$5,015,000 design contract and $1.5 million budget add for sewer plant power project

In plain English

The city runs the regional Wastewater Treatment Facility, and studies from 2020-2024 found nearly all of its electrical equipment — backup generators, cabling, transformers, substations and motor control centers — at medium to high risk of failure. The council is asked to hire Royal Electric (Sacramento, CA), teamed with Kennedy Jenks Engineers, for $5,015,000 to perform Phase 1 of the Wastewater Treatment Facility Energy and Electrical Resiliency Project (Project WEER): design, site and geotechnical investigations, cost estimating, permitting support and early equipment procurement support. The council would also shift $1,500,000 from Fund 721 into the wastewater electrical project budget (project c401405) in the FY 2027 budget. Construction itself (Phase 2) is not approved now; it would come back to council after a Guaranteed Maximum Price is negotiated in early 2028.

The treatment plant handles wastewater for the city and the County Sanitation District and must keep running during the work; two arc-flash events already occurred, one knocking out the PG&E main service entrance and forcing a month of temporary diesel generation at a cost exceeding $1 million. The full project is estimated at $92,000,000, paid through wastewater utility rates and financing, with the County Sanitation District cost sharing 8/17 of total costs.

Key facts

Phase 1 design and preconstruction contract with Royal Electric: $5,015,000; budget adjustment of $1,500,000 from Fund 721 into project c401405.
Total project cost at completion estimated at $92,000,000, including construction costs escalated to future dollars; adopted wastewater rates plus financing are described as sufficient.
Royal Electric/Kennedy Jenks ranked first with a score of 86, ahead of Anderson Pacific/Frish Engineering (81) and Shimmick Construction/Jacobs (76), out of six teams that submitted qualifications.
Schedule: updated Conceptual Design Report in Q2 2027, 30 percent design Q3 2027, 60 percent design Q4 2027, Guaranteed Maximum Price negotiations Q1 2028, construction 2028-2030; target Substantial Completion June 17, 2030.
Contract liquidated damages include $11,260 per day for late Substantial Completion, $32,000 per day for utility interruption and $2.00 per gallon for effluent violations; the city applied for a Clean Water State Revolving Fund low-interest loan, with an application to be submitted in 2026.
Environmental review is ongoing; an Initial Study/Mitigated Negative Declaration is to come to council in November 2026.

Reasons to support

The electrical system is already failing: assessments rated nearly all equipment medium to high risk, and one arc-flash event cost more than $1 million in temporary diesel generation after the main PG&E service entrance failed.
The winning team proposed sequencing that keeps the plant fully operational and a schedule that finishes the project about 8 months sooner than anticipated.
Paying for design first under the progressive design-build method lets the city confirm scope, costs and risks and review a Guaranteed Maximum Price before committing to construction; if no agreement is reached, the city can decline Phase 2 and pursue other options.

Reasons to oppose or change it

The $5,015,000 Phase 1 payment buys design and investigation work, not construction, and the city could still end up rejecting the Guaranteed Maximum Price and having to procure construction another way.
The $92,000,000 total cost is carried by wastewater ratepayers plus borrowing, with the County Sanitation District covering 8/17 of capital costs; the low-interest Clean Water State Revolving Fund loan has only been applied for, not secured.
The contract is approved before environmental review is finished — the Initial Study/Mitigated Negative Declaration is not scheduled to reach council until November 2026 — and the item also delegates future contract amendments within the budget to the Public Works Director rather than the council.

Official wording

Wastewater Treatment Facility (WWTF) Energy and Electrical Resiliency (Project WEER) - Award of Progressive Design for Phase 1 Services (c401405) – Budget Adjustment (PW) LOCATION: District 3 Motion to: 1) Authorize the City Manager to execute the Project WEER Progressive Design Build Agreement for Phase 1 Services in a form approved by the City Attorney with Royal Electric (Sacramento, CA) in the amount of $5,015,000, and authorize the Public Works Director to execute future contract amendments within the approved budget; and 2) Adopt a resolution amending the FY 2027 budget to appropriate funds to the WWTF-Electrical System Project (c401405) in the amount of $1,500,000 from Fund 721.

Official agenda

Summary written by claude-opus-5 from the agenda and the Staff report (agenda packet, pages 40-69). It can contain mistakes. The official documents govern.