Title
Adopt a Resolution to Approve and Authorize the City Manager to Execute a Lease Agreement with Fluence Corporation for the Pilot Testing of a Membrane Aerated Biofilm Reactor (MABR) System for an Amount Not to Exceed $195,000
Staffreport
COUNCIL PRIORITY
• Infrastructure
SUMMARY
The City of San Leandro’s Water Pollution Control Plant (WPCP) plans to repurpose an underutilized 6.9-acre wastewater retention pond on site into a multi-benefit treatment wetland. As part of building this nature-based treatment wetland, effluent from the Plant will need to go through a nitrification system before release to the pond. The system design calls for installing 15 Membrane Aerated Bio Reactor (MABR) units. Because this is an innovative solution, the design engineers recommend procuring one unit as a pilot test to ensure it will function as expected.
RECOMMENDATIONS
Staff recommends that the City Council approve and authorize the City Manager to execute an agreement for the rental of the MABR system for up to a 12-month pilot testing period. This will allow the City to test the product prior to purchasing. The lease agreement allows the City to terminate the agreement if the effluent produced by the system does not meet expected results. This reduces the risk for the City prior to purchasing any equipment.
BACKGROUND
The City, along with other Bay Area treatment plants, will soon be required by the State Water Resources Control Board to reduce approximately 50% of the nitrogen in water discharged to San Francisco Bay. This is necessary to prevent overgrowth of harmful algae, which can cause fish kills. This Treatment Wetland project will be the first step in accomplishing this goal and is one of the first in the Bay Area to do so using a nature-based solution that treats the water and provides additional educational and habitat benefits.
The purpose of the Treatment Wetland project is to remove nitrogen and other contaminants from approximately 20% of the WPCP’s discharge water. In addition, the project will enhance wetland habitat along the San Francisco Bay Trail for educational opportunities and demonstrate cost-effective nature-based solutions for contaminant removal.
Removing nitrogen from water is a two-step process. In the first step, bacteria combine the inorganic nitrogen with oxygen. In the second step, different bacteria use the oxygen and release the nitrogen as nitrogen gas. Most wastewater treatment plants accomplish this in the treatment process. The Treatment Wetland project will use advanced Membrane Activated Biofilm Reactors (MABR) technology to do the first step and the second step will occur by passing the water through a wetland that will be constructed in an underutilized treatment basin.
The project has been supported by the following grants:
• $538,926, April 2018: Measure AA grant from the San Francisco Bay Restoration Authority (SFBRA) to plan, design and permit a multi-benefit Treatment Wetland
• $3,734,489, July 2024: Measure AA grant from the San Francisco Bay Restoration Authority (SFBRA) for construction of the Treatment Wetland
• $2,975,302, July 2024: Grant from the US Environmental Protection Agency through the San Francisco Bay Water Quality Improvement Fund for construction of the Treatment Wetland
Analysis
After considering multiple options, the design engineers recommended a modular product that can be installed in the space available adjacent to the basin. The units come in a shipping container and will be installed on concrete pads. These modular units reduce the footprint and the impact since it doesn’t require retrofits to the WPCP. The design engineers recommended a product from Fluence because it is the only vendor that provides a modular MABR system. These units are in use around the world and are typically used as part of a small treatment system.
The design of the system calls for procuring 15 of these modular units. Because this is a unique use of this product, both Fluence and the design engineers recommend a pilot test to ensure it will produce the expected results. The pilot test will consist of leasing one of the units and testing it in the treatment plant. If the pilot is successful, the product can be reused in the full treatment wetland implementation, which is scheduled for completion in 2026. If the pilot is unsuccessful, Fluence will remove the unit.
Because this will allow the City to test the system at a smaller scale, it lowers the risk for the City and increases the chance that the Treatment Wetland project will go smoothly as it will allow the design engineers to make any necessary changes.
The lease agreement includes the delivery, installation, and training of staff to operate the system. The cost of the rental is $15,000 per month as well as a $15,000 deposit. Therefore staff recommends a not to exceed amount of $195,000 to encompass up to 12 months.
Previous Actions
October 15, 2018 - Resolution No. 2018-30, Resolution of the City of San Leandro City Council to Accept Grant Funds of $538,926 from the San Francisco Bay Restoration Authority for San Leandro's Treatment Wetland for Pollution Reduction, Habitat Enhancement, and Shoreline Resiliency Project (Project No. RA-007)
October 17, 2019 - Resolution No. 2019-160, Resolution of the City of San Leandro City Council to Approve and Authorize the City Manager to Execute a Consulting Services Agreement with Terraphase Engineering, Inc., in the amount not to exceed $789,036 for Design and Permitting Services of a New Treatment Wetland at the Water Pollution Control Plant; Authorize the City Manager to Execute Contract Amendments Up to 20% (or $157,807) and an Appropriation of the Water Pollution Control Plant Enterprise Fund Balance in the Amount of $501,917 for Fiscal Year 2019-2020
April 2, 2024 - Resolution No. 2024-029, Resolution to Adopt a Mitigated Negative Declaration (MND) for the San Leandro Water Pollution Control Plant Treatment Wetland and Shoreline Resilience Project in Accordance with the Requirements of the California Environmental Quality Act (CEQA)
July 15, 2024 - Resolution No. 2024-089, Resolution to Approve and Authorize the City Manager to Accept a Grant for $3,734,489 from the San Francisco Bay Restoration Authority for San Leandro’s Treatment Wetland for Pollution Reduction, Habitat Enhancement, and Shoreline Resiliency
July 15, 2024 - Resolution No. 2024-091, Resolution to Approve and Authorize the City Manager to Accept a Grant for $2,975,302 from the United States Environmental Protection Agency for San Leandro’s Treatment Wetland for Pollution Reduction, Habitat Enhancement, and Shoreline Resiliency
September 3, 2024 - Resolution No. 2024-109, Resolution to approve and authorize the City Manage to Execute Amendment No. 3 to the Consulting Services Agreement with Terraphase Engineering Inc. for Environmental Design Services for a Treatment Wetland, Increasing the Not-to-Exceed Amount by $266,624 for a Total Contract amount of $1,177,863
Applicable General Plan Policies
• Policy EH-1.8 Sea Level Rise. Consider the effects of projected sea level rise in the design and planning of all development, recreational improvements, and infrastructure along the San Leandro shoreline.
o Action EH-1.8. A: Adaptation Plans. Develop long-term adaptation plans which minimize the potential for coastal flooding on public and private properties near the San Leandro shoreline. Periodically evaluate the risk to homes, businesses, parks, and other features and take steps to protect or fortify these areas to reduce damage potential.
• Policy CSF-6.4 Wastewater Collection and Treatment. Maintain efficient, environmentally sound, and cost-effective wastewater collection and treatment services in San Leandro.
Environmental Review
Pursuant to the California Environmental Quality Act (CEQA), the City of San Leandro prepared the “San Leandro Water Pollution Control Plant Treatment Wetland and Shoreline Resilience Project Initial Study/Mitigated Negative Declaration” (MND). The City Council adopted the Final MND on April 2, 2024.
Legal Analysis
The City Attorney’s Office and the Fluence legal department have negotiated terms acceptable to both parties.
Financial Impacts
Sufficient funds are included in the Fiscal Year 2024-2025 Water Pollution Control Plant Fund budget for this pilot test:
• WPCP Fund-Treatment Wetland, Account 593-52-276: $195,000
This Council action will not impact fund balance because there are funds available in the FY2024-2025 adopted budget.
ATTACHMENTS
A: Draft Resolution for Fluence Corporation Lease Agreement
B: Fluence Corporation Lease Proposal
PREPARED BY: Ramya Sankar, Management Analyst II, Water Pollution Control Division; Hayes Morehouse, Water Pollution Control Manager