AGENDA

Report of the Chair

No report.

Report of the Executive Director

Fred Laskey, MWRA Executive Director, stated that Richard Goldstein would be departing from his position managing the Authority's litigation issues to work on cost recovery for the Big Dig. Throughout his tenure at MWRA, Mr. Goldstein has made valuable contributions and will be missed. He returned his thanks to Mr. Laskey and the Board for their support.

Mr. Laskey stated that MWRA has elected to enter default service status for its energy needs at the Deer Island Treatment Plant (DITP) for the next three months. Although the Authority recently solicited and received competitive bids from energy providers, the market is too unstable and prices are too high at this time to further pursue those options.

MWRA will soon be providing the Environmental Protection Agency (EPA) with a vulnerability assessment report. It was requested in response to heightened security concerns.

Mr. Laskey recently had a favorable meeting with the major bond rating agencies. They reacted positively to MWRA's three-pronged approach to the debt service assistance shortfall.

Exelon of Weymouth recently contacted Mr. Laskey to inform him that Raytheon appears behind on its [already delayed] construction project at the property MWRA needs to access to complete the Braintree-Weymouth Relief Facilities. The Authority is not in a strong position to make formal complaints because it is not the property owner. Mr. Laskey has spoken with Mayor Madden of Weymouth and will continue to seek resolution to the matter.

APPROVALS

Transmittal of Proposed FY04 Current Expense Budget

The Board voted to approve transmittal of the Proposed FY04 Current Expense Budget (CEB) to the MWRA Advisory Board for its review and comment. The projected rate revenue requirement for FY04 is $435.8 million, an increase of 3.9% over the revised FY03 rate requirement. To reduce the rate revenue requirement to the 3.9% increase, the proposed CEB includes $33.2 million of reserves ($12.6 million from the Rate Stabilization Fund to enhance revenue and $20.6 million in bond redemption savings to reduce debt service costs). This is the first time in nine years that a proposed CEB does not reflect any state debt service assistance.

Despite staff's efforts to further reduce the CEB overall, debt service assistance still accounts for 60% of MWRA's annual budget. This level of debt is driven in part by capital projects undertaken per court orders and regulatory requirements.

Staff does not anticipate that FY04 will offer the refunding opportunities that have been available throughout FY03 ($1 billion worth). MWRA will have to borrow approximately $165 million for FY04. However, staff is seeking options to reduce operating expenses through insurance revisions, reevaluation of landfill needs and increased automation.

Ms. Pollak asked whether MWRA would be reevaluating its capital project schedule to allow some temporary relief. Mr. Laskey responded that a list has been generated of projects that could potentially be delayed.

Authorization to Surplus Constitution Beach Combined Sewer Overflow Facility

The Board voted to authorize the Executive Director, on behalf of the Authority, to declare Constitution Beach combined sewer overflow (CSO) facility in East Boston as surplus to the construction, maintenance and operation of the sewer and waterworks systems and return it to the control of the Division of Capital Asset Management (DCAM). The surplus property includes both a small land parcel and building. It is no longer needed because sewer separation has been implemented at the site and CSO discharges have been eliminated.

Memorandum of Understanding and Financial Assistance Agreement with Boston Water and Sewer Commission for Implementation of CSO Projects: Amendment 2 - MWRA funding through June 2002

The Board voted to authorize the Executive Director, on behalf of the Authority, to execute Amendment 2 to the Memorandum of Understanding (MOU) and related Financial Assistance Agreement (FAA) with Boston Water and Sewer Commission (BWSC) for implementation of the CSO Control Plan to incorporate the Dorchester Brook Conduit system optimization plan improvements, delete the Fort Point Channel Dorchester Brook Conduit In-Line Storage project, and increase the financial assistance award amount by $18,980,000 to a revised not to exceed amount of $160,328,000.

Cost estimates have been revised by BWSC and approved by MWRA several times since the MOU and FAA were last amended in 1998. Amendment 2 addresses the cost increase of sewer separation projects at South Dorchester Bay that arose after contracts were first awarded.

The FY03-05 CIP budget includes $160,328,000 and the Proposed FY04-06 CIP includes $169,567,000 for design and construction of the BWSC-implemented CSO projects.

Pay During Military Leave

The Board voted to approve a policy of maintaining the equivalent of full MWRA pay for any employee called to active duty during a wartime conflict. Seven employees are members of the armed services reserves, two of whom have been called to active duty.

The cost estimate to cover the differential between military and MWRA pay for one year is $24,500 for the two activated employees and $201,000 for all seven employees. The cost will be absorbed with funds currently allocated in the FY03 CEB Wages and Salaries line item and with funding requested in the FY04 CEB.

Contract Employee, Bench Technician for Wastewater Metering

The Board voted to approve the immediate hiring of a contract employee, Bench Technician, in the Wastewater Metering Department, Operations Division, at an hourly rate not to exceed $25.00, with an annual compensation not to exceed $52,000. Staff stated that this position is critical for the immediate future for data collection and analysis generated by MWRA's current metering system. The position is contract rather than permanent because it will no longer be needed when the metering system is updated.

CONTRACT AWARDS

Union Park Detention/Treatment Facility: Barletta Engineering Corp., Contract 6265

The Board voted to approve the award of Contract 6265, Union Park Detention/Treatment Facility (Facility), to the lowest responsive bidder, Barletta Engineering Corp. The Board further voted to authorize the Executive Director, on behalf of the Authority, to execute said Contract in the bid amount of $37,224,444 with a contract term of 913 days from the Notice to Proceed.

The Facility will treat discharges from BWSC's Union Park Pump Station, which is the largest contributor of CSO flow to Fort Point Channel and a significant cause of water quality standards violations. Construction of the Facility is one of the twenty-five projects included in MWRA's long-term CSO control plan. The Facility and other collection system improvements will reduce average annual CSO volume to Fort Point Channel from 132 million to 29 million gallons, with remaining flows receiving treatment.

The FY03-05 Capital Improvement Program (CIP) budget includes $34,639,000 for Contract 6265, resulting in a $2,585,444 shortfall. Staff states in its summary that if this additional amount causes the CIP budget to exceed the ten-year spending cap or the cap for any of the first three years, reductions will be made elsewhere. BWSC will fund $4,299,423 (11.55%) of Contract 6265.

East Boston Branch Sewer Rehabilitation: D'Allessandro Corp., Inc., Contract 6840

The Board voted to approve the award of Contract 6840, East Boston Branch Sewer Rehabilitation, to the lowest responsive bidder, D'Allessandro Corp., Inc. The Board further voted to authorize the Executive Director, on behalf of the Authority, to execute said Contract in the bid amount of $5,142,125 with a contract term of 300 calendar days from the Notice to Proceed. The FY03-05 CIP contains $6,100,000 for Contract 6840.

The East Boston Branch Sewer Relief project is one of the twenty-five CSO control projects required by federal and state regulators. It includes the rehabilitation of part of the main trunk sewer, installation of floatable controls and pipe replacement.

Although MWRA did receive a lower bid for this project, the cost proposal omitted a major portion of the project and information on the bidder's qualifications. D'Allesandro Corp. offered the second lowest bid amount and reliable references for itself and its subcontractor for pipelining.

Deer Island Public Access Groundskeeping Services: UNICCO Service Co., Contract S386

The Board voted to approve the award of Contract S386, Deer Island Public Access Groundskeeping Services, to the lowest responsive bidder, UNICCO Service Co. The Board further voted to authorize the Executive Director, on behalf of the Authority, to execute said Contract in the bid amount of $18,000 with a contract term of 485 calendar days from the Notice to Proceed. Contract S386 will provide groundskeeping services for the path, shoreline, beach and overlooks at the DITP. Funding is available within the DITP expense budget.

CONTRACT AMENDMENTS/CHANGE ORDERS

Squantum Pumping Station: Zenone, Inc., Contract 5405, Change Order 7

The Board voted to authorize the Executive Director, on behalf of the Authority, to approve Change Order 7 to increase the amount of Contract 5405, Squantum Pumping Station, with Zenone, Inc., by $28,147.65, and to extend the term by 217 calendar days to June 30, 2003. The Board further voted to authorize the Executive Director, on behalf of the Authority, to approve additional change orders as may be needed to Contract 5405 in amounts not to exceed the aggregate of $250,000 and 180 calendar days.

Progress on Contract 5405 has been impeded because staff has struggled to keep Zenone working on it, MWRA has initiated several changes, design issues have arisen, and outside parties, such as MassElectric and the state plumbing inspector, have caused delays. However, it is reaching its conclusion.

Change Order 7 increases the cumulative change order total to $267,761.57, added to the original contract amount of $4,029,000, for a revised contract total of $4,296,761.57. The FY03-05 CIP includes $4,296,761.57, resulting in a $28,147.65 shortfall. Staff states in its summary that if this additional amount causes the CIP budget to exceed the ten-year spending cap or the cap for any of the first three years, reductions will be made elsewhere.

South Boston CSO Reassessment - Design and Construction Services for North Dorchester Bay/Reserved Channel Consolidation Conduits and Reserved Channel CSO Facility: Parsons Brinckerhoff/Metcalf & Eddy, Joint Venture, Contract 6220, Amendment 6

The Board voted to authorize the Executive Director, on behalf of the Authority, to approve Amendment 6 to increase Contract 6220, Design and Construction Services for North Dorchester Bay/Reserved Channel Consolidation Conduits and Reserved Channel CSO Facility, with Parsons Brinckerhoff/Metcalf & Eddy, Joint Venture, by the not to exceed amount of $1,264,000.

With approval of Amendment 6, staff will begin Phase II of the CSO reassessment. It will include water quality investigations; evaluation of CSO control alternatives recommended in the Phase I report; development of approaches to phase in CSO control; selection of a recommended plan and implementation schedule; and preparation of a Supplemental Environmental Impact Report.

Amendment 6 increases the cumulative amendment total to $2,006,588, added to the original contract amount of $10,209,673, for a revised contract total of $12,216,261. The FY03-05 CIP includes $1,745,235 for Phases I and II; Amendment 6 increases the total cost to $2,422,379, resulting in a $677,144 shortfall. Staff states in its summary that if this additional amount causes the CIP budget to exceed the ten-year spending cap or the cap for any of the first three years, reductions will be made elsewhere.

Expansion Joint Caulking Repair Evaluation and Design: Simpson, Gumpertz & Heger, Inc., Contract 6668, Amendment 3

The Board voted to authorize the Executive Director, on behalf of the Authority, to approve Amendment 3 to increase Contract 6668, Expansion Joint Caulking Repair Evaluation and Design, with Sampson, Gumpertz & Heger, Inc., by $16,458.60 and to extend the time for completion by 611 calendar days to October 31, 2004.

Staff maintains that Amendment 3 is necessary because this project to repair caulking at the DITP could not be started on time due to the extraordinarily cold winter. Amendment 3 increases the cumulative amendment total to $40,458.60, added to the original contract amount of $99,874.20, for a revised contract total of $140,332.80. The FY03-05 CIP contains $124,000 for Contract 6668, resulting in a $16,332.80 shortfall. Staff states in its summary that if this additional amount should cause the CIP budget to exceed the ten-year spending cap or the cap for any of the first three years, reductions will be made elsewhere.

Walnut Hill Water Treatment Plant, Design and Engineering Services During Construction: Camp Dresser & McKee, Inc., Contract 5017, Amendment 12

The Board voted to authorize the Executive Director, on behalf of the Authority, to approve Amendment 12 to increase Contract 5017, Walnut Hill Water Treatment Plant (WHWTP) Design and Engineering Services During Construction, with Camp, Dresser & McKee, Inc., by the not to exceed amount of $3,109,123.

Amendment 3 increases the cumulative amendment total to $22,930,624, added to the original contract amount of $23,459,620, for a revised contract total of $46,390,244. The FY03-05 CIP contains $46,441,000 for Contract 5017.

Mr. Pappastergion stated that Amendment 3 brings Contract 5017 to 100% over its original budget. Staff responded that the scope has changed significantly since the Contract was awarded in 1996. At that time start-up of the WHWTP was limited to bringing it into service. Start-up has since expanded to a multi-phased sequence of operations with numerous components coming on-line at different times so as not to interrupt service to MWRA customers.

INFORMATION

Update on MWRA's Field Communications System

At the request of the Advisory Board, staff offered the Board a field communications update. Currently MWRA uses cell phones, pagers and portable radios in its field communications program, which has a collective budget of $200,000. All are considered effective means of maintaining communications among staff, especially in light of increased security needs.

Portable radio use has decreased from approximately 1100 to 800; pagers from 700 to 500; and cell phones number 100. Staff is also considering the use of Blackberry technology, which allows text messages to be sent.

MWRA's MOU with the MDC for use of its portable radios has expired. It is being renegotiated and staff anticipates there will be associated costs. The MOU provided that, following its expiration date, a fee would be negotiated for future radio use.

Update on Leased Space at Charlestown Navy Yard

The consolidation to the new facility in Chelsea and the Early Retirement Program have reduced MWRA's needs for leased space at the Navy Yard. Staff is seeking to sub-let surplus space; however, the Boston commercial real estate market is currently flooded with empty properties.

Mr. Laskey spoke with the Commissioner of DCAM and asked him to recommend potential sub-letters and to make them aware that MWRA would consider reduced rates. Eventually the Authority will vacate Building 34 entirely and consolidate within Building 39 and the Chelsea facility. A long-term decision will also be made on whether the entire Authority should move to Chelsea or maintain a Boston presence.

Preliminary FY04 Assessments

Each member community has been sent its preliminary assessment for wholesale water and sewer charges for FY04. The projected FY04 rate revenue requirement of $435,828,376 has driven staff to recommend a 3.9% increase over FY03. This translates into approximately $20 annually per household, or $33 with an assumed increase in municipal operations charges.

Update on MWRA's Wastewater Metering Replacement Project

Although the Authority continues to meet its performance goals for wastewater metering, it is currently working with the Advisory Board and member-communities on a wastewater metering replacement project. Discussions have raised complex technical and transition issues, such as the potential for rate fluctuations in flows registered once the new system is installed.

The scope of the project is to replace the existing metering system and improve data availability. A bid selection committee has been formed to recommend the highest weighted evaluation rather than the lowest bidder. A second committee will then convene to review the selection committee's work. The FY03-05 CIP includes $5.3 million for the project.

During the meter installation period a three-year average flow will be the measure for all communities' water use. MWRA has the right to review the previous twelve months and place an adjustment on a community's assessment for the following fiscal year for structural adjustments.

West Roxbury Tunnel Rehabilitation

The West Roxbury Tunnel (Tunnel) was built in 1963 to expand the sewer system serving the metropolitan region, including areas of Newton, Boston and several MetroWest towns. In 1999 a physical inspection of the Tunnel revealed minimal to severe deterioration throughout. In 2000 MWRA entered a contract with JE/Sverdup Civil, Inc. (JE/S) to provide design, construction administration and resident inspection services for the rehabilitation of the severely deteriorated sections of the Tunnel. A construction contract was awarded in 2001 and was substantially completed in 2002.

The contract with JE/S also required the preparation of a Conceptual Design Report for portions of the Tunnel and connections that were not rehabilitated. JE/S identified and evaluated feasible rehabilitation and/or replacement alternatives by considering effective construction techniques, corrosion resistance, hydraulic capacity, fifty-year structural life, flow capacity, community and environmental impacts, and costs.

The resulting alternatives being considered are rehabilitation and sewer reconfiguration of the Neponset Valley Connection Chamber; tunnel replacement and pipe slip-lining of the West Roxbury Tunnel; and pipe slip-lining of Section 137A. The outstanding issues are construction safety, traffic impacts and construction segmentation, which would lengthen the construction period and increase costs.

The FY03-05 CIP contains $1,000,000 for Tunnel project planning. The Proposed FY04-06 CIP adds $74,272,000 for design and construction of the project.

Update on Regulatory Developments in Water Treatment

[MWRA's decision in October 1998 to build the WHWTP, which provides primary disinfection with ozone, followed a series of briefings to the Board over a six-month period that covered issues of public health, risk, regulatory requirements and treatment technology. As part of its decision, the Board committed to reevaluating the treatment issues by December 2003.]

Staff anticipates that in the near future the EPA will be releasing new regulations regarding cryptosporidium. These regulatory changes were not contemplated in 1998 when the Board elected to build the WHWTP and move forward with facility design and construction.

The new regulations will be stronger than staff would have expected; however, EPA officials will be cooperating on the enforcement schedule, which would not require implementation until 2012. Staff advises that MWRA should 1) continue seeking influence on the drafting of the regulations while awaiting publication of the draft; 2) complete the WHWTP and start it as presently designed; and 3) evaluate options to complying with the final regulations by 2012.

In order to comply, it is likely that MWRA will eventually use ultraviolet disinfection treatment at the Quabbin and Wachusett Reservoirs. Research and feasibility work is currently underway at Wachusett at a cost of $400,000; pilot work is underway at Quabbin at a cost of $1.2 million.