BILL ANALYSIS Ó
AB 2551
Page 1
Date of Hearing: April 12, 2016
ASSEMBLY COMMITTEE ON WATER, PARKS, AND WILDLIFE
Marc Levine, Chair
AB 2551
(Gallagher) - As Introduced April 5, 2016
SUBJECT: Surface storage: contracts
SUMMARY: Authorizes alternative contracting methods for surface
storage projects that receive Proposition 1funding. Conditions
the use of alternative project delivery methods on meeting
specific solicitation, qualification, and selection
requirements. Specifically, this bill:
1) Authorizes the use of construction management at-risk,
design-build, public-private partnership or
design-build-operate project delivery methods for
Proposition 1 funded surface storage projects.
2) Specifies the process by which a local agency will
solicit bids on a project.
3) Prohibits a bidder to prequalify unless they use a
skilled and trained workforce, as defined.
4) Requires the local agency to make a list of prequalified
bidders available to the public.
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5) Specifies the bid selection process to be made from the
pool of prequalified bidders.
EXISTING LAW:
1) In various ways authorizes the use of alternative
project delivery methods for state and local agencies.
2) Establishes a Sacramento-San Joaquin Delta policy that
among other things lists expanded statewide water storage
as an objective.
3) Makes surface storage projects identified in the CALFED
Bay-Delta Program Record of Decision, except projects
prohibited by the California Wild and Scenic Rivers Act,
eligible for $2.7 billion funding continuously appropriated
to the Water Commission under Proposition 1.
FISCAL EFFECT: Unknown
COMMENTS: Authorizes alternative contracting methods for
surface storage projects that receive Proposition 1 funding.
1) Author's Statement: This bill would allow eligible
projects, including Sites Reservoir, expanding Los Vaqueros
Reservoir, Temperance Flat dam, and in-delta storage
projects to utilize alternative delivery methods.
Authorizing these water storage projects to utilize
alternative delivery methods will help expedite these
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projects and increase our water storage capacity.
Authorizing alternative methods of contracting also gives
these projects the needed flexibility to ensure the best
possible use of the public's money.
2) Background:
Alternative delivery methods
Increasing use of alternative project delivery methods have
been occurring in the public sector over the last 15 years.
The adoption of alternative project delivery has been
driven by benefits that the private sector has achieved
from these methods. Any benefit or downside of a specific
contracting method is going to be realized on a case by
case basis. Research on alternative project delivery
methods have shown those methods to have all of the
following benefits:
Greater flexibility in the contracting process
Greater accountability
Higher quality
Faster project completion
Lower project costs
Greater cost certainty
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More opportunity for innovation
It remains an open question as to what delivery method is
best for a given project, but it seems that expanding
project delivery methods with parameters can be beneficial.
Status of Surface Storage
Proposition 1 appropriated $2.7 billion to the Water
Commission for storage. Those funds are available for all
of the following projects:
Surface storage projects identified in the
CALFED Bay-Delta Program Record of Decision, except
projects prohibited by the California Wild and Scenic
Rivers Act.
Groundwater storage projects and groundwater
contamination prevention or remediation projects that
provide water storage benefits.
Conjunctive use and reservoir reoperation
projects.
Local and regional surface storage projects
that improve the operation of water systems in the
state and provide public benefits.
In addition to providing funding for storage, Proposition 1
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conditioned funding on several requirements being met.
Among those requirements a project must:
Provide measurable improvement to the Delta
ecosystem or to the tributaries to the Delta.
Create ecosystem improvements that contribute to
restoration of aquatic ecosystems and native fish and
wildlife, including those ecosystems and fish and
wildlife in the Delta.
Create water quality improvements that provide
significant public trust resources, or that clean up and
restore groundwater resources.
Development of storage is tied to improved operations in
the Delta. Surface water storage for the State Water
Project and Central Valley Project is directly tied to the
Delta. The origins of surface storage projects currently
before the Water Commission come from CALFED Bay-Delta
recommendations.
In 1994 after years of uncoordinated efforts to improve
fish restoration and reliability of Delta water, state and
federal agencies joined together to coordinate activities.
This coordination became the CALFED Bay-Delta Program
(CALFED). CALFED initiated a long-term planning process.
As part of that process, CALFED considered surface storage
that would allow for improved operations for water quality
and water flows. In an August 28, 2000, Record of Decision
CALFED identified several storage projects for further
evaluation. Those identified projects were ultimately made
eligible for funding under Proposition 1.
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This Legislation would provide for the use of several
alternative methods of project delivery for surface storage
projects that receive Proposition 1 funding. The bill does
not alter the requirements currently required under
Proposition 1. It lays out the specific process by which a
project could utilize the alternative methods. Only after
meeting the requirements of Proposition 1, receiving
Proposition 1 funding, and meeting the solicitation and
evaluation requirements in this bill will a surface storage
project be able to utilize alternative project delivery
methods.
1) Prior and Related Legislation:
a) AB 1649 (Salas) 2016, establishes a state
policy to prioritize funding surface storage. AB 1649
is currently pending in this committee.
b) AB 1471 (Rendon), Chapter 188, Statutes of
2014, placed Proposition 1, a $7.545 billion general
obligation bond for water-related projects and
programs on the November 4, 2014, ballot where it
passed with 67% of the vote.
c) SB 785 (Wolk) Chapter 931, Statues of 2014,
authorized the use of design-build contracting methods
for state and local agencies under specific
circumstances.
d) AB 1329 (Wolk) Chapter 228, Statues of 2005,
authorized the use of design-build contracting methods
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for state and local agencies under specific
circumstances.
2) Supporting Arguments:
Allowing public agencies to be able to consider delivery
methods other than the traditional design-bid-build method,
allows greater flexibility. For large complex projects
multiple procurements will be needed, each having a
distinct set of performance requirements and requiring
different and diverse skill sets. Being allowed to use
alternative delivery will allow the procurement to be
tailored to achieve greater efficiencies.
3) Opposing Arguments:
Projects eligible for Water Bond funding must be able to
deliver public benefits. Alternative delivery methods
involve beginning construction before a design is
finalized. This cannot guarantee public benefits will
accrue, and may lead to impacts not included in an
Environmental Impact Report (EIR) required under the
California Environmental Quality Act (CEQA). Under CEQA, a
project must account for its impacts and mitigate those
effects before a project can be approved. Alternative
delivery methods feature vague planning. Such vague
planning may mask impacts during the EIR process, and
changes after approval may lead to unmitigated impacts.
REGISTERED SUPPORT / OPPOSITION:
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Support
Sites Project Joint Powers Authority
Teamsters Local 137
Opposition
Sierra Club California
Analysis Prepared by:Ryan Ojakian / W., P., & W. / (916)
319-2096