 And assistance to the attorney McLean might be able to speak to this better, but the contract was effective or still Yeah, I want to say I guess effective but basically it now provides the Supplier to in to escalate their prices to bring them up to present day essentially, right? I think what? Mr. Kazary is trying to explain is that the contract itself didn't expire That's why we can do an amended and restated MOU instead of a brand new MOU Rather the provision in the contract that held the price in place for that 18 months that Provision termed out or timed out. So now we're in a place where we can Do an amendment essentially amended and restated MOU with the same provider, but with a different price In place and the contract Okay, thank you So let me move on to my my other couple of questions is If we if the board approves that the amendment and then we move forward We're already kind of at step three based on the old schedule where we we did the the pre-select process is already done The the value engineering is done And so we're ready to kind of hit the ground and take off. Is that about where we are? Yeah, that's that's correct. We're still moving forward in design, but we need to be able to enter into new agreements Specifically the professional services agreement to provide support services from the supplier to our Existing design consultants or cruel engineers. So the design is moving forward We are we're looking to get into construction in next year And so we know we need to enter into this new agreement with Calgon or our preferred UV equipment supplier to help get us there Sure. Sure. Okay. Thank you when we did our Value engineering where we're evaluating the different UV systems. There were four different proposed systems And you mentioned that we send a team out to to look at them all and get some feedback from users and so forth What were those systems? Largely in California Yeah, well, so there's two different there's two different facets to that question So when I when we went out to the different wastewater treatment plants, some of them were in different states I recall I think in Washington and potentially in New York as well They were treatment plants that were similar to ours and that had equipment that we reviewed and analyzed and Were interested in the value engineering study was actually a study performed for the overall design project and looked at Exactly how we wanted to move forward with our issue of inadequate disinfection capacity and an AG new B system So the value engineering study I wanted to bring that up because that I think played a role in what's kind of led to the You know the subsequent, you know somewhat delays of the design project and other Issues and other changes to the projects some for good But the analysis that I was referring to as far as the pre-selection that was done as a as a separate Process essentially, okay, and again the reason I ask about whether it's California examples is we all know about The standards in California and particularly the standards in region one where we are and how stringent they are As far as meeting all the the water quality requirements And so forth in your process and I don't take comfort in using New York because I've seen the Hudson River firsthand And it's not a great example of how to reuse water, but that's an aside So my last question is Are we able to so that we avoid This price guarantee Threshold that we would now move up to 22 months With the possibility that something else could happen and we could have another delay and we could be back here in 24 months talking about this again Is there a way for us to lock in the pricing even beyond or contractually and maybe this is a question for assistant attorney and McLean is To lock in the pricing for instance if we were to make a progress payment towards the UV equipment Say pick a number 25% of the total project cost if we make a project payment Before this this 22 month deadline is up Can can that contractually lock us into that price so that we don't have this hanging over our head in the event that down the road We run into another delay. I mean it's possible It would have to be negotiated with the provider because we my understanding is that we didn't Ask that question of them. It certainly is a good You know a concept that could make sense is that we would put a down payment so that we would hold the price my understanding of the 22 months is that that was very carefully looked at and calculated to give us ample time to get through our bond financing our design and go out for bid and we were the way we have set up the MOU is that we're not committed to to Actually do the project by anything until we actually award until the board actually awards a contract for the construction of the project and we've completed our sequel that would allow the board to Legally make that decision. So we could build in You know an extension payment of sorts That could take multiple different forms one option would be a down payment My concern is that that we wouldn't want to trigger that or come up against that until we at least done the sequel And hopefully if we've done the sequel, we've already put the contract out to bid and we're ready to go to award So, you know, you want to make sure that the timing all makes sense with all of those things So the reason I raise that as a as a potential option is because say we get up into 20 months Of the 22 months and it's clear from our staff and our contractor That we're not going to meet the deadline Could we already have a provision in the contract that says 60 days before you reach the The end the deadline we could make a X percent Progress payment and lock in the price for another Six months or whatever we thought we might need So that we just don't wind up something comes up beyond our control and we're up against this deadline again and then We have to reprice again And so we've already added a million with this action and then we would whatever we would add on again Maybe it's another million And all of a sudden it's twice what we thought it was going to be five years ago So I just raise that as something and I'm happy to bring it up to the to the when this comes before the board And to give you time to kind of research it a little bit and see if it's something that's possible or not But I just raise it as sort of a fallback for us in the event that we run up against this This deadline again down the road and it's not a knock on staff. It's it's not I'm not looking to blame anybody I'm just trying to sort of cover ourselves because a million dollars is a million dollars and So just want us to be in a situation where we can get this built without having the fear or the concern about this deadline again on round two so we Would we could certainly attempt to discuss such an extension payment or our option with the provider we haven't at this point It attempted that discussion or that negotiation As so it's possible. I mean it would it would what it would entail is a modification renegotiation of certain a provision of the MOU that we have already worked out I think as far as the timeline I would defer to in the engineering staff To speak to you know How much cushion we've given ourselves to avoid coming up against that deadline because I understand exactly what you're saying It's something that you know, we would do potentially and you know Real estate transaction where we we we may need more time to get through Whatever prior processes Are needing to happen before we can commit That that is certainly a consideration. I would say that I think one more thing I would add um, is that I believe The the 18 months that we had prior um, I don't know that we ever Tempted to renegotiate or extend that contract while we were still in the process But I think we were we were going to go so far past it that you know, even a Minor extension wouldn't have helped us get to where we are today You know year and a half or so later So I would say, you know, certainly a possibility But I think I would want to defer to engineering staff to say, you know, how tight of a window Do you think we have are we giving ourselves sufficient amount of time that it's worth to stop right now and pause And go back and really ask for You know that cushion or did we build that cushion in on the front end? and and I think if I could just add to to give a little bit more context of um, sort of Initially and the schedule. I think, um, you know, we had a leadership change and With that with a really big project looming It made sense to take a big step back and really take a look at it and understand what that cost would be and go down A process of the value engineering Which was mentioned was a very robust process I think that has been completed and we've confirmed we're on the right track And so we are really moving this forward and I think That combined also with, um, you know, the fires that did take staffing away But but I think we're a lot further down the road now Then when we were initially when uh, this occurred and and so I think there's more confidence From staff's perspective that we will be able to meet this timeline But as Molly said, I'll defer to mark to give more clarification. But if that helps give a little more context, it was Um, you know, something that made sense at the time when you do have a change And someone who really needs to get up to speed and understand for such a large undertaking to ensure that we were Going the right direction Yeah, these are these are all excellent points and there's there's no doubt that this is a very complex and difficult project and To some degree we can't protect ourselves fully against all the, you know, probabilistic, you know Situations that could occur But yes, I think we have included enough of a cushion or a buffer That we should have no issue moving forward and and meeting this this 22 month deadline that effectively pushes us into 2022 June june of 20. I'm sorry. Yeah june of 2022 that we would need to award or advertise the project by And we're anticipating Next year that happening and I don't see a reason why that can't happen now Of course, there are Extending waiting circumstances that we've all seen that have prevented it But um, we have essentially over a year beyond what we're anticipating that this MOU would remain valid as far as the pricing escalation guarantee um There also is a best and final price that that Uh is included as a provision of the MOU that allows for minor modifications to pricing based on Scope changes as we see through the remainder of the design process. So we will we will see A best and final price prior to advertising the overall construction project But it's not likely that that price would be less than what the estimate we're talking about here Um, it could be about you it depends I mean if if the design changes for example The number of control centers as we talked about if it for some reason they reduce the number of control centers or um Some other modification to the overall scope of the uv equipment It could change it But I think what you're pointing to is that often it does increase the cost. So I think that would be a safe Yes Okay, thank you. That's my questions We're going to battle for any questions or comments Uh, sure, uh board member moan Asked them pretty eloquently my more a little bit Uh clarifying questions. I think maybe I it's a complex project So I'm hoping you can clarify. It looks like on the one hand We we knew that our price guarantee would would not Last the life of how long it would take us to get to construction and so I think in the vein of um Trying to prevent Increases kind of especially kind of of this nature Is it common that? um Not even how to ask it. Is it common that This kind of middle of the of the of the Pre development process we would have this um Kind of retooling of the of the price. Did we anticipate? I mean, obviously it was only for for 18 months and we knew that it was going to take us longer than 18 months to get to construction um So obviously We didn't did we not know? Well, no, we the reason why we held the mo you for a period of 18 months, which is actually a bit longer than most suppliers feel comfortable with guaranteeing their prices because of bulk material fluctuations and direct labor increases that they have to still pay for um, no, we fully anticipated meeting construction prior to that but Prior to that 18, okay escalation. Yeah, it was just the You know a number of factors that contributed to a slightly longer delivery process. Okay, that's helpful. Um, and then Uh on slide nine it says that overall construction costs Uh as previously reported includes equipment cost um So there isn't a contingency that was approved in the original contract that that could offset some of the increased cost well, um Directly answering no but that I don't think is is a problem we any contingency that we spoke about earlier was for design and um Let's see the the 47 million dollars represents our current estimate for construction It includes the equipment cost but also includes this million dollar price escalation as we performed a preliminary analysis prior to negotiations with our preferred supplier And determined or or estimated the escalation of being about a million dollars So we were able to budget that and we actually were I reported to the board that that increase And that 47 million dollar price point based on what our current information is um And so no, we don't have anything in the mo that provides a contingency for price escalations Besides that provision that allows for a best and final price prior to Advertising the project Great. Thank you And then I guess my final question was really kind of coming out of the the opposite direction that In complex projects like these where we're dealing with price escalations and long term projects Are there tools that? Uh staff that you would recommend that you see putting into place Um that are common that can help avoid situations such as this um I I certainly understand the fluctuation of long time horizon projects It's kind of a startling It's a startling number. So, uh, I'm interested in your expertise of what do you because I know you guys work so hard Um on on putting these together so fantastically that what tools Uh, can you see that might help? um Offset this in the future on the one hand It isn't really technically over budget. So we appreciate that No, well, yeah, thank you for that and it does seem to coincide with Board member mollins questions as well. So I think we can look into that and at a deeper level and report back um, if you like um I think You know, this is is just one of those unique projects that have so many different moving parts so many different facets That really the mo you is one of the tools that we use to address these Difficult constraints of of the delivery of the overall project You know, we need to somehow budget for pricing. We need to establish a relationship between, you know, and a unique Equipment supplier and our overall design consultants and process Um, so, you know this mo you and trying to guarantee a price for a set Period of time is one of the tools that we use to to deal with one of or to manage one of these projects Whereas a more simple project you can just specify that pumps will go into this what well or We will use these material You know or or whatever and then the contractor can select Various equipment at various pricing that during the advertisement and award process But we're not afforded that that luxury on a project like this. We need to Get into contract with a supplier and utilize their services throughout the design process and then furthermore Enter into an agreement on what the cost will be so that we can budget it. We can raise bond funding and do a number of other um, you know procedures to to support the construction process um, so I guess short answer for you is I don't think I have a direct answer how how we can mitigate this type of concern that the Pricing may expire due to unforeseen circumstances, but I think we can look into that certainly Thank you very much. Thanks for helping me understand. This was uh, this is a complex one for me. Appreciate it So mr. Kazary assistant city attorney mcclain Kind of made reference to one issue I wanted to bring up and I think I already know the answer to it But when we were approaching the deadline for the price guaranteed the original 18 months Do we have any discussions with calgon about extending that 18 months or? renegotiating it then to try and buy us some more time without getting hit with a million dollar increase So, um, you know, that's a great question. Frankly put. I wasn't the project manager at that time I know that we were anticipating this provision in the mo u Sun setting and so we were anticipating New negotiations with calgon and to come before the board during that time or close to that time for for a new agreement um Deputy director walton, do you have anything to add to that? Did we anticipate? Um Sorry, um We did we were aware that the uh guaranteed price was nearing expiration We had conversations, um With staff at that time recommending to reengage with calgon calgon if I remember correctly was Very willing and interested in discussing renegotiation at that time. Um as director berk mentioned earlier Due to the change in leadership and Kind of that big direction of this huge project Undertaking a huge project and really needing to pause and reconsider the direction. We were going There wasn't interest from the city's part At that time to renegotiate The terms given we weren't really confident in the direction that the project was going So we didn't want to kind of drag calgon along with us at that time But they were willing to and we did discuss it Okay, thank you. Um, I would just like to kind of echo what board member mullen has proposed. I think I don't want to see us prolong the The process or delay the the project any further, but if there is a way to Quickly negotiate some sort of an arrangement with calgon that would bias some additional time Uh by putting down some amount of money, whether it's 25 or whatever Towards the end of the 22 months if we were in that position It would be nice to have that option and that flexibility without having to go back and renegotiate again. So um, I don't know Probably throws a monkey wrench into Where we're at today, but um, I'd be interested in staff's response to that I think uh Chair galvin, um and uh board members we can definitely bring that back. Um, it will Delay our schedule a bit. Um, so we will not be bringing this forward to the august 6th VPU meeting. I don't believe Um, I'll check in with staff afterwards just to confirm that but I think it will delay Us bringing this back to the board, but we can explore that option And um, if we're able to successfully put that in we'll add that to the mou Bring this back to the board My question would be did would you want this to come back to the subcommittee first? Or do would you give us direction to Explore that option if we're successful or not either way Bring this back to the board or do you want us to come back to the subcommittee first? Well, maybe the first question to the committee members is Given the discussion that we've had given, uh, mr. Casrae's belief that the 22 months is more than adequate Are we comfortable going to the full board with a recommendation that's being requested of us or Are we willing to hit pause and explore this other issue? um I'll comment on it since i'm the one that's sort of raised the issue is I'd like to try to avoid delaying the project since it's been a delayed already for A period of time for a lot of reasons beyond our control But my my biggest concern is we've had since we originally let this contract We've had two wildfires and now we're in the middle of a pandemic And I fear that this time next year we're going to be still be doing zoom meetings And waiting for a solution to that And i'm just concerned that the project is going to slip and we're going to run up against this deadline I'm absolutely comfortable recommending the the approval With direction to staff to come up with a solution that gives us some protection If we run up against the deadline to work up with the language. It's obvious we have a relationship with calgon and They they appear to be a willing and we can reiterate our commitment to the project It's just we're we're ramping back up with the with the new amendment But i'm really comfortable approving the recommendation Provided staff comes up with some language that gives us some protection If we run up against the deadline again Okay, board member badport Oh, okay Go ahead. I I have some There's variations on the theme that I think may be helpful to to to put out there, but I defer to remember bad and for to weigh in first I'm comfortable with that. We will obviously have another opportunity to to comment and and and to make a decision um, I i'm somewhat agnostic about the the solution for the potential language And for the potential mitigation of this dynamic, um, I I think we have a Uh, a strong staff that will that will look at options top to bottom And so since we'll be able to hear this again, I'm comfortable with proceeding okay assistant City attorney McLean, I appreciate board member badden ford's comments because that's kind of the direction I was I was going was how much Um specificity do you want to provide in in what staff could evaluate at this point? I can think of different ways where we could try to build in um some protection You know to to not get Beyond the 22 months and then have to renegotiate I don't down payment is certainly one concept And that implies that the money that the city puts down One we have to be prepared to be committed But it also implies that the money that the city puts down then applies to the purchase price Which I guess we would just ask that the bidders to to deduct that from their bid I'd line item in their bid There's a there's also the potential that we could just Ask for the right to extend for a fee Typically that would be a smaller amount Would not commit us to um Moving to the project so it wouldn't have to happen prior to sika for example So it would keep a larger portion of flexibility in place, but it would probably cost Some amount that would not necessarily go towards the ultimate purchase price So I was I thought I'd put a couple of options out there for the board to The committee to if they want to weigh in or do they want to Just defer to um directors per view on that um or I'm just looking for you know, I wanted to provide some thoughts that I had about different options and how to receive that I would say that that's another option that should be explored if we can for example if we know Towards the end of the 22 months that we're really close But we're just maybe maybe sika hasn't completed or whatever Being able to pay them 10,000 a month or 25,000 a month to extend for a month If we know we're going forward, um, I think that would be an option As well as just some sort of a a firm down payment and commitment that would apply to the purchase price So I I think I'm comfortable leaving staff with the flexibility to try and Come up with a solution that you think calgon would would potentially go for Or remember Sorry go ahead I agree with chair galvin is We have we have great staff here and a lot of smart minds staring at this At this computer that we're sitting at and so I would uh, I would be perfectly comfortable Letting those people. I think you've heard the concerns and how we get there is You're a lot smarter than than me. So I would defer to you And if you come up with something director burk that you want to run by the committee Perhaps we can do it in an email fashion. I don't know if that would run a foul of anything that Just get some I just would like to get clarification to make sure i'm understanding the direction In terms of the this would be to the mo you Are you as a committee requesting? Which I think you are that we have a solution in the mo you before we bring it to the board or are you Are you recommending the mo ux currently stated? Which would mean we'd go to the board on august 6 but then we'd need to bring back an amendment to the mo you in the future I just want to make sure i'm clear on on what What i'm understanding from the committee Well from my perspective I'm fine if we go forward with the recommendation and we approve the amendments to the mo you and the new msa um or psa With the understanding that staff is going to at least explore Whether there's options available to us to to eliminate this potential risk And if staff comes back and says Either calgon won't renegotiate or we can't come up with a solution or we're super confident that the 22 months is All of the time we're going to need Then we don't request any further amendments to the mo you Okay, is that that Um, is there concurrence with the other committee members on that direction? Okay Okay, and I think I understand Um, and so it sounds like we we can uh look to but I but I will will strategize With the team after this committee meeting And uh, I would leave it on the august 6 Yeah agenda Yes, got it Okay, thank you. I appreciate the clarification All right, um, do we need to have a formal Vote on the recommendation. I guess we do secretary for us. Do you want to uh through a roll call based on what we've just discussed Chair galvin apologies for the interruption, but I think you have to open for public comment before you do that Oh, thank you We'll now open it up for public comment on item 3.1 if you wish to make a comment via zoom, please raise your hand If you're dialing in via telephone, please dial star 9 to raise your hand Do we have any public comments? I see no raised hands Okay, thank you. Now. We'll do a roll call vote Okay, uh chairman galvin. Hi Board member bennford Board member moan Hi All right. Thank you. Thank you. Good comments all the way around. I hope we didn't Like I say throw a monkey wrench into staff's plans, but I think um This is at least a good alternative to explore between now and when We have to make the final commitment to order that that material so Any equipment any other questions comments by board or staff? All right, if not, we are adjourned. Thank you all have a great rest of your afternoon Thank you very much. Thank you Thank you