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Purified Water Program - Public-Private Partnerships (P3)

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The Purified Water Project is part of Valley Water's water resources strategy to provide a reliable water supply from a diversity of sources (see Valley Water’s Water Supply Master Plan 2040). In addition, the Purified Water Project will help to avert local groundwater depletion that could result in ground surface subsidence. Valley Water’s objectives to meet these goals are to:

  • Implement an indirect potable reuse supply project that provides 10 million gallons per day (MGD) production capacity (11,200 AFY) of sustainable water supply for long-term/future demands.
  • Design-construct-operate the project so that it reduces or minimizes environmental impacts.
  • Deliver the project in such a manner that is cost-effective and provides value to the ratepayers.

The project will be delivered via a Public-Private Partnership (P3) utilizing a fixed-price design-build-finance-operate-maintain (DBFOM) procurement method.

Background 

In response to severe drought conditions and the expectation of more frequent droughts, Valley Water initiated the Expedited Purified Water Program in 2015 to develop up to 45,000 acre-feet per year (AFY) of purified water for indirect and/or direct potable reuse. This includes plans to supplement groundwater recharge from other existing sources, such as imported and local water supply. 

To that end, procurement processes were initiated in 2016 and refined in 2018. To resolve several critical interrelated elements, the procurement process was paused in July of 2018. Since then, progress has been made on these elements including agreements on treated wastewater, Reverse Osmosis (RO) concentrate management studies, clarity on regulations for Direct Potable Reuse (DPR) and completion of the draft final Countywide Water Reuse Master Plan (final going to Board in April-May 2021).

In 2020, the Board of Directors made several decisions:

  1. Proceed with a Purified Water Project: At a special Board meeting on June 16, 2020, the Valley Water Board re-affirmed its commitment to proceeding with the Purified Program and directed staff to implement an indirect potable reuse project as soon as feasible using a public-private partnership approach (P3) .
  2. Down-size the Project: Consistent with refined demand projections, the Board affirmed implementing an 11,000 AFY(~10 MGD) rather than a 24,000 AFY project, the capacity of which would meet Valley Water’s reliability goals.
  3. Finalize Public Partner Negotiations: The Board affirmed that with the agreement signed with the Cities of Palo Alto and Mountain View in December of 2019 for treated wastewater, that staff proceeds with negotiating a full agreement with the Palo Alto/Mountain View regarding a site and an RO concentrate management alternative, while simultaneously negotiating agreements with the Cities of San Jose and Santa Clara. As of March 2021, negotiations continue with both public partners.
  4. Utilize a Fixed-Price Design-Build-Finance-Operate-Maintain (DBFOM) Procurement Method: On September 8, 2020 the Board directed staff to utilize a fixed-price DBFOM procurement method as the best means to harnessing private sector expertise and innovation in design, construction, financing, operations, maintenance and management. More specifically, the Board wanted to encourage market competition so as to: a) deliver the Project more cost-effectively, b) optimize risk transfer by allocating meaningful life-cycle risks to the private sector, and c) provide better budget predictability.

The Countywide Water Reuse Master Plan also envisions that, in the future, purified water may also be used for direct potable reuse either via raw water augmentation (i.e., blended with imported water prior to conveyance to VW’s conventional water treatment plants) or via treated water augmentation (i.e., directly added to the potable water supply system).

Public-Private Partnerships (P3) Procurement Process

Procurement Process

Valley Water plans a dual-stage selection procedure for the DBFOM public-private-partnership (P3) project delivery method consisting of:

  1. Request for Qualifications (“RFQ”) as part of determination of eligibility and qualification
  2. Request for Proposals (“RFP”) wherein shortlisted Respondents will be invited to submit proposals for the Agreement

 Prior to issuing the RFQ, a two-part informational meeting will be held as part of Industry Day to provide an overview of the procurement process and to discuss the technical background of the project.

To be placed on the Outreach List please fill out the form in the link below. To view the most up-to-date Outreach List please see the link below.

Schedule 

The current timeline is contingent on completion of finalization of agreements with other public agencies supplying treated wastewater and providing land for treatment plant construction. At this point the major milestones include:

  • Industry Day – March 30, 2021
  • RFQ Release – April/May 2021
  • RFQ Due Date – May/June 2021
  • Short-list Announcement – June/July 2021
  • RFP Release – TBD
  • RFP Due Date –TBD
  • Board Approval of Agreement – TBD
  • P3 Entry into Force – TBD

The milestone dates will be updated as new information becomes available.

Related Reports

Contacts

District Plan Room ([email protected])
(408) 630-3088

Ken Wong ([email protected]),
Construction Procurement and Contracts Manager
(408) 630-2076