How Council Quietly Approved a 10 Million Dollar Water Project

water_tank.jpg

The Davis City Council recently approved a ten million dollar water project that was on the consent agenda with no discussion of the costs of the project, its design, size, impact or alternatives.  When Councilmember Sue Greenwald pulled the item from the consent agenda, the discussion was delayed until the end of the meeting, by that point the council was so tired they refused to discuss it and simply approved it.

The genesis of this approval began on July 15, 2008 with another consent item.  The council at that time approved a consultant agreement with West Yost Associates to prepare plans, specifications and estimates for the subject project.  The consultant agreement was not to exceed $600,724.

The staff report read:

The design and construction of the East Area Water Storage Tank will contribute to the following Council Two-Year Strategic Goals:

* Maintain and Improve the Infrastructure: Installation of this four-million-gallon tank will improve the water delivery system in meeting peak demand and for fire fighting (see next bullet).
* Ensure Top Quality Fire, Police and Emergency Services: Water availability for fire
emergencies will vastly increase.

It continued:

The East Area Water Storage Tank will be the City’s third reservoir and backup water supply facility and will located north of Highway 80 at the Mace Boulevard Exit, just south of the City’s Park and Ride. The other two tanks are the West Area Water Storage tank located north of Sutter Hospital (four-million-gallon capacity) and the Elevated Tank on Eighth Street (200,000-gallon capacity).

The East Area Water Storage Tank will improve the reliability of the city’s water system, especially during peak summer demands periods, and provide much improved fire fighting capacity. The flow from the tank to the distribution system can be smoothly increased to a maximum of 2,000 gpm.

The concrete water storage tank will have a capacity of four million gallons. The tank dimensions will be approximately 165 feet in diameter and 28 feet tall. A small adjacent building will house pumps and controls.

The concrete walls and the surrounding landscaping will be designed to a pleasing aesthetic. The design of the aesthetic features is part of West Yost’s scope of work. Consideration will also be given to the use of the large circular roof. If the research and design development show that a photovoltaic solar system or other type of environmental friendly use is viable, the design will reflect the future use in the plans and specifications. Currently, the budget does not have allowance for the installation of solar panels or other types of roof use.

Seven consulting firms submitted responses to our Request for Proposal and four of those firms were interviewed. West Yost was determined to be the most qualified for this project.

fiscal_impact

The $600,000 approved on July 15, 2008, was just the tip of the iceberg. And so on April 21, 2009, there were two items again on consent calendar that authorize the full project–a project that is listed at $10.94 million.

The first item recommended the council:

“Adopt the attached resolution so that the I-Bank Board can approve the city of Davis 10 million dollar loan request at their April 28, 2009 Board meeting to allow construction of the East Davis water storage tank (CIP 8172).”

Fiscal impact:

“The total project costs to design and build the East Davis Water Storage Tank are estimated to be 10.9 million. The 10 million dollar low interest loan with I-Bank (30-year amortization/approx.  4% interest rate) would fund construction, construction inspection and construction management costs associated with the East Davis water storage tank. The debt service on this loan would be approximately $48,000/month or $576,000 annually. These costs are included in the city’s adopted water rates and would be accounted for in future water rates until the debt is retired.  This loan would have no impact on existing water fund debt service, however would require that any future rated debt the city incurs against the water fund be on par or sub-ordinate to this debt.”

The second item recommends:

“Approve the plans and specifications for the East Area Tank (EAT) Project and authorize bid advertisement.”

The construction contract is estimated to be $9.05 million with the total project including staff hours, consultant support, and contingency puts the total cost at $10.94 million.

fiscal_impact2

Here is the breakdown of the costs:

Water_Tank_Construction

Who pays for this?  Well the ratepayers.  But of course the city does not have the funds right now, so they will borrow the money first and then the ratepayers will pay it back with interest over a 30 year period.

Funding to support this project is anticipated to ultimately be paid for by water rates. However, at present, the City does not have sufficient funds available to finance this construction project.  In order to proceed with the project, Public Works staff has worked with the City’s Finance Division and have applied for a $10M low interest loan from the I-Bank in order to have all of the necessary funds to award the contract. The loan application will be reviewed by the I-Bank Board on April 28th. If the loan is denied, City staff will reconsider options to advance the project and return to the Council prior to bidding the work.

This preceded another contract, this time a no-bid contract again to West Yost Associates to act as consultant to the water supply project.

Last week, the council by a 3-2 vote, this time at least with discussion and debate approved a no-bid contract to West Yest Associates.

Resolution Authorizing the City Manager to Execute Consultant Agreement with West Yost Associates for Wastewater Reclamation Alternative Analysis, CIP No. 8119 (Public Works Director Bob Weir/Utilities Engineer Keith Smith/Principal Engineer Diane
Phillips)

Recommendation: Approve resolution authorizing a not-to-exceed $487,404 sole source agreement for the following reasons:

1. Conaway Preservation Group (CPG) originally included the firm in initial discussions and the firm has continued to participate in meetings since summer of 2008

2. Reclamation feasibility schedule as set forth in the Amended Order with the State will not accommodate the weeks necessary to solicit proposals and proceed with a selection process

3. If a firm other than West Yost Associates was identified to provide the subject services, several weeks would be required for the newly selected firm to review the work developed to date, which again the schedule will not accommodate.

Casting one of the deciding votes was Mayor Pro Tem Don Saylor.  It is perhaps time to start questioning the relationship between Mr. Saylor and West Yost Associates and wondering whether there is political favoritism going on here that helped push through the project without a competitive bid process.

As some may remember at his re-election announcement we saw this picture in the Davis Enterprise–Don Saylor standing next to one of his key supporters Bruce West from West Yost Associates.

Saylor_announces

Meanwhile the entire tank project with its $10.94 million price tag was done in a suspicious manner.  The first consultant agreement was placed in the consent calendar last spring.  There was no mention in the staff report of a $10 million plus construction project and it was not not pulled.

Then the staff comes back several months later–again in the consent agenda–this time asking for a $10.94 million approval from council.  When Councilmember Sue Greenwald complained and had it pulled, council majority used the late hour to refuse discussion on the item and push it through.

So we have had no discussion of any sort of alternatives whether it is an alternative and less expensive design such as concrete rather than steel, there was no discussion of anything.  It does not seem appropriate for city staff to put projects of this price tag in the consent calendar and for the project to be approved without any sort of discussion particularly after a councilmember passes it.

I think council needs to put strict limits on what can and cannot be put on consent. 

According to the city’s own policy:

consent_calendar

With all due respect to city staff, how could a $10.94 million project ever be considered routine and non-controversial and to require “no discussion.”  What expectation would they have that this be approved with unanimous Council support.

The city staff’s decision deprived the citizens of Davis a true hearing.  And we have no recourse on this issue.  We are now stuck with a $10.94 million bill without any ability to redress the issue.

—David M. Greenwald reporting

About The Author

David Greenwald is the founder, editor, and executive director of the Davis Vanguard. He founded the Vanguard in 2006. David Greenwald moved to Davis in 1996 to attend Graduate School at UC Davis in Political Science. He lives in South Davis with his wife Cecilia Escamilla Greenwald and three children.

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14 Comments

  1. Mike Harrington

    When I was on the CC 2000-04, the city did not have any issues with water pressure or supply in the East, just the West. (The underground water flows from west to east, down to the Sacto River.)

    The City built the storage tank near Sutter Hospital, West area pressure problems solved.

    Now this? Basically, the new East tank clearly has an unwritten goal: to support urban growth in the Mace Ranch/Second area (ie, Shriners, etc.) It’s all about growth.

    I have a standing offer to support with my business facilities a group that wants to put on the ballot the water supply and treatment issues.

    Unfortunately, I think a ballot measure is the only way to get taxpayer review of what the city is doing, as staff and CC majority are using the rate increases to spend massive amounts of taxpayer money on infrastructure designed to accommodate future sprawl. (It pays for political careers and “safe” staff positions, doesn’t it?)

  2. martin

    Is there anyway for the taxpayers who are City of Davis residents to inform the lender that we are insolvent and can’t repay any loan? Tell them about the pension obligations that the City has and how a lot of State employees are facing layoffs while our house values are declining so that the expected City tax revenue is declining at an unknown rate.

  3. Rich Rifkin

    [quote]Is there anyway for the taxpayers who are City of Davis residents to inform the lender that we are insolvent and can’t repay any loan?[/quote]This will be repaid by ratepayers, not taxpayers. Granted, they are the same people on the whole. But the difference is that ratepayers have no say in their utility rates going up. Rates have been going up for the last three years. They will go up at a much steeper rate in the next 10.

  4. Nancy

    Any sound business practice is to seek competitive bids for both consulting and for projects. Homeowners do it all the time.
    Why is this not being done for this and many other cases of city business? No wonder we are in a hole!

    I say this decision must be revisited now and a proper process followed. Secrecy and lack of public discussion is inimical to democracy.

    It is time to demand that the CC request competitive bids and save the taxpayers money.

    It is time to look at campaign donations to our city council candidates and CC members. Maybe a council member should recuse him/herself in the same way that if he/she has property interests near a project recusal is mandated.

  5. Dont get it

    The thousands of you(and you know who you are, but few of you have the spine to admit it…)who went braindead and thought it FUN to play at the polls and voted for Saylor should be proud. This man, always smiling and putting himself out to be all things to all people, just can’t be trusted.

  6. Old Skool Davis

    And what’s the relationship of Jeff Pelz? That is a familiar name in Davis public works operations. Is the G.O.B.N. in action here as well? I love that Wyoming Carpet Bagger smile! Don’t you?

  7. Mike Harrington

    Folks, you want to change things? Add a third progressive to the CC in June 2010, or put the water issues on the ballot. Who is going to step up to the plate and take charge? I can help.

  8. Yolo Watcher

    This most certainly smacks of favoritism. But aside from that, considering that we are already in dire straits with our unfunded liabilities, it seems almost criminal not to require competitive bidding for the contract. How can we get this accomplished? What leverage do we have to force the council to re-open this process for public discussion.

    I also wonder at whether or not a council person should have to recuse him/herself in a case like this where the company being considered is also a major donor to his/her campaign.

    An EIR should also be required. This is going to be quite an impact in many ways.

  9. Don Shor

    “It is time to look at campaign donations to our city council candidates and CC members.”
    I agree that an article about who has contributed to each of the council members would be interesting. As far as I can tell from the 8+ times David has mentioned this issue here, Jeff Peltz and Bruce West each donated $100 to Don Saylor’s campaign. But I haven’t dug into the public records of donations to all council members, as I’m sure David has.

    The no-bid part of all this was for the consulting contract, not the design of the water facility nor for its construction. I would be curious if any present council members are concerned about not soliciting bids for the consulting contract.

  10. Rich Rifkin

    [quote]And what’s the relationship of Jeff Pelz? That is a familiar name in Davis public works operations.[/quote]I don’t believe Jeff Pelz works for the City of Davis. He is a long-time Davisite. His father is Dave Pelz, for whom the overcrossing from Cowell to 5th Street is named. Jeff was in my graduating class at Davis High (1982). He was a bright, very popular guy. He was the editor-in-chief of the yearbook, among other things.

  11. Rich Rifkin

    I found this in a 2007 Enterprise article: [quote]West Yost Associates Inc., a consulting civil/environmental engineering firm in Davis, has promoted Jeffrey Pelz and John Goodwin to the positions of vice president.

    Jeff Pelz has 20 years of industry experience and is a leader in wastewater facilities planning and design. He joined WYA in 1990 as the firm’s first full-time engineering employee and serves as a senior manager for its wastewater program, overseeing projects from the Davis office. In his new role, he has taken on a firm-wide operations management and will lead strategic planning. [/quote]

  12. green solutions are complicated

    check out the environmental angle on this item… plenty of other designs that would have a much smaller carbon footprint.

  13. Anonymous

    The city council donations might be limited to $100, but if a council member wants to run for higher office, he or she needs very, very big contributions, and the council contribution limit does not apply. The best way to raise a war chest for a run for higher office is to do big favors when on the city council or board of supervisors.

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