“For 15 years, the city grappled with the same problem,” said Bob Gonzales, Santa Paula’s Vice Mayor, during a phone interview last week. “The city spent a lot of money designing, planning, or investigating facilities. The city manager and city council hired a couple of companies to come up with ideas and studies.”
But after an election brought some new members to the city council, they started looking into options other than traditional facilities, including public-private partnerships and design-build projects. That approach opened new options for the city.
Gonzales, who had previous experience with construction projects on a community college board, knew the value of a design-build contract. “On (that) board,” Gonzales said, “we would build a building for $10 million and we would get hit with a $3M change order. I couldn’t understand how we could pay $13 million for a $10 million building before we could even move in. With the Design-Build philosophy, the person who builds it is the guy who designed it. They have to eat whatever change orders they have.”
City staff and private consultants identified necessary qualifications for companies interested in working on the project, and issued a Request for Qualifications (RFQ) and then followed up with a Request for Proposal (RFP).
“This RFP specifically stated that the proposals were for a Design, Build, Operate and Finance (California Government Code 5956) of a new wastewater treatment facility for the City of Santa Paula,” wrote Gonzales in a 2008 guest column in the Santa Paula Times. “One of the reasons stated in the request was ‘To provide certain risk insulation for the city.'”
The city, which had already spent millions of dollars on plans for facilities that never made it to fruition, wanted to avoid any continued uncertainty in their solution and risk further fines from the water board.
PERC Water, one of the companies that bid on the project, presented the city a first-in-the-nation proposal that would bring certainty to the equation and minimize costs to the city.
Under a typical design-build contract, the winning company can reduce costs by streamlining the design and construction phase of a project. PERC Water’s proposal went even further.
Their proposal called for a Design-Build-Operate-Finance model (California Government Code 5956). In addition to simply constructing the facility, they would operate it for 30 years. Additionally, the company offered its own financing through a partnership with a company Alinda.
But that wasn’t the only thing that set PERC apart from other bids turned in for the project. Their proposal created a facility that could be expanded to handle up to 4.2 million gallons of wastewater per day, and that expansion was included in the original deal. That means that if the city needed to maximize its treatment capacity, it could be done at no additional cost to the city.
“The old (traditional) facility, the value of any home downwind of the facility was awful,” said Gonzales. “Because of (the PERC) design, there is no smell. We eliminated the odor issue.”
After PERC was awarded the contract, the city assigned their public works director to be the project liaison. According to Gonzales, the director was an engineer who couldn’t believe the speed that PERC’s construction crews maintained or the quality of their work.
“He was originally against (the project),” said Gonzales, “but he ended up buying into the idea at the end.”
It’s easy to understand why: construction ended seven months ahead of schedule. PERC also made its own capital investments to install energy saving technology and has since saved the city additional money because of the energy efficient technologies that PERC incorporated into the facility.
According to Gonzales, PERC is the type of company where they are always looking for better ways to solve problems. “They are really creative in their thinking,” Gonzales said. “They are full of ideas and they are a really innovative, forward thinking group of people. They have great ideas and are great to work with.”
One of the things that Gonzales said he appreciates is that the company retained many of the employees that had worked with the city for years. “The employees were good and competent in their jobs. They made an offer the employees couldn’t refuse and now they work for PERC. So we still have people we are comfortable with working to clean our water.”
The facility has been operating in Santa Paula for about a year now, and Gonzales is very pleased with the arrangement.
“I’m happy with it,” said Gonzales. “And a lot of other people are happy with it, too.”