HomeMy WebLinkAboutCC 5 NITRATE REMOVAL 10-19-92'ke' E 11
Ac'i
AL DA
DATE:
TO:
FROM:
SUBJECT:
OCTOBER 19, 1992
WILLIAM A. HUSTON, CITY MANAGER
04ONSENT CALENDAR NO. 5
10-19-92
Inter -Com
PUBLIC WORKS DEPARTMENT/ENGINEERING DIVISION
NITRATE REMOVAL PLANT AT 235 EAST MAIN STREET
(P.W. FILE NO. 2930)
RECOMMENDATIONS:
That the Tustin City Council authorize a supplemental budget
appropriation in the amount of $614,542 to the 1992-93 Water
Service Capital Projects account.
BACKGROUND:
In November, 1984 the Orange County Water District (OCWD) and the
City of Tustin entered into an agreement for the design and
construction of a demonstration project for the removal of nitrates
from the domestic ground water supply. This demonstration facility
provided that the OCWD serve as lead agency for the design and
construction of the "Ion Exchange Process" and the "Reverse Osmosis
Process" of the facility.
The City of Tustin has operated the facility at 235 E. Main Street
for the required two year demonstration period, per terms of the
agreement, and both agencies have jointly determined the
feasibility of both the Ion Exchange and the Reverse Osmosis
Facilities as outlined in the original agreement.
DISCUSSION:
The OCWD has completed the cost analysis of the joint project based
upon two years of plant operating data and it was determined that
the treated water project cost is less than the City's alternative
source of supply. (Copy of this analysis is attached for
reference). The project water cost is $290.00 per acre-foot which
is less than the City's alternative source through East Orange
County Water District at a rate of $325.00 per acre-foot. The City
staff concurs with this analysis.
The total project cost previously paid by OCWD is $1,548,896.00.
Per Section Five of the agreement, the City is required to purchase
the project facilities from OCWD by making an initial lump sum
payment in the amount of $614,542.00 ($800,000.00 less prior
$185,458.00 credit). The balance in the amount of $748,896.00 will
be due over the next several years and will be computed based on
the plant yield and the cost difference between the project water
and the prevailing East Orange County Water District rate. This
initial lump sum payment to OCWD is due and payable by November 1,
1992.
Nitrate Removal Plant
October 19, 1992
Page 2
Staff requests that the City Council authorize a supplemental
budget appropriation in the amount of $614,542.00 to the 1992-93
Water Service Capital Projects account with future reimbursement
from the proceeds of the upcoming bond sale, tentatively scheduled
for January -February, 1993, to be evaluated prior to the final
sizing of the issue.
Robert Ledendecker
Director of Public Works/City Engineer
RL:ccg:nitrate
cc: Ron Nault
Gary Veeh
Mce of
General Manager
5 3 SEP 1 61992
D z
��°
7 J�
O
OF
F �Nc'
ORANGE COUNTY WATER DISTRICT
September 11, 1992
Mr. William Huston
City Manager
City of Tustin
300 Centennial Way
Tustin, CA 92680
Dear Mr. Huston:
OCWD/City of Tustin Nitrate Removal Project Agreement
The purpose of this letter is to transmit the results of a cost analysis of our joint water
treatment and supply project conducted by the District's internal auditor. The analysis is
based on two years of plant operating data and finds that the project water cost is less than
Tustin's alternative source of supply.
Section Four of our agreement requires that OCWD and Tustin jointly determine the
economic feasibility of the project by comparing the project water cost with the cost of
Tustin's alternative supply, i.e. water imported by the Metropolitan Water District and the
East Orange County Water District. Per the agreement, the project is determined feasible
if the project water cost is less than the East Orange County water rate. The analysis finds
that the project water cost is $290 per acre-foot which is less than the prevailing East
Orange County rate of $325 per acre-foot. Therefore, the District concludes that the project
is feasible.
The total cost paid by OCWD to construct the project facilities was $1,548,896. If
determined feasible, Section Five of our agreement requires that Tustin purchase the project
facilities from OCWD by making an initial lump sum payment in the amount of $614,542
($800,000 less prior $185,458 credit). The balance will be due over the next several years
and will be computed based on the plant yield and the cost difference between the project
water and the prevailing East Orange County water rate.
MAILING ADDRESS: P.O. BOX 8300 10500 ELLIS AVENUE, FOUNTAIN VALLEY
FOUNTAIN VALLEY, CA 92728-8300 TELEPHONE (714) 963-5661
FAX (714) 963-7472
September 11, 1992
Page Two
If the City of Tustin accepts the cost analysis and the District's conclusion on feasibility,
please pay the amount indicated in the enclosed invoice.
As always, we will continue to support the project by providing technical assistance during
future operation. The District and the City can be proud of implementing such an
innovative and successful project to protect our water supply.
Very truly yours,
William R. Mills Jr., P. .
General Manager
enclosure
c: Gary Veeh, City of Tustin Water Service
•
OF
DATE:
TO:
FROM:
SUBJECT:
INTER -OFFICE MEMORANDUM
August 14, 1992
J. Chaufty, A. Czorny, J. Reilly
Laura U
TUSTIN NITRATE REMOVAL DEMONSTRATION PROJECT- Cost Analysis
In an attempt to mitigate the water quality problems created by nitrate concentration in
the Tustin area, the District has completed the design and construction of an lon-
Exchange Process Plant and Reverse Osmosis Process Plant to remove nitrate from the
City of Tustin wells No. 2 and No. 3.
According to the agreement, the City of Tustin is responsible for operating and
maintaining the facilities and its costs for a two year demonstration period. At the
conclusion of the demonstration period, the District and Tustin shall determine if the
groundwater production cost for either facility is less than the imported water cost.
I have audited the accounting records of the City of Tustin for the project O & M costs
and compared the groundwater production costs with the costs of treated, non -
interruptible imported water for the two year demonstration period, commenced July 1,
1990 and concluded June 30, 1992.
1. In accordance with generally accepted auditing standards, all material and records
submitted by the City of Tustin are in order and accurately reported.
2. The groundwater production costs per acre foot are based on labor, materials, electric
energy, and annual interest of the project capital cost compared to the water produced
from well No. 2 and well No. 3. The capital cost is in accordance with the Project Cost
Statement dated October 31, 1991. Computation on the interest of the project capitall
cost is amortizated over 20 years at an annual interest rate of 10% (agreement section
5.1.3 and 5.2.3).
3. The imported water rate is the treated non -interruptible Met rate plus MWDOC and
EOCWD charges. It is entirely possible that the City of Tustin, while importing water, can
face three rate increases any time.
Attached is an Operation Summary and its supporting reports for the feasibility analysis.
It is apparent that the project groundwater rate is below the imported water rate.
If you have any questions, I am available at your convenience.
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Page 1
TUSTIN NITRATE REMOVAL PROTECT
EXPENDITURE REPORT
OC'T'OBER 31, 1991
Consultant/Contractor
Description
Expended
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seas:sssssaassssaaaas
I W A Engineers
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Test Tustin Wells
$7,900.00
Metcalf i Eddy
Design plan t specs for 0.5 MGD
$73,000.00
ion exchange and RO plant
sa s assn
.sssa..$80`900'00
assasassssssssasassssas
"`TOTAL`EIiGINEERIliG/DESIGN`•$=
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sssssasssssassasasassas
Ace Stainless
sassssasssssssssasssssasssassaasssssssaa
U-bolt/pipe/ trusline ball valve
$96.44
Advantec-Div Greene
Pumps t accessories
$812.97
Advantec-Div Greene
Equip. manitenance i repair
$1,624.42
Allosep
Filter housing
$17,617.16
Allstar Paving
Road and highway material
$820.00
Argo Scientific
Cleaning chemical
$2,673.69
B S t B
Parts
$137.83
Baxter Scientific
Electrode/potass chl/nitrate extract
$990.05
Baxter Scientific Prod.
Lab supply
$180.27
Boyd Industrial Coating
Patch coating in acid
$2,325.00
City of Tustin
Start-up costs for project
$47,981.00
Columbia Specialty
Weld fittings
$33.55
County of Orange EMA
Emergency spill response
$190.00
Crosby & Overton
Clean up acid spill
$4,284.02
Davis Quality Engr.
verify test
$240.00
Diversified Salt
Rock sQlt
$1,478.70
Fike Metal Products
Rupture disk
$393.80
GACO Systems, Inc.
Construction of Demonstration Project
$1,295,027.16
Each Company
Nitrate ionic stry
$112.66
Barrington Indus.Plast.
Ladder
$1,992.50
Batch
Analysis
$482.84
Batch Co.
Meter
$1,599.49
House of Batteries
Battery
$29.75
I W A Engineers
Construction project management
329,500.00
I W A Engineers
Engineering services bidding phase
$6,389.00
Indust. Metal Supply Co
Metals, rods
$622.63
Irvine Pipe i Supply
Gaskets
$213.39
Irvine Pipe & Supply
Flange/coup
$959.96
Raman Bearing
Crane seal repair
$440.39
Mc Coy Sheet Metal
Cover for motor
$209.42
Milton Roy Co.
Pumps and accessories
$1,569.21
Page 2
Consultant/Contractor
Orange County Bose Co.
O.C. Ind. Plastics
Pendarvis Sales
Peninsula Pump a Equip.
Precision Chemical
Preferred Pump
Pro Shops
Republic supply
Ryan Berco
Sensorex
Separation Processes
Shook Bldg. Systems
Sparling Instruments
Summit Steel
The Mater Man
Truesdale Labs
vallen Safety
van Waters a Rogers
Van waters a Rogcrs
Viking Freight
VWR Scientific
Western Salt
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TUSTIN NITRATE REMOVAL PROJECT
EXPENDITURE REPORT
OCTOSER 31, 1991
Description
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Expended
ssssasssssasssssss
Suction hose
$508.91
Clear acrylic
$267.96
Asco i solenoid valves
$298.07
Equip. manitenance a repair
$138.62
Precision injection valve &say.
$56.36
Pump slack slurry
5138.50
Equip. manitenance a repair
$1,791.71
Pressure gauge
$86.61
Tubing
$159.19
Reference electrode
5291.15
Technical review (part)
$26,518.00
Plans
$690.00
Test
$60.00
Steel angle
$1,323.07
Rock salt
$1,929.00
Samples testing
$300.00
Modesty curtain
$252.60
Sulfuric acid
$1,681.15
Acid spill settlement payment
($888.37)
Freight
5132.18
Lab supply
$26.19
Salt
$7,900.32
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TOTAL CONSTRUCTION
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$1,167,995.80
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TOTAL PROJECT $1,518,895.80
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Costs Attributed to Re% -Arse Osmosis Facility $898,359.56
Costs Attributed to Ion Exchange Facility $650,536.21
OCWD/CITY OF TUSTIN NITRATE REMOVAL DEMONSTRATION PROJECT
TOTAL PROJECT COST STATEMENT
Engineering/Design $ 80,900.00
Construction $1,467,995.80
TOTAL $1,548,895.80
Costs attributed to Reverse Osmosis Facility . $898,359.56
Costs attributed to Ion Exchange Facility $650,536.24
I hereby certify, under penalty of perjury, that this cost statement is true,
correct, to the best of my knowledge.
/ XA/0"-7 0-'/ // -
Jo . Chaufty
Assistant General Mana r
A dr w V. C Orn
Finance Director ;
eLo6s Reilly
roject Engineer
ORANGE COUNTY WATER DISTRICT
AMORTIZATION SCHEDULE
TUSTIN NITATE REMOVAL PROJECT
(ION EXCHANGE FACILITY)
CITY OF TUSTIN
Project Capital Cost:
5650,536.24
Interest Rate:
10.00%
Annual Payment:
$76,411.74
Begin Payment:
02/28/93
Fully Amortized By
02/28/12
Annual
Period
------------
Principal
--------------
Interest
--------------
Amortization
-------
1
---------
5650,536.24
511,358.12
565,053.62
--------------
576,411.74
2
5639,178.12
$12,493.93
563,917.81
576,411.74
3
$626,684.19
$13,743.32
$62,668.42
$76,411.74
4
5612,940.87
$15,117.66
561,294.09
576,411.74
5'
$597,823.21
$16,629.42
$59,782.32
$76,411.74
6
5581,193.79
$18,292.36
558,119.38
$76,411.74
7
5562,901.43
520,121.60
$56,290.14
576,411.74
8
$542,779.83
522,133.76
$54,277.98
576,411.74
9
$520,646.07
524,347.14
$52,064.61
576,411.74
10
5496,298.93
526,781.85
549,629.89
576,411.74
11
5469,517.08
529,460.03
546,951.71
576,411.74
12
5440,057.05
532,406.04
544,005.70
$76,411.74
13
5407,651.01
$35,646.64
540,765.10
576,411.74
14
5372,004.37
539,211.31
537,200.44
576,411.74
15
5332,793.06
543,132.44
533,279.31
576,411.74
16
$289,660.62
547,445.68
528,966.06
$76,411.74
17
5242,214.94
552,190.25
524,221.49
576,411.74
18
5190,024.69
557,409.27
519,002.47
576,411.74
19
5132,615.42
563,150.20
513,261.54
576,411.74
20
569,465.22
569,465.22
--------------
56,946.52
--------------
576,411.74
--------------
-650,536.24
5877,698.61
51,528,234.85
Note: This amotization schedule is part of the formula to compute the "Annual
Differential Factor ($/AF)" for "A" component, as per agreement
Section 5.1.3 which dated June 1, 1987.
Prepared by: Laura Li
June 10, 1992
ORANGE COUNTY WATER DISTRICT
AMORTIZATION SCHEDULE
TUSTIN NITATE REMOVAL PROJECT
(REVERSE OSMOSIS FACILITIES)
CITY OF TUSTIN
Project Capital Cost:
1898,359.56
Interest Rate:
10.00%
Annuat Payment:
1105,520.98
Begin Payment:
02/28/93
Fully Amortized By
02/28/12
Annual
Period
------------
Principal
Interest
Amortization
----------------
1
1898,359.56
--------------
115,685.02
--------------
589,835.96
--------------
1105,520.98
2
5882,674.54
517,253.52
588,267.45
1105,520.98
3
1865,421.02
518,978.88
186,542.10
1105,520.98
4
1846,442.14
120,876.76
184,644.21
1105,520.98
5
1825,565.38
522,964.44
182,556.54
$105,520.98
6
5802,600.94
525,260.88
580,260.09
1105,520.98
7
1777,340.06
527,786.97
177,734.01
1105,520.98
8
1749,553.09
530,565.67
174,955.31
5105,520.98
9
1718,987.42
133,622.24
171,898.74
1105,520.98
10
5685,365.18
136,984.46
168,536.52
5105,520.98
11
1648,380.72
140,682.90
564,838.07
1105,520.98
12
5607,697.82
544,751.19
560,769.78
1105,520.98
13
1562,946.62
549,226.31
556,294.66
1105,520.98
14
5513,720.31
154,148.95
151,372.03
1105,520.98
15
1459,571.36
159,563.84
545,957.14
1105,520.98
16
5400,007.52
565,520.22
540,000.75
1105,520.98
17
1334,487.30
$72,072.25
133,448.73
1105,520.98
18
$262,415.05
179,279.47
126,241.51
1105,520.98
19
$183,135.58
587,207.42
118,313.56
$105,520.98
20
195,928.16
595,928.16
--------------
19,592.82
--------------
1105,520.98
--------------
1898,359.56
=.x..cccc...ca
51,212,059.98
.:saaxcnacc�nc
12,110,419.54
===c��==a.c.cc
Note: This amotization schedule is part of the formula to compute the "Annual
Differential Factor (SAF)" for "A" component, as per agreement
Section 5.2.3 which dated June 1, 1987.
Prepared by: Laura Li
June 10, 1992
ORANGE COUNTY WATER DISTRICT
AMORTIZATION SCHEDULE
TUSTIN NITATE REMOVAL PROJECT
(ION EXCHANGE AND REVERSE OSMOSIS FACILITIES)
CITY OF TUSTIN
Project Capital Cost:
$1,548,895.80
Interest Rate:
10.00%
Annual Payment:
$181,932.72
Begin Payment:
02/28/93
Fully Amortized By
02/28/12
Annual
Period
Principal
Interest
Amortization
----------------------------
1
51,548,895.80
--------------
$27,043.14
--------------
5154,889.58
--------------
5181,932.72
2
$1,521,852.66
529,747.45
5152,185.27
5181,932.72
3
51,492,105.21
532,722.20
5149,210.52
1181,932.72
4
51,459,383.01
135,994.42
5145,938.30
5181,932.72
5
51,423,388.59
539,593.86
5142,338.86
1181,932.72
6
51,383,794.73
143,553.25
5138,379.47
5181,932.72
7
11,340,241.48
147,908.57
1134,024.15
1181,932.72
8
11,292,332.91
552,699.43
1129,233.29
1181,932.72
9
11,239,633.48
157,969.37
1123,963.35
1181,932.72
10
11,181,664.11
163,766.31
1118,166.41
1181,932.72
11
11,117,897.80
170,142.94
1111,789.78
1181,932.72
12
51,047,754.86
177,157.23
1104,775.49
1181,932.72
13
1970,597.63
184,872.96
597,059.76
1181,932.72
14
1885,724.68
193,360.25
188,572.47
1181,932.72
15
1792,364.42
1102,696.28
$79,236.44
5181,932.72
16
1689,668.15
5112,965.90
168,966.81
1181,932.72
17
1576,702.24
1124,262.50
157,670.22
1181,932.72
18
$452,439.75
$136,688.74
145,243.97
$181,932.72
19
5315,751.00
5150,357.62
531,575.10
1181,932.72
20
$165,393.38
$165,393.38
516,539.34
$181,932.72
--------------
--------------
51,548,895.80
--------------
$2,089,758.59
53,638,654.39
Note: This amotization schedule is part of the formula to compute the
"Annual
Differential
Factor (S/AF)"
for "A" component,
as per agreement
Section 5.1.3
and Section 5.2.3 which dated June 1, 1987.
Prepared by: Laura Li
June 10, 1992