ITEM:		CONSENT CALENDAR
2.	CONSIDER EXPENDITURE OF FUNDS TO PREPARE FINAL REPORT ON EVALUATION OF SEAWATER DESALINATION PROJECTS PROPOSED FOR THE MONTEREY PENINSULA BY GEI CONSULTANTS/Bookman-Edmonston
Meeting Date:			September 17, 2007	Budgeted:	No
From:			David A. Berger,	Program/	Contingency
			General Manager	Line Item No.:	Acct. 8900
Prepared By:			Andrew Bell	Cost Estimate:	$16,000
General Counsel Approval: N/A
Committee Recommendation: The Administrative Committee reviewed this item on September 11, 2007 and recommended approval.
CEQA Compliance: N/A

SUMMARY: The Board will consider amending an existing contract with GEI Consultants/Bookman-Edmonston (GEI/B-E) for additional services to revise their July 10, 2007 draft report titled “Evaluation of Seawater Desalination Projects Proposed for the Monterey Peninsula.” This draft report evaluates four seawater desalination project alternatives. An additional $16,000 is needed to allow GEI/B-E to finalize the July 10 report by responding to comments received from project proponents, from another public agency, and from members of the public. Staff believes this final, added expense is necessary for the GEI/Bookman-Edmonston report to be considered accurate, complete and useful on future decisions regarding the Monterey Peninsula’s long-term water supply solution. The reasons for the additional cost is threefold: (1) the current contract scope of work does not include circulating the draft report for comment and then incorporating responses to comments and questions into a final report - the District requested an additional round of review and public comment, resulting in the need to revise and publish an additional version of the report; (2) a significant volume of comments was received; and (3) additional costs were incurred by the consultant team in obtaining information from and negotiating confidentiality agreements with Water Standard Company. Persons wishing to review the comments received may view them at the District office. The scope, schedule, and cost for the additional work to revise and finalize the report are presented in Exhibit 2-A.

RECOMMENDATION: Staff recommends that the Board authorize the General Manager to amend the existing contract with GEI Consultants/Bookman-Edmonston to revise the July 10, 2007 draft report titled “Evaluation of Seawater Desalination Projects Proposed for the Monterey Peninsula” in accordance with the scope of work presented in Exhibit 2-A at a cost not to exceed $16,000.

BACKGROUND AND DISCUSSION: At its February 23, 2006 meeting, the District Board authorized a contract with GEI/B-E to perform an independent review of the three desalination projects then included in the District’s comparative matrix of water supply projects. The projects are as follows:

1. Coastal Water Project, sponsored by Cal-Am.

2. North Monterey County Desalination Project, sponsored by the Pajaro/Sunny Mesa Community Services District.

3. 7.5 million-gallon-per-day project in Sand City, most recently evaluated by MPWMD in 2004.

At the June 29, 2006 Board Special Workshop, GEI/B-E presented their June 26, 2006 report titled “Seawater Desalination Projects Evaluation.” At the June 2006 workshop, GEI/B-E representatives responded to a number of questions and comments by the Board and public. At the end of the workshop, the Board asked for the cost for additional work by GEI/B-E to revise the final report by including responses to comments and questions during the workshop. Additional comments on the report were submitted following the workshop. On August 31, 2006, the District hosted a public presentation on seawater conversion vessels, a concept by which seawater would be treated on a ship located offshore, with the potable water transported to shore for municipal use. At the February 22, 2007 Board meeting, the Board authorized an amendment of the GEI/B-E contract to update the June 2006 report to address comments and questions submitted following issuance of the June 2006 report, and to add the seawater conversion vessel project to the consultants’ evaluation.

The draft report dated July 10, 2007 and titled “Evaluation of Seawater Desalination Projects Proposed for the Monterey Peninsula” was received by the Board at its July 16, 2007 meeting. The draft report is available for review at the District office, and also at the following website location:

http://www.mpwmd.dst.ca.us/desalination-projects/dealination-projects.htm

The July 16, 2007 staff note regarding receipt of the report includes the following statements: “Contingencies authorized by the Board to address unanticipated necessary work on the part of the consultant total $7,800. If the estimated costs for preparation of the final report exceed this amount, staff will seek Board authorization for amending the B-E/GEI contract.”

A significant number and breadth of comments on the draft report was received from Water Standard Company, sponsors of the seawater desalination vessel project. Comments in the 33-page submittal by Water Standard Company ranged from clarifications of specific features of the project to revised capital and operation/maintenance cost estimates. A 10-page document contains comments on permitting requirements is included in Water Standard Company’s submittal. Comments were also received from the Pajaro Valley Water Management Agency (PVWMA) requesting additional information specifying the locations within PVWMA’s service territory that are proposed to be supplied by the Pajaro/Sunny Mesa Community Services District’s seawater desalination project. In addition, a member of the public posed a series of questions regarding the seismic safety of the three land-based projects. The scope of work in the GEI/B-E contract amendment authorized by the Board on February 22, 2007 does not include circulating the draft report for comment and then incorporating responses to comments and questions into a final report. It will take additional time and expense to respond to comments received and to prepare and publish the final report. In addition, GEI/B-E will need to meet with Water Standard Company representatives to clarify their comments and requested changes.

Additional costs were incurred by the consultant team in obtaining information from and negotiating confidentiality agreements with Water Standard Company. GEI/B-E spent a considerable amount of unbudgeted time in acquiring data on the seawater desalination vessel alternative and on the associated matter of working out Non-Disclosure Agreements acceptable to both Water Standard Company and their subconsultants.

IMPACT TO STAFF/RESOURCES:

The not-to-exceed cost in the contract with B-E/GEI would be increased by $16,000 from $82,200 to $98,200. The contract amount includes preparation of the June 26, 2006 report titled “Seawater Desalination Projects Evaluation,” and the July 10, 2007 report titled “Evaluation of Seawater Desalination Projects Proposed for the Monterey Peninsula.” Funds for this contract amendment are not included in the Project Expenditures section of the Fiscal Year 2007-2008 Budget. Therefore, staff recommends that the funds come from the Capital Projects Fund Contingency amount, which is budgeted at $16,500.

On February 23, 2006 the Board authorized an expenditure of up to $60,000, including a contingency of $5,000, to contract with B-E/GEI to prepare the 2006 report. On February 22, 2007, the Board authorized an expenditure of up to $30,000, including a contingency of $2,800, to complete the additional work required to revise the report. The proposed amendment would add $16,000 to the contract not-to-exceed amount. This includes the $7,800 in contingencies already authorized. Therefore, the Board will be authorizing the General Manager to expend an additional $8,200, which when added to the $7,800 in contingencies already approved, will provide $16,000 to finalize the report. District Engineer Andrew Bell is the staff person responsible for administering the contract.

EXHIBIT

2-A Work Effort Estimate and Cost Estimate To Finalize July 10, 2007 Draft Report, GEI Consultants/ Bookman-Edmonston

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