Jenks. The option to include a CMU or concrete reinforced structure is included under the
“Optional Services” section of this scope.
Detailed design elements will progress from the conceptual design (20%) developed under Phase
1, to 60% design, 90% design, 100% design, and final bid documents, respectively. It is assumed
that interim design deliverables will be submitted in electronic format with drawings in 11x17 half-
size pdf format, and specifications as a single combined pdf file, plus 8 hard copy sets of drawings
in half-size format.
60% Design Documents
This task will build on the Conceptual Design drawings from Phase 1 to produce design
documents at the 60% level of completion, including:
Drawings. General, civil, structural, mechanical, and electrical design drawings will
progress from conceptual to 60% stage. P&IDs will be refined to 90% complete based
on conceptual design feedback from the MWMC staff. It is assumed that the MWMC will
provide all surveying information and utility locates needed to provide vertical and
horizontal control points as well as subsurface utility crossings for the biogas upgrading
facility and pipeline areas.
Specifications. Technical specifications table of contents and major equipment
sections, such as thermal oxidizer, will be developed. Preliminary control narratives will
also be provided.
Construction Sequence. A preliminary construction sequence technical memorandum
will be developed indicating any major outages/shutdowns needed for construction.
Permitting Support. Will continue to support the MWMC with coordination activities
associated with LRAPA and the City of Eugene’s permitting requirements for the project.
Permitting requirements are not within our control, so an initial estimate of 40 hours has
been included for this work.
AMENDMENT NO. 1
RNG UPGRADES PROJECT – MWMC PROJECT P80095
EXHIBIT A – SCOPE OF WORK
Scope of Work for Phase 2 ATTACHMENT 2 Page 4 of 11
Cost Estimate. Updated Class 3 Opinion of Probable Construction Cost with
contingency set at 20%
Assumptions:
Kennedy/Jenks shall identify, discuss and document the status of the project permits,
utility coordination and outstanding issues to address during this task.
Kennedy/Jenks shall identify impacted utilities and follow up coordination with written
action items.
Kennedy/Jenks shall document all key design decisions made during the task and
communicate these via Constructware™
Assume one (1), 4-hour 60% design submittal review meeting with the MWMC project
team and associated meeting minutes.
MWMC will participate in the review meeting and provide a consolidated set of review
comments prior to the review meeting.
Assume one (1), 2-hour meeting with MWMC staff representatives related to specialized
systems (such as designing the instrumentation and control) including provision of
meeting notes.
Kennedy/Jenks shall facilitate meetings and document interactions with permitting
agencies to ensure permit application submittals are complete
Key Deliverables:
60% design drawings, details and specifications (electronic format plus 8 hard copy sets
of drawings).
Schedule and cost estimate (Engineer’s Estimate) based on 60% design and most
current market conditions.
Record of comments received and Kennedy/Jenks’ written responses.
60% design documents shall be uploaded to Constructware™ by Kennedy/Jenks, and a design
review workshop will be held roughly three weeks thereafter. The design review workshop will
be attended by three (3) K/J representatives. Review comments obtained during the design
review meeting shall be documented in the MWMC’s comment tracking spreadsheet. Each
comment shall be addressed by Kennedy/Jenks prior to submittal of the 90% design package
unless written consent is requested of and granted in writing by the MWMC Project Manager.
90% Design Documents
This task will include further development of the construction bid documents as follows:
Drawings. The MWMC comments from 90% design will be incorporated into the
drawing package. General, civil, structural, mechanical, and electrical design drawings
will progress, with general, civil, and mechanical essentially complete at this stage.
P&IDs will be refined based on 60% design feedback from the MWMC staff as well as
equipment vendors.
Specifications. Technical specifications table of contents will be updated, and all
Division 0, 1, and technical specifications will be provided in draft format. Control
narratives will be updated based on feedback from the MWMC staff and equipment
vendors.
Construction Sequence. Construction sequence technical memorandum will be revised
as needed based on feedback from 60% design.
Permitting Support. Will continue to support the MWMC with coordination activities
associated with LRAPA and the City of Eugene’s permitting requirements for the project.
In addition, a set of plans and specifications will be issued to the City of Eugene Building
AMENDMENT NO. 1
RNG UPGRADES PROJECT – MWMC PROJECT P80095
EXHIBIT A – SCOPE OF WORK
Scope of Work for Phase 2 ATTACHMENT 2 Page 5 of 11
Department for permit approval. Permitting requirements are not within our control, so an
initial estimate of 40 hours has been included for this work.
Cost Estimate. Updated Class 2 Opinion of Probable Construction Cost with
contingency set at 10%
Assumptions:
Kennedy/Jenks shall identify, discuss and document the status of the project permits,
utility coordination and outstanding issues to address during this task.
Kennedy/Jenks shall identify impacted utilities and follow up coordination with written
action items.
Kennedy/Jenks shall document all key design decisions made during the task and
communicate these via Constructware™
Assume one (1), 4-hour 90% design submittal review meeting with the MWMC project
team and provide associated meeting minutes
MWMC will participate in the review meeting and provide a consolidated set of review
comments prior to the review meeting.
Assume one (1), 2-hour meeting with MWMC staff representatives related to specialized
systems (such as designing the instrumentation and control) including provision of
meeting notes.
Kennedy/Jenks shall facilitate meetings and document interactions with permitting
agencies to ensure permit application submittals are complete
Key Deliverables:
90% design drawings, details and specifications (electronic plus 8 hard copy sets of
drawings). Also included shall be the following:
o Updated process control narratives
o Instrumentation schedule with signal type, language, and instrument range.
o Equipment Performance Test forms template
Schedule and cost estimate (Engineer’s Estimate) based on 90% design and most
current market conditions.
Record of comments received and Kennedy/Jenks written responses.
90% design documents shall be uploaded to Constructware™ by Kennedy/Jenks, and a design
review workshop will be held roughly three weeks thereafter. The design review workshop will
be attended by three (3) Kennedy/Jenks representatives. Review comments obtained during the
design review meeting shall be documented in the MWMC’s comment tracking spreadsheet.
Each comment shall be addressed by Kennedy/Jenks prior to submittal of the 90% design
package unless written consent is requested of and granted in writing by the MWMC Project
Manager.
100% Design Documents
This task will include further development of the construction bid documents as follows:
Drawings. The MWMC comments from 90% design and Building Department review will
be incorporated into the drawing package. All disciplines will be complete.
Specifications. Specifications will be updated based on comments from 90% design.
Construction Sequence. Construction sequence technical memorandum will be revised
as needed based on feedback from 90% design.
Permitting Support. Will continue to support the MWMC with coordination activities
associated with LRAPA and the City of Eugene’s permitting requirements for the project.
AMENDMENT NO. 1
RNG UPGRADES PROJECT – MWMC PROJECT P80095
EXHIBIT A – SCOPE OF WORK
Scope of Work for Phase 2 ATTACHMENT 2 Page 6 of 11
Permitting requirements are not within our control, so an initial estimate of 20 hours has
been included for this work.
Cost Estimate. Updated Class 1 Opinion of Probable Construction Cost with
contingency set at 5%
100% design documents shall be uploaded to Constructware™ by Kennedy/Jenks. Two weeks
of review time will be provided to the MWMC, but no workshop is planned. Instead, the MWMC
Project Manager shall provide Kennedy/Jenks with a list of remaining comments/issues to be
addressed and/or incorporated into the Bid Documents.
Assumptions:
The MWMC will provide a consolidated set of review comments.
No review meeting is planned for this stage of design.
Key Deliverables:
100% design drawings, details and specifications (electronic only) for the MWMC final
review and comments.
Revised project/construction schedule and an electronic copy of the overall
schedule in Microsoft Project format.
Detailed cost estimate (Engineer’s Estimate) based on current market conditions
and the final design requirements. Cost information shall relate to the construction
bidding line items (Bid Form).
List of permits/applications identified, completed application materials to be
submitted, contact list, and related status summaries.
Record of comments received and Kennedy/Jenks written responses.
Bid Document Production
Comments from the MWMC’s review of the 100% Design will be addressed and/or
incorporated into the final bid drawings and specifications, then stamped and signed by
the discipline leads. Final requirements for hard copy and digital production will be
provided to Kennedy/Jenks prior to finalizing this amendment. Kennedy/Jenks shall
provide contract drawings electronically in pdf and AutoCAD formats (half-size and full-
size) and specifications will be provided in pdf format.
Key Deliverables:
Finalized Bid Package of the Completed Construction Drawings including
o One (1) electronic copy of the final construction drawings including
professional engineering seal and signature in PDF format (on CD or a
memory stick)
o One (1) electronic copy of the finalized construction drawings in AutoCAD
format (on CD or memory stick)
Finalized Bid Package of Completed Construction Specifications
o One (1) “camera-ready” single-sided copy ready to send to the printer.
o One (1) electronic copy of the specifications in both Microsoft Word and
PDF format on CD or memory stick. The PDF version shall contain a table
of contents with links to specific specification sections.
AMENDMENT NO. 1
RNG UPGRADES PROJECT – MWMC PROJECT P80095
EXHIBIT A – SCOPE OF WORK
Scope of Work for Phase 2 ATTACHMENT 2 Page 7 of 11
Task 8 – Bid Support Services
Kennedy/Jenks will support the MWMC during the bid stage by responding to potential bidder
questions, and generating addenda as required. It is assumed that MWMC will administer project
bidding by maintaining the plan holders list, distributing plans, etc. A 4-week bid period is also
assumed. Specific tasks are as follows:
Construction Bid Review. Kennedy/Jenks will meet with the MWMC staff to review
the bids.
Bidder RFIs. Kennedy/Jenks will respond to bidder’s questions during advertisement,
keeping a log of all interactions with prospective bidders.
Addenda Preparation. Kennedy/Jenks will issue addenda to the MWMC as
appropriate to clarify or change the bidding documents. The MWMC will be responsible
for distributing addenda. A total of two (2) addenda are assumed.
Conformed Drawings and Specifications. After a contractor is selected,
Kennedy/Jenks shall incorporate changes made during the bid process arising from
RFIs and addenda, and provide 10 bound full-size sets (22” x 34”) on bond paper
along with a conformed set of specifications in pdf format.
Task 9 – Construction Support Services
Kennedy/Jenks will provide limited engineering and construction observation services as described
below. It is assumed that the MWMC will enlist their own in-house Construction Manager (CM) to
monitor construction activities and be responsible for day-to-day communications with the
contractor, processing contractor pay requests, and electronic posting of submittals, RFIs, and
change order requests for retrieval by Kennedy/Jenks. Specific tasks are as follows:
Construction Progress Meetings. Kennedy/Jenks will participate in the pre-
construction meeting at the WPCF, as well as construction progress meetings as
needed during the extent of construction, which is estimated at 10 months (roughly 40
meetings), at approximately four (4) hours per meeting.
Discipline Lead Site Visits. Kennedy/Jenks’ discipline leads involved in the design
will make visits to the site at intervals deemed appropriate to the various stages of
construction but at least twice monthly, to observe the progress and quality of
Contractor’s executed Work. Such visits and observations are not intended to be
exhaustive or to extend to every aspect of Contractor’s Work but rather are to be
limited to spot checking and similar methods of general observation. Kennedy/Jenks
will generate and submit an observation report from each site visit to the MWMC.
Effort is budgeted assuming a 10-month construction period. Specialty inspection,
such as concrete, coatings, etc. is assumed to be the responsibility of the MWMC.
RFI Review. Kennedy/Jenks will review and respond as needed to Requests for
Information (RFI) submitted by the Contractor through the MWMC’s CM. Effort is
budgeted assuming 40 RFIs.
Submittal Review. Kennedy/Jenks will review shop drawings, product data, and
samples for conformance with the design concepts and general compliance with the
Contract Documents. Effort is budgeted assuming 30 submittals, including
resubmittals but not limited to:
o Submittals critical to the project, schedule, schedule of values, operations and
maintenance.
o Submittals that do not identify specific product types or model numbers.
o Components requiring special fabrication or specialized design requirements.
o Submittals of specialized tests and procedures/methods.
o Submittals confirming system performance and the designer’s intent.
AMENDMENT NO. 1
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EXHIBIT A – SCOPE OF WORK
Scope of Work for Phase 2 ATTACHMENT 2 Page 8 of 11
o Submittals for structural, mechanical, piping, electrical, instrumentation/control
systems, and specialized equipment/products.
o Construction/product submittals regarding operations and maintenance (O&M)
information.
o Submittals for equipment/system testing (performance, certifications, etc.).
Change Order Assistance. Kennedy/Jenks will provide the CM with assistance as
needed to prepare change orders to modify the Contract Documents. Effort is
budgeted assuming preparation of four (4) change orders.
Integrate NW Natural Design. It is assumed that NW Natural’s design of its Receipt
Point Facility (RPF) and pipeline will lag behind the MWMC’s construction bid
documents, so Kennedy/Jenks will coordinate integration of the NW Natural design
with the contractor’s activities, determining if any change orders are necessary. This
includes changes to utility requirements (power, air, communication), access, and
security provisions for the RPF. Draft and final change order documents will be issued
to MWMC prior to incorporation into the contract documents. NW Natural
requirements are not within MWMC’s or Kennedy/Jenks’ control, so an initial estimate
of 100 hours has been included for this work. To the extent more than 100 hours are
required then a change order shall be sought.
Record Drawings. Kennedy/Jenks will revise the Contract Documents for record
purposes to show major changes made during construction. Documents used in
preparing the record drawings will include addenda, change orders, and hand
prepared as-built drawing provided by the Contractor. Final requirements for hard
copy and digital production will be provided to Kennedy/Jenks prior to finalizing this
amendment. At this time it is assumed that Kennedy/Jenks will provide drawings
electronically only in pdf and AutoCAD formats (half-size and full-size).
Assumptions:
Kennedy/Jenks shall not review construction contractor’s means and methods.
Kennedy/Jenks shall attend every weekly construction meeting at the project site and be
available to look at specific field issues at that time and follow-up as needed. Identify
Kennedy/Jenks assumptions and anticipated construction schedule phasing to complete the
project with some construction change order extra work anticipated within the schedule.
Kennedy/Jenks shall attend pre-installation meetings and perform final inspections for each
critical work activity. Final inspections shall be completed after successful start-up and
testing of the new systems.
Key Deliverables:
A list of the required construction/project submittals to upload to Constructware™.
A submittal check-list document for the General Contractor to fill out with each submittal in
the construction bid package.
A response to each submittal item in Constructware™ with comments related to the project
requirements/specifications and all items that need to be addressed for the successful
completion of construction
Marked up copies (as needed) of the Contractor submittals uploaded into Constructware™
for project documentation
Professional written responses to all requests for information/clarification (RFI, etc.) using
the Constructware™ tool.
Confidential written communications to the MWMC regarding possible cost implications
and/or QA/QC concerns and issues as necessary for the successful completion of
construction
AMENDMENT NO. 1
RNG UPGRADES PROJECT – MWMC PROJECT P80095
EXHIBIT A – SCOPE OF WORK
Scope of Work for Phase 2 ATTACHMENT 2 Page 9 of 11
A comprehensive punch list for the construction contractor and provided to the MWMC
Project Manager via Constructware™.
Task 10 – Startup and Testing (Project Commissioning)
This task includes testing and startup assistance associated with the Biogas Upgrade Equipment
and NW Natural interconnection. It is assumed that the biogas upgrading equipment manufacturer
would be responsible for testing and startup of the equipment, but Kennedy/Jenks would be
involved primarily with the NW Natural interconnection testing and startup.
Commissioning Assistance. Kennedy/Jenks will assist with on-site startup and
testing related to the new RNG facility. The MWMC, Kennedy/Jenks, and contractor
roles for programming, startup, and testing will be identified in the construction
contract/specifications. Kennedy/Jenks will participate in and coordinate startup and
testing with the contractor, equipment representatives, the MWMC programming and
systems integration staff, and the MWMC operations staff.
o Witness equipment functional and performance testing.
o Witness systems performance test, including coordination to and connection
with NW Natural receipt point facility.
o Assist MWMC in coordinating and evaluating System Commissioning. The
commissioning shall be performed for a period of seven (7) consecutive days
without malfunction.
o Attend startup and commissioning coordination meetings held at the WPCF.
Assume up to three (3) meetings will be held.
Operations Manual. Kennedy/Jenks will prepare and submit an electronic operations
manual with descriptions and information about the new facility. The manual will
include narratives describing various operating modes (normal, alarm scenarios, unit
failure, etc.) and maintenance indicators of abnormal conditions. The manual will be
provided in electronic format (Microsoft Word, Adobe Acrobat, and AutoCAD as
appropriate). Draft and final manuals will be submitted to the MWMC for review prior
to commissioning.
Operations Training. Kennedy/Jenks will conduct a 1-day on-site system operational
training session in conjunction with the biogas upgrading equipment manufacturer. Training
will incorporate operational theory, design intent, process control, and operational strategy,
as well as having a time for hands-on orientation with the new facility. Training will occur on
one (1) day, at two (2) separate sessions, each lasting four (4) hours. If needed, a second
training to MWMC operation staff will occur after System testing is complete to reflect any
alterations made through the course of System(s) Commissioning is complete (included
under Optional Services).
Maintenance Manual. Kennedy/Jenks will prepare and submit an electronic
maintenance manual with manufacturer’s equipment maintenance information and
instructions about the new facility. Manual will be provided in electronic format
(Microsoft Word, Adobe Acrobat, and AutoCAD as appropriate). Contractor will be
required to provide the manufacturer’s equipment maintenance manual submittals as
searchable PDF files and not as scanned images. The maintenance manual will
include the following information, instructions and diagrams, as provided by the
Contractor and equipment manufacturers:
o Completed MWMC asset tracking form.
o Local manufacturer representative with contact information.
o Installation and startup equipment.
o Regular/routine maintenance tasks (inspection, lubrication, tune-up, etc.).
AMENDMENT NO. 1
RNG UPGRADES PROJECT – MWMC PROJECT P80095
EXHIBIT A – SCOPE OF WORK
Scope of Work for Phase 2 ATTACHMENT 2 Page 10 of 11
o Troubleshooting procedures.
o Shutdown and disassembly of equipment.
o Recommended spare parts.
Assumptions:
Kennedy/Jenks shall review up to eight (8) Equipment Functional Test form submittals.
Up to three (3) startup and commissioning coordination meetings will be attended at the
WPCF.
Contractor shall perform Equipment Functional Tests on mechanical, electrical, and
instrumentation devices
Eugene/Springfield staff will witness Equipment Functional Testing. Upon request by the
MWMC Project Manager, Kennedy/Jenks shall also witness key tests. On-site witnessing of
testing by Kennedy/Jenks is limited to 40 hours at project site.
An independent third party inspector will oversee the Equipment Functional Test of any
Profibus network, if used on the Project
Kennedy/Jenks shall review up to eight (8) Equipment Functional Test results.
Contractor will submit a detailed plan for startup/testing/commissioning prior to 50%
completion of construction, and finalize the detailed plan before 80% completion of
construction. Kennedy/Jenks and MWMC will review for completeness.
Contractor will submit a System Performance Test plan and Kennedy/Jenks will assist
MWMC staff with conducting, monitoring, and analyzing the test.
Key Deliverables:
A brief summary report describing System Performance Test results including
recommendations whether to accept test or provide additional recommended actions.
A one day system operational training session (as described above) and a second training
to MWMC operation staff after System testing is complete to reflect any alterations made
through the course of System(s) Commissioning if needed (see Optional Services). The
training session shall include:
o Draft and final training agenda
o Draft and final training materials (PowerPoint presentation, handouts, photos,
electronic files)
o Draft operational manual
A final electronic operation manual of the new System(s) that is compliant with DEQ
guidelines and useable by the MWMC.
An electronic maintenance manual of manufacturer’s equipment maintenance information
and instructions for MWMC daily use.
Optional Services
The Kennedy/Jenks team has identified and proposed the following optional tasks for MWMC’s
consideration:
Design of RNG Facility Building. The proposed biogas upgrading equipment is currently
anticipated to be housed in a basic FRP or pre-engineered metal structure. As the
conceptual design is developed, however, further discussions with MWMC staff and
equipment manufacturers regarding the support structure for this equipment may warrant
inclusion of a hard-sided, permanent structure. Factors to consider will include the
environment needed to operate and maintain the equipment safely and effectively,
performance of the equipment, and noise abatement. Task includes the design of a CMU or
reinforced concrete structure and associated architectural, HVAC, fire protection, and
AMENDMENT NO. 1
RNG UPGRADES PROJECT – MWMC PROJECT P80095
EXHIBIT A – SCOPE OF WORK
Scope of Work for Phase 2 ATTACHMENT 2 Page 11 of 11
electrical elements.
Project Registration. RNG project registration with EPA, Oregon (CFS) and California
(LCFS). This service may or may not be necessary based upon the terms of the MWMC’s
agreement with Trillium CNG, and so is listed as optional at this time.
Performance Data Analysis. Collect operational data from the project, to analyze that data
for economic and environmental impacts. Provide a quantified estimate of the project’s
carbon intensity values for life-cycle greenhouse gas emissions. Compare any project
performance and expectations provided in the equipment manufacturer bid to actual project
performance and accomplishments.
Additional Operations Training. If needed, a second training to MWMC operation staff
noted under Task 10 will occur after System testing is complete to reflect any alterations
made through the course of System(s) Commissioning is complete.
______________________________________________________________________________
M E M O R A N D U M
DATE: July 5, 2018
TO: Metropolitan Wastewater Management Commission (MWMC)
FROM:
Meg Allocco, MWMC Accountant
John Huberd, Finance and Administrative Manager
SUBJECT: MWMC Financial Plan Asset Management #4
ACTION
REQUESTED: Consider proposed minor revisions to the asset management policy language
ISSUE
Based on earlier discussions regarding the 2005 MWMC Financial Plan, staff is proposing minor revisions
to the asset management policy language to update key components of the financial policies.
BACKGROUND
At the December 8, 2017 meeting, staff and the MWMC began discussions on updating the 2005 MWMC
Financial Plan to update language in order to more accurately reflect the current practices and
incorporate guidance from the Commission. This will include a review of the financial administration of
the Regional Wastewater Program as directed toward achieving the objectives as required by Section 3.f
of the MWMC Intergovernmental Agreement (IGA).
At the December 2017 meeting, staff and the Commission reviewed the reserve policies located on page
12 of the MWMC Financial Plan including: F5a) Working Capital Reserve; F5c) Equipment Replacement
Reserve; and F5j) adding an Insurance Liability Reserve policy.
At the February 9, 2018 meeting, staff provided a chart displaying the flow of regional wastewater funds,
including: (1) sources of funding for reserve funds, (2) individual reserve funds by type, and (3) how each
of the funds and reserves relate to their intended purpose.
At the June 8, 2018 meeting, staff discussed proposed revisions to the reserve policies F5a – F5j of the
2005 Financial Plan, and received feedback form the Commission.
DISCUSSION
Based on discussions and input from the Commission, staff is proposing revisions to asset management
Memo: MWMC Financial Plan Asset Management #4
July 5, 2018
Page 2 of 2
policy language in the 2005 Financial Plan on page 18. Revisions are outlined below, with underline
representing additions and strikethrough representing deletions:
A1) MMWC assets shall be insured for replacement value so that, in the event of a
loss, plant and equipment could be restored to working condition.
A2) The Commission shall maintain a fully-funded Equipment Replacement
Reserve so equipment may be replaced or rehabilitated when needed, without
creating rate volatility. in the operating budget.
A3) Equipment provided for by the Equipment Replacement Reserve shall
include all rolling stock fleet equipment, all computer equipment and all other
equipment with an original historical cost between over $10,000 and $200,000, a
projected replacement cost between $10,000 and $200,000, and with a useful life
expectancy of between one and up to 20 greater than 1 year.
Discussion) - The equipment list shall be reviewed annually and estimates of
replacement costs and life expectanciesy adjusted. The analysis shall make use of
other estimates, such as inflation, and available resources, such as and interest
earnings on the reserve balance.
Before equipment is replaced, an analysis shall be done to determine if it should be
kept in use longer, rehabilitated to extend its life, replaced with similar equipment,
or replaced with different equipment. Equipment that outperforms projections in
useful life expectancy may be replaced with funds accumulated in the reserve.
A4) Major Rehabilitation work shall be funded from the Capital Reserve and
appropriated annually into a budget line item called Major Rehabilitation.
A5) The Major Rehabilitation work shall be capitalized if it extends the useful life
of the asset beyond the original estimate. If the Major Rehabilitation work does not
extend the life of the asset, but enables the asset to reach its originally estimated
useful life, then it will be considered major maintenance work and not capitalized.
ACTION REQUESTED
Consider the proposed revisions to asset management policy language, and provide staff with direction
to accept or amend proposed policy language.
ATTACHMENT:
1. 2005 Financial Plan – Policy A1-A5 Asset Management (page 18)
ATTACHMENT 1
______________________________________________________________________________
M E M O R A N D U M
DATE: July 5, 2018
TO: Metropolitan Wastewater Management Commission (MWMC)
FROM: Randy Gray, BMF Operations Supervisor
SUBJECT: Biosolids Management Program
ACTION
REQUESTED: Informational Only
ISSUE
The Water Pollution Control Facility (WPCF) is an activated sludge wastewater treatment facility with
pretreatment, primary, secondary, tertiary, and final treatment processes. The wastewater treatment
process generates approximately 5,000 dry tons of biosolids annually. The majority of biosolids are
applied to volunteer cooperative agricultural producers to utilize the nutrients and soil building qualities
for crop growth.
BACKGROUND
Biosolids are primarily organic solids produced by wastewater treatment processes that can be
beneficially recycled. The Environmental Protection Agency (EPA) mandates the standards for the use of
sewage sludge to protect public health and the environment from any reasonable anticipated adverse
effects of certain pollutants that might be present in biosolids. The Oregon Department of
Environmental Quality (OR-DEQ) stipulates the procedures and restrictions required for the safe
handling and use of biosolids.
Processing of biosolids takes place at two locations; the WPCF, and the Biosolids Management Facility
(BMF). At the WPCF, solids collected from clarifiers are processed in anaerobic digesters and then stored
in holding tanks until they are pumped daily, approximately five miles northwest, to facultative sludge
lagoons (FSL) at the BMF.
Over a typical period of four years, biosolids in the lagoons undergo further stabilization and pathogen
reduction. Beginning in the spring, biosolids (~3% solids) are dredged from a lagoon and sent to two
holding tanks. Next, they pass through strain presses to remove any trash material which is then sent to
the landfill. A concentrated polymer solution is added to the biosolids before being processed through
belt filter presses. The dewatered biosolids (~14% solids) are then transported to Air Drying Beds (ADBs)
Memo: Biosolids Management Program
July 5, 2018
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for further drying and processing where they are turned and windrowed periodically for 6-10 weeks,
depending on weather conditions and application site availability.
Near the end of July through early September the resulting dry biosolids (~75% solids) are transported
by truck to DEQ approved cooperative application sites where they are applied at controlled rates in
accordance with crop nutrient needs and DEQ requirements. Neighboring land owners and residents of
all DEQ approved land application sites are provided with notification by mail, prior to beginning initial
application activities. In 2003, the MWMC established the Biocycle Farm (BF) as a 600-acre dedicated
biosolids land application site where hybrid poplar trees are grown, fertilized with biosolids, and
irrigated with recycled water. Approximately 25% of the biosolids produced are applied to the Biocycle
Farm annually.
Past testing has shown that the MWMC’s biosolids have met EPA’s “Class A” requirements. However, due
to the requirement for the length of the test and the resulting time to obtain test results during the
application period (approximately six weeks), the program is managed under Class B requirements. In
addition, the biosolids program is managed to achieve very low levels (less than 50% of exceptional
quality criteria concentration limits) of monitored pollutants.
In the past, digester cleaning materials have been sent to the existing onsite lagoon at the WPCF (which
is slated to be decommissioned in 2019-2020). However, as part of P80084 – Increase Digestion Capacity
(the capital project adding the 4th digester), digester cleaning materials, made up mostly of struvite, will
be sent to the lagoons located at the BMF. Given these changes, staff will be closely monitoring the
lagoons and biosolids for any changes in nutrient content or other parameters to ensure the
continuation of a high-quality biosolids management program.
DISCUSSION
Staff welcomes any questions from the Commission.
ACTION REQUESTED
Informational Only