HomeMy WebLinkAboutAgenda Packet - EVWD Board of Directors - 02/26/2002East Va ' ey Wate 'Di trict
l 155 DEL ROSA AVENUE, SAN BERNARDINO, CA
REGULAR BOARD MEETING February 26, 2002 2:00 P.M.
A__GENDA
"In order to comply with legal requirements for posting of agenda, only those items filed with the
District Secretary by 10:00 a.m. on Tuesday prior to the following Tuesday meeting not requiring
departmental investigation, will be considered by the Board of Directors".
CALL TO ORDER
PLEDGE OF ALLEGIANCE
l. Approval of Agenda
2. Public Comments
CONSENT CALENDAR
3. Approval of Board Meeting Minutes for February 12, 2002.
4. Approval of Liens for Delinquent Water and Sewer Accounts.
5. Resolution 2002.07 - Authorizing execution of a Grant Deed to the Metropolitan Water
District of Southern California.
6. Accounts Payable Disbursements: Accounts Payable Checks #188022 through #188204 were
distributed February 6, 2002 through February 14, 2002 in the amount of $765,305.40.
Payroll Checks were distributed February 15, 2002 in the amount of $91,948.83. Total
Disbursements and Payroll for the period were $857,254.23.
OLD BUSINESS
7. Well Site acquisition on 6u' Street, Al?N: 1192-201-23-24.
8. Discussion and possible action regarding the Design/Build Contract with CDM Engineering
for the Plant 39 Fluoride Blending Project.
9. Patton Golf Course - Proposed Lease Amendments with the State of California.
10. Discussion and possible action regarding the Contract for Architectural Services in Support
of Developing a Preliminary Design and Cost Estimate for Constructing the District's
Headquarters Building and Related Facilities.
11. Radon Rule Update (General Manager)
NEW BUSINESS
12. Appointment of Brian W. Tompkins as District Treasurer/Chief Financial Officer.
13 Review of the "Information Systems, Internet, E-Mail and Electronic Communications,
Ethics, Usage and Security Policy" for adoption.
14 Discussion and possible action regarding the purchase of new billing software for the District.
15. Discussion and possible action regarding the designation of voting delegate to represent
EVWD to make selections for the Special Districts' voting member and alternate voting
member positions on the Commission.
REPORTS
16. February 5 - 14, 2002 - Releases of Lien for Delinquent Water and Sewer Accounts.
17. General Manager's Report.
l 8. Oral Comments from Board of Directors.
CORRESPONDENCE
19. Correspondence from Department of Health Services regarding Source Water Quality
Monitoring Frequency.
20. Draft policies and procedures for the conduct of service reviews to be considered by LAFCO.
MEETINGS
21, National Water Resources Association "2002 Federal Water Seminar", Washington, D.C.,
April 10 - 12, 2002.
22. Water Environment Federation - "Washin~on Briefing 2002: Innovations in Water Quality",
Hotel Washington, Washing-ton, D.C., April 16-17, 2002.
CLOSED SESSION
23 CONFERENCE WITH LEGAL COUNSEL - EXISTING LITIGATION
[Government Code Section 54956.9(a)]
Name of Case: Judith Ann Petrosino v City of Highland, East Valley Water District, County
of San Bernardino, Banner Elementary School; Superior Court of the State of California for
the County of San Bernardino-Unlimited Case No. SCVSS 81330.
24. CONFERENCE WITH LEGAL COUNSEL - ANTICIPATED LITIGATION
[Government Code Section 54956.9(b)]
One Potential Case
ANNOUNCEMENT OF CLOSED SESSION ACTIONS
ADJOURN
2
DRAFT SUBJECT TO APPROVAL
EAST VALLEY WATER DISTRICT
REGULAR BOARD MEETING FEBRUARY 12, 2002
MINUTES
The meeting was called to order at 2:00 p.m. by President Goodin. Director Sturgeon
led the flag salute.
PRESENT: Directors Goodin, Lightfoot, Sturgeon
ABSENT: Director Negrete, Wilson
STAFF: Paul Dolter, District Engineer; Brian Tompkins, Chief Financial
Officer; Mary Wallace, Administrative Assistant.
LEGAL COUNSEL: Steve Kennedy
GUEST(s): Jo McAndrews, Ron Buchwald, Jeff Endicott (CDM), Bill
Hendrickson (DYK), and David Devlin (Lyon & Lyon)
APPROVAL OF AGENDA
M/S/C (Lightfoot-Sturgeon) that the February 12, 2002 Agenda be approved as
submitted.
PUBLIC PARTICIPATION
President Goodin declared the public participation section of the meeting open at 2:03
p.m. There being no written or verbal comments, the public participation section was
closed.
President Goodin took this opportunity to welcome Brian Tompkins to the staff of East
Valley Water District.
APPROVAL OF JANUARY 14, 2002 SPECIAL BOARD MEETING MINUTES.
M/S/C (Lightfoot-Sturgeon) that the Special Board Meeting Minutes for January
14, 2002 be approved as submitted.
APPROVAL OF JANUARY '15, 2002 SPECIAL BOARD MEETING MINUTES.
M/S/C (Lightfoot-Sturgeon) that the Special Board Meeting Minutes for January
15, 2002 be approved as submitted.
APPROVAL OF JANUARY 22, 2002 BOARD MEETING MINUTES.
M/S/C (Light-foot-Sturgeon) that the Board Meeting Minutes for January 22, 2002
be approved as submitted.
RESOLUTION 2002.04 - NOTICE OF COMPLETION FOR INSTALLATION OF 20"
WATER MAIN IN MISSION STREET IN THE CITY OF HIGHLAND BY LAW
PLUMBING was presented to the Board for approval.
M/S/C (Lightfoot-Sturgeon) that Resolution 2002.04 be approved.
RESOLUTION 2002.05 - COPRORATE RESOLUTION TO AUTHORIZE DELETION
AND ADDITION TO DISTRICT CHECKING ACCOUNTING was presented to the
Board for approval.
M/SIC (Lightfoot-Sturgeon) that Resolution 2002.05 be approved.
RESOLUTION 2002.06 - NOTICE OF COMPLETION FOR INSTALLATION OF WELL
BUILDING, CONCRETE SIDEWALK, DRIVEWAY APPROACH, AND BLOCK WALL
AT 7695 VISTA RIO IN THE CITY OF HIGHLAND BY MALCOM ENTERPRISES, INC.
was presented to the Board for approval.
M/S/C (Lightfoot-Sturgeon) that Resoiution 2002.06 be approved.
DEVELOPMENT AGREEMENT BETWEEN EAST VALLEY WATER DISTRICT AND
STANDARD PACIFIC HOMES TO PROVIDE WATER AND SEWER SERVICE TO 87
DWELLING UNITS WITHIN TRACT NO. 15985-'1 LOCATED NORTH EAST OF THE
INTERSECTION OF HIGHLAND AVENUE AND CLOVERHILL DRIVE IN THE CITY
OF HIGHLAND was presented to the Board for approval.
M/SIC (Lightfoot-S~urgeon) that the Development Agreement between East
Valley Water District and Standard Pacific Homes be approved.
REVIEW AND ACCEPT FINANCIAL STATEMENTS FOR THE PERIOD ENDED
DECEMBER 31,2001.
M/S/C (Lightfoot-Sturgeon) that the Financial Statements for the period ended
December 31,2002 be accepted.
MINUTES: 02112/02
APPROVAL OF LIENS FOR DELINQUENT WATER AND SEWER ACCOUNTS.
The Administrative Assistant stated that Account No.114-0078-9 had been paid and
should be removed from the lien list.
M/S/C (Lightfoot-Sturgeon) that the liens for delinquent water and sewer
accounts be approved for processing with the revision noted by the Administrative
Assistant.
DISBURSEMENTS
M/S/C (Lightfoot-Sturgeon)that General Fund Disbursements #187775 through
#188021 in the amount of $585,529.56, and Payroll Fund Disbursements distributed
January 18, 2002 in the amount of $83,948.31 and February 1, 2002 in the amount of
$76,857.16 totaling $746,335.03 be approved.
AWARD OF BID FOR PLANT 37 RESERVOIR PROJECT.
M/S/C (Sturgeon-Lightfoot) that staff's recommendation to reject the current bids
for Contract Documents and Specifications for East Valley Water District Plant 37
Relocation be adopted and that the project be re-advertised and, at Director's
Lightfoot's request, be amended to include BBR's suggested revisions as deemed
appropriate by staff.
DISCUSSION AND POSSIBLE ACTION REGARDING SPECIAL DISTRICTS'
FUNDING FOR LAFCO -FY2002-03.
The issue of sharing the LAFCO cost by independent special districts FY2003-03 was
reviewed. Information only.
DIRECTOR'S FEES AND EXPENSES FOR JANUARY 2002 were presented to the
Board for approval.
M/S/C (Lightfoot-Sturgeon) that the Director's fees and expenses for January
2002 be approved.
DISCUSSION AND POSSIBLE ACTION REGARDING SUPPORT OF MWD'S
POSITION IN THE CARGILL ACTION.
Legal counsel was directed to request a copy of the amicus brief filed by MWD in the
Cargill action for review by the General Manager and Legal Counsel. Information only.
CLAIM FOR DAMAGES AT 25015 UNION STREET, SAN BERNARDINO, BY
RAYMOND BILBREW.
3 MINUTES: 02/12/02
M/S/C (Sturgeon-Lightfoot) that the claim for damages at 25015 Union Street
from Raymond Bilbrew be denied and referred to District's Legal counsel and
Insurance Agency.
DISCUSSION AND POSSIBLE ACTION REGARDING THE PURCHASE OF A
PROMOTIONAL VEHICLE FOR THE DISTRICT.
M/S/C (Lightfoot-Sturgeon) that the District be authorized to purchase a 1954
Service Truck for promotional purposes with a budget figure not to exceed $30,000.
REVISION TO PERCHLORATE ACTION LEVEL AND GOVERNING BODY
NOTIFICATION.
Action was deferred pending further review of the revision to the State Action Level for
Perchlorate by DHS. Legal Counsel and the General Manager were directed to confer
and prepare a staff report for presentation to the Board on the issue. Information only.
JANUARY '16 TO FEBRUARY 4, 2002 RELEASES OF LIEN FOR DELINQUENT
WATER AND SEWER ACCOUNTS.
List of liens released from January 16 to February 2, 2002 was reviewed, information
only.
ORAL COMMENTS FROM BOARD OF DIRECTORS.
There being no verbal or written comments from the Directors, this section of the
meeting was closed.
CORRESPONDENCE FROM DR. PAUL WU REGARDING SUGGESTED CHANGE
TO DISTRICT'S BILLING CYCLE. Information only.
LETTER OF APPRECIATION FROM THE YMCA FOR THE DISTRICT'S DONATION
OF WATER FOR THEIR 19TH ANNUAL RUN. Information only.
ASBCSD MEMBERSHIP MEETING -FEBRUARY '18, 2002, THE OLD SPAGHETTI
FACTORY, RANCHO CUCAMONGA. Information only.
WATER EDUCATION FOUNDATION - "MAKING SENSE OF THE NEW WATER AND
GROWTH LAWS", FEBRUARY 21, 2002, CAPITOL PLAZA HOLIDAY INN,
SACRAMENTO. Information only.
SAN BERNARDINO AREA C.O.C. LEGISLATIVE BREAKFAST FEATURING STATE
OF THE CITY ADDRESS BY MAYOR JUDITH VALLES, FEBRUARY 26, 2002, SAN
BERNARDINO HILTON. information only.
4 MINUTES:
~
SAN BERNARDINO AREA C.O.C. "BUSINESS AFTER HOURS", FEBRUARY 28,
2002, BUSINESS BANK OF CALIFORNIA, 505 W. 2ND STREET, SAN
BERNARDINO. Information only.
ACWA - "LEGISLATIVE SYMPOSIUM & DAY AT THE CAPITOL", MARCH 19 & 20,
2002, SHERATON GRAND, SACRAMENTO. Information only.
WATER EDUCATION FOUNDATION - "LOWER COLORADO RIVER TOUR",
MARCH 20-22, 2002, LAS VEGAS, NV. Information only.
CLOSED SESSION
M/S/C (Lightfoot-Sturgeon) that the meeting adjourn to Closed Session.
The Board entered into session at 2:30 p.m. as provided for in the California Open
Meeting Law, Government Code Section 54945.9(a), to discuss those items listed on the
Agenda.
ADJOURN TO REGULAR SESSION
M/S/C (Lightfoot-Sturgeon) that the meeting adjourn to regular session.
ANNOUNCEMENT OF CLOSED SESSION ACTIONS
The Board returned to open session at 2:40 p.m. The items listed on the Agenda were
discussed in closed session with no reportable action being taken except:
With Respect to Item f~30 - Authorize acceptance of service of the cross
complaint from Banner elementary School and to instruct special counsel to continue to
handle defense.
With Respect to Item #31 - The Vote was 3-0 to authorize Legal counsel to file
a Notice of Non-Opposition.
With Respect to Item #32 - There was no reportable action. Information only.
ADJOURN
The meeting was adjourned at 2:45 p.m.
Donald D. Goodin, President
Robert E. Martin, Secretary
$ MINUTES: 021~2/0~
CERTIFICATE OF LIEN
FEBRUARY 26, 2002
ACCOUNT OWNERS PROPERTY AMOUNT
NUMBER NAME ADDRESS OWED
1. 002-0090-3' $70.58
2. 002-0173-0' ~ $139.60
3. 021-0123-2 $15.95
4. 042-0062-2* $36.31
5. 054-1211-2' $46.87
6. 063-0120-2' $58.66
7. 063-0265-2' $58.71
8. 072-0002-1' $15.82
9. 074-2633-2* $98.64
10. 081-0186-2' ~, $48.20
11. 082-0031-5' $17,89
12. 084-2775-2* $75.11
13. 101-0126-2' $64.55
14. 113-0215-2'+ $78.62
15. 113-0227-3' $60.51
16. 132-0048-1 ~oL $17.58
17. 156-0732-9' $109.10
18. 161-0063-2 {)ol~ $22.28
19. 164~0732-1' $153.15
TOTAL $1,188.13
* STILL OWNS PROPERTY
+ MULTIPLE UNITS
Page 1 of 1
RESOLUTION 2002.07
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE EAST VALLEY WATER
DISTRICT AUTHORIZING EXECUTION OF A GRANT DEED TO THE
METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA, A PUBLIC
CORPORATION
BE IT HEREBY RESOLVED AND ORDERED that the East Valley Water District
does hereby grant, convey, sell, assign and transfer to The Metropolitan Water District of
Southern California, a Public Corporation, real property located in the County of San
Bernardino, State of California, more particularly described in Exhibit "A".
NOW, THEREFORE, BE IT RESOLVED that a copy of this resolution be
attached to said Grant Deed, and that the same be recorded in the Office of the County
Recorder, County of San Bemardino, State of California and filed in the records of said
Board.
The foregoing resolution was duly adopted at a meeting of the Board of Directors
of the East Valley Water District, by motion made, duly seconded and carried
unanimously on February 26, 2002.
AYES: DIRECTORS:
NOES:
ABSENT:
EAST VALLEY WATER DISTRICT
Donald D. Goodin, President
ATTEST:
Robert E. Martin, Board Secretary
Wt970
0~l~02jw
Recorded at the Request of
THE METROPOLITAN WATER DISTRICT
OF SOUTHERN CALIFORNIA
When Recorded Mail to
THE METROPOLITAN WATER DISTRICT
OF SOUTHERN CALIFORNIA
Post Office Box 54153
Los Angeles, CA 90054
Attention: Asset Management
DOCUMENTARY TRANSFER TAX $ None
(Exempt--Section 11922, California
Revenue and Taxation Code)
GRANT DEED
MWD Parcel No. INFED 1-28-271
APN 1201-401-03
EAST VALLEY WATER DISTRICT, a body corporate and politic and a political subdivision of
the State of California which acquired title as EAST SAN BERNARDINO COUNTY WATER
DISTRICT, a body corporate and politic and a political subdivision of the State of California.
(Grantor),
hereby grants to
THE METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA,
a public corporation (Grantee),
the property in the City of Highland, County of San Bemardino, State of California, described on
.Exhibit A and shown on Exhibit B attached hereto and incorporated herein by reference.
Dated:
EAST VALLEY WATER DISTRICT, a
body corporate and politic and a political
subdivision of the State of California
By:
s: wordsharh'onmac~docs\281F271 grantdeed
E~IRIT A
INFED 1-28-271
(Grant Deed)
East San Bemardino
CountyWater District
That portion of the east half of the southeast quarter of Section 3,
Township.1 South, Range 3 West, San Bemardino Meridian, in the City of Highland,
County of San Bemardino, State of California, as conveyed to East San Bemardino
County Water District, by Corporation Grant Deed recorded December 18, 1978, in Book
9582, Page 1668 of Official Records of said County described as follows:
Beginning at the southwest comer of said east half of the southeast quarter
of said Section 3; thence S 89° 43' 30" E 150.00 feet along the south line of said Section
3; thence N 00° 04' 45" W 100.00 feet on a line parallel with the west line of said east
half of the southeast quarter of said Section 3; thence N 89° 43' 30" W 150.00 feet to a
point on said west line of the east half of the southeast quarter of said Section 3; thence
along said west line S 00° 04' 45" E 100.00 feet to the Point of Beginning.
EXCEPTING therefrom all surface and ground water rights.
All as shown on Exhibit "BT attached hereto and made a part hereof.
PREPARED UNDER MY SUPERVISION ~
pGW~pS. Ainfed l~28~lega~.71.doe November 15, 2000
Page 1 of 1
~HIBIT B Page I of 1
"mis ~HIBIT IS TO BE A~ACHED TO THE ~L DESCRIPTIO~
~ POR. E 1/2, SE 1/4, SEC. 3 T. 1 S., R. 3 W., S.B.M., CI~ OF HIGH,ND,
COUN~ OF SAN BERNARDINO, STATE OF CAUFORNIA
NOT TO SCALE
MERRIS ST.
15o' 10'PIPELINE ~SE. ~
INFED1-28-271 ~/////~ BK. 9582/1668 O.R. ~
~ ~'::::::/!::::::::::::::--'::~:::::*-:::'::"::::~2 ABBEY WAY
p.O.B.~ 150' 10 11
LEGEND ~
G~NT DEED
(~aEEtPOran' ] PREPARED UNDER THE METROPOLITAN WATER DISTRICT
ERRIS I i MY SUPERVISION OF SOUTHER~ CALIFORNIA
G~NT DEED
~l ~ I ~aeEY W~Y// Pp~e~G-. WI~.L.S. 6241 ~ST SAN BERNARDINO
( ~ COUN~WATER DISmlCT
~~ TO
~o~ m sc~ DA TE M WD
INFEDT.28-27~
STATE OF CALIFORNIA )
)
COUNTY OF )
On before me, the undersigned, a Notary Public in and for said
State, personally appeared
personally known to me (or proved to me on the basis of satisfacto~] evidence) to be the
person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to
me that he/she/they executed the same in his/her/their authorized capacity(ies), and that
by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature
San Bernardino, CA, 2001-2002 - 1201-401-03-0000, Sheet: I of 1
East Va ° ey Water District
TO: BOARD OF DIRECTORS
FROM: BRIAN W. TOMPKINS /~ FINANCIAL OFFICER
SUBJECT: DISBURSEMENTS
DURING THE PERIOD FEBRUARY 6, 2002 THROUGH FEBRUARY 14, 2002 CHECK
NUMBERS 188022 THROUGH 188204 IN THE AMOUNT OF $ 765,305.40
WERE ISSUED.
PAYROLL CHECKS WERE DISTRIBUTED IN THE AMOUNT OF $91,948.83 ON
FEBRUARY 15, 2002.
TOTAL OF ACCOUNTS PAYABLE DISBURSEMENTS AND PAYROLL FOR THE PERIOD -
$ 857,254.23.
0 ~ 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
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o
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3694 East Highland Avenue. Suite 26
Highland. CA 92346
(909) 425-8550
Fax (909) 425-0494
EAST VALLEY WATER DISTRICT Date: February 6, 2002
ATTN: MR. BOB MARTIN Escrow No: 17041-MR
P. O. SOX 3427
SAN BERNARDINO, CA 92413
RE: VACANT LOTS/APN#1192-201-23 & 2.4, HIGHLAND, CA 92346
We are pleased to inform you that your above referenced escrow was closed on February 6, 2002. We are
enclosing the followlng items for your records:
-Final Closing Statement
Our Check in'the amount of $113.24 representing your refund.
Policy of Title Insurance No. 512863, to follow, issued by FIRST AMERICAN TITLE.
NOTE: in accordance with standard banking requirements, any check that is not praperly endorsed will be
returned unpaid by our bank. All parties shown on the face of the check must endorse the check and any
check made payable to a Company, Corporation or Partnership must be endorsed with the name of the entity
and signed by the authorized signatory. If you have any questions regarding proper endorsement please call
this office prior to cashing or depositing the check into your account,
Property Tax Information - TAXES ARE YOUR RESPONSIBILITY. The law does not require that tax statements
or notices be mailed, but it places the responsibility for payment entirely upon the owner after the close of
escrow. For your information, County taxes on real property become delinquent as follows: First Installment
after December 10th, Second installment after the following April 10th. If you do not receive a tax bill one
month prior to the delinquency date, a written request for same should be made to the County Tax Collector.
Your written request should include the legal description end Assessor's Parcel Number (APN) of the property.
When the lender collects impound funds for payment of taxes, the tax bill is usually sent to them.
Any documents to which you are entitled will be forwarded to you directly from the appropriate psrty[ies)
governing this transaction.
It has been a pleasure handling your escrow. We look forward to servicing your future real estate transactions.
Sincerely,
THE HERtTAGE ESCROW COMPANY
Marly Radke
Sr. Escrow Officer
MR
3694 East Highland Avenue, Suite 26
Highland, CA 92346
(909) 425.-8550
Fax (909) 425-0494
Escrow No. 17041 (MR) Closing Date: 'February 6, 2002
Reference: VACANT LOTS/APN~l192-201-23 & 24 Page 1
HIGHLAND, CA 92346
Lot: PARCELS 3 AND 4 OF PARCEL MAP 5201
Buyer
CLOSING STATEMENT
EAST VALLEY WATER DISTRICT
P. O. BOX 3427
SA/~ BERNARDINO, CA 92413
- - DEBITS - - - CREDITS -
Consideration:
Total Consideration 50,000.00
~eposits:
~poslt
By: EAST VALLEY WATER DISTRICT 2,000.00
Deposit
By: EAST VALLEY WATER DISTRICT 51,694.00
Prorations:
County Taxes 30. :12
at $ 154,88 per 6 months
From 01/01/02 to 02/06/02
Disbursements Paid:
Commission 3,000.00
Commission of $ 3,000.00
pd to: JIM CIMINO REALTY
Title Charges:
Taxes: Paid by Title Company 154.88
Record Grant Deed 6.00
Escrow Fees:
Escrow Fees 490.00
Refund Herewith $ 113.24
Totals $ 53,724.12 $ 53,724.,12
SAVE FOR INCOME TAX PURPOSES
AGREEMENT FOR PROFESSIONAL SERVICES
BETWEEN
EAST VALLEY WATER DISTRICT
AND
CDM ENGINEERS & CONSTRUCTORS INC.
This Agreement is made and entered into as of , 2002, by and
between EAST VALLEY WATER DISTRICT, a county water district organized and
operating pursuant to California Water Code Section 30000 et seq. (hereinafter referred
to as "District"), and CDM ENGINEERS & CONSTRUCTORS INC., a Massachusetts
corporation (hereinafter referred to as "Consultant").
RECITALS
WHEREAS, District is in need of engineering, design, and construction services for
its Plant 39 Flouride BIending Facilities (hereinafter referred to as "Project");
WHEREAS, Consultant is duly licensed, qualified, and willing to provide such
professional services to the District; and
WHEREAS, this Agreement establishes the terms and conditions for the District to
retain Consultant to provide the services described herein.
COVENANTS
NOW, THEREFORE, in consideration of the faithful performance of the terms and
conditions set forth herein, the parties hereto agree as follows:
1. SERVICES
Consultant shall provide professional services as described in the Scope of Work
attached hereto as Exhibit A and incorporated herein by this reference. Such work
expressly includes all related services ordinarily provided by Consultant under same or
similar circumstances and/or are necessary to satisfy Section 6 of this Agreement.
2. AUTHORIZATION
Authorization for Consultant to proceed with all or a portion of the work described
in Exhibit A will be granted in writing by the District pursuant to a Notice to Proceed which
shall be issued as soon as both parties hereto sign this Agreement and all applicable plans
and specifications, and the insurance and other security documents required by the District
pursuant to Section 16 hereof, have been received and approved by the District.
Consultant shall not proceed with the work until so authorized and shall commence work
immediately upon receipt of the Notice to Proceed.
3. PAYMENT
Subject to Consultant's performance of its obligations under this Agreement to the
satisfaction of the District, District shall pay for services in accordance with the Payment
Schedule attached hereto as Exhibit B and incorporated herein by this reference. No other
compensation will be paid by the District except for service performed in accordance with
an Amendment to this Agreement as provided for in Section 14 herein.
4. TIME OF PERFORMANCE
Consultant shall perform services in a prompt, timely, and professional manner in
accordance with the Activity Schedule attached hereto as Exhibit C and incorporated
herein by this reference. Time is of the essence in this Agreement.
5. DUTIES OF THE DISTRICT
District, without cost to Consultant, will provide all reasonably-available pertinent
information necessary for Consultant to perform its obligations under this Agreement.
District does not guarantee or ensure the accuracy of any reports, information and/or data
so provided. To the extent that any reports, information and/or other data so provided was
supplied to District by persons who are not employees of District, any liability resulting from
inaccuracies and/or omissions contained in said information shall be limited solely to
liability of the party who prepared the information for District.
District's approval of Consultant's designs, specifications, reports and incidental
work or materials furnished hereunder shall not in any way relieve Consultant of
responsibility for the technical adequacy of its work. Neither District's review, approval or
acceptance of, nor payment for, any of the services shall be construed as a waiver of any
rights under this Agreement or of any defense or cause of action which it may have arising
out of the performance of this Agreement.
6. STANDARD OF CARE
Consultant's services under this Agreement will be performed in accordance with
generally accepted professional practices and principles and in a manner consistent with
the level of care and skilt ordinarily exercised by members of the same profession currently
practicing under similar conditions. The Consultant shall observe and cause all work and
deliverables to conform to all applicable federal, state, and local laws and regulations.
Consultant shall, at no cost to District, prepare any necessary rework occasioned by
Consultant's or subconsultant's negligent act or omission or otherwise due substantially
to Consultant's or subconsultant's fault.
Where the services to be performed hereunder by Consultant include the
preparation of drawings and other contract documents, and where such drawings and
contract documents are used in the letting of a contract for construction of the Project, and
where, notwithstanding District's acceptance and approval thereof, the District determines
during the course of construction of the Project that the drawings and contract documents
so prepared are found to require modification due to Consultant's incompetence,
inadvertence, misconduct, mistake, oversight, error, negligent act or omission, and/or lack
of adequate compensation, then Consultant shall assume responsibility for any direct or
actual damages suffered or incurred by the District, including, but not limited to, any
increase in compensation due to a construction contractor caused thereby.
7. ORGANIZATION
Before starting any work on the Project, Consultant shall designate, in writing, a
representative who shall have overall responsibility for Consultant's performance under this
Agreement. An alternate representative may be designated. The representative or
alternate shall be present at the Project site whenever work is in progress or whenever
such presence is otherwise necessitated to take measures necessary to protect the work,
persons, or property thereon. During the course of performance of this Agreement, the
representative or alternate shall be available to District on an "on caIl" basis as required by
District. Any order or communication given to this representative shall be deemed
delivered to the Consultant. No compensation shall be paid by District for Consultant's "on
calf availability, The representative or alternate shall not be removed from the Project or
reassigned without prior request or approval of the District.
8. DELIVERABLES
Ail odginal drawings, specifications, reports, calculations, and other documents
developed for the Project shall be furnished to and become the property of the District.
Consultant agrees that the District will have access to, and the right to examine, any
pertinent documents, papers, and records in the Consu[tant's possession for any
transaction relating to this Agreement. Consultant shall have the right to make a copy of
deliverables for its records.
9. STATUS OF THE CONSULTANT
Consultant shall perform the services provided for herein as an independent
contractor, and not as an employee of the District. The District shall have ultimate control
over the work performed for the Proiect. Consultant is net to be considered an agent or
employee of the District for any purpose, and is not entitled to participate in any pension
plans, bonus, stock, or similar benefits that the District provides for its employees.
Payments made to Consultant pursuant to this Agreement shall be the full compensation
to which Consultant is entitled. The District shall not make any federal or state tax
withholdings nor pay any workers' compensation insurance on behalf of Consultant.
Consultant hereby expressly acknowledges that it is aware of the provisions of Section
3700 of the Labor Code and that Consultant must comply with such provisions before
commencing the performance of any work under this Agreement. Consultant shall also
comply with Section 380 of the California Labor Code by securing, paying for, and
maintaining in full force and effect for the duration of the Agreement, complete Workers
Compensation Insurance in an amount and upon terms established by the Distdct pursuant
to Section 16 of this Agreement. Contractor shall provide the District with a copy of a
certification of such insurance prior to commencing work under this Agreement. The
District, its officers, or employees, will not be responsible for any claims in law or equity
occasioned by failure to the Consultant to comply with this section. In the event of
expiration or proposed cancellation of such policy or policies for any reason whatsoever,
the District shall be notified not less than 30 days before expiration or cancellation is
effective.
Consultant also acknowledges that it is aware of the requirements of the
Immigration Reform and Control Act of 1986, and Consultant hereby agrees that it will
comply with those requirements, including verifying the eligibility for employment of all
agents, employees and subconsultants included in this Agreement.
Consultant shall indemnify the District for any tax, retirement contribution, social
security, overtime payment, or workers' compensation payment which the District may be
required to make on behalf of Consultant or any employee of Consultant for work
performed under this Agreement.
10. PREVAILING WAGES
in accordance with the provisions of the California Labor Code, Consultant shall
secure the payment of compensation to employees. As required by the California Labor
Code, Consultant shall pay not less than the prevailing rate of per diem wages as
determined by the Director, Department of Industriat Relations, State of California. Cop[es
of such prevailing rate of per diem wages are on file at the District's office, which copies
will be made available to any interested party upon request. Consuttant shall post a copy
of such determination at each job site.
Consultant shall forfeit to the District the amount of the penalty set forth in Labor
Code Section 1777.7(b), or any subsequent amendments thereto, for each calendar day,
or portion thereof, for each worker paid less than the specified prevailing rates for such
work or craft in which such worker is employed, whether paid by Consultant or by any
subconsultant.
11. HOURS AND WORKING CONDITIONS
The District is a public entity in the State of California and is subject to the
provisions of the Government Code and the Labor Code of the State. It is stipulated and
agreed that ail provisions of law applicable to public contracts are a part of this Agreement
to the same extent as though set forth herein and will be complied with by Consultant.
Consultant shall comply with all applicable provisions of the California Labor Code
relating to working hours and the employment of apprentices on public works projects.
Consultant shall, as a penalty to the District, forfeit $25.00 for each worker employed in the
execution of this Agreement by Consultant or by any subconsultant, for each calendar day
during which such worker is required or permitted to work more than 8 hours in any one
calendar day and 40 hours in any one calendar week, unless such worker received
compensation for ali hours worked in excess of 8 hours at not less than 11/~ times the basic
rate of pay.
12. ASSIGNMENT AND SUBCONTRACTING
Consultant shall not assign, sub[et, subcontract, or transfer this Agreement, or rights
under or interest in this Agreement, or otherwise hire, retain, or employ any independent
professional associates or subconsultants to assist in the performance of services
hereunder, without the written consent of the District.
If Consultant subcontracts any of the work to be performed, Consultant shall be as
fully responsible to the District for the performance of the work, including errors and
omissions of Consultant's subconsultants and of the persons employed by the
subconsultant, as Consultant is for the acts and omissions of persons directly employed
by the Consultant. Nothing contained in this Agreement shall create any contractual
relationship between any subconsultant of Consultant and the District. Consultant shall
bind every subconsultant and every subconsultant of a subconsultant to the terms of this
Agreement applicable to Consultant's work unless specifically noted to the contrary in the
subcontract in question and approved in writing by the District.
13, INUREMENT
Subject to the provisions of Section 17 of this Agreement, all terms, conditions, and
provisions hereof shall inure to and shall bind each of the parties hereto, and each of their
respective heirs, executors, administrators, successors, and assigns.
14. CHANGES IN WORK
If changes in the Scope of Work seem merited by Consultant or District, and
informal consultations indicate that a change is warranted, it shall be processed in the
following manner: A letter outlining and justifying the changes shall be forwarded to the
District by Consultant with a statement of estimated changes in fee and schedule. If the
change is approved by the District, an Amendment to this Agreement shall be prepared by
the District and executed by both parties prior to the performance of such services, or the
District will not be required to pay for such changes. Such Amendment shall not render
ineffective or invalidate any unaffected portions of this Agreement.
15. TERMINATION OR ABANDONMENT
If the engagement of Consultant is not extended by the mutual written consent of
the District and Consultant, then this Agreement shall be terminated on the latest date set
forth for completion of tasks identified in the Activity Schedule attached hereto as Exhibit
C.
Notwithstanding the above, the District may terminate or abandon any portion of the
work by giving ten (10) calendar days written notice thereof. Consultant may terminate its
obligation to provide further services under this Agreement upon thirty (30) calendar days
written notice only in the event of substantial failure by the District to perform in accordance
with the terms of this Agreement through no fault of Consultant.
In the event of termination or abandonment of any portion of the Project, the District
shall be given title immediately to all original drawings and other documents developed for
that portion of the work. The District shall pay Consultant for services performed in
accordance with this Agreement for any portion of the work being terminated which were
rendered prior to termination. If termination occurs prior to completion of any task for which
payment has not been made, the fee for services performed during such task shall be
based on an amount mutually agreed to by the District and Consultant. However, such
payments available to Consultant under this Section shall not include costs related to lost
?
profits associated with the expected completion of the Project or other such payments
related to Consultant's benefit of the bargain.
'16. INSURANCE
In addition to the requirements contained in Sections 9 and '~7 of this Agreement,
Consultant shall procure and maintain during the performance of this Agreement such
policies of insurance, bonds from an acceptable surety, cash deposits, and other forms of
security, in amounts and upon terms deemed sufficient by the District in its sole but
reasonable discretion to protect the District from any and all exposure to loss or liability.
17. INDEMNITY - HOLD HARMLESS
Consultant shall take all precautions necessary for the safety of and prevention of
damage to property on or adjacent to the work site, and for the safety of and prevention
of injury to persons, including District's employees, Consultant's employees, and third
persons, on or adjacent to the work site. All work shall be performed entirely at
Consultant's risk. Consultant agrees to carry, for the duration of this Agreement, and shall
furnish to the District a policy or certificate evidencing such public liability insurance during
the duration of this Agreement, in an amount, and with an insurer, acceptable to the
District. In the event of expiration or proposed cancellation of such policy or policies for
any reason whatsoever the District shall be notified not less than 30 days before expiration
or cancellation becomes effective.
Consultant shall also furnish the District with a copy of any injury prevention
program established for the Consultant's employees pursuant to Labor Code Section
6401.7, including any necessary documentation regarding implementation of the program.
Consultant hereby certifies that its employees have been trained in the program, and
procedures are in place to train employees whenever new substances, processes,
procedures, or equipment are introduced. The Consultant shall demonstrate compliance
with Labor Code Section 6401.7 by maintaining a copy of its Injury and Illness Prevention
Plan at the Project site and making it available to the District. Consultant also agrees to
defend, indemnify, protect, and hold the District and its officers, directors, agents, and
employees harmless from and against any and all claims, demands, damages, debts,
liabilities, obligations, causes of action, suits, and losses of whatever nature, character, and
description, including death or injury to person or property, which arise from or are
connected with or are caused by the negligent acts or omissions of the Consultant and its
subconsultants and their agents, officers, or employees in performing the services herein,
and/or which are alleged, asserted, suffered, or incurred on account of the execution
and/or performance of this Agreement and/or any breach by Consultant or its employees,
agents, or subconsultants of any of the covenants contained herein, and including all fees,
costs, and expenses that are sustained in investigating and defending against same;
provided, however, that the Consultant's duty to indemnify and hold harmless shall not
include any claims or liability arising from the sole negligence or willful misconduct of the
District, its officers, directors, agents, or employees.
Where approval by the District is indicated, it is understood to be conceptual
approval only and does not relieve the Consultant of responsibility for complying with all
laws, codes, industry standards, and liability for damages caused by negligent acts, errors,
omissions, noncompliance with industry standards, or the willful misconduct of the
Consultant or its subconsultants. Consultant agrees to defend, indemnify, and hold
harmless the District, its officers, agents, and employees from and against any and all
claims, costs, suits, and damages, including attorney's fees, arising from the willful
misconduct or negligent acts, errors, or omissions of the Consultant and its subconsultants.
18. LAWS AND VENUE
This Agreement shall not be construed against the party preparing it, but shall be
construed as if both parties jointly prepared this Agreement and any uncertainty or
ambiguity contained herein shall not be interpreted against the party drafting same.
This Agreement shall be enforced and governed by and under the laws of the State of
California. If any action is brought to interpret or enforce any term of this Agreement,
the action shall be brought in a state or federal court situated in the County of San
Bemardino, State of California.
19. ATTORNEYS FEES
If the District or the Consultant is the prevailing party in any arbitration, mediation,
litigation, court action, or other proceeding involving a dispute or controversy arising out
of, under, in connection with, or in relation to this Agreement, and any amendments
thereto, or the breach thereof, the non-prevailing party shall pay all attorneys fees and
costs actually incurred by the prevailing party in connection therewith. In any such action,
arbitration, mediation, litigation, or other proceeding, the entitIement to attorneys fees and
costs will be considered an element of costs and not of damages.
20. NONDISCRIMINATION
Consultants doing business with the District are expected to be equal opportunity
employers who attempt to achieve parity in the representation of women and minorities in
their work force. The Consultant is to ensure equal employment opportunity for all
persons, regardless of race, color, religion, sex, creed, national origin, ancestry, age,
medical condition, physical or mental disability, Vietnam-era veteran or special disabled
veteran status, marital status, or citizenship, within the limits imposed by law. These
principles are to be applied by the Consultant in all employment practices including
recruiting, hiring, transfers, promotions, training, compensation, benefits, layoffs, and
terminations. The Consultant aisc agrees to comply with Title VII of the Civil Rights Act of
1964, as amended, the California Fair Employment Practices Act, the Americans with
Disabilities Act of 1990, and other applicable federal and state laws and regulations.
21. REPRODUCTION RIGHTS
Consultant agrees that all rights, title, royalties, copyrights, and interest in all work
which may arise from its performance of services pursuant to this Agreement shall be
vested in the District, and, Consultant hereby agrees to relinquish all claims to such rights
in favor of the District. Such work product shall not be revealed, disseminated, or made
available by Consultant to others without the prior written consent of the District.
22. COVENANTS AGAINST CONTINGENT FEES
Consultant agrees that its firm has net employed or retained any person, other than
a bona fide employee of Consultant, to solicit or secure this Agreement, and that
Consultant has not paid any person, other than a bona fide employee, any fee,
commission, percentage, gift, or other consideration contingent upon, or resulting from, the
award of this Agreement.
23. INTEGRATION AND PARTIAL INVALIDITY
This Agreement represents the entire understanding of the District and Consultant
as to those matters contained herein. No prior ora[ or written understanding shall be of any
force or effect. This Agreement may not be modified or altered except in writing signed by
the District and Consultant.
If any term, covenant, condition or provisions of this Agreement is found by a court
of competent jurisdiction to be invalid, void, or unenforceable, the remainder of the
provisions hereof shall remain in full force and effect, and shall in no way be affected,
impaired, or invalidated thereby.
24. EFFECT OF DISTRICT'S WAIVER
Any failure by the District to enforce any provision of this Agreement, or any waiver
thereof by the District, shall not constitute a waiver of its right to enforce subsequent
violations of the same or any other terms or conditions herein.
25. NOTICE
Any notice required to be given or delivered by this Agreement shall be in writing
and delivered personally or mailed to such party by depositing the same in any United
States Post Office, registered or certified, postage prepaid, addressed to:
District:
East Valley Water District
1155 Del Rosa Avenue
P.O. Box 3427
San Bernardino, CA 92413
Attn: Generat Manager
Consultant:
CDM Engineers & Constructors Inc.
2030 West 17th Street
Long Beach, CA 90813
Attn: Michael D. Dzubnar, P.E.
and shall be effective upon receipt thereof.
26. AUTHORITY
The individuals executing this Agreement represent and warrant that they have the
legal capacity and authority to do so on behalf of their respective legal entities.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date written above.
DISTRICT CONSULTANT
By: By:
Robert E. Martin, General Manager Craig M. Watkins, Senior Vice President
East Valley Water District CDM Engineers & Constructors Inc.
Exhibit A
Scope of Services
The purpose of this project is to provide water-blending capabilities to decrease the level of Fluoride in
water delivered for the District's Well No. 39. Water from tkis well will be blended with water from the
Intermediate pressure zone to supply the Upper and Foothill pressure zones.
The intent of the scope of these services is for CDM to provide a turn-key engineering, procurement of
equipment and subcontractors, and construction services to successfully install the new Fluoride
blending facility.
TASK 1 - PROJECT MANAGEMENT
CDM will provide project management for the project.
1.1 Prepare Project Plan
CDM will define the approach to managing the personnel and services to be provided to the District
under this Agreement. The Project Plan will consist of the following elements:
· The scope of services
· Schedule with milestone dates
· Budget tracking plan
· Submittal process
The Project Plan shall be submitted after District issues notice to proceed.
1.2 Reporting
CDM shall prepare and transmit a monthly status report to the District. The report should summarize:
· Work completed during the month
· Upcoming work activities
· Problems, anticipated problems, and suggested solutions
· Project schedule updates
· Project budget updates
TASK 2 -- ENGINEERING DESIGN
CDM will provide engineering design services required to build the Well 39 Blend'mg Facility. The
work shall include:
· Electrical single-line diagram
· Civil site plan and details
· Tabulation of design criteria by site; relevant codes and standards to be cited with specific
indication where materials or installation are needed that exceed code
· Cut sheets for proposed equipment
Equipment layout drawings
· General approach for design and furnishing materials will be to use standard products that
are available on an off-the~shelf basis.
· District will provide available as-built drawings.
TASK 3 - EQUIPMENT AND SUBCONTRACTOR PROCUREMENT
CDM will solicit proposals and estimates from vendors and subcontractors, where appropriate, to
procure and supply the necessary material, equipment, and services. These considerations and services
will include:
Availability
· Delivery Time
· Cost
Solicit quotes for equipment packages. Select vendor with District's approval.
· Placing orders with suppliers for the equipment.
Checking shop drawings
· Expediting delivery
· Shop inspection, if needed
· Receiving equipment at the site
· Payment for materials, equipment, and services
A new reservoir for blended water from the Intermediate Zone and Well No.39 will be located north of
the existing reservoirs at Plant No. 39. New piping, valves, mixing mechanism, and controls will be
installed to reroute well water and to control water levels in the new tanks.
Reservoir
The reservoir will be a 250,000 gallon welded steel tank. The welded tank will be approximately 55~
feet in diameter with a 14-foot side water depth. The tank size has been sized to provide the optimal
volume to the blending operation so the system does not experience excessive starts and stops of the
well and blending pumps, and will provide for adequate cycling periods for the reservoir, approximately
two cycles per day.
Pump Station and Site Modifications
A new pump station will be located to the northwest of the existing booster station adjacent to the
existing 1.5 million gallon reservoir. The pump station will consists of two 20 horsepower, horizontal
split-case pumps, one duty and one standby, designed to convey 1,550 gpm each. It is proposed that the
pumps be designed at 1200 rpm to reduce the noise level in the vicinity of the pump station due to the
close proximity of neighbors.
Water from the Intermediate Zone will be blended in a static mixer with water from the existing Well
39. To accomplish th/s, the existing piping for Well 39 will be modified to connect to a static mixer.
The existing well will continue to use the on-site chlorine injection system for disinfection. In addition,
a connection with two-valve separation is proposed to allow the District to operate the system "as-is"
without using the blending pump station. The proposed pump station will draw water from the two
existing reservoirs at Plant 39 and lift the water, tkrough a static mixer, before it is delivered into the
proposed blending reservoir.
The proposed pump station and reservoir will require site improvements. The reservoir will receive
asphalt paving around its circumference as a dedicated driving surface and the pump station will require
construction of a six to eight foot tall retaining wall in order to set the pump station back into the hill out
of the existing maintenance travel ways.
Appror3mately 800 linear feet of yard piping will be placed to connect the existing system to the new
blending facility. The piping will consist of 12-inch and 18-inch diameter PVC. After the piping and
pump station are installed, prior to operation, the new system will be disinfected per District standards.
Control Implementation
The new system is designed to match the present District telemetry and control system. A radio based
communication link will be used to allow control of the new pumps from the reservoir levels. Plant
operating and control parameters shall be provided as inputs to and outputs from the Remote Telemetry
Unit (RTU). The RTU shall drive the radio system to the Districts central station. The KIX.I, radio, and
modem shall all be provided by ATSI with make and model to match existing. RTU equipment shall be
ASTI, King Fisher Model 91100
TASK 4 - INSTALLATION AND START UP TESTING
After the installation is completed, CDM will test the system to demonstrate full functionality. CDM
shall prepare as-built drawings and submit to the District.
TASK 5 - OPTIONAL SERVICES
CDM will perform additional services only with the prior written authorization of the authorized District
representative.
Exhibit B
Fees and Payment
A. BASIS OF COMPENSATION
Payment for services performed by CDM will be based on the following:
Professional Services will be on a time material basis per the attached rate sheet.
· Materials, equipment, and subcontractors will be actual cost plus markup to include 8%
overhead and 10% profit.
· Self-performed construction will be on a time and material basis per the attached rote sheet.
A project cost summary is as follows:
Description Total
Construction $649,338
~3esign and Construction Services $120,000
Constmction/Pro. iect Management $43,000
Contingency $53,806
Bonds $17,409
Total $883~553
Total payment for all services and equipment provided in this Agreement will not exceed $883,553.
B. PAYMENT
Payment for work completed by CDM shall be based on the following:
1. Invoicing -- Invoicing for progress payments may be submitted based on documented percent
completion of each task. Invoicing shall be on a monthly basis.
2. Payment - Payment of District approved invoices will be made within thirty (30) days of receipt of
invoice.
3. Retention -Ten (10) percent of each statement shall be withheld by District. The retention will be
paid to CDM thixty (30) days after the installed systems are tested and are demonstrated to be
functioning properly.
SCHEDULE OF HOURLY RATES
For East Valley Water District
Plant 39 DB Engineering Support
January 1, 2002-July 31, 2002
Categories Hourly Rate
Engineers/Scientists/Planners:
Grade 1 $ 80.00
Grade 2 90.00
Grade 3 100.00
Grade 4 ! 15.00
Grade 5 130.00
Grade 6 140.00
Grade 7/Principal 155.00
Grade 8/Associate 170.00
Grade 9/Vice President 185.00
Grade 10/Sr. Vice President 195.00
Support Service:
Designer Drafter 1 55.00
Designer Drafter 2 65.00
Designer Drafter 3 75.00
Designer Drafter 4 80.00
Designer Drafter 5 85.00
Designer Drafter 6 95.00
Designer Drafter 7 110.00
Designer Drafter 8 120.00
Administrative Manager 75.00
Administrative Assistant 60.00
Office Clerk 40.00
Clerical Manager 55.00
Word Processor 55.00
Technical Writer 75.00
Financial Manager 90.00
Contract Administrator 75.00
Finance Assistant 45.00
Accounting Clerk 45.00
Miscellaneous Expenses:
Auto Mileage 0.365/Mile
Computer Support - PC $2/Staff Hour
Internal Reproduction Services
Black and White Copies $0.1 O/Page
Color Copies $1.00/Page
Outside Services Cost + 18%
Materials and Other Expenses Cost + 18%
Labor and Equipment rates:
Dra~ing $ 52.50 /hr.
CADD generated drat~ing/design surcharge $ 17.00 /hr.
Staff Estimator $ 107.00 Par.
Clerical $ 55.00 /hr.
Superintendent $ 95.00 /hr.
Working Foreman/System Operator $ 68.50 /hr. *
Maintenance Foreman $ 63.50 gar. *
Pipefitter/Mechanie $ 55.00 /hr. *
Pipefitte~ Helper/Mechanics Helper $ 39.00 /hr. *
Backhoe or Bobcat Operator $ 45.50 Par.
Welder with Rig $ 65.00 /hr. *
Welder with Rig (Heli-arc) $ 75.00 /hr. *
Welder (Shop) $ 39.50 /hr. *
Delivery Driver (includes truck) $ 49.00 /hr. *
Concrete Finisher $ 47.75 Par. *
Laborer $ 34.00 /hr. *
Shop tools and Equipment (8 hour max./dy) $ 10.00 /hr.
Field Pickup $ 70.00 /day
Truck, (l ton) Truck & Tools $ 75.00 /day #
8 Ton Boom Crane $ 325.00 /day
Truck, Dump (9 yd.w/Driver) $ 69.00 /hr. *
Backhoe (Case or John Deere) $ 48.00 /hr.
Bobcat $ 40.00 /hr.
Air Compressor (100 CFM) $ 120.00 /day
Jack Hammer, Tools & Hose $ 60.00 /day
Concrete & Asphalt Saw $ 25.00 /hr.
Concrete Mixer $ 75.00 /day
Compactor or Tamp $ 125.00 /day
Hydrostatic Pump - Air Operated $ 65.00 /day
Stmap Pump ~ 3HP Engine Driven $ 65.00 /day
Generator - 3000 Watt $ 65.00 /day
Pump (1-1/2") Air Operated $ 65.00 /day
Pump (2') Air Operated $ 75.00 /day
Pump (3") Air Operated $ 80.00 /day
Buna Hoses $ 30.00 /day
Pressure Washer $ 60.00 /day
Portable Fuel Filter (1000) GPM) Per Job Basis
TLV Monitor, J.W, Indicator, 02 meter $ 100.00 /day
Fresh Air Equipment/Confined Space (plus air fills) $ 175.00 /day
8" Blower (electric) $ 80.00 /day
Concrete Finishing Machine $ 90.00 /day
Subsistance: Per Person $ 85.00 /day
Note: * 4 hour minimurn
# Includes round-trip travel up to 50 miles (36.5 cents per mile differential applicable over 50 miles).
Overhead (8%), Profit (10%) applicable to all material, rental equipment and subcontractors.
Overtime rates for personnel: After 3:30PM, Saturday, Sunday and Holidays at time and one half.
Subsistance Rates apply for ~ork performed outside a 80 mile radius of the dispatching office
Exhibit C
Schedule of Completion
CDM shall commence work after receipt ora Notice to Proceed (NTP). In order to complete tkis work
by August 31, 2002, the NTP must be delivered by March 1, 2002. A detailed schedule will be prepared
as a par~ of the Project Plan described in Exhibit A.
EAST VALLEY WATER DISTRICT
Information Systems, Internet, e-mail and
Electronic Communications, Ethics, Usage
and Security Policy
The District has established this "Ethics, Usage, and Security Policy" to ensure
that all District employees use the computer resources, such as software, hardware,
Internet and e-mail, in an ethical, legal and appropriate manner. This policy establishes
what is an acceptable and an unacceptable use of the software, hardware, Intemet, e-
mail and other electronic communications.
All employees are required to read and adhere to the guidelines set forth in this
policy. Failure to comply may lead to disciplinary action up to, and including, immediate
suspension and/or termination.
TABLE OF CONTENTS
Summary of the information Systems Security Policy ............................................. 4
Security Policy for all Computers, Computer Equipment and Related Computer
Items ...5
Policy Objectives ............................................................................................ 5
Definitions of Resource Responsibility and Authority ............................................ 6
Assignment of Resource Responsibility ............................................................. 7
User Identification and Verification .................................................................... 8
Screen Savers ............................................................................................. 8
Resource Authorization Checking .................................................................... 8
Logging and Reporting of Variations ................................................................. 8
Computer Audit Trail ..................................................................................... 8
V
Software Licensing Guidelines ........................................................................ 9
Hardware, Software, and Cables Ownership .................................................... 10
Maintenance and Repair .............................................................................. 11
Employee Resignation, Termination, or Reassignment ....................................... 12
Computer Guidelines ................................................................................... 13
Off Site Use of District Owned Equipment ........................................................ 16
Non-District Owned Computer Equipment on District Premises ............................ 17
Intemet, e-mail and Electronic Communications Guidelines ...18
Failure to Abide .......................................................................................... 20
SUMMARY OF THE INFORMATION SYSTEMS SECURITY POLICY
1. All access to computers must be authorized.
2. Users should only be allowed to access data that Celates to their jobs, tasks,
projects or assignments.
3. Any changes in employee status must be immediately reported to the Information
Systems Manager.
Except in circumstances specifically authorized by the Information Systems
Manager, there shall be only one user per user I.D. and password. Passwords are
considered confidential and are not to be shared.
5. Only software approved and purchased by the District is allowed on the District's
computers.
6. Information Systems oversees the computer system and is responsible for the
integrity and backup of data on the network servers. However, each user retains
responsibility for the validity of their data.
7. Information Systems is responsible for security administration on the network.
~ However, each personal computer user is responsible for security administration on
the individual P.C. system used.
8. Information Systems is responsible for technical support.
9. Only Information Systems personnel and their designees are authorized to relocate
or remove hardware, software/hardware upgrades to servers, microcomputers,
workstations or miscellaneous hardware peripherals; install or remove software,
perform maintenance repairs; and request assistance for qualified vendors for
specialized services, which will be coordinated by the Information Systems
Department.
10. Internal recording of access will be monitored and any attempted variance from the
authorized use of system resources will be reported.
-4-
SECURITY POLICY FOR ALL COMPUTERS, COMPUTER EQUIPMENT
'""""' AND RELATED COMPUTER ITEMS
It is the intent of the District to protect all of its resources. These resources include
computer hardware, software, data, and all computer related items. This document will
set forth the policy of maintaining logical security, protecting the software, and utilization
of systems by persons with legitimate access rights.
POLICY OBJECTIVES
1. Maintain the integrity of the data and programs on all computer systems and
microcomputers in the District.
2. Protect production systems and data against unauthorized disclosure, modification
or destruction.
3. Uniquely identify each user of the computer resources to guarantee accountability.
4. Stop access and use of computer resources to any individual user who cannot be
~ positively identified and authenticated by the system.
5. Limit a user's data access privileges to:
Data designated by the District Management as necessary to accomplish
assigned work.
Data previously approved by the District Management responsible for the
validity of that data.
6. Audit actions affecting authorizations to computer resources.
-5-
DEFINITIONS OF RESOURCE RESPONSIBILITY AND AUTHORITY
The District retains the exclusive right of ownership and use of all its computer assets.
Protection of data is the responsibility of the Information Systems Manager and the end
user.
A. Resource Responsibility and Authority
1. Information Systems Manager
Information Systems will be responsible for the integrity of data while said
date is under "I.S." control. Information Systems cannot be responsible
for the accuracy of said data.
During the period of time that any data is under Information Systems'
control, "l.S." shall have sole responsibility for the integrity and
maintenance of security as requested by the District.
information Systems shall take required measures to maintain security
and integrity of the District's data, based on the nature of the data, as
instructed by the District's management,
-6-
ASSIGNMENT OF RESOURCE RESPONSIBILITY
To determine and establish the level of protection required for each resource,
responsible authority under Information Systems must be assigned. The assignment is
based on the type of resource to be protected and the requirement/authorizations set
forth by the District's management.
A. Security Administration
Information Systems is responsible for the overall administration of coordinating
and establishing resource protection. This protection is based on established
and approved security procedures that include the development and
establishment of logical security procedures, and coordination of user
requirements.
B. Technical Support
The Information Systems Manager supports all computer hardware throughout
the District. This responsibility includes the maintenance of hardware, software,
and operating environments, promoting the efficient use of computer resources,
and protection of the District's programs and data. Local Area Network (LAN)
administration will also be managed by the Information System Division.
C. Internal Production Audit
The Information Systems Manager is responsible for the monitoring and
evaluation of all activities performed by users on the network to ensure that all
activities are performed pursuant to the established and authorized procedures.
-7-
USER IDENTIFICATION AND VERIFICATION
identification is established through the use of a user i.D. Verification is established
through the use of a password. The combination of a user I.D./Password shall be
unique and ensures personal accountability for activities performed. Users should
never reveal their 1.13. and password to another person.
SCREEN SAVERS
If a user chooses to apply a screen saver to the system, the screen saver should not be
password protected.
RESOURCE AUTHORIZATION CHECKING
Having identified and verified user authenticity, Information Systems then controls
interaction between the user and the system resources. Control extends not only to
which resources are accessed, but also how they are accessed. (For example, read
only vs, edit rights). Information Systems is also responsible for ensuring that data is
accessible only to those individuals who have been granted access by the District's
management.
LOGGING AND REPORTING OF VARIATIONS
Once the identity of the user has been authenticated, Information Systems limits the
user to authorized resources. The system may record all activity, which occurs for a
given user I.D. Information Systems may also log and report any user activities and/or
system events which do not conform to the authorized user of system resources.
COMPUTER AUDIT TRAIL
The network servers may record all terminal transactions for each end user. This form
of audit is extremely vaiuable for recovery if the system goes down, if the user
experiences problems, or if security violations are noted.
-8-
SOFTWARE LICENSING GUIDELINES
The District has established certain guidelines for the purchasing of computer software.
Only software purchased, or authorized by the District's management, is allowed on
District computers and/or microcomputers. Software and hardware, may not be
purchased with petty cash, voucher request, or credit card without prior approval of the
District's management. This policy applies to public domain and shareware software,
as wetl as commercially available programs. It is the District's policy to pay for any
shareware software used on the District computer systems.
Downloading unauthorized, unlicensed or inappropriate software from the Internet is
prohibited.
Absolutely no games or software not owned by the District are to be installed on District
computers, whether or not these games or software will be used on breaks, lunch hours
or after hours.
No testing of software from other sources will occur at any time without Information
Systems involvement. Information Systems will assist the user in testing and evaluating
all software. This is necessary to ensure that computer viruses are not introduced into
District owned computer systems and to maintain software continuity.
If Information Systems encounters any software that was not purchased and installed by
the District, the user will be requested to provide documentation authorizing the use of
the software in question, if the user is unable to provide written authorization,
Information Systems will discuss the matter with District management for direction on
the appropriate action to take to rectify the situation.
-9-
HARDWARE, SOFTWARE AND CABLES OWNERSHIP
All computers, computer equipment, software, hardware, and related peripherals (i.e.,
mouse, printer, scanner, etc.) are the property of the District and are administered and
supported by the Information Systems Division.
When hardware or software has been installed, no employee is allowed to move,
transfer or copy it. When there is a need for hardware to be moved to a more
convenient location, the action should be requested through Information Systems. Only
Information Systems personnel are authorized to perform these tasks.
When new software has been acquired, a request to install the software must be
submitted to Information Systems.
Written approval must be obtained from the District's management before any hardware
or software may leave the District's offices. Upon approval, the employee is solely
responsible for that hardware or software, including providing insurance to cover loss or
theft.
Diskettes brought to the work place from an outside source must be scanned for viruses
at the Information Systems test computer before it may be loaded on any District
system.
-10-
MAINTENANCE AND REPAIR
The maintenance and repair of any computers, or related peripheral, shall be performed
by the Information Systems Department, or a contracted service provider. No one else
will be allowed to attempt any maintenance or repair functions. When an incident
occurs, a service request should immediately be submitted to Information Systems
indicating the circumstances and any other pertinent information surrounding the failure.
If computer failure interferes with production, action will be taken on an emergency
basis.
The Information Systems Manager has the authority to take whatever steps are deemed
necessary to remedy the user's problem(s).
-11-
EMPLOYEE RESIGNATION, TERMINATION OR REASSIGNMENT
As part of the employee's separation process, the District's management shall notify the
Information Systems Manager so the appropriate action may be taken to remove the
employee's access to the District's computer systems. This notification should take
place prior to the employee's last day of work.
If an employee is involuntarily terminated by the District, "l.S." shall be notified
concurrently with the notification of termination of employment to the employee to allow
for the immediate deletion of the employee's User I.D./Password. This provision allows
for protection to both the District and the employee.
For employees who are assuming new job responsibilities, the District's management
will request Information Systems to make the necessary modifications to the user's
access rights.
COMPUTER GUIDELINES
It is the responsibility of each employee to follow the guidelines of the Computer
Procedures for all District computer systems - hardware and software.
Access to the District's computer systems will be prohibited until an employee has been
authorized by the District's management, who will request a Iogin (User I.D.) and
Password be assigned on the appropriate systems.
Guidelines:
1. Either the District's management or the Information Systems Manager will
indicate the access rights of a user.
2. Users are not to share login information with other employees. These are
assigned to specific individuals and must only be used by the one user for whom
it was assigned.
3. When a user encounters a variance in the normal processes of utilizing
applications Information Systems must be notified immediately. The user should
stop processing at the first indication of a problem, leaving the information on the
screen intact for review by the appropriate Information Systems staff. This will
ensure data accuracy and prevent any major discrepancy within the system.
4. All users will perform functions allocated to them by the menu systems, and not
deviate from this approach. If a user is forced out from the menu system,
Information Systems should be notified, as in #3 above.
5. File creations, changes or deletions must be made in conjunction with duties
assigned to the user's job classification.
6. Those users who have addition, modification or deletion privileges through
applications will be authorized to update files for accuracy. Deletions,
modifications or additions to personally benefit oneself or others, corrupt or
misrepresent data within an application is strictly prohibited and is grounds for
disciplinarY action up to, and including, termination and possible legal action.
7. Foreign software and access to bulletin boards or the Internet are not allowed on
District equipment without prior written approval of the District's management.
8. There shall be no downloading of files, which are unauthorized, illegal or
inappropriate. Files to be downloaded must first be scanned for viruses..
-13-
9. Normal processing includes the proper logging out of all systems and the
shutting down of microcomputers at the completion of the user tasks. If the user
is to be away from the workstation, logging out of the system is required to
prevent unauthorized use of the user I.D. This is the responsibility of the
assigned Iogin user.
10. All modem access either direct or through the modem pool, requires written
approval.
11. District personnel shall not use outside equipment for access to District
applications without prior written approval. Outside access is to be performed
only through the use of a District owned modem line. A "calkback" procedure
may be used for additional security.
12. Any employee who notices any unauthorized use of computer equipment or
software should notify Information Systems immediately.
13. Caution should be exercised when eating or drinking in the vicinity of personal
computers. Items of this nature dropped on a keyboard can cause malfunctions,
which are not covered by service contracts and warranties.
14. Floppy disks should always be handled with care:
(a) Always store disks in a protective jacket.
(b) Do not touch the magnetic media inside the sleeve.
(c) Protect the disk from being bent or otherwise mishandled: do not force
disks into disk drives.
(d) Avoid contact with magnetic fields such as telephone handsets and
computer monitors.
(e) Do not write on disk, either directly or through the jacket/sleeve.
(f) Do not leave disk in hot areas; do not expose to heat or sunlight for
extended periods of time.
(g) Do not leave disks in any vehicles or other areas where unauthorized
persons can pick them up.
15. Compact Disks should always be handled with care:
(a) Always store in protective case.
(b) Avoid contact with the data-entrenched surface; hold by the edges only.
(c) Do not leave disks in hot areas; do not expose to heat or sunlight for
extended periods of time.
(d) Report CD-ROM malfunctions to Information Systems right away.
(e) Do not leave disks in any vehicle or other area where they can be picked up
by unauthorized persons.
-14-
16. Always perform recommended shutdown procedures before powering off. Not
doing so may damage the disk or the drive read/write heads of the fixed disk
devices, or may result in damage or destruction to data files.
17. The mistreatment of computer equipment is not covered by normal maintenance
agreements.
-15-
OFF SITE USE OF DISTRICT OWNED COMPUTER EQUIPMENT
When an employee needs to use District-owned equipment or software at home, prior
written approval must be obtained from the District's management.
The employee will be required to sign a log on the day the equipment is taken and again
when it is returned. The log is necessary so that Information Systems can maintain
continuous control of all Distdct computer assets.
Laptop and Notebook computers may be taken off the premises for use by authorized
District employees with the approval of the District's management.
-16-
NON-DISTRICT OWNED COMPUTER EQUIPMENT
ON DISTRICT PREMISES
Computer equipment and peripherals not owned by the District will not be attached to
District computer or communications systems. District owned or licensed software will
not be installed on computer systems not owned by the District, unless specifically
permitted by the software licensing agreement.
-17-
INTERNET, E-MAIL AND ELECTRONIC COMMUNICATIONS
GUIDELINES
1. Employees shall not use the Internet or e-mail in an inappropriate manner.
Inappropriate use of the Internet and e-mail includes, but is not limited to:
a. Accessing Intemet sites that contain pornography, exploit children, or sites
that would generally be regarded in the community as offensive, or for which
there is no official business purpose to access.
b. Participating in any profane, defamatory, harassing illegal, discriminatory, or
offensive activity, or any activity that is inconsistent in any way with District
policies (i.e. policy on sexual harassment).
c. Exploiting security weaknesses of the District's computing resources and/or
other networks or computers outside the District.
2. Personal use of the District's computer system and access to the Intemet and e-
mail is not a benefit of employment with the District. Intemet access is to be
used for District business purposes. Employees may access the Internet and e-
mail for other than District business in accordance with this policy if the employee
is on an authorized break. Use of the Intemet should not interfere with the timely
and efficient performance of job duties.
3. Employees do not have any right to privacy in any District computer resources,
including e-mail messages produced, sent, or received by District computers or
transmitted via the District's servers and network. Employee access to the
Intemet and e-mail is controlled by use of a password. The existence of a
password does not mean that employees should have any expectation of
privacy. The District may monitor the contents of all e~mail messages to promote
the administration of the District, its business, and policies. Employee access to
and use of the Internet, e-mail, and other electronic communications will be
monitored frequently.
4. Use of another employee's name/account to access the District's network or the
Intemet is strictly prohibited without express permission of Information Systems.
5. Personal use of the District's computer resources for personal commercial
activity is strictly prohibited.
6. The District will not be responsible for maintaining or payment of personal
tnternet accounts or related software. To maintain the integrity and firewall
protection of the District's system, personal Internet accounts may not use the
District's network system, telephone system, modem pool, or communication
server to access the Internet without prior authorization by District's
V management.
-18-
7. The Internet and e-mail provide means by which employees of the District may
~ communicate with its customers, consultants and other official persons, and
retrieve valuable information. Messages and downloaded information through
the District's system may be considered part of the District's business records
and should be treated as such.
8. Deleting an e-mail message does not necessarily mean the message cannot be
retrieved from the District's computer system. For a specific period of time, the
District retains backup copies of all documents, including e-mail messages
produced, sent, and received on the District's computer system.
9. The vast majority of District records are public documents. Do not transmit
information in an electronic mail message that should not be written in a letter,
memorandum, or document available to the public. E-mail and any attachments
are subject to the same ethical and legal concerns and standards of good
conduct as memos, letters, and other paper-based documents. E-mail can be
forwarded to others, printed on paper, and is subject to possible discovery during
lawsuits in which the District may be involved.
10. Use of electronic mail or the Internet to send offensive messages of any kind is
prohibited.
11. Downloading software and programs for other than District-authorized tasks is
strictly prohibited. When required to download authorized software or programs
for the District, the following procedures will be followed.
a. Computer viruses can become attached to executable files and program files
and result is significant losses to the District. Receiving and/or downloading
executable files and programs via electronic mail or the Internet without
express permission of the Information Systems Manager is prohibited. This
includes, but is not limited to, software programs and software upgrades.
This does not include e-mail and/or documents received via e-mail and the
Internet. The Information Systems Manager will scan an employee's
downloaded executable files and/or program flies before using or opening
them on their computers to prevent the introduction of computer viruses.
b. Employees will respect all copyright and license agreements regarding
software or publications they access or download from the Internet. The
District will not condone violations of copyright laws and licenses and the
employee will be personally liable for any fines or sanctions caused by the
license or copyright infringement. Any software or publication, which is
downloaded onto District computer resources, becomes the sole property of
the District.
-19-
FAILURE TO ABIDE
Failure to follow the prescribed procedures and policies may lead to discipline, up
to and including immediate termination. Disciplinary action may include the removal of
Internet and e-mail access from the employee's computer or termination of employment.
By signing this document, I hereby represent that I have read, understand and
agree to the District's Information Systems, lnternet, e-mail, and electronic
communications, ethics, usage, and security policy.
Date Signature
Employee's Name
-20~
FEB-i3-2~2 08:16 REAL ESTATE SERVICES 5bC;l' ~i~ ~-*~ ~ , ......
DE-ARTMENT OF GENERAL SERVICES
Rea~state Services Division · Profess~al Services Branch
~e ~gg~at · 707 ~ ~l~t. R~h Floor · PO
February 11, 2002
Kenneth C. Noorigian
Noodglan & Associates, P.C.
1010 Second Avenue, Suite 1770
San Diego, California 92101
Dear Mr. Noorigian:
In response to your letter dated January 14, 2001. The state has objections to the revisions
you have proposed for lease numbers L-1625 and L-1172.
On January 4, 2002, I returned a phone call to your office and left a long and detailed message
making it clear that the state was not agreeable to your proposal, in that message I also stated
a meeting was necessary and suggested you or your representatives, come to Sacramento for
said meeting.
After leaving that message on your voice mail, in early January I received several phone ca,Is
from your secretary, asking for my new fax number. He also left voicemail messages with my
staff-person, Carolyn Momsen, stating that he was trying to set up dates for the meeting here in
Sacramento.
I witl be copying the East Valley Water District and Steve Kennedy on this correspondence so
they too have no doubt regarding the state's position on proposed revisions to the existing
leases.
I currently have all day on Fdday, February 22"~ available in my schedule to meet with you.
If that date does not fit your schedule, I have several times available during the week of
February 25~"' i would strongly urge you to take the opportunity to meet with myself and my
staff-person, whether or not East Valley Water District is available to meet.
Sincerely,
CHERYL L. ALLEN, Manager
State Owned Leasing and Development
CLA:cla
cc: Robert Martin, East Valley Water DistriCt
Steven Kennedy, Esq.
Carolyn Momsen, Staff
TOTAL P.
AGREEMENT NO. 2002.02
FOR, PROFESSIONAL SERVICES
BETWEEN
EAST VALLEY WATER DISTRICT
AND
GARY W. MILLER ARCHITECT & ASSOCIATES
This Agreement is made and entered into as of ., 200__, by and
between EAST VALLEY WATER DISTRICT, a county water district organized and
operating pursuant to California Water Code Section 30000 et seq. (hereinafter referred to
as "District"), and GARY W. MILLER ARCHITECT & ASSOCIATES (hereinafter referred
to as "Consultant").
RECITALS
WHEREAS, District is in need of Architectural services for design of new
headquarters and operational facilities (hereinafter referred to as "Project");
WHEREAS, Consultant is duly licensed, qualified, and willing to provide such
professional services to the District; and
WHEREAS, this Agreement establishes the terms and conditions for the District to
retain Consultant to provide the services described herein.
COVENANTS
NOW, THEREFORE, in consideration of the faithful performance of the terms and
conditions set forth herein, the parties hereto agree as follows:
1. SERVICES
Consultant shall provide professional services as described in the Scope of Work
attached hereto as Exhibit A and incorporated herein by this reference. Such work
expressly includes all related services ordinarily provided by Consultant under same or
]
similar circumstances and/or are necessary to satisfy Section 6 of this Agreement.
2. AUTHORIZATION
Authorization for Consultant to proceed with all or a portion of the work described
in Exhibit A will be granted in writing by the District pursuant to a Notice to Proceed which
shall be issued as soon as both parties hereto sign this Agreement and all applicable plans
and specifications, and the insurance and other security documents required by the District
pursuant to Section 14 hereof, have been received and approved by the District.
Consultant shall not proceed with the work until so authorized and shall commence work
immediately upon receipt of the Notice to Proceed.
3. PAYMENT
Subject to Consultant's performance of its obligations under this Agreement to the
satisfaction of the District, District shall pay for services in accordance with the Payment
Schedule attached hereto as Exhibit B and incorporated herein by this reference. No other
compensation will be paid by the District except for service performed in accordance with
an Amendment to this Agreement as provided for in Section 12 herein.
4, TIME OF PERFORMANCE
Consultant shall perform services in a prompt, timely, and professional manner in
accordance with the Activity Schedule attached hereto as Exhibit C and incorporated herein
by this reference. Time is of the essence in this Agreement.
5. DUTIES OF THE DISTRICT
District, without cost to Consultant, will provide all reasonably-available pertinent
information necessary for Consultant to perform its obligations under this Agreement.
District does not guarantee or ensure the accuracy of any reports, information and/or data
2
so provided. To the extent that any reports, information and/or other data so provided was
~ supplied to District by persons who are not employees of District, any liability resulting from
inaccuracies and/or omissions contained in said information shall be limited to liability on
behalf of the party who prepared the information for District.
District's approval of Consultant's designs, specifications, reports and incidental
work or materials furnished hereunder shall not in any way relieve Consultant of
responsibility for the technical adequacy of its work. Neither District's review, approval or
acceptance of, nor payment for, any of the services shall be construed as a waiver of any
rights under this Agreement or of any defense or cause of action which it may have arising
out of the performance of this Agreement.
6, STANDARD OF CARE
Consultant's services under this Agreement will be performed in accordance with
~ generally accepted professional practices and principles and in a manner consistent with
the level of care and skill ordinarily exercised by members of the same profession currently
practicing under similar conditions. The Consultant shall observe and cause all work and
deliverables to conform to all applicable federal, state, and local laws and regulations.
Consultant shall, at no cost to District, prepare any necessary rework occasioned by
Consultant's or subconsultant's negligent act or omission due substantially to Consultant's
or subconsultant's fault.
7, ORGANIZATION
Before starting any work on the Project, Consultant shall designate, in writing, a
representative who shall have overall responsibility for Consultant's performance under this
Agreement. An alternate representative may be designated. The representative or
~, alternate shall be present at the Project site whenever work is in progress or whenever
such presence is otherwise necessitated to take measures necessary to protect the work,
persons, or property thereon. During the course of performance of this Agreement, the
representative or alternate shall be available to District on an "on call" basis as required by
District. Any order or communication given to this representative shall be deemed
delivered to the Consultant. No compensation shall be paid by District for Consultant's "on
call" availability. The representative or alternate shall not be removed from the Project or
reassigned without prior request or approval of the District.
8. DELIVERABLES
All original drawings, specifications, reports, calculations, and other documents
developed for the Project shall be furnished to and become the property of the District,
Consultant agrees that the District will have access to, and the right to examine, any
pertinent documents, papers, and records in the Consultant's possession for any
transaction relating to this Agreement. Consultant shall have the right to make a copy of
deliverables for its records.
9. STATUS OF THE CONSULTANT
Consultant shall perform the services provided for herein as an independent
contractor, and not as an employee of the District. The District shall have ultimate control
over the work performed for the Project. Consultant is not to be considered an agent or
employee of the District for any purpose, and is not entitled to participate in any pension
plans, bonus, stock, or similar benefits that the District provides for its employees.
Payments made to Consultant pursuant to this Agreement shall be the full
compensation to which Consultant is entitled. The District shall not make any federal or
state tax withholdings nor pay any workers' compensation insurance on behalf of
Consultant. Consultant hereby expressly acknowledges that it is aware of the provisions
4
of Section 3700 of the Labor Code and that Consultant must comply with such provisions
v before commencing the performance of any work under this Agreement. Consultant shall
also comply with Section 380 of the California Labor Code by securing, paying for, and
maintaining in full force and effect for the duration of the Agreement, complete Workers
Compensation Insurance in an amount and upon terms established by the District pursuant
to Section 14 of this Agreement. Contractor shall provide the District with a copy of a
certification of such insurance prior to commencing work under this Agreement. The
District, its officers, or employees, will not be responsible for any claims in law or equity
occasioned by failure to the Consultant to comply with this section. In the event of
expiration or proposed cancellation of such policy or policies for any reason whatsoever,
the District shall be notified not less than 30 days before expiration or cancellation is
effective.
~ Consultant also acknowledges that it is aware of the requirements of the
Immigration Reform and Control Act of 1986, and Consultant hereby agrees that it will
comply with those requirements, including verifying the eligibility for employment of a~l
agents, employees and subconsultants included in this Agreement.
Consultant shall indemnify the District for any tax, retirement contribution, social
security, overtime payment, or workers' compensation payment which the District may be
required to make on behalf of Consultant or any employee of Consultant for work
performed under this Agreement.
10. PREVAILING WAGES
In accordance with the provisions of the California Labor Code, Consultant shall
secure the payment of compensation to employees. As required by the California Labor
~, Code, Consultant shall pay not less than the prevailing rate of per diem wages as
determined by the Director, Department of Industrial Relations, State of California. Copies
of such prevailing rate of per diem wages are on file at the District's office, which copies will
be made available to any interested party upon request. Consultant shall post a copy of
such determination at each job site.
Consultant shall forfeit to the District the amount of the penalty set forth in Labor
Code Section 1777.7(b), or any subsequent amendments thereto, for each calendar day,
or portion thereof, for each worker paid less than the specified prevailing rates for such
work or craft in which such worker is employed, whether paid by Consultant or by any
subconsultant.
1'1. HOURS AND WORKING CONDITIONS
The District is a public entity in the State of California and is subject to the provisions
of the Government Code and the Labor Code of the State. It is stipulated and agreed that
all provisions of law applicable to public contracts are a part of this Agreement to the same
extent as though set forth herein and will be complied with by Consultant.
Consultant shall comply with all applicable provisions of the California Labor Code
relating to working hours and the employment of apprentices on public works projects.
Consultant shall, as a penalty to the District, forfeit $25.00 for each worker employed in the
execution of this Agreement by Consultant or by any subconsultant, for each calendar day
during which such worker is required or permitted to work more than 8 hours in any one
calendar day and 40 hours in any one calendar week, unless such worker received
compensation for all hours worked in excess of 8 hours at not less than 1¼ times the basic
rate of pay.
12. ASSIGNMENT AND SUBCONTRACTING
Consultant shall not assign, sublet, subcontract, or transfer this Agreement, or rights
under or interest in this Agreement, or otherwise hire, retain, or employ any independent
professional associates or subconsultants to assist in the performance of services
hereunder, without the written consent of the District.
If Consultant subcontracts any of the work to be performed, Consultant shall be as
fully responsible to the District for the performance of the work, including errors and
omissions of Consultant's subconsultants and of the persons employed by the
subconsultant, as Consultant is for the acts and omissions of persons directly employed
by the Consultant. Nothing contained in this Agreement shall create any contractual
relationship between any subconsultant of Consultant and the District. Consultant shall
bind every subconsultant and every subconsultant of a subconsultant to the terms of this
Agreement applicable to Consultant's work unless specifically noted to the contrary in the
subcontract in question and approved in writing by the District.
13. INUREMENT
Subject to the provisions of Section 15 of this Agreement, all terms, conditions, and
provisions hereof shall inure to and shall bind each of the parties hereto, and each of their
respective heirs, executors, administrators, successors, and assigns.
14. CHANGES IN WORK
If changes in the Scope of Work seem merited by Consultant or District, and
informal consultations indicate that a change is warranted, it shall be processed in the
following manner: A letter outlining and justifying the changes shall be forwarded to the
District by Consultant with a statement of estimated changes in fee and schedule. If the
change is approved by the District, an Amendment to this Agreement shall be prepared by
7
the District and executed by both parties prior to the performance of such services, or the
~ District will not be required to pay for such changes. Such Amendment shall not render
ineffective or invalidate any unaffected portions of this Agreement.
15. TERMINATION OR ABANDONMENT
If the engagement of Consultant is not extended by the mutual written consent of the
District and Consultant, then this Agreement shall be terminated on the latest date set forth
for completion of tasks identified in the Activity Schedule attached hereto as Exhibit C.
Notwithstanding the above, the District may terminate or abandon any portion of the
work by giving ten (10) calendar days written notice thereof. Consultant may terminate its
obligation to provide further services under this Agreement upon thirty (30) calendar days
written notice only in the event of substantial failure by the District to perform in accordance
with the terms of this Agreement through no fault of Consultant.
~ In the event of termination or abandonment of any portion of the Project, the District
shall be given title immediately to all original drawings and other documents developed for
that portion of the work. The District shall pay Consultant for services performed in
accordance with this Agreement for any portion of the work being terminated which were
rendered prior to termination. If termination occurs pdor to completion of any task for which
payment has not been made, the fee for services performed during such task shall be
based on an amount mutually agreed to by the District and Consultant. However, such
payments available to Consultant under this Section shall not include costs related to lost
profits associated with the expected completion of the Project or other such payments
related to Consultant's benefit of the bargain.
16. INSURANCE
~, In addition to the requirements contained in Sections 9 and 15 of this Agreement,
8
Consultant shall procure and maintain during the performance of this Agreement such
v policies of insurance, bonds from an acceptable surety, cash deposits, and other forms of
security, in amounts and upon terms deemed sufficient by the District in its sole discretion
to protect the District from any and all exposure to loss or liability.
17. INDEMNITY - HOLD HARMLESS
Consultant shall take all precautions necessary for the safety of and prevention of
damage to property on or adjacent to the work site, and for the safety of and prevention of
injury to persons, including District's employees, Consultant's employees, and third
persons, on or adjacent to the work site. All work shall be performed entirely at
Consultant's risk. Consultant agrees to carry, for the duration of this Agreement, and shall
furnish to the District a policy or certificate evidencing such public liability insurance during
the duration of this Agreement, in an amount, and with an insurer, acceptable to the
~ District. In the event of expiration or proposed cancellation of such policy or policies for any
reason whatsoever the District shall be notified not less than 30 days before expiration or
cancellation becomes effective.
Consultant shall also furnish the District with a copy of any injury prevention program
established for the Consultant's employees pursuant to Labor Code Section 6401.7,
including any necessary documentation regarding implementation of the program.
Consultant hereby certifies that its employees have been trained in the program, and
procedures are in place to train employees whenever new substances, processes,
procedures, or equipment are introduced. The Consultant shall demonstrate compliance
with Labor Code Section 6401.7 by maintaining a copy of its Injury and Iltness Prevention
Plan at the Project site and making it available to the District.
~, Consultant also agrees to defend, indemnify, protect, and hold the District and its
9
agents, officers, and employees harmless from and against any and all liability established
~ for damages and/or injuries to any person or property, including injury to the Consultant's
or its subconsultant's employees, agents, or officers which arise from or are connected with
or are caused by the acts or omissions of the Consultant and its subconsultants and their
agents, officers, or employees in performing the services herein, and/or have been suffered
or incurred on account of any breach of the covenants contained herein by Consultant or
its employees, agents, or subconsultants, and all expenses of investigating and defending
against same; provided, however, that the Consultant's duty to indemnify and hold
harmless shall not include any claims or liability arising from the established negligence or
willful misconduct of the District, its agents, officers, or employees.
Where approval by the District is indicated, it is understood to be conceptual
approval only and does not relieve the Consultant of responsibility for complying with all
~ laws, codes, industry standards, and liability for damages caused by negligent acts, errors,
omissions, noncompliance with industry standards, or the willful misconduct of the
Consultant or its subconsultants. Consultant agrees to defend, indemnify, and hold
harmless the District, its officers, agents, and employees from and against any and all
claims, costs, suits, and damages, including attorney's fees, arising from the willful
misconduct or negligent acts, errors, or omissions of the Consultant and its subconsultants.
18. LAWS AND VENUE
This Agreement shall not be construed against the party preparing it, but shall be
construed as if both parties jointly prepared this Agreement and any uncertainty or
ambiguity contained herein shall not be interpreted against any one party. This Agreement
shall be enforced and governed by and under the laws of the State of California. If any
~, action is brought to interpret or enforce any term of this Agreement, the action shall be
l0
~
brought in a state or federal court situated in the County of San Bernardino, State of
California.
19. ATTORNEYS FEES
If the District is the prevailing party in any arbitration, mediation, litigation, court
action, or other proceeding involving a dispute or controversy arising out of, under, in
connection with, or in relation to this Agreement, and any amendments thereto, or the
breach thereof, Consultant shall pay all attorneys fees and costs actually incurred by the
District in connection therewith. In any such action, arbitration, mediation, litigation, or
other proceeding, the entitlement to attorneys fees and costs will be considered an element
of costs and not of damages.
20, NONDISCRIMINATION
Consultants doing business with the District are expected to be equal opportunity
employers who attempt to achieve parity in the representation of women and minorities in
their work force. The Consultant is to ensure equal employment opportunity for all persons,
regardless of race, color, religion, sex, creed, national origin, ancestry, age, medical
condition, physical or mental disability, Vietnam-era veteran or special disabled veteran
status, marital status, or citizenship, within the limits imposed by law. These principles are
to be applied by the Consultant in all employment practices including recruiting, hiring,
transfers, promotions, training, compensation, benefits, layoffs, and terminations. The
Consultant also agrees to comply with Title VII of the Civil Rights Act of 1964, as amended,
the California Fair Employment Practices Act, the Americans with Disabilities Act of 1990,
and other applicable federal and state laws and regulations.
21. REPRODUCTION RIGHTS
Consultant agrees that all rights, title, royalties, copyrights, and interest in all work
tt
which may arise from its performance of services pursuant to this Agreement shall be
~ vested in the District, and, Consultant hereby agrees to relinquish all claims to such rights
in favor of the District. Such work product shall not be revealed, disseminated, or made
available by Consultant to others without the prior written consent of the District.
22. COVENANTS AGAINST CONTINGENT FEES
Consultant agrees that its firm has not employed or retained any person, other than
a bona fide employee of Consultant, to solicit or secure this Agreement, and that
Consultant has not paid any person, other than a bona fide employee, any fee,
commission, percentage, gift, or other consideration contingent upon, or resulting from, the
award of this Agreement.
23. INTEGRATION AND PARTIAL INVALIDITY
This Agreement represents the entire understanding of the District and Consultant
~, as to those matters contained herein. No prior oral or written understanding shall be of any
force or effect. This Agreement may not be modified or altered except in writing signed by
the District and Consultant.
If any term, covenant, condition or provisions of this Agreement is found by a court
of competent jurisdiction to be invalid, void, or unenforceable, the remainder of the
provisions hereof shall remain in full force and effect, and shall in no way be affected,
impaired, or invalidated thereby.
24. EFFECT OF DISTRICT'S WAIVER
Any failure by the District to enforce any provision of this Agreement, or any waiver
thereof by the District, shall not constitute a waiver of its right to enforce subsequent
violations of the same or any other terms or conditions herein.
V
25. NOTICE
Any notice required to be given or delivered by this Agreement shall be in writing
and delivered personally or mailed to such party by depositing the same in any United
States Post Office, registered or certified, postage prepaid, addressed to:
District:
East Valley Water District
1155 Del Rosa Avenue
P.O. Box 3427
San Bernardino, CA 92413
Attn: General Manager
Consultant:
Gary W. Miller Architect & Associates
350 W. 5th Street
San Bernardino, CA 92410
Attn: Gary W. Miller
and shall be effective upon receipt thereof.
26. AUTHORITY
The individuals executing this Agreement represent and warrant that they have the
legal capacity and authority to do so on behalf of their respective legal entities.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date written above.
CONSULTANT
By:
Gary W. Miller
DISTRICT
By:
Robert E. Martin, General Manager
East Valley Water District
.EXHIBIT A
SCOPE OF WORK
EXHIBIT B
PAYMENT SCHEDULE
EXHIBIT C
ACTIVITY SCHEDULE
EAST VALLEY WATER DISTRICT
HEADQUARTERS FACILITY
SCOPE OF WORK
Exhibit A
Project Description:
General -
The purpose of the project is to meet the near term and plan for the long term
physical facility needs of the District. It is estimated that the department will grow
an additional 30 to 40% of its present staffing level. The facility will include a
headquarters building to house office and public functions such as
administration, management, public board meetings, customer service, finance,
building, engineering services and systems planning. Operations and
maintenance facilities are expected to accommodate field personnel, parts and
equipment storage, parts, repair and maintenance equipment.
The consultant shall also consider means to provide natural light to the interior
offices, ways to maximize energy efficiency, safety, public relation opportunities,
screening equipment yard from public view and the need to gain public support
for this project at this location.
Headquarters Building -
The headquarters building must include space for the following departments and
rooms: Customer Service and Finance, Engineering Services, Production
Department, Administration, Field Services, Computer/Data Processing, Library
Archiving, Document Processing/Duplicating, File Storage, Conference Rooms,
Lunch Rooms and Public Areas.
Customer Service and Finance shall include space for a receptionist, customer
waiting, a customer service counter with appropriate security provisions, mail
processing area with sufficient data and power to accommodate equipment,
secure vault and/or safe for cash handling and storage, offices and workstations
as will be identified during the project information phase of the work.
Engineering Services shall include a reception area with space for a receptionist
and customer waiting, a customer service counter with sufficient counter space
for laying out plans, offices and work stations as required, services for future
GIS/CAD work stations, fire-safe storage area for drawing archives, facilities for
design and drafting.
The Production Department shall include a Lab Facility for testing water quality, a
SCADA system room, and offices and workstations as required.
Administration shall include reception and waiting areas, offices and workstations
as required for administrative staff, human resources personnel, and public
relations staff.
Field Services shall include offices and workstations as determined by the
information gathered during the Project Information Phase of the work.
Computer/Data Processing shall include space for the server, appropriate
services and environment for equipment, data processing room, test bench/work
area, equipment storage and workstations as required.
Library/Archiving shall include adequate space and storage systems to store and
access District records.
Document Processing/Duplicating shall include space to accommodate existing
and anticipated equipment, counters, storage as necessary and sufficient power
and data for the identified need.
File storage shall accommodate District files in an organized and accessible
manner.
Conference Rooms shall accommodate the number of people identified during
the project information phase and provide the communication technology
necessary for the room to function in the manner identified by the District.
The Public Area shall include a Board Room with seating for fifty people and
provisions for built-in multi-media equipment, Closed Session
Chambers/Conference room adjacent to the Board Room with seating for fifteen
people and communication equipment as needed, public restrooms sufficient to
meet the needs of the public area, an entrance and reception area clearly
identified as the building entrance. This reception area shall have controlled
access to other parts of the building. Courtyards and/or atriums shall be
considered and included where appropriate.
Shop/Yard Facilities
The Shop/Yard Facilities shall accommodate yard activities and space
requirements that include but are not limited to the following:
Vehicle and Equipment area shall include covered storage and parking,
maintenance and repair garage, remote area fueling, and parts storage. The
parts storage area shall include secured storage areas.
Water Meter Shop shall include workstations as required, maintenance and
repair area with appropriate benches, storage, power and meter-testing area.
Pipeline and Appurtenances area shall include construction staging and build-up
area, and a Welding shop.
The Warehouse shall include workstations as required, interior storage, exterior
storage and loading dock.
Additional space and area needs include interior meeting and training facility,
showers and lockers, and secure employee parking.
Description of Services:
Project Management - Consultant will provide overall project management for
the District including but not limited to: Preparation of overall project schedule,
design process coordination and quality control, meeting scheduling, preparation
of agendas for design team meetings, maintenance and distribution of
communications to team members, assembling and organizing the product from
the various team members, maintaining the project schedule.
Project Information - Through a process using questionnaires and interviews
with department heads identify key room proximities, important workflow
considerations and operational information. Develop preliminary space
relationship diagrams. Coordinate site research including but not limited to:
Preliminary Soil Investigation, Topographic and Boundary Surveys. Obtain City
of Highland information necessary to process a Conditional Use Permit.
Conceptual Design - Using the information developed in the Project Information
Phase develop conceptual site and floor plans. Upon approval of conceptual site
and floor plans develop exterior elevation options and submit to District for
consideration. Using the information provided by the Board refine the exterior
elevations and produce a final exterior view of all sides of all buildings.
Conceptual Design Report - Summarize the design team's findings in a report.
Report shall include a summary of primary design criteria. Design criteria shall
cover each design discipline and include a preliminary cost estimate
Meetings - Organize and attend with appropriate staff all meetings necessary to
process the work. In addition to staff level meetings include at least 4 meetings
with the Board of Directors or a Committee of the Board.
Reimbursable expenses Except for mileage consultant's expenses for
document reproduction, photographs, and similar expenses shall be reimbursed
in accordance with the attached schedule.
Compensation for additional services, if requested, will be negotiated at the time
of the request.
4
~VEAST VALLEY WATER DISTRIC'~,,v
HEADQUARTERS FACILITY
PAYMENT SCHEDULE
EXHIBIT B
Fees based on phases of work:
Project information phase: $8,875.00
Boundary & Topographic Survey 6,000.00
Conceptual Design and Conceptual Design Report 22,125.00
Value Engineering 16,100.00
Conditional Use Processing 14,000.00
TOTAL FEE $67,100.00
Payments for Basic services shall be made monthly and shall be in proportion to
services performed within each phase of service as describe under scope of
services (exhibit A).
Reimbursable expenses - All local (within a 60 mile radius) mileage and all
phone calls are included in the cost of basic services. Consultant's expenses for
document reproduction, photographs, and similar expenses shall be reimbursed
in accordance with the fee schedule listed below.
Compensation for additional services, if requested, may compensated on an
houdy basis in accordance with the fee schedule listed below or a fixed fee may
be negotiated at the time of the request.
PROFESSIONAL A~_.~ TECHNICAL STAFF:
Senior Principal $125.00/hour
Court/Arbitration Appearance $120.00/hour
Deposition $180/hour
Principal $100.00
Associate $85.00/hour
Senior Project Manager $70.00/hour
Project Manager $65.00/hour
Staff Architect $60.00/hour
Contract Administrator $54.00/hour
Senior Technician $55.00/hour
Intermediate Technician $45.00
Junior Technician $35.00/hour
Administrative Assistant $45.00/hour
Secretarial/Clerical/Intern $25.00/hour
Archive Retrieval Fee $40.00
Overtime for hourly personnel will be charge at the base rate of 1.5 per hour for
time in excess of 8 hours per weekday or for work on Saturdays, Sundays and
holidays.
EXPENSES:
1. Out of pocket expenses, (i.e. photo copies, film development, shipping,
blueprints): cost plus 15%.
2. Reproduction done In-house:
Blueprints: $.17 per square foot
Sepias: $.50 per square foot
Mylars: $.84 per square print
Plotter Costs: 24 x 36 $39.00/each
30 x 42 $47.00/each
PhotoCopies: $.15 per 8-1/2"x11" or
1/2"xi4" page.
3. Mileage: $.40 per mile.
4. For work which requires overnight lodging, a per diem charge will be made
appropriate to the area, based on actual costs.
INVOICING
Invoices will be issued monthly and are payable within 30 days, unless otherwise
agreed. Interest of 1-1/2% per month, but not exceeding the maximum rate
allowed by law, will be payable on any amounts not paid within 30 days.
Payment thereafter to be applied first to accrued interest and then to the principal
unpaid amount. Attorney's fees or other costs incurred in collecting any
delinquent amount shall be paid by the prevailing party.
EAST VALLEY WATER DISTRICT
HEADQUARTERS FACILITY
ACTIVITY SCHEDULE
EXHIBIT C
Notice to Proceed February 21,2002
Project Information Phase-
Distribute questionnaires March 4
Solicit Soil Report proposals March 4
Collect questionnaires March 8
Collect soil report proposals March 11
Assimilate data and report findings March 18
Present findings and proposals to District March 19
District Feedback March 25
Refine findings & make final report March 29
Conceptual Design Phase-
Conceptual Site and Floor Plans options submitted to District April 15
District Feedback April 18
Refined site and floor plan concepts submitted to District April 24
District Feedback April 25
Exterior elevation concepts May 2
District Feedback May 6
Revised elevation concepts May 9
Final Design Report May 16
Board approval of plans and elevations May 22
Conditional Use Permit Phase -
Submit applications and required drawings May 27
Complete Planning Process September 3
East Water District
MEMORANDUM
To: Robert E. Martin, General Manager
From: Brian Tompkins, Chief Financial Officer ~
Justine Hendricksen, Customer Service Supervisor,/(/¢¢'
Jim Browning, Regulatory Affairs Coordinator'~
Subject: New Utility Billing System
Date: February 20, 2002
It has been nearly two (2) years since we were informed of the September
2002 scheduled termination of support for our existing utility billing system and
the almost simultaneous declaration of "end-of-life" for the Hewlett Packard
mainframe computer that the program is operated on. Although disappointed by
the pending death of our current utility billing process, we were excited by the
aspect of breathing new life into a legacy system that technology had left behind.
The next few months were spent analyzing our needs, talking to sister
agencies, reviewing computer hardware specifications and researching software
vendors who tailored their applications to organizations of our size. By August
200t, an initial list.had been complied, consisting of eighteen (18) software
vendors that offered a utility billing system that, on the surface, could provide the
features we desired. Each of these vendors were queried using our broad-base
major issues list that included computer hardware platform, customer base,
application cost, company strength and market share, program and database
development tools, feature set and application flexibility. Using these criteria, we
narrowed the possible vendors to a long-list of seven (7) and began our in-depth
research.
We requested that each of the seven (7) vendors do either an in-person or
web-based demonstration of their applications, strengths, and features. After
reviewing the information gathered from the observations made during those
presentations, we narrowed the list to three (3) prospective vendors. A thorough
review and analysis was completed for each of the three (3) short-list vendors.
Using this data we were able to narrow our selection list down to two (2):
IMSofTech, Inc. and Harris Computer Systems.
MEMORANDUM
February 20, 2002
Page Two
Comparison of the two vendors' features to our key capability list, made
Harris Computer Systems our pdmary selection. Subsequently, Harris Computer
was requested to do another in-house demonstration of their products to give us
the opportunity to ask any unanswered questions about their systems ability to
meet our requirements. After the five-hour demonstration session, we were
convinced that the Harris Computer Systems applications would best meet our
utility billing, finance and customer service needs, as well as add technological
features that our customers frequently ask about, but which we cannot provide
with our current system.
Harris Computer Systems is a long established software company whose
products focus on utilities that have 5,000 to 100,000 customers. They have
been in the software industry since 1983 and have a customer base of over 200
installed sites. Although in the market place since its inception in 1983, a
Microsoft Windows version of their applications was not released until 1995.
Since then, they have continued to enhance and develop their system into one of
the industry's leading utility billing software packages with features not offered by
other vendors. This leading edge technology will integrate into our existing
network infrastructure and bring our utility billing system into the future.
The attached Utility Billing Software Comparison details the cost
information and the key capabilities that were compiled during our research. Also
attached is a copy of the proposal with a categorical breakdown of the costs.
Although the Application Software, Database Software Licenses, eCare
Software, and Cognos Report Writer categories are an exact price, the other
items are not the actual cost, but a best-estimate projection of the expected
expenses related to the installation, based on Hards' experience. Items in these
categories will be billed on a time and material basis. Since not all agencies have
the advantage of in-house technical expertise, we expect the costs in the
Services and Conversion categories to be less than detailed in the proposal. If
approved, we anticipate signing the Agreement by March 1, 2002, and
completing the project by going live on the new system July 1, 2002.
attached as noted
BT:mw
Harris Computer S~s5ems 919-8U1-8~92 P'~
~ Harris Computer Systems "'"
5.2 Investment Summary
East Valley Water District, CA .
February 1.5, 2002
Valid for 3~
Application Software
General Ledger. 0
Budget Preparation. 0
Budget ValMatien 0
Accounts Payable 0
Bank Recormiliation 0
Purchasing 0
Inve~ory 0
Worl( Ordem 0
Fixed Asse~
Busir~ss License 0
Payroll, 0
Miscellaneous A/P, 1
Chart o[Accoants. Inc.
Cas~ Rece~IXs {nc.
Bank Drafts. inc.
Hand Held Interlace 1
Total. Herds. Software $103,000
Database: Sui';.wam U cerises $10,5~0
l$.Orade Users
eCare Software - intemetaccess $ ~,oo0
Software Dtscount.-AWWAMember ($5o,0o0)
Modifications
Modifications billed at $~,50~'.per ~ay, if
necessary-or needed at. users request
C.,~lnOS Rep~r~W-riter
Includes 2 users, 3: admln training days & Data D{ctiona~' $ '11',540
$ 11,540
Cons~J~ng Days:@ $$;250 per day .~.o ~-~ '~J 49 $ 61,250 ....
Estimated, MIled'asincarred ~5 $ 61,250
Conversion
Bill:print genetic, forms & Hand Held Interface 12 $ 18,000
Cenve~on billed at $:1,500 per day, estimate 19 days 19 $ 28,500
~ilfty Billing .Mastefl]le common fields
$ 48,500
Hardware Install'
Minlmum.l.day. required at $1.,500 per day I $: 1,500
$ %500
H~r~s Compu~e~ S~s~ems 919-881-849~ p.3
Equipment
S~nner and Cash Drawer) $ 3,000
To~I So.am & Se~ices $207,290
So.are Maintenance
and annua~lythe~afler. Bill~ separately. To~I Main~nance $ 16,~00
NOTES:
~. ~~~~m~rofuse~ is increa~.
2, All ~avel e~n~s a~ the res~nsi~lity of th~Cu~omer.
4. Ha~s will no(take res~nsibHity for any thi~ pa~y ~a~wam pr~u~s.
LO~"L AGENCY FORMATION COMMIS~,JI*ON ·
175 West Fifth Street, Second Floor
San Bernard[ne, CA 92415-0490 · (909) 387-5866 · FAX (909) 387-5871
E-MA[L: lafco @ [afco.sbcounty.gov
www.sbclafco.org ....
Established by the Sta~e of Callfornia ~o serve th~ Citizens, Cities, ~pecial Districts and the County of San Bernard~no
DATE: February 13, 2002
TO: Presidents of the Boards of Directors of the
COMM~SS~0NERS Independent Special Districts in San Bernardino
c~ M,mbef County
JUN MIKEL$
~o,s~,.~o~ SUBJECT: Meeting of the Special Districts Selection Committee
RICHARD P. PEARSON, Chair
Pu~C Member
SILL POSTMUS
8~ardo,$upe~'isors Notice is hereby given that a meeting of the Special Districts
OUvER P. RO~m Selection Committee--composed of the Presidents of all
~s~L0 w. s~,m. w c,,~, independent special districts--will meet:
DI~NEWILUAMS Thursday, April 4, 2002, at 1:30 p.m.
LAFCO Hearing Chambers
175 W. Fifth Street, Second Floor
ALTERNATES
San Bernardino
S^V,OR. ~SSaU~. The purpose of this meeting will be to make selections for the
c~.,.~., Special Districts' voting member a_nd alternate voting member
~,,~o,s~.~ positions on the Commission. These positions are currently held
^.R.-rON~'S~^,O by Mr. Oliver Roemer (voting member) and Mr. Robert Colven
~'~'~b" (alternate voting member), whose terms of office are scheduled to
expire On May 6, 2002.
STAFF
a~as., nooo* Please note the following important points related to the selection
~,u~es ROmNOS-U~O~^LO process:
~s~c,~su, 1. There are currently 54 independent special districts in San
Bernardino County, so representatives from 28 districts
EAFCOSe:m,~ (50%q-1) will need to attend this meeting to establish a quorum.
LEGAL COUNSEL 2. The individuals selected will serve a four-year term of office,
c~R~..^~so, expiring on the first Monday in May, 2006.
3. Only Board Presidents or a duly appointed Board member may
vote. District staff cannot be designated to vote.
4. It would be very helpful if you would send us a short note to
provide the name of your voting delegate prior to the meeting.
~.~ ~,
Selection Committee
February 13, 2002
5. LAFCO Legal Counsel has advised that the vote must be by open ballot.
Votes will be cast by a voice vote in a roll-call of the districts.
6. Official nominations must be made from the floor; however, persons
who expect to be nominated maysubmit a resume and/or letter of
interest to our office by March 15, 2002. We will provide copies of the
material received in a "meeting reminder" notice that we will mail on
March 18t~. Please note that the submission of application papers
DOES NOT constitute an actual nomination. This is merely an
opportunity to provide a copy of your application to all of the districis
for their consideration prior to the meeting.
7. A long-standing policy of the selection committee is to encourage
balanced geographic representation, with valley,' desert, and mountain
districts seated on the Commission as voting or alternate members.
The positions under consideration are now represented by the valley
and mountain areas, and the incumbents are eligible for re-
appointment if they are nominated.
8. Many of the district members drive long distances to attend the
selection committee meetings, making it very frustrating if a quorum is
not present. Please mark your calendars for this meeting, designate an
alternate board member if you cannot attend, and encourage your
neighboring districts to participate.
Please let me know if you have any questions concerning this selection
process.
Sincerely,
Executive Officer
2
RELEASES OF LIEN
FEBRUARY 5, 2002 - FEBRUARY 14, 2002
ACCOUNT RELEASE OWNERS PROPERTY AMOUNT
NUMBER DATE NAME ADDRESS OWED
I. 004-0114-4 02/'14/02 65.97
2. 004-0114-5 02/14/02 52.17
3. 044-0135-3 02/14/02 78.85
4. 084-0627-5 02/14/02 102.71
5. 161-0118~2 02114/02 186.55
TOTAL $ 486.25
+PAID THROUGH TAX ROLLS
Page 1 of 1
~ .........
office memorandum
From: Fred Stafford
Date: January 29, 2002
Cc: Paul Dotter, Alberta Hess, Ron Buchwald, Gary Young
In response to the attached letter from the Department Of
Health Services dated December 24, 200'1, I requested that Gary
Young submit a proposed sampling schedule to achieve compliance.
Gary' created an annual and monthly schedule, which we submitted
to Oliver Pacifico for review. With only a few minor changes Oliver
approved our plan which is included in this memo.
FS/Ih
SE-'~VICES
DEPARTMENT OF HEALTH
SOUTHERN CALIFORNIA BRANCH
DRINKING WATER FIELD OPERATIONS
VERNMENT CENTER
~ WEST 4TH STREET, SUITE 437
SAN BERNARDINO, CA 92401
GEN (909) 383-4328
FAX (909)383-4745
December 24, 2001
Robert Martin
General Manager
East Valley Water District
P.O, Box 3427
San Bemardino, CA 92413
Subject: Source Water Quatity Monitoring Frequency for Compliance Cycle
Beginning January 1, 2002 (System No, 3610064)
Dear Mr. Martin:
The current nine-year water quality monitoring compliance cycle began on
January 1, 1993, and will be ending on December 31,2001. In August 1993, you
were advised of your source water monitoring frequencies for the current cycle.
This letter is to advise you of your source water quality monitoring frequency for
the next nine-year compliance cycle beginning January 1, 2002. Please find the
enclosed Minimum Water Quality Monitoring Frequency table for the existing
sources supplying your water system. The monitoring frequenci6s indicated
in the table do not apply to sources exceeding an MCL, or those sources
subject to additional monitoring as required by the Department due to
detected contaminants at levels of concern. Periodic monitoring for
bacteriological quality of sources and the water in the distribution system
is not included in this letter, but is required.
The enclosed tables indicate the vulnerability of your groundwater and surface
water sources, except for vulnerability to MTBE. Vulnerability to MTBE has been
previously determined for each of your sources in our letter dated August 6,
2001. The vulnerability classification for your sources may be modified following
completion of your Drinking Water Source Assessment Program documents.
Monitoring frequencies for General Mineral, General Physical, inorganic
Chemicals, and Radiological Chemicals will remain the same as in the current
nine-year cycle (1993-2001). Monitoring for these contaminant groups will
continue to be due at the appropriate frequency from their last sampling
dates.
For Volatile Organic Chemicals (VOCs) monitoring will be due three years from
their last sampling date for groundwater sources. If the date of your last VOC
monitoring is more than three years ago, then VOC monitoring must be
')'{__)~Z'~, ,. Do your part to help Catifornia save energy. To learn more about saving energy, visit the following web site:
.~0~ www.consumerenergycenter.org/flex/index.html
2002 Compliance C' '~. Monitoring Frequencies
December 24, 2001'"' v
Page 2
completed in 2002. For surface water sources, VOC monitoring will continue to
be required annually.
The enclosed table does not give your sources' vulnerability to MTBE as
indicated in our letter dated August 6, 2001. Please follow the guidance in the
MTBE letter to complete the initial MTBE monitoring requirements. Once the
initial monitoring requirements are complete, a waiver for MTBE monitoring for a
three-year period may be applied for those sources designated as "non-
vulnerable" to MTBE. The enclosed table gives the monitoring frequency for
MTBE upon completion of the initial MTBE monitoring requirements.
During the previous compliance cycle, waivers were granted for Synthetic
Organic Chemical (SEC) monitoring following the initial monitoring period. With
the upcoming compliance cycle beginning January 1, 2002, these waivers will
have expired. Monitoring for SOCs may be necessary within three years of
either the last sec monitoring date, or the expiration date of your last sec
monitoring waiver.
You may apply for a waiver from sec monitoring for a three-year period if all
sample results from previous monitoring were non-detect. If you have conducted
sec monitoring for your sources since January 1, 1999, you may apply for a
waiver from monitoring during the first compliance period if all results were non-
detect. The period of the waiver shall be limited to three years, and may be
renewable. Please note that waivers will not be given for monitoring of DBCP,
EDB, and simazine, and monitoring for these three constituents will be required
every three years.
In order to reduce the amount of SeC monitoring required during the next three
years, the Department will allow you to sample from representative sources of
your supply, The sources designated as representative sources must draw from
the same groundwater basin as the sources they represent. Representative
sampling must be conducted from a minimum of ten percent of your sources, or
least one source within each groundwater basin, whichever provides the greater
number of samples. Please submit a plan for review and approval of the
sources designated as "representative" before SOO monitoring is
conducted. The plan must include a schedule for rotation of sampling among
the sources represented. Representative sampling according to this plan will
only be allowed for sec monitoring.
The monitoring schedule does not indicate monitoring frequencies for the nine
unregulated (UCMR) chemicals. Please refer to our letter dated February 15,
2001, for information on UCMR chemical monitoring requirements.
This monitoring schedule does not supercede any increased monitorinq
frequency required by the Department due to a detection of a contaminant.
This monitorinq schedule also does not apply to new sources. New
2002 Compliance C 'e Monitorir~g Frequencies
December 24, 2001~''~ ~
Page 3
sources must complete the initial monitorin.q requirements before this
monitorln.q schedule will apply to those sources. Please contact the
Department for the additional monitoring requirements when a contaminant has
been detected, er for the initial water quality monitoring requirements for new
sources.
It is your responsibility to review past water quality data and determine when the'
next sample is due for these constituents, using the frequencies provided in the
attached table. Your water quality monitoring plan should be updated to reflect
the monitoring frequencies outlined in the attached table. Please submit a copy
of the revised water quality monitoring plan when completed.
If you have questions regarding this letter, or attached monitoring table, please
contact Oliver Pacifico at (909) 383-5468.
Baliga, Ph.D., P.E.
Senior S{ tnitary Engineer
EncloSure(s)
E ~m~
z ~'~
Sampling Schedule 2002
MTBE -Oround Water:
Each well shall be sampled once in 2002 - then once every three years.
Sample June of 2002.
UCMR - Ground Water:
Each well shall be sampled two times in 2002 - once each in May and
November.
UCMR - Surface Water:
EaCh surface water source (SAR & SWP) shall be sampled quarterly in 2002 -
February, May, August and November.
Nitrate - Ground Water:
Well 9A, 11-A, 24A, 24B, 27, 39, 41,120, 125, 132-2, 132-3, 132-4, 141 and 147
shall be sampled once in 2002 - June.
Nitrate - 0round Water:
Well 12A, 25A, 40A, 132-4, 143 at~d 146 shall be sampled quarterly in 2002 -
January, April, July and October.
Inorganic - Ground Water:
Each well shall be sampled once in 2002 - June.
General Minerals - Ground Water:
Each well shall be sampled once ~n 2002 - June.
Radiologicai - Ground Water:
Well I07 - Plant 107, City Line, 120, 1:~2.4 and 147 shall be sampled quarterly
in 2002 - January, April, July and October.
VOCs -Oround Water:
Each well shatl be sampled once each in 2002 - June, then every three years
thereafter.
SOts - Ground Water:
EaCh well shall be sampled once each in 2002 - June, then every three years
thereafter if non-detec.
General Physical - Ground Water:
Each well shall be sampled once each in 2002 - June, then every three years
thereafter.
THMS/HAA - Distribution System:
I0 pre-chosen sites shall be sampled quarterly in 2002 - January, April, July
and October. See the Water Quality Monitoring Plan for locations.
PgE -Oround Water:
PgE shall be sampled quarterly in 2002 from wells 9A, 40A, 141, January,
April, July and October.
plant 134 (Treatment Plant)
Inorganics - (SWP & SAR)
Each source shall be sampled once each in 2002 - September.
oeneral Min. - SWP & SAR: (Influent)
Each source shall be sampled once each in 2002 - September.
general Min. - SWP & SAR: (EfflL~ent)
Each source shall be sampled once each in 2O02 depending on which source
of water ls being used (SAR or SWP) september.
Nitrate - SWP & SAR: (Influent)
Each source shall be sampled once each In 2002 - September.
vocs - Reg. - SWP & SAR: (Influent)
Each source shall be sampled once each in 2002 - September.
sogs - Reg. - SWP & SAR: (Influenb
Each source shall be sampled once each in 2002 - september.
MTBE - SAR & SWP:
Each source shall be sampled once each in 2002 - June.
Radiological - SWP & SAR:
Each source shall be sampled two times in 2002 which will complete the
four consecutive quarters required - ~r~ quarter, January, 4TM quarter, May.
General Physical - SAR & SWP - (Source)
V
Plant 147:
UCMR - Well 147:
Well 147 has been sampled once - 7/50/01 leaving one more round of
sampling to complete requirements - February.
MTBE - Well 147:
Well 147 should be sampled 4 consecutive quarters for MTBE. On 9/25/01,
the first quarter was collected. Three quarters remain - January, April and
July.
VOCS - Well 147:
Well 147 shall be sampled 4 consecutive quarters. Quarter #1-sample date
7/30/01, quarter #2-sample date 11/:~0/01, quarters 3&4 remain February and
May.
LO~AL AGENCY FORMATION coMM'~VSION
COUNTY OF SAN BERNARDINO.
175 West Fifth Street, Second Floor
San Bernardino, CA 92415-0490 · (909) 387-5866 · FAX (909} 387-5871
E-MAIL: lafco @ lafco.sbcounty.gov
www.sbclafco.org
DATE: FEBRUARY 1, 2002
FROM: JAMES M. ROD rive Officer · c ~ ,~ ~.
TO: CITY MANAGERS
DISTRICT GENERAL MANAGERS
DIRECTOR, COUNTY SPECIAL DISTRICTS DEPARTMENT
SUBJECT: SERVICE REVIEWS/SPHERE OF INFLUENCE STUDIES
Government Code Section 56425 now requires the Commission to
conduct sphere of influence studies every five years for each city and
special district in the county. In addition, Government Code Section
56430 requires the Commission to conduct "service reviews" in advance
of or in conjunction with sphere of influence studies.
Attached for your consideration is a copy of draft policies and procedures
for the conduct of service reviews. These policies and procedures will be
considered by the Local Agency Formation Commission at its regular
hearing scheduled for February 20, 2002, beginning at 9:00 a.m., in our
hearing chambers located at the above address.
Please review the proposed policies and procedures and forward any
comments or suggestions to our office, or plan to attend our heating to
address the Commission on this topic.
Thank you very much for your consideration of this issue.
JMR/
Attachment
LO{.,. ,L AGENCY FORMATION COMMIb,~ION
COUNTY OF SAN BERNARDINO
175 West Fifth Street, Second Floor
San Bernardino, CA 92415-0490 · (909) 387-5866 · FAX (909) 387-5871
E-MAIL: lafco @ lafco.sbcounty.gov
www,sbclafco.org
DATE: JANUARY 7, 2002
FHOM: JAMES M. RODD~Secutive Officer
TO: LOCAL AGENCY FORMATION COMMISSION
SUBJECT: Agenda Item #7: Consideration of Draft Policies and Procedures
for the Conduct of Service Reviews
BACKGROUND INFORMATION:
Over the past year, this Commission, and all LAFCO's throu§hout the
state have debated the implementation of AB 2838 and its requirements
for preparation of "service reviews in conjunction with periodic sphere of
influence studies." Most Commissions have been awaiting completion of
Service Review Guidelines which were required by the new law to be
prepared by the Governor's Office of Planning and Research and to be
completed by July 1, 2001.
Although the Guidelines will be advisory in nature, staff felt it would be
helpful to learn how OPR staff and consultants thought the service
reviews should be implemented prior to undertaking the large task of
scheduling the reviews and sphere of influence studies. The problem is
that the Commission is required to conduct the reviews in conjunction
with sphere studies, and sphere studies must be completed for all
agencies within five years, and the statutory clock, while it is directory
rather than mandatory~ is ticking.
OPR's Guidelines are now six months overdue, and staff is concerned
that much more of a delay will jeopardize the Commission's ability to
complete its sphere studies on time. Unfortunately, OPR is still working
on the Guidelines, and at this time, there is no clear estimate as to when
they might be finally completed.
Accordingly, staff believes that it is time for the Commission to come to
grips with details and policies and'procedures to be used in the conduct
of service/sphere reviews. Provided below is a "refresher" on the
Service Review Draft Policies
January 7, 2002
provisions of Government Code Section 56430, which requires service
reviews, followed by a series of draft policies and procedures which might
be adopted by the Commission at the January 16th hearing or at some
qther hearing in the near future.
THE LAW:
The Commission is now required by Government Code Section 56430 to
conduct ~service reviews" throughout the County. This is an extremely
important new requirement for the Commission, and the new section of
law is provided below for review:
$6430. {a) In order to prepare and to update spheres of influence in
accordance with section 56425, the commission shall conduct a service
review of the municipal services provided in the county or other
appropriate area designated by the commission. The commission shall
include in the area designated for service review the county, the region, the
sub-region, or such other geographic area as is appropriate for an analysis
of the service or services to be reviewed, and shall prepare a written
statement of its determinations with respect to each of the following:
1. infrastructure needs or deficiencies;
2. growth and population projeaions for the affected area;
3. financing constraints and opportunities;
4. cost avoidance opportunities;
5. opportunities for rate restructuring;
6. opportunities for shared facilities;
7. government structure options, including advantages and
disadvantages of consolidation or reorgfmization of service providers;
8. evaluation of management efficiencies; and,
9. local accountability and governance.
{b) In conducting a service review, the commission shall comprehensively
review ali of the agencies that provide the identified service or services
within the designated geographic area.
(c) The commission shall conduct a service review before, or in conjunction
with but no later than the time it is considering an action to establish a
sphere of influence in accordance with section 56425 or section 56426.5 or
to update a sphere of influence pursuant to section 56425.
(d} Not later than July 1, 2001, the Office of Planning and Research, in
consultation with commissions, the California Association of Local Agency
Formation Commissions, and other local governments, shall prepare
2
Service Review Draft Policies
January 7, 2002
guidelines for the service reviews to be conducted by commissions
pursuant to this section.
DRAFT POLICIES:
General Policy Statement:
The Commission recognizes that service reviews can, in many cases, be
an important tool in promoting logical, orderly, and efficient service
patterns for local agencies. The Commission also recognizes that such
reviews, to be meaningful, must be accomplished with the participation
and cooperation of affected local agencies. Finally, the Commission
recognizes that the applicability of specific factors required for such
reviews may substantially vary based on the unique conditions and
circumstances found in San Bernardino County.
Function-by-Function Approach:
In furtherance of the goals of Section 56430, the Commission will
conduct such reviews on a sub-regional basis, using a function-by-
function approach {e.g., water functions, fire functions, etc.), with the
participation of management an.d/or board members responsible for
delivering such services.
Responses to Statutory Findings:
The Commission recognizes that Section 56430 requires written
responses to specific findings in the conduct of service reviews. The
Commission also recognizes, however, that some or all of the 'factors
listed may not be applicable to specific reviews. Based on discussions,
testimony, and appropriate other input from affected agencies and
interested parties, the Commission finds that its statutory obligation for
written findings will be fulfilled by indicating that, "No substantive issues
relative to this factor were identified" when appropriate.
Exemption of Minor Sphere Changes from Service Review Requirement:
The draft OPR Guidelines recommend exemption of"minor sphere
changes" from the requirement for a service review. The Commission
concurs with this recommendation and adopts the following policies
relative to minor sphere changes:
} A minor amendment to the sphere of influence of any agency may be
processed and acted upon by the Commission without a service
review if all the following criteria are met:
3
Service Review Draft Policies
January 7, 2002
1. The requested amendment is less than 3 percent of the acreage of
the subject agency's existing sphere of influence.
2. There are no objections from other agencies that are authorized to
provide the services the subject agency provides and whose sphere
of influence underlies or is adjacent to the subject territory.
~ An amendment to a retail water district sphere of influence may be
processed 'and acted upon by the Commission without a service
review if ali the following are met:
1. The area is currently within the sphere of influence of the
appropriate wholesale purveyor.
2. The request is made by affected landowners or residents in
conjunction with a concurrent annexation.
3. No objection is received from any other agency that provides water
service and whose SOl underlies or is adjacent to the subject
territory.
} Notwithstanding the foregoing, the Commission ~:eserves the
discretion to conducta service review when it deems appropriate,
even though a proposal might meet the criteria for a minor sphere
review.
SERVICE REVIEW PROCEDURES:
Staff reiterates its position that service reviews must be conducted,
whenever possible, through a participative and cooperative approach
with affected agencies. As the Commission begins to undertake its
sphere review/service review responsibilities, it seems to staff that the
first step should be to convene a meeting with managers/board members
of affected agencies.
Through those discussions, specific service review factors can be
· identified for further review, and some review factors might be set aside
as not requiring further study. Where disagreements among agencies or
LAFCO staff might exist as to the applicability of a specific factor, the
matter can be brought back to the Commission for a public hearing and
decision.
It would also be appropriate for the Commission to direct staff to
incorporate its findings related to the service reviews within the staff
4
Service Review Draft Policies
January 7, 2002
report prepared for the required sphere of influence study. This would
streamline the process and provide for a more efficient Commission
hearing schedule. The Commission could then incorporate its sphere of
influence review/service review findings within one resolution of
approval.
CONCLUSION:
Th~ policies and procedures outlined in the report are simply a first draft
based on previous conceptual discussions with Commissioners. In the
staff opinion, they are workable, but there are number of possible policy
options that the Commission may wish to consider.
If the Commission finds that the draft policies are acceptable, it may
adopt them at the January 16th hear/ng and staff can begin the work of
implementing the service review/sphere review program. If the
Commission wishes to consider the matter further and suggest
substantive changes, then this matter should be continued to the
February hearing for further review.
Whatever the Commission decides, it should be noted that it may modify
its policies and procedures at any time in a noticed public hearing, and
staff would recommend that the Commission will want to re-review this
matter after the OPR Guidelines are finally issued.
JMR/
5
NATIONAL WATER RESOURCES ASSOCIATION
Federal Water &minar
APRIL 10-12, 2002 WASHINGTON, D.C.
WATER, ENERGY
AND THE' POST 9/11-
CONGRESS
water,'EnergY'and (he.:po t 9/IT Congress
Th~ Federal Water Seminar is a unique, opportunity :~ irieet the water policy-maker~ of the 107e= Congress and the
Bush Admimstratmn and for NWtLA2s grassroors .membership ko inform them about the concerns and needs of their
smrei region or district. This yeir's Federal Water Seminar ~vil[ provide NWRA members with an oppo~eanity ro
' interact with Members of Congress, key Cong~es~ismai s~affand federal agency representatives on issues ofimportance
to the constituents they serve. '.(Upon request NW~A {~ wi~ assist aitendees, in iz~ranging Congressional visiu on Thursday and Friday
TENTATIVE PROGRAM Noon MUNICIPAL CAUCUS LUNCHEON
'Oubje~ to Change.
~ee NWIM"~ web~ite at nwra. orgfor prograrn anno,encemehtb ' Heat{line Spea~er
' -WEbNEsOAY' APRIL 10 ; 11-6 p.m: . CONGRESSIONAL VISITS
8 am-5 pm Congressional Visits
2-4. p.m.. BOARD OF DIRECTORS
11:30 a:m. State Executives Council Luncheon
4-6 p.m. Federal Affairs Committee
Noon Registration
FRIDAY. APRIL 6
h00 p.m. TASK FORCE MEETINGS 7:00 a.m. Registration
Environmental' (1-3 pm)
Water S~xpply (2-3. pm) 8:00 a.m. HEADLINERBP, EA3~AST
.Sp~a~er The Honorable RIchard Pombo
3:00 p.m. TASK FORCE MEETINGS (R-CA-11) (invited)
Water Qualiiy (3,5 pm) U.S, House of Representatives
Waterpower (4-5:30 pm) Resources Committee
Water and Pioperty RIOts (TBA) . .
'9:15 kin. FEDERAL LEADERSHIP'FORUM
6:00 p.m. CONGRESSIONAL'RECEPTION The Honorable Bennett Raley (~nvited)
~ - Historic Senate Caucus ROom Assistant Administrator for W.a~r.er
. ' . · U.S. Environmental Protection Ag~x~cy'
THURSDAY, APRIL.11 '
:7:00'i.m. Registration ' ' : - ' ' ' i"-' The Honorable Tracy Melian 5'nvited)
. . , , , , Assista. ni'Secretary for Water and'Science
8:00 a:m. . HEADLINER BRF_JUKFAST U.S. Department of the Interior ' · .'
-~slaeaker: The HOnorable Harry Reid {D-NV)
.... (invited) 10:45 a.'m. wESTERN WATER ISSUES FO-R-~JM
Majority Whip .. .. . A panel of water supply professionils will
· United S~:atis Se~ate discuss ongoing and emerging issues of
. ' . . · concern and haterest to water managers.
9:0~ a.m. WATER, ENERGYAND THE 107m
CONGRESS Noon IRRIGATION CAUCUS LUNCHEON
' "' A panel of Congrkssional S~aff members Speaker Gordon Nelson
will discuss their committee's priorities and Reclamation Historian
the legislative issues impacting Western . - Author ofTb. e Lobbyist: The Story Of
water. George H. Maxwell; Irrigation Crusader
10:30 a.m, LOBBYING THE 9/11 CONGRESS 1-6 p.m. CONGRESSIONAL VISITS
. . A ~angl of Washingion's premiere
natural resource lobbyists will discuss 1:30 p.m. COMMISSIONER'S RoUNDTABLE
the issues and how 9/11 has changed The Honorable John Keys III (invited)
Congress and the Administration's focus. Commissioner
U.S. Bureau of Reclamation
3:00 p.m. Adjourn
2002'Federal.Water Seminar Registrati0nF°rm
(IMPORTANT: Fax or, mail completed form to Travel Worldwlde Network,
ATTN: JudiTarpley (770) 420-3800/701 WhiflockAvenue, Suite J45; Marietta, GA 30064) '
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NICKNAME (name on badge to read~. ' "
POSITION
ORGANIZATION
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ADDRESS
CITY/STATE/ZIP
TELEPHONE: ( ) __- FAX: ( )
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Pre-registration (received by 3/20) $400 $500
Afl:er 3/20 or On Site $450 $500
OPTIONAL EVENTS:
No. ofAd&t onal Tmkets·
Municipal Caucus Luncheon $35
Irrigation Caucus Luncheon $40
~.~ Additional Congressi0nid Reception'Ticket(s) $30'
Additional Breakfast Ticket(s) Thursday 4/11 $30 ' ':
Additional Breakfast Ticket(s) Friday <t[2 $30 ' TOTAL $ · · '
METHOD OF PAYMENT (Please'check applicable bo~.) ' ' '' ' ." '- .'"
· Ex/dosed is a ch~ck payable to NWRA (mail to Travel WoddwideNetwo~k~'se~ addms ~bove) ' . ' .
Please charge my (circk one): American Express Disdover -" Mastercaxd Visa
Name (as it appears on card) - Expiration Date:
Acct. # Signature ' ' '
REFUND POLICY: A $100.00 adiniuistratlvl fee will be chaxg~d on all refund rec~uests received fin o~ before April ~} 2b02.
Refunds will be processed thirty (30).days kfter the Seminar. There will be no refundi for cimcellations received April 4, 2002
or after. Refund requests should be sent' to Travel Worldwtde' Network' 'at the above add/ess and fax number.
HOTEL RESERVATIONS: NWRA has reserved a block of moms ar The Washington C~urt Hotel, 525 New Jersey
Avenue, NW, Washington, DC.- To make. your reservations please callThe Washington Court at'l-(800) 321-3010. All
reservatlqm must be made.no latei than March 12, 2002. The room rate per night at the Washir~gton Court is $I83.00
single or double occupancy plus DC tax (14.5%). Check in time is 4 pm; check out time is 12 noon. Once our block is sold
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tions.
~ AIRLINE AND RENTAL CAR RESERVATIONS: Travel Worldwide Network has arranged Zone Fares for the Federal
Water Seminar, which do not require a ~atarday hight'stay. These fares represent a significant savings, but are only available
through Travel Worldwide Network. Call Travel Worldwide Network at 1 (800) 631-9675, Mohday-Friday, 8:30 am-5:00 pm
EST. By using Travel Worldwide Network you can save money and help NWRA earn travel credits for staff busines~ travel, the
cost of which would otherwise be borne by the Asiociation.
Federation®
~ ~ ~ng&E~ng ~m~-~
the Glob~ W~ En~
J~
D~ar Wa{er Quali~ Professional:
The 2002 WEF Washington Briefing, Innovations in Water QuMity, will bring
together top fed~z'al and state officials ~o discuss innovative legislative and regulato~ solutions
to water quali~ challenges. The event begins April 16 at the Hotel Washington in
Washington~ DC and is followed by ~ WEF Gove~ent Affairs Con~R¢~ strate~ session
on April 17 ~d ~F member visits to Capitol ~ill.
Linda Fisher, USEPA Depu~ Administrator and l~ader of ~e Agency's innovation
projects, will kick-offth~ program on ~e 16th With a~ Ovemigw ofnon-~aditionM r~lato~
projects that enoourag~ a pa~ership among gowmment and th~ regulated co--unity.
Following Ms. Fish.r, a panel on ¢~viromemal management systems (EMS) will look at the
federal, state, ~d indust~ rol~ in addressing water qualiw challenges though volunta~,
inoentN~ based, ~nvironm~ntM compliance measures. '
After the EMS panel, four of ~e EPA's otfic~ directors with jurisdiofion over water
qua~W pro.ams will provid~ and ow~iew of the latest re~lato~ challenges facing EPA ~d
what steps th~ Agency will pursue to ad&~ss thes~ chall~ng~s in th~ a¢~ ~. Mike Cook,
Director of the Office of Wastewat~r Management, Geoff Grubbs, Director of the Office of
8ci~nc~ ~d T~c~ology, Mark PoOhs, Director of th~ Of~c~ of Enforcement Complianc~ aad
Assistance, O~fic~ of Re~lato~ Enforcemem, Water Division, and Robert Wayland, Director
cftc Offi¢¢ of Wg~an~, Oceans, and Watersheds will provido th~ updates.
D~ing th~ afternoon of th~ Briefing th~ Honorabl~ Parris N. Glendenlng, Gowmor of
M~l~d, ~d Senator aim $effords (I-VT), chMr of ~¢ S~nat¢ Envirom~nt ~d Public Works
Co~iRe~, haw been ~vit~d to provid~ keynot~ ad~esses on sm~ ~o~ and
ramifioations for water quali~ as well as a federal ow~i¢w of ~nvironmental legislation M
107m Con~ss. Follo~ng the ~o keynote ad&esses, a p~l of staff members ~om ~e
and Sena~ env~om~nt co~ittees will ~souss c~nt l~gislafion to address water
i~as~cNr~ ~nding ~ th~ 107¢h Con~ess and a separat~ panel of staff ~om Capitol Hill, EPA,
and the not for profit co~niw will discuss ~ndMg for water and wastewater security proj cots.
Th~ WasNngton Briefing 2002 is in cooperation with th~ Environmental and Water
Resources Institute of the American Soeie~ of Civil Engineers and promises to be ~
educational ev~m. ~¢ event has b~en sold out the last several years so registers are
encouraged to si~ ~p e~ly. ~ ag~ada for th~ Briefing and regis~ation intonation, including
discounts for rooms at th~ Hotel Washington, is ~n~losed. For ~her info.atica on ~¢
proem contact Jim Sulliv~, ~F Manager of Legislatiw Affairs at 703/684-2436 or
jsullNan~weLor~. For assistance with regis~afion contaot Lisa ScoR at lsooR~wet, org.
601 wv acs cee o Alexandt'ia. \~,223lzi-1994 USA o 1-703-68~-2400 o 1-703-684-2492
' :~ter Environment Federation
Washington Brit. flng 2002: Innovations in Wi t r Quality
Cosponsored by the Environmental and Water Resources Institute of ASCE
April 16~17, 2002
Hotel Washington
515 15th Street NW, Washington, DC
· Registration Form
Advance registration deadline is April $, 2002.
After April 5, participants must register on-site at the Washington Briefing
Cost: $110 (includes lunch)
Name E-mail address
Organization
Address
City ] State Zip
Telephone no. I Fax no.
· Registration Information
Payment must accompany registration forms. (Photocopies of checks are not acceptable).
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Approved U.S. government purchase orders must accompany the registration form. Government
purchase orders are not accepted on~site.
To Register
By Fax (credit card & government purchase orders only) 1-703-684-2471
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By Nail (check, credit card, government purchase order) to: Water Environment Federationt
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(I authorize WEF to charge my credit card for the amount listed above.)
Hotel Information
~' · Special WEF Washington Briefing room rates guaranteed of $198.00 plus tax per night until
t4arch ~.6~ 2002 or until block has sold out.
· To make reservations, contact the Hotel Washington at (800) 424-9540 and reference the WEF
Washington Briefing.
For more/nformat/on, contact L/sa Scott, WEF, (703) 68,¢-2~t00 x77,¢.~, /$cott@wef. org
Water Environment Federation
Washington Briefing 2002: Innovations in Water Quality
In Cooperation with the Environmental and Water Resources Institute of ASCE
April 16-17, 2002
Hotel Washington
515 15th Street NW, Washington, DC
Tuesday, April 16
Washington Room
9:00 a.m. Welcome
*Jim Clark, President, Water Environment Federation
*Bill Bertera, Executive Director, Water Environment Federation
9:15 a3xa. Keynote Address: Regulatorv lnnovations in Water Oualitv
Linda Fisher USEPA Deputy Administrator
9:45 a.m. Environmental Management Systems and Re,eulatory Innovation
Moderator: *Nancy Wheatley, Chair, WEF Government Affairs Conmfittee
James L. Connaughton, Chair, Council on Environmental Quality
*Hank Habicht, CEO, Global Environment and Technology Foundation
Bill Sugar, Environmental Affairs Director, Busch Brewing, Inc.
Gordon Garner, Louisville & Jefferson Metropolitan Sewer District
10:30 a.m. Morning Break
10:45 a.m. Perspectives on Water Ouality Priorities
Moderator: *Sandra Ralston, Chair, WEF Regulatory and Outreach Subcommittee
*Mike Cook, Director, U,S. EPA'Office of Wastewater Management '
Geoffrey Grnbbs, Director; U.S. EPA Office of Science and Technology
Mark Pollins, Acting Director, U.S. EPA Office of Enforcement Compliance and
Assistance, Office of Regulatory Enforcement, Water Division
· *Robert Wayland, Director, U.S. EPA Office of Wetlands, Oceans, and
Watersheds
12:30 p.m. Luncheon Address: Smart Growth and Water Ouality Innovation
Sky View The Honorable Parris N. Glendening, Governor, State of Maryland
Room Introduction: Steve Wordelman, V/ce-Chair WEF Government Affairs Committee
2:00 p.m. The 107th Con~ress and Water (gualitv Innovation
Washington Keynote Address: Senator Jim Jeffords (][-VT), Chair Environment & Public Works
Room Committee
~'~ Water Environment Federation
Washington Briefing 2002: Innovations in Water Quality
Cosponsored by the Environmental and Water Resources Institute of ASCE
April 16-17, 2002
Hotel Washington
515 15th Street NW, Washington, DC
2:30 p.m. Setting Legislative Prioritie's: Water lnfrastructure Funding In 107th Congress
Moderator: *Paul Demit, Vice-Chair, WEF Legislat/ve and Outreach Committee
Gabrielle Batkin, Professional Staff Member, Senate VA, HUD, and Independent
Agencies Appropriations Subcommittee
Cathafine Ransom, Professional Staff Member, Senate Enviromnent and Public Works
Cormnittee, Majority Staff
Michelle Nellenbach, Professional Staff Member, Senate Environment and Public Works
Committee, Minority Staff
Susan Bodine, Senior Counsel, House Water Resources and Environment
Subcommittee, Majority Staff
Ken Kopocis, Staff Director/Senior Counsel, House Water Resources and Environment
Subcommittee, Minority Staff
3:30 Innovative Financing for Water Security and Asset Management
Moderator: *Ed Wagner, Chair, WEF Legislative and Outreach Committee
Janet Pawlukiewicz, Water Security Project Director, USEPA
Robert Perciasepe, IT Corporation
Steve Albee, Water Infrastructure Gap Analysis Project Director, USEPA
Bill Bertera, Executive Director, WEF
4:30 p.m. ADJOURN
* Denotes Confirmed Speaker
Wednesday, April 17
Washington Room
8:00 a.m. WEF Government Affairs Committee Strategy Session (guests welcome)
10:00 a.m. Preparations/'or Capitol Hill Visits
11:00 a.m. CapitolHillvisits
Briefing attendees are encouraged to make appointments with their elected
officials in Washington, DC. Contact Jim Sullivan for assistance at 703/684-2436.
United States General Accounting Office
GAO Report to Congressional Committees
~ ~.oo~ DRINKING WATER
Revisions to EPA's
Cost Analysis for the
Radon Rule Would
Improve Its Credibility
and Usefulness
GAO
Accountability * Integrity * Reliability
GAO-02-333
Contents
Letter 1
Results in Brief 3
Background 4
EPA's Cost Analysis Has a Number of Strengths 9
Lir~tations of EPA's Cost Analysis Reduce Its Credibility and
Usefulness 15
Conclusions 27
Recommendations for Executive Action 28
Agency Comments 28
Scope and Methodology 29
Appendix I Adjustments to EPA's Best Estimates of Total
National Costs to Address Limitations in EPA's
Economic Analysis 31
Appendix II GAO Contact and Staff Acknowledgments 32
Page i GAO-02-333 Drinking Water
A 0
United States General Accounting Ol~ce
Washington, DC 20548
February 22, 2002
The Honorable James T. Walsh
Chairman
The Honorable Alan B. Mollohan
Ranldng Minority Member
Subcommittee on VA, HUD, and Independent Agencies
Committee on Appropriations
House of Representatives
The Honorable Barbara A. Mikulski
Chairman
The Honorable Christopher S. Bond
Ranking Minority Member
Subcommittee onVA, ~, and Independent Agencies
Committee on Appropriations
United States Senate
The National Academy of Sciences has estimated that about 20,000 lung
cancer deaths occur in the United States each year from exposures to
radon, a naturally occurring radioactive gas found in soil, rock formations,
and water. The vast majority of these deaths result from the inhalation of
radon that has been released to indoor air from soil beneath homes.
However, about 160 of these deaths are estimated to stem from inhalation
of radon that has evaporated from drinking water. The Safe Drinking
Water Act, as amended, mandates that the Environmental Protection
Agency (EPA) issue a regulation setting a drinking water standard for
radon. In setting the standard, EPA must, among other things, consider the
costs and benefits of control programs for radon from other sources, such
as air. While EPA does not directly regulate radon in indoor air,' the Safe
Drinking Water Act authorizes EPA to set a drinking water standard that
allows states and water systems to offset high radon levels in drinking
water with reductions of radon levels in indoor air.
In a proposed rule issued in November 1999, EPA presented a unique and
complex drinking water regulation that used the framework for regulating
radon specified in the Safe Drinking Water Act. Under the proposed radon
~Accordmg to EPA, the agency does not have the statutory authority to directly regulate
radon in indoor air.
Page 1 GAO~02~33 EPA's Proposed Rule on Radon
rule, states and water systems could, for the first time, choose one of two
different standards, or limits, for a drinking water contaminant. The first
standard reflects the typical regulatory approach under the Safe Drinking
Water Act--that is, it imposes a health-based lLmit on the level of radon in
drinldng water and requires water systems to provide drinking water that
does not exceed the limit. The second standard, called the alternative
standard, allows considerably higher levels of radon in drinldng water, but
may be used only when an EPA-approved program to reduce radon in
indoor air is also implemented. The alternative standard allows kigher
levels of radon in drinking water because the associated health risks are
offset by reduced exposure to radon in indoor air. EPA believes that the
most cost-effective approach to reducing the health risks associated with
radon in water is to use the alternative standard, along with a program to
reduce radon levels in indoor air.
EPA estimated that the benefits of its proposed nde-consisting almost
entirely of reduced cancer deaths--would be worth $362 million annually.
EPA estimated that the annual cost of implementing the nde would range
from $60 million to $408 rail]ion, with $121 million as EPA's best estimate.2
EPA's cost estimates are designed to reflect the typical costs that water
systems would incur to monitor water and install treatment technologies,
when needed, to comply with the regulation. The estimates also reflect the
administrative costs that states and water systems would incur to
implement programs encouraging homeownem to reduce radon in indoor
air and homeowners' costs to do so. As of February 2002, EPA has not yet
developed a schedule for issuing the final rule.
Citing the significant financial implications of the 1999 proposed rule, the
conference report accompanying EPA's fiscal year 2001 appropriations act
directed us to report on the financial impacts of the proposed radon nde
and encouraged EPA to consider our findings prior to fil~lizi~g the rule.
As agreed with your offices, this report identifies the (1) strengths and
(2) limitations of EPA's cost analysis for the proposed rule. Because the
scope of our review was limited to EPA's cost analysis, we did not
evaluate EPA's analysis supporting the benefits the agency expects the
proposed rule to provide. EPA officials said the agency plans to revise its
estimate of the benefits in the final nde.
~EPA reported its estimates of the costs and benefits of the radon nde in 1997 dollars.
Page 2 GAO-02-333 EPA's Proposed Rule on Radon
Results in Brief EPA's analysis of the costs to implement the proposed radon nile has a
number of strengths. First, EPA's estimates of the typical costs for water
systems to purchase and install radon removal technologies---a key
determinant of total national costs--are reasonable for estimating national
compliance costs. Most of the radon removal technologies that EPA's cost
analysis assumes will be used most frequently are akeady being used by a
number of water systems across the country to remove radon and other
contaminants, and EPA's cost estimates are generany within the ranges of
costs reported in case studies on these technologies. Other strengths of
the analysis include EPA's (1) use of recommendations from an expert
panel in estimating water systems' costs for construction, engineering, and
labor needed to install and maintain radon removal equipment and
(2) development of a range of annual cost estimates, rather than a single
estimate, to account for uncertainty about the extent to which the less
costly alternative standard will be adopted by states.
EPA's analysis of the national annual costs of complying with its proposed
radon drinldng water rule has several limitations that, if corrected, would
likely increase EPA's best estimate of these costs. Specifically, EPA
· made two errors in estimating the various costs associated with programs
to reduce radon levels in indoor air under the alternative standard---one
that understated radon testing and mitigation costs by about $37 million
and another that ovemtated administrative costs by about $31 million--
resulting in a combined understatement of costs by about $6 mi/lion; and
· excluded from its analysis "mixed" water systems, which use a mix of
groundwater and surface water sources, effectively understating
compliance costs by approximately $17 million.
Correcting these errors and including the mixed water systems alone
would increase EPA's estimate by about 20 percent, from about
$121 million to about $145 million (see app. I). Other aspects of EPA's
analysis may have further understated total compliance costs, although by
an unknown amount. For example, EPA assumed that more water systems
than suggested by some evidence would choose the less-costly alternative
standard. In addition, EPA may have insufficiently considered potential
costs faced by water systems to alleviate concerns about the use of water
treatment technoingies that would vent radon near homes, schools, or
other population centers. Further, EPA's cost analysis reflects inadequate
quality assurance, does not consistently comply with EPA's guidelines
cnlling for clarity and transparency in presenting economic analyses, and
includes a number of inaccuracies. For example, the economic analysis
contains inconsistent and inaccurate information about an important cost
Page 3 GAO-02-383 EPA's Proposed Rule on Radon
factor as well as unclear or conflicting information about the
responsibility for certain costs, and it omits assumptions underlying a key
cost determinant. EPA has taken steps to improve the agency's quality
assurance process, but it is not clear that these steps will be sufficient to
identify and correct deficiencies like those we found.
Because of the linfitations we identified, we are malting several
recommendations aimed at improving EPA's cost analysis for the radon
rule and its economic analyses in general. In commenting on a draft of this
report, EPA officials from the Offices of Water; Air and Radiation; and
Policy, Economics, and Innovation generally agreed with our findings and
recommendations, providing some technical and editorial suggestions that
we have incorporated into the report, as appropriate. However, while
agreeing that the proposed rule contained the errom and other
inaccuracies we identified, the Office of Water did not agree that an effect
of these errors was reduced credibility of EPA's cost analysis. While our
repor~ identifies a number of strengths of the cost analysis, these strengths
do not offset or negate the effects of the errors and inaccuracies we found.
We continue to believe that, collectively, the limitations we identified
reduced both the credibility and usefulness of the cost analysis for the
radon rule.
Rac rouna The majority of the estimated cancer deaths in the United States
associated with radon are related to the inhalation of radon in outdoor or
indoor air. Specifically, the National Academy of Sciences has estimated
that about 700 deaths occur from inhaling radon in outdoor air and more
than 19,000 deaths occur each year from inhaling radon in indoor afl.~
Some radon in indoor air is derived from the evaporation of drinking
water, and the academy estimated that about 160 of these 19,000 deaths
are associated with such releases. In addition, the academy estimated that
consumption of drinking water containing radon causes about 23 deaths
from stomach cancer each year. EPA relied on the academy's estimates of
radon health risks in developing the proposed rule on radon in drinldng
water.
EPA's proposed radon rule applies to water systems that include only
groundwater and those that include both ground and surface water (rivers
~National Academy of Sciences, Risk Assessment of Radon in Drinking Water,
Washington, D.C.: 1999.
Page 4 GAO-0~-333 EPA's Proposed Rule on Radon
and lakes), referred to as mixed systems.4 Radon is usually present in only
negligible amounts in surface water because this water is exposed to the
air and the radon in it will tend to be released to the air. Groundwater
ori 'gmating in underground aquifem is not similarly exposed to air. As a
result, high leveis of radon are sometimes found in groundwater that
coilects and flows under the earth's surface. Radon levels in groundwater
vary across the country, with the highest levels in New England and the
Appalachian uplands of the Middle Atlantic and Southeastern states. There
are also isolated areas in the Rocky Mountains, California, Texas, and the
upper midwest where radon levels tend to be higher than the U.S. average.
According to EPA, at the state level, high leveis of radon in drinking water
can occur in areas with low levels of radon in the soft (thus low levels in
indoor air) and vice versa~
1996 Safe Drinking Water Under the Safe Drinking Water Act, EPA sets health-based, legally
Amendments Require EPA eixforceable standards limiting the level of drinking water contaminants
to Establish a Radon that can adversely affect public health. In developing a standard, EPA
Standard establishes a health-based goal at a level that causes no known or
anticipated adverse health effects arid that allows an "adequate margin of
safety." If a contaminant, such as radon, is likely to cause cancer, EPA
generally sets the goal at zero. After setting the goal, EPA typically issues a
regulation establishing an enforceable standard, called a maximum
contaminant level, that is as close to the health-based goal as is feasible,
considering the available technology, treatment techniques, and costs.
Under the 1996 amendments, when proposing a standard, EPA is also
required to perform an economic analysis to determine whether the
benefits of the standard justify the costs. If the benefits do not appear to
be justified, EPA may adjust the standard to a level that "maximizes health
risk reduction benefits at a cost that is justLqed by the benefits."
The 1996 amendments also included a number of provisions specific to a
radon standard. First, the amendments required EPA to withdraw its 1991
proposed rule on radon. Before issuing a new proposed rule on radon,
EPA was required to obtain from the National Academy of Sciences an
~l'he proposed rule excludes certain groundwater systems: (1) nontransiel~t noncommurdty
water systems axe excluded on the basis that the more limited exposure to radon from
drinldng water in the schools, hospitals, and factories in this category results in lower
health risks compaxed with life-time exl)osures in homes aud (2) transient noncommunity
water systems axe excluded because most people who use such facilities (service stations,
campgrounds) do so ordy occasionally.
Page 5 GAO-02-333 EPA's Proposed Rule on l~don
assessment of the health risks from radon in drinking water and arrange
for the academy to assess the health risk reduction benefits from various
measures to reduce radon levels in indoor air. In addition, EPA was also
required to (1) publish and seek public comment on its analyses of the
costs and health risk reduction benefits for standards being considered for
radon in drinking water and (2) respond to all significant public comments
received on the analyses in the preamble for the proposed rule. In setting a
radon standard for drinking water, EPA was also required, under the
amendments, to consider the costs and benefits of programs to reduce
radon exposures from other sources, such as indoor air.
The amendments specified that if the drinking water standard is more
stringent than necessary to reduce the concentration of radon in indoor air
from drinking water to a level equivalent to the national average
concentration of radon found in outdoor air, then EPA must also
promulgate an alternative standard (alternative maximum contaminant
level). The alternative standard must be set at a level that would result in a
concentration of radon in indoor air from drinking water equivalent to the
national average concentration of radon in outdoor air. The alternative
standard would allow more radon in drinking water than the more
stringent standard. To offset the higher level, the water systems that use
the alternative standard must be covered by an EPA-approved program to
reduce radon in indoor air. Such a program could be managed by either
states or water systems. To be approved, a program's expected health risk
reduction benefits must be equal to or greater than the health risk
reduction benefits that would result from compliance with the more
stringent standard for radon in drinking water. Fina]ly, the 1996
amendments required EPA to propose a new radon rule in 1999 and to
promulgate it within 12 months. EPA issued the proposed rule in 1999. As
of February 2002, EPA has not yet developed a schedule for issuing a final
rule.
EPA Developed a In developing the proposed rule, EPA obtained and relied on assessments
Proposed Radon Rule and conducted by the National Academy of Sciences and issued its economic
a Supporting Economic analysis for public comment in February 1999.~ When EPA issued the
Analysis proposed radon rule in November 1999, it set the health goal at zero,
proposed a standard of 300 picocuries per liter of water, and proposed an
~U.S. Environmental Protection Agency, Radon in Drinking Water Health Risk Reduction
and Cost Analysis (Washington, D.C.: Feb. 26, 1999).
V Psge 6 GAO-02-333 EPA's Proposed Rule on Radon
alternative standard of 4,000 picocuries per liter to be used in conjunction
with state or water system programs that reduce radon in indoor air?
In the economic analysis supporting the proposed radon rule, EPA
indicated that 46 percent of the 40,863 groundwater systems that would be
subject to the rule would, in the absence of any additional treatment,
exceed the standard of 300 picocuries. (The majority of these water
systems serve 500 or fewer customers.~) Further, EPA estimated that ff
these systems had to comply with the more stringent standard, the
systems would incur costs of about $2.5 billion to purchase and install
radon treatment teclmologies, or about $233 million each year for 20 years.
EPA estimated that the total annual cost of the rule would be about
$408 million,8 as follows
· $233 million to purchase and install radon treatment technologies,
· $152 million to operate and maintain the treatment technologies,
· $14 million to monitor water for radon,
· $6 million to administer these activities, and
· $2.5 million for states to oversee the water systems.
However, EPA estimated that the vast majority of water systems would
not incur any water treatment costs because they would be subject to the
alternative standard of 4,000 picocuries. EPA estimated that ouly about
4 percent of water systems subject to the rule have radon levels in excess
of the alternative standard. EPA provided lower-bound, best, and upper-
bound cost estimates that reflect varying assumptions about the
proportion of states and local water systems that would choose the
alternative standard and thus implement programs to reduce radon levels
in indoor air, as follows:
EPA's upper-bound estimate of $408 million annually assumed that all
water systems would be subject to the more stringent water standard.
· EPA's best estimate of $121 million annually assumed that about two-
thirds of water systems would be subject to the less stringent alternative
standard.
aA picocurie is one trillionth of a cm'ie, a unit of radioactivity.
?Most (96 percent) groundwater systems serve 10,000 or fewer customers; 67 percent of the
systems serve 500 or fewer customers.
SMost of the estimated cust---$405 million--would be borne by water systems.
Page 7 GAO-02-333 EPA's Proposed Rule on Radon
· EPA's lower-bound estimate of $60 million annually assumed that about
97 percent of water systems would be subject to the less stringent
alternative standard.
The benefits that EPA esttmates would be provided by the proposed rule---
S362 million annually--are the same under all the scenarios, differing only
in the extent to which the lives are saved because of water treatment
versus reductions of radon in indoor air. Considering these costs and
benefits, along with more subjective benefits and costs that EPA did not
quantify,~ EPA determined that the costs of the proposed rule were
justified by the benefits. EPA stated that in making this determination, the
agency also considered that costs would be substantially less than
$408 million annually if most states implement indoor air programs,
allowing water systems to comply with the less stringent water standard.
Regarding the benefits, we note that EPA's estimates of future benefits in
the proposed rule were not discounted (reduced) to present value,
although the cost of purchasing and installing radon eqnlpment was
appropriately discounted. According to EPA officials, EPA will discount
the benefits in the final rule in response to recommendations from the
Science Advisory Board.
EPA's Guidelines for Preparing Economic Analyses highlight the
importance of economic analyses in making informed policy choices and
specify criteria for effective presentation of economic analyses, such as
the cost analysis supporting EPA's proposed radon rule.h° Primary criteria
include clarity and transparency of all aspects of the analyses and
descriptions of all important data sources, key assumptions, and their
justifications. In addition, EPA's Office of Water has a quality management
plan to guide its quality assurance and control activities, specifying which
types of such activities are necessary and the various procedures for
conducting quality reviews. The quality assurance elements include
internal peer review, external peer review, external agency review, and
stakeholder meetings, among other measures.
~rhese nonqmmfffied benefits mad costs include, among other items, customer comfort
from knowing that radon ts being removed from their water and customer anxiety about
living near tream~ent plants that emit radon gas.
I~EPA replaced its 1983 Guielelines for Performing Regulatory Impact Analyses w~th
Guidelines for l~repar~ng Economic Analyses in September 2000. EPA was using draf~
revised guideiines for economic analyses when the proposed radon rule was issued. The
criteria for effective presentation of economic analyses were substantially the same in the
1999 draft guidelines and the issued guidelines.
Page 8 GAO-02-333 EPA's Proposed Rule on Radon
EP Ys Cost Analysis EPA's cost analysis has a number of strengths. First, and most importantly,
the estimates of the typical costs for a water system to remove radon are
Has a Number of reasonable for the purpose of estimating the rule's national costs. The
.q renoths estimates of typical costs are for currently used technologies whose
effectiveness is generally known and for which published cost data are
available. Moreover, these estimates have been improved by input from a
blue ribbon panel of drinldng water and cost experts and other
stakeholders. Further, while some concerned parties questioned several of
EPA's assumptions on water treatment issues--such as the extent to
which water systems would have to address certain water quality issues
and how they would be addressed-our review indicated that EPA
generally had a reasonable basis for its assumptions. Another strength of
the analysis is that EPA estimated a range of costs to account for
unce 'rtainty about the approach that states will use to comply with the
rule.
EP~fs Estimates of Typical EPA's estimates of the typical costs for water systems to purchase, install,
Costs for Water Treatment and operate radon removal teclmologies---a key determinant of total
Are Reasonable for national costs to implement the proposed rule--are reasonable for use in
Estimating National Costs estimating national compliance costs. To estimate the typical costs for a
system to remove radon from drinking water, EPA generally assumed the
use of aeration technologies that have been commonly used by water
systems to remove radon and other contaminants, such as volatile organic
compounds,u EPA estimated radon removal costs for eight size categories
of water systems, ranging from those that serve between 25 to 100 people
to those serving between 100,000 and 1 miliion people. EPA's cost
estimates for systems to purchase and install treatment technologies
ranged from about $45,000 for the smallest systems to more than
$6 million for the largest--or about $4,200 to $580,000 per year for
20 years. In addition, EPA est/mated operations and maintenance costs
ranging from about $3,600 per year for the smallest systems to about
$440,000 for the largest.
Information on the cost of insts]ling aeration technologies is available in
published case studies, which EPA used to cross-check its estimates. For
example, in 1998, the American Water Works Association published a
guide for water utilities to use for evaluating and selecting radon treatment
UAeration technologies force air through drinking water and strip away contaminants,
which are then vented into outdoor air.
Page 9 GAO-02-333 EPA's Proposed Rule on Radon
teclmologies that includes construction cost information for 33 water
treatraent sites, including 12 very small fac'flities, and performance
L~formation for most of the sites. EPA's technology cost estimates are
generally veitbin the ranges of costs identified in ~ and in other case
studies. Such data are not always available to i~xform regulatory cost
estimates. For example, in estimating costs for its arsenic role, EPA had to
rely on more limited data because some of the technologies for removing
arsenic from drhddng water are not commonly used.
Moreover, EPA's estimates of the typical costs for a water system to
remove radon have benefited from the recommendations of an expert
panel of water design and cost engineers from utilities, state and federal
agencies, cons~flting fi~ms, and public utility regdiatory commissions.
Following the reauthorization of the Safe Drinldng Water Act, EPA
convened the panel to help improve the accuracy of the agency's cost
estimates for all drinking water regniations. EPA's cost analysis for the
radon rule relies on the panel's recommendations in estimating a water
system's cost for construction, engineering, and labor needed to install
and maintain radon removal equipment. For example, based on the panel's
recommendations, EPA increased its estimates of the labor costs to
operate and maintain such equipment to include not only base salaries but
also fringe and other benefits.~
In addition, EPA incorporated advice from other stakeholders in
developing its estimates. For example, in response to comments that its
initial estimates were not adequate, EPA increased its radon technology
costs for pumps and blowers needed to operate aeration equipment.
Although some stakeholders said that EPA did not increase its technology
cost estimates sufficiently, our analysis of the key issues they raised
indicates that EPA generally used reasonable assumptions in developing
its estimates, as the following examples show.
Some parties commented that EPA did not include adequate costs for
water systems to remove iron and manganese from water. These parties
said that water systems would, in many cases, need to remove iron and
manganese from their water before it is aerated so as not to damage the
~2EPA analysts had previously assumed labor rates for water treatment professionals to be
about $15 per hour. For the proposed rule, EPA adjusted labor rates to add fringe and other
benefits, resulting in hourly labor costs ranging from $28 to $52, depending on the size of
the water system.
Page 10 GA0~)2-333 EPA's Proposed Rule on Radon
aeration equipment. However, EPA assumed that water systems that need
to treat for iron and manganese would generally be able to add chemicals
to neutralize these elements, which is less expensive than removing them.
Based on estimates of the number of water systems with elevated levels of
iron and manganese, EPA included costs for 25 percent of small systems
(systems serving fewer than 10,000 people) and 15 percent of large
systems (systems serving more than 10,000 people). In addition, EPA
assumed that systems with levels of iron and manganese too high for
chemical neutxalization would already be removing these elements
because high levels of these elements result in unacceptable discoloration
of water. Because these removal costs would not be incurred as a result of
the radon rule, EPA's cost estimates do not Include them. We believe that
EPA's assumptions are reasonable for the purpose of estimating national
costs.
Some parties commented that EPA did not Include adequate costs for
water systems to disinfect water that might be contaminated by microbes
during aeration. For example, a stakeholder said that the cost estiraates
may be understated for clearwells~welis or tanks that are needed to hold
water so that it can be disinfected. This comment stemmed from two
conflicting sets of cost estimates for clearwells, one much higher than the
other, which EPA included in a supporting report on technology costs.
EPA used the lower estimates in its cost analysis. EPA officials told ns that
the higher estimates were incorrect and were inadvertently included in the
supporting report and that the lower estimates--generated by EPA's cost
model for aeration technologies--were correct. The lower estimates are
consistent with EPA's guidance manual for disinfecting drinking water and
incorporate best engineering judgment.~3 We note that national costs for
clearwells may be overstated because EPA included these costs for all
systems that add radon treatment. However, as case studies show, a
nuxaber of systems (particularly those that already disinfect their water)
will be able to use existing clearwelis.
A stakeholder commented that EPA did not include adequate costs to
address the increased corrosiveness of water resulting from aeration. We
believe, however, that EPA's addition of such costs for a small portion of
water systems is appropriate based on information from the National
Academy of Sciences and case studies indicating that aeration does not
generally increase the corrosiveness of water.
~'U.S. Enviromental Protection Agency, Gu/dance Manual for Compliance With the
Filtration and Disiqfection Requirement~ for Public Water Systems Using Surface Water
Sources (Wasl~mgton, D.C.: March 1991).
~ Psge 11 GAO-02-333 EPA's Proposed Rule on Radon
A stakeholder commented that EPA might have understated treaWaent
costs for large water systems because it underestimated the number of
treatment sites at these systems. Underestimating the number of treatment
sites that potentially need to have radon treatment technologies would
undemtate costs because costs increase as the number of sites needing
radon treatment increases. In its cost analysis, EPA estimated that there
were an average of 13.1 treatment sites for groundwater systems serving
between 100,000 and 1,000,000 customers.~ In contrast, the stakeholder
commented that its survey of water systems serving over 100,000
customers indicated the correct number of average txeatment sites would
be 23.8. We believe, however, that EPA's estimate was adequately
supported, based on our review of EPA's assumptions and data as well as
the information provided by the stakeholder. For example, the
stakeholder's estimate of 23.8 sites included systems serving more than
1,000,000 customers and therefore was not directly comparable to EPA's
estimate. When, as paxt of our review, the stakeholder provided us with an
estimate that was consistent with EPA's size categories, the estimate was
14.7--a number reasonably close to EPA's estimate of 13.1. Further, our
limited review of the stakeholder's data indicates tlmt such data would
need to be evaluated for accuracy and representativeness. Specifically, in
reviewing information about 4 of the 102 survey respondents, we found
that an entity ident'ffied as having 650 sites---an atypically high number~--
was incorrectly classified as a single system. This entity represents a
number of affiliated water districts of varying sizes in different locations,
each with its own rate structure. The stakeholder acknowledged that these
water districts should have been analyzed as individual water systems, not
aggregated into one system.'~
In finding that EPA's technology cost estimates axe appropriate for
estimating national costs, we recogrtize that some systems would incur
higher costs than EPA estimates and othem would incur lower costs. Costs
for individual water systems even those of similar size~would vary
~4This is the largest category of grotmdwater systems for which EPA included costs.
According to EPA, its review of the t~o groundwater systems that serve more ti'mn
I miliion customers indicated that these systems would not have to treat for radov~
~According to the stakehulder's survey data, most large systems have an average of 11
sites.
~6Because this s~stem serves more than 1,000,000 customers, its inclusion distarted the
stakeholder's es'~n nate of 23.8 sites per system but did not distort its subsequent estiraate of
14.7 sites.
~t Page 12 GAO-02-333 EPA's Proposed Rule on Radon
depending on factors such as the technologies selected and the
site-specific conditions, including water quality and management skills.
EPA's estimates should not be interpreted as being representative of the
individual decisions that thousands of water systems will make on the
basis of their unique circumstances.
EPA Supported Its ~n developing its best estimate of total national costs for the rule, EPA
Assumption about States' assumed that 50 percent of states would implement EPA-approved indoor
Compliance with the Rule air programs that have expected health risk reduction benefits equal to or
greater than the benefits that would result from compliance with the more
stringent drinking water standard. As a result, the vast majority of local
water systems in those states would not have to mitigate radon levels in
driuldng water because only those with radon leveis in excess of
4,000 picocuries (the alternative standard) would have to reduce the radon
in the water.L7 EPA's assumption was supported by the results of a survey
of state indoor air and drinking water officials conducted by the American
Water Works Association.'s Fifty percent of the survey respondents
indicated that they probably would adopt the indoor air option, and
9 percent indicated that they defmitely would.
EPA's assumption about the decisions states would make is also
supported by extensive discussions between EPA and state
representatives and recognizes the potential difficulties that may dissuade
some states from implementing the option. Most states already conduct
indoor air programs for radon. To comply with the proposed rule, states
would have to upgrade their existing programs by setting quantitative risk
reduction goals, reporting on progress toward those goals, and allowing
for extensive public participation in developing the indoor air prograxas.
According to EPA, program officials from many states believe they would
be able to comply with these requirements without too much difficulty.
Furthermore, officials from many states believe that it makes good public
health sense to mitigate radon levels through indoor air, rather than water,
because indoor air risks are much higher than drinking water risks and
indoor air mitigation is more cost-effective. However, other states are not
inclined to use the indoor air option to comply with the rule because of
concerns about potential public relations problems that could arise
L?EPA estimates that 1,776 systems nationwide have radon levels above 4,000 picocuries.
~SAmerican Water Works Association, State Response to the Proposed Multimedia
Mitigation Program Option, Washington, D.C.: 2000.
Page 13 GAO~02~33 EPA's proposed Rule on Radon
because of different protections people will receive, depending upon
where they live. Specifically, the executive director of the Association of
State Drinking Water Administrators told us that states are greatly
concerned about explaining to the public that the same level of radon in
drinldng water is safe in some states but unsafe in others, depending on
whether the state adopted the indoor air option. She stated that trading the
drinking water risks of the community for the indoor air risks of relatively
few residents would cause substantial public confusion. Similarly, the
National Academy of Sciences stated that concerns regarding the equity of
risk trading "might ultimately constitute the deciding factor" in whether
the air mitigation option is undertaken. A program official from one state
told us that her state would likely not adopt the air mitigation option
partially because the unequal treatment of radon risks could lead to court
cases.
Nonetheless, according to EPA officials, their estiraate that 50 percent of
the states would upgrade their indoor air programs to comply with the
radon drinking water rule may be conservative. These officials told ns that
after several workshops EPA held with the states in late 2000, nearly two-
thirds of the state program managers indicated that they would likely
adopt the indoor air option. However, an EPA official acknowledged that
some state program managers that favor the program may not be the ones
making this decision, and therefore some of these "likely' states may not
adopt the program. This recognition corroborates a potential impediment
that program officials from some states had discussed with us--that is,
adopting the indoor air option could be subject to the approval of the
legislature or the governor. As a result, the decisions of the state program
managers may be subject to political processes, the outcomes of which
cannot be certain. Overall, we believe that EPA had a reasonable and
supported basis for its assuraption, reflected in its best estimate of costs,
that 50 percent of states would choose the indoor air option, as the
assumption reflects the potential disincentives that could prevent some
states from participating.
EPJls Estimates Include a Another strength of EPA's cost analysis for the proposed radon rule is that
Range of Costs to Account it provided a range of national annual compliance costs to address the
for Uncertainty about How uncertainty about how states would choose to comply with the rule. EPA's
States Would Choose to designation of a range helps decisionmakers and the public understand
how costs could vary depending on how the rule is implemented, and it is
Comply with the Rule consistent with EPA's guidelines for preparing economic analyses, as well
as with guidance issued by the Office of Management and Budget in 2000.
Because it is generally less costly to reduce radon risks in indoor air than
Page 14 GAO~02-333 EPA's Proposed Rule on Radon
in drinking water, the estimated costs of compliance with the radon rule
are lower when more states are assumed to implement indoor air
programs. Reflecting a range of potential responses, EPA's cost est/mates
range from $60 million to $408 million per year.~ EPA designated
$121 million as its best, or most likely, estimate of annual costs.
Limitations of EP s EPA's analysis of the national annual cost of complying with its proposed
radon drinldng water rule has several lhuitations that, ff corrected, would
Cost Analysis Reduce likely increase EPA's best estimate of national costs. Specifically, EPA
Its Credibility and made two errors in estimating the annual costs associated with programs
to reduce radon levels in indoor air under the alternative standard--one
Usefulness that understated radon testing and treatment costs by about $37 minion
and another that overstated administrative costs by about $31 million.
Correcting the two errom would increase EPA's best estimate of national
annual costs for the proposed rule by about $6 million. In addition, EPA
excluded from its analysis mixed water systems~those that get their
water from a mix of both groundwater and surface water sources--which
effectively understates compliance costs by approximately $17 million.
Correcting these errors and including the mixed water systems alone
would increase EPA's estimate by about 20 percent, from about
$121 million to about $145 million. Other aspects of EPA's analysis may
have underestimated total compliance costs, although by an unknown
amount. Specifically, EPA
assm-aed that more water systems than suggested by some evidence would
choose the less-costiy alternative standard and
· insufficiently considered potential costs faced by water systems that
remove radon from water using aeration facilities--which vent the radon
to the outside air--located near homes, schools, or other population
centers.
Further, EPA's cost analysis reflects a lack of quality assurance in certain
important respects. For example, the analysis contains inconsistent and
inaccurate information about an important cost factor and unclear or
conflicting hfformation about the responsibility for certain costs, and
omits the assumptions underlying a key cost determinant. EPA has taken
steps to improve its quality assurance process, but it is not clear that they
~EPA's estimates are in 1997 dollars.
~ l'age 15 GAO-02-333 EPA's Proposed Rule on Radon
will be sufficient to identify and correct deficiencies like those we
identified.
EPA Miscalculated Costs In estimating costs for reducing radon levels In indoor air under the
for the Rule's Indoor Air alternative water standard, EPA made two errors--one that understated
Option the costs of testing and treating indoor air for radon by about $37 million
and another that overstated administrative costs to implement amd oversee
the programs by about $31 million. Correcting the two errors would
increase EPA's best estimate of national annual costs for the proposed
rule by about $6 million. (See app. I.)
EPA's first error resulted in an underestimate of the annual costs for
reducing radon levels in indoor air that the agency expects will be borne
by Individual households. EPA multiplied its assumed cost of testing and
treating for radon in indoor air per life saved ($700,000)~ by the expected
number of lives saved per year,~L and then amortized the result over
20 years at a discount rate of 7 percent. However, EPA should not have
amortized the result because it represents costs that would be incurred
every year. For example, in its best estimate, EPA assumed that 59 lives~
would be saved every year at a total cost of $41 million (59 lives times
$700,000 per life). EPA then amortized the $41 million over 20 years,
resulting in an estimated annual cost of $3.9 million, even though the
$41 mil]Jori cost would be incurred each year. EPA officials acknowledged
that they should not have amortized the $41 raillion cost and told us that
they intend to correct this error in EPA's economic analysis for the final
rule.
~l~his assumption is based directly on an estimate described in EPA's Technical Support
Document for the 1992 Citizen's Guide to Radon (May 1992). EPA did not adjust the
ese-hate, which was reported in 1991 dollars, for inflation because it believed that testing
and treatment costs had not increased since 1991.
2LEPA's estimate of the number of lives saved per year assumes that the indoor air
programs adopted in co,unction with the less stringent drinking water standard would
save the same number of lives as compliance with the more stringent standard. This
assumption is based on the requirements of the 1996 amendments to the Safe Drinldng
Water Act.
=EPA estimated that if all systems were required to comply with the alternative standard of
300 picocuries, 62 lives would be saved each year. However, in the case of EPA's best
estimate, about 95 percent of systems either would be in states with indoor air programs or
would implement the're own indoor air programs, so indoor ah' programs would be
expected to save 59 lives (95 percent of the 62 lives that would be saved assuming that all
systems were required to comply with the more stringent standard of 300 picocuries).
Page 16 GAO-02-333 EPA's Proposed Rule on Ra~on
The second error occurred because EPA inadvertently included costs to
administer and oversee indoor air programs of water systems that will not
Lmplement such programs. EPA's estimate did not reflect the fact that
regardless of whether the states choose to implement indoor air prograxcts,
water systems with radon levels below 300 picocuries would be required
only to monitor the radon level in their water. They would not be required
to treat their water, nor wonid they be required to implement their own
indoor air programs. The estimate also did not reflect that water systems
with radon levels above 4,000 picocuries are unlikely to implement indoor
air programs because they would be required to treat their water
regardless of whether they implement these programs. As a result, EPA's
best estimate of national annual costs included $53 million in costs
associated with oversight and administraiAon of about 18,400 water
systems' indoor air programs, inadvertently including costs for about
10,800 water systems. We estimate that correcting this error would reduce
costs associated with oversight and administration of water systems'
indoor air programs to about $22 million. EPA plans to correct both errors
in its economic analysis for the final rule.
EPA Excluded Certain EPA's cost analysis excluded mixed water systems, which get their water
Systems That Would Be from a combination of groundwater and surface water sources, even
Subject to the Rule though these systems would be subject to the radon rule. EPA officials
told us that they did not include costs for mixed systems in the economic
analysis because of data Limitations and because their preliminary analysis
indicated that including the mixed water systems in its analysis would not
have a significant effect on the total annual cost of complying with the
rule. However, EPA did include mixed systems in its economic analysis for
the January 2001 arsenic rule. An EPA official told us that there does not
seem to be a strong technical basis for handling mixed systems differently
in the two rules. In January 2002, EPA officials told us that the agency
would consider including costs for these systems in the economic analysis
for the fmai rule. We estimate that including mixed systems in EPA's best
estimate would further increase tots1 annual costs by about $17 mi]lion
Page 17 GAO~02-333 EPA's Proposed Rule on Radon
(see app. I)? Including these systems would also increase the estimated
benefits of the proposed rule.24
EPA May Have A key factor in EPA's cost estimate is the extent to which programs to
Underestimated mitigate radon levels in indoor air would supplant the m~)re costly
Compliance Costs for approach of mitigating radon levels through water treatment. While EPA's
Some Water Systems assumption about the number of states that would adopt indoor air
programs is well supported, we found that its assumption about the
number of local water systems that would do so is not and appears to be
overly optimistic. A decrease in the estimated number of systems choosing
the less expensive approach would increase the total annual cost of
compliance.
In the 50 percent of states where EPA did not assume selection of the
indoor air option, EPA assumed that 90 percent of local water systems
would elect the alternative standard and establish their own indoor air
programs. According to EPA officials, the assumption was based solely on
the premise that water systems would choose the least costly approach to
mitigating radon risks. EPA officials acknowledged that they did not
collect any data on the extent to which water systems would establish air
programs.
This data limitation reduces the credibility of EPA's optimistic assumption
in light of questions that have been raised about the likelihood of small
water systems adopting air programs. For example, EPA's assumption
conflicts with the opinions of the National Academy of Sciences and state
and industry associations. Specifically, the National Academy of Sciences
report~d in 1999 that "non-economic considerations" could play a large
role in a local water system's decision about whether to use an indoor air
program to meet the rule's requirements. According to the academy's
report, experience with certain provisions of the Clean Water Act indicates
SOur estimate of the costs for mixed systems is based on an estimate that EPA developed
and we reviewed. The estimate includes 1,074 mixed water systems receiving more than 50
percent of their water from groundwater sources. It does not include the costs for three
systems serving more than 1,000,000 customers that receive some of their water from
groundwater sources and that EPA believes would incur costs to comply with the radon
rule. We did not develop an estimate for these systems, which should also be inchided in
EPA's cost estimate for the final radon rule.
~Of the limitations we found, the exclusion of mixed systems is the ordy one that has an
effect on EPA's estimates of the benefits of the rale.
Page 18 GAO-02~333 EPA's Proposed Rule on Radon
that small entities have had difficulties dealing with complex federal
program requirements. While EPA may be correct in its assertion that the
requirements for indoor air programs are not as complex as the
requirements cited by the academy, small water systems may have
limitations or concerns that could lead them to choose compliance with
the more stringent standard~ For example, the executive director of the
Association of State Drinking Water Admiulstratem told us that local
water companies, especially the small ones, will not want to be involved in
public meetings, goal setting, and program monitoring and reporting--
activities required under the proposed rule's indoor air option. The
National Association of Water Compadies, a trade association representing
the nation's privately owned drtnking water utilities, expressed s'nullar
doubts in its comments on the proposed rule: "We believe that the
prospect of water systems implementing local (indoor air) programs in the
absence of state programs is unrealistic... Tracking new home
construction and remedial venting of existing homes is far removed from
the chartered objectives of community water systems, not to mention the
expectations of water ratepayers." In our view, these are reasonable
concerns.
The academy also raised concems that the indoor air option may not be
practical for some local water systems that have elevated radon in their
water but not in their customers' indoor air. EPA acknowledges that
elevated radon in drinking water and in indoor air may not occur in the
same geographic area. Program officials from several states concurred
that the indoor air option may be problematic for some local water
systems for this reason. One of these officials also said that using the
indoor air option would not work nearly as well at the local level as it
would at the state level The official explained that because states have a
larger geographic area than local water systems, states would have a much
better chance to offset one area's elevated radon in drinking water by
mitigating another area's indoor air radon.
Considering the evidence indicating a fair mount of uncertainty about the
extent to which local water systems, in the absence of a state program,
would choose the indoor air aption to comply with the rule, EPA's
assumption that 90 percent of systems would do so appears overly
optimistic. As discussed previously, the uncertainty about adopting the
indoor air option is particularly strong for small water systems--the
majority of systems subject to the rule. Adjusting EPA's assumptions to
reflect less optimistic scenarios would increase the total national cost
esthuate for the proposed rule. For example, assuming that 75 percent,
instead of 90 percent, of local water systems would choose the indoor a~r
~ Pa~e 19 GAO-02-333 EPA's Proposed Rule on Radon
option would increase national annual costs by $23 million; assuming
50 percent of systems would choose the option increases the estimated
national annual cost by $61 million (see app. I). In January 2002, EPA
officials told us that in finalizing the economic analysis for the rule, they
plan to include a range of costs based on different assumptions about how
many water systems will adopt indoor air programs. EPA's planned use of
varying assumptions about the choices of water systems would
appropriately reflect the uncertainty associated with the responses of
water systems. (As discussed previously, EPA's proposed rule already
included a range of costs to reflect uncertainty about how many states
would adopt indoor air programs.)
EPA May Have EPA's cost estimates may not adequately account for the additional costs
Underestimated the Costs to address the health risks from radon that would be emitted into outdoor
to Address the Risks from air as it is removed from drinking water through aeration. These risks may
Radon Emitted during be of particular concern where water treatment facilities that remove
radon in water and vent it into the air would be located cinse to homes and
Aeration schools and other population centers. In these cases, water systems may
face public relations problems due to residents' concerns. Credible
~' information on the estimated risks from such emissions could help water
systems address such concerns.
However, we found that EPA's analysis of these health risks has some
lLmitations that tend to underestimate the risks and reduce its credibility.
The limitations stem from the use of outdated health risk data and the
outdated air quality model EPA used to develop its estimate of risk from
emissions for the proposed radon rule. Specifically, EPA's estimates of the
risks from radon emitted during aeration inadvertently did not incorporate
updated information from the National Academy of Sciences. EPA officials
said that updated information from the academy indicated that the health
risk from exposure to radon was about 2.5 times higher than its previous
estimate. While EPA incorporated this revision in its estimates of the risks
from radon in drinking water, it erred by not doing so for its estimates of
the risks associated with radon emissions from aeration. Furthermore,
EPA used the deficient health risk data in an outdated 1988 model that the
agency acknowledged has substantial limitations, even though the agency
had newer models available. Specifically, EPA's documentation of the 1988
air quality model states that the resulting estimates of human health risks
associated with radon emitted during aeration are (1) "preliminary in
nature and should be used with caution," and (2) "do not account for the
additive impact of emissions from plants located close to one another."
~ P~ge 20 GAO4}2-333 EPA's proposed Rule on Radon
A 1999 study commissioned by a water district in California suggests that
EPA's 1988 model may understate these health risks. Specifically, the
study includes a comparison of the estimated health risks associated with
using aeration technologies to remove radon from the district's water first
using the 1988 model, and then using an updated EPA model. In this site-
specific analysis, the risk estimate developed from the updated model was
five times higher than the estimate developed using EPA's 1988 model.
In discussing this issue, EPA officials told us that they may update the final
rule's estimates of the health risks from radon emissions by incorporating
the academy's updated risk information and using updated air quality
models. However, the officials said that taking these steps would not
substantially change the overall risk estimates for exposures to radon
emissions from water treatment shown in the proposed rule. They also
said that the health risks associated with emissions of radon from
treatment plants would still be negligible compared to the risks of radon in
water. While the officials agreed that higher risk estimates could lead to
higher national costs to implement the rule, they believe the cost increases
would be insignificant. However, without an updated risk est/mate using
current data and models, water systems may have difficulty addressing
concerns their customem may raise about the risks--actual or perceived--
of radon treatment. These concerns could increase costs if, for example,
customers demand more expensive technologies to reduce risks
associated with treating water for radon,z~ Along these lines, we note that
in commenting on the proposed rule, the American Water Works
Association pointed out that "the perception of risk is often as important
as the actual risks when siting any industrial process, including water
treatment systems. The mitigation of such concerns of the citizenry can
restflt in substantiatly increased costs....'
EPA's Cost Analysis EPA's cost analysis for the proposed radon rule does not consistently
Indicates Inadequate comply with EPA guidance cn]llng for clarity and transparency of all
Quality Assurance aspects of the analyses and inclusion of all important data sources, key
assumptions, and their justifications. These presentation defic/encies, as
well as analytical errors, occurred despite the agency's quality assurance
~SOne alternative technology, granular activated carbon (GAC), is much more costly than
aeration for ali but the very smallest water systems. This technology does not vent radon
into the air during treatment but collects the radon in filters.
Page 21 (~AO-02-333 EPA's Proposed Rule on Radon
process. As a result, the credibility of the analysis was reduced and the
ability of affected parties to provide informed comments was hampered.
Documents Were Not EPA's guidelines for preparing economic analyses state that EPA should
Uniformly Clear, Accurate, and strive for max~raum clarity and transparency of all aspects of the
Consistent assessments and clearly describe all important data sources, key
assumptions, and their justi/ications. The guidelines also say that the
presentation should highlight the key elements that dominate modeling
frameworks and its results and address uncertainties by ident'ffying ranges
for inputs and results. We found a number of instances in which EPA did
not comply with its guidance. For example
· EPA's proposed rule and the accompanying regulatory impact analysis
contain inconsistent and inaccurate information about an important cost
factor--the number of sites at which each water system would have to
monitor radon concentrations and potentially install treatment
technologies. In both documents, EPA states that it assumed ~eatment
would occur at each well with a radon level higher than the applicable
drinking water standard. Tables presenting numbers of wells accompany
these statements. However, EPA actualiy assumed that testing and
treatment would occur at sites known as "entry points' where water from
multiple wells is often combined. Because there are many fewer entry
points than wells, assuming treatment at each entry point instead of each
well leads to a much lower national cost es~dmate. Comments on the
proposed rule show that affected parties were confused about how EPA
could have a~dved at its national cost estimate by assuming treatment at
each wel~ as EPA incorrectly indicated it had done.
EPA's documents are not clear about whether implementing an indoor air
program in lieu of treating radon in drinking water is a choice or a
requirement for small local water systems--because the documents
contain conflicting statements. Both the proposed rule and the economic
analysis state that small water systems "must" implement an indoor air
program ff there is no state indoor air program that meets the rule's
requirements. However, both documents also state that small water
systems may "choose" to either implement an indoor air program or
comply with the more stxingent water standaxd. In fact, under the
proposed rule, implementing an indoor air program would be a choice--
not a requirement--for small local water systems, just as it is for large
water systems. These conflicting statements confused some affected
parties about the proposed rule's requirements and the associated costs.
Both the proposed nde and the economic analysis lack transparency and
clarity about who would incur the costs to test and, if necessary, treat
Page 22 GAO~)2-833 EPA's Proposed Rule on Radon
indoor air for radon. The documents incorrectly indicate that state and
community water systems would pay to test indoor air and reduce radon
levels in homes under the proposed rule's alternative standard. However,
EPA officials told as that, in fact, households would be expected to bear
most of these costs and that EPA intends to clarify this in the final rule. By
misstating who would bear a substantial portion of the costs of the
proposed rule, EPA did not disclose that the success of this nde depends
on the ability of states and water systems to persuade thousands of
households to spend a total of about $41 million each year to reduce their
health risks from exposure to radon in indoor air. As discussed previously,
EPA also erred in estimating these annual costs in the proposed rule,
reporting them as $3.9 million.
· EPA's documents do not disclose the agency's assumptions regarding how
many systems would need to remove 50 percent, 80 percent, or 99 percent
of the radon in their water under the proposed rule. Because costs
increase with the level of radon removed, the number of systems assumed
to fall into each of the removal categories is a key determinant of the total
national cost of the proposed nde. EPA's omission of these assumptions
prevented stakeholders from readily assessing the reasonableness of
EPA's cost estimate.
EPA's proposed rule is unclear about whether EPA accounted for the
additional costs to reduce the risks from radon that would be emitted into
outdoor air as it is removed from drinldng water through aeration. For
example, in the proposed rule, EPA first states that its cost estimates do
not include the additional costs associated with reducing the risks from
such radon emissions. Yet later in the proposed rule, EPA states that its
cost estimates do include these additional costs. EPA's confusing
presentation contributed to affected parties' concerns that EPA's
est/mates had not accounted for any of these additional costs. In fact, EPA
did include some costs for reducing the risks from radon that would be
emitted through aeration,26 as shown by documentation that EPA provided
to us. However, ss noted previously, EPA may have understated these
costs because it underestimated the health risks associated with radon
emissions generated by aeration equipment.
~Specifically, EPA's analysis assumed that (1) no systems serving populations smaller than
3,301 would face addit/onal costs to address emissions from water treatment because EPA
bel/eves that these small systems are generully located in mml areas where emissions
would not be a concera and (2) 15 percent of systems that serve populations larger tha~
3,300 and that ~ aeration treatment would incux additional costs to address emissions,
at an average annual cost of $39,000 per system. Ttfis cost represents a 35-percent increase
to these systems' average costs for treating and monitoring their water for radon.
Page 23 GAO-02-333 EPA~s l'roposed Rule on Radon
We also found that stakeholders questioned certain cost estimates, in part,
because of the lack of clarity and transparency about cost elements in the
documents supporting the rule. For example, as discussed previously, EPA
cited two sets of cost estimates for clearwelis. In addition, regarding the
costs for treating iron and manganese, EPA said in its proposed rule that it
included some costs for this task, but said in its regulatory impact analysis
that it excluded them.
Some of the flaws we identified in the cost analysis for the radon rule are
s'uuiisx to those that we previously identified in EPA's economic analyses
for other rules. For example, in 1997 we reported that in several of the
analyses we reviewed, EPA did not describe certain key assumptions used
to estimate costs and benefits.~7
EPA's Quality Assurance The analytical errors and documentation flaws that we identified in EPA's
Process Did Not Identify proposed rule and cost analysis were not detected or corrected by the
Analytical Errors and agency's quality assurance process. EPA officials said that the Office of
Documentation Flaws in the Water has a quality management plan that guides its quality assurance and
Cost Analysis control activities, specifying which types of such activities are necessary
and the various procedures for conducting quality reviews. The quality
assurance elements include internal peer review, external peer review,
external agency review, and stakeholder meetings, among other measures.
According to EPA officials, the primary quality assurance elements that
EPA relied on for the proposed radon rule were
· the National Academy of Sciences' assessments of the health risks from
radon;
· recommendations from an expert panel on the costs water systems would
incur for construction, engineering, and labor related to installing radon
water treatment equipment;
recommendations from EPA's National Drinldng Water Advisory Council
on issues related to the analysis of costs and benefits of drinking water
regulations in general;
· recommendations from EPA's Science Advisory Board valuing the benefits
of cancer cases avoided in environmental regulations in general;
· comments received at three national meetings with stakeholders; and
~?U.S. General Accounting Office, Air PoHutiom. I~formation Contained in EPA 's
Regulatory Impact Ar~lyses Can be Made Clearer, GAO/RCED-97-35 (Washington, D.C.:
Apr. 14, 1997).
Page 24 GAO-02~33 EPA's Proposed Rule on Radon
· meetings with the American Water Works Association to examine
technical components of the rulemaking.
In addition, EPA published its health risk reduction and cost analysis for
public comment more than 6 months prior to issuing a proposed rule on
radon. The expert groups and the public comments provided EPA with
valuable information that it used to improve key components of the
proposed nde during its development. However, these reviews did not
provide a detailed, comprehensive review of the completed cost analysis
supporting the proposed radon rule.
EPA's economic analyses do not undergo external peer review nor have
they typically undergone formal Internal peer review by experts outside of
the program offices that prepared them. We have previously stated that
important economic analyses supporting regulations should receive peer
review--the critical evaluation of scientific and technical work products
by independent experts--to enhance the quality, credib'flity, and
acceptability of both the analyses and the associated agency decisions.~
Experts in economic analysis have also noted the importance of peer
review. For example, a diverse panel of renowned economists
recommended in a 1996 paperTM that peer review of economic analyses be
used for regulations with potentially large economic impacts. In addition,
the Presidential/Congressional Commission on Risk Assessment and Risk
Management reported that agencies did not give enough attention to the
quality and interpretation of economic analyses and recomraended that
these analyses receive adequate peer review.
EPA has recognized the need to improve the quality of its economic
analyses, and in August 2001, the EPA Administrator approved the
implementation of the recommendations of an agency work group to,
among other things, require internal review of EPA's major rules and the
economic analyses supporting them. As part of this effort, EPA's National
Center for Environmental Economics has begun to develop a process to
systematically review economic analyses for the agency's major rules. The
~J.S. General Accounting Office, Regulatory Reform: Comments on S. 981--The
Regulatory Improvement Act of 1997, GAO/T-GGD/RCED-97-250
(Washh~gton, D.C.: Sept. 12, 1997).
~Arrow, Kenneth J. et al., Benefit-Cost Analysis in Environmental, Health, ar~l Safety
Regulation: A Statement of Principles (the Ametican Enterprise Institute, the Annapolis
Center, and Resources for the Future, 1996).
~ P~ge 25 GAO-02-333 EPA's Proposed Rule on P~don
center has developed a draft "Economic Regulatory Review Summary and
Critique," dated December 12, 2001, that includes a lengthy checklist the
center may use to review key data, assumptions, and modeling techniques
used in the analyses and the transparency and clarity of the economic
analyses. The center's reviews of the economic analyses prepared by
EPA's program offices could provide the agency with meaningful internal
peer review of its economic analyses.
Implementation of the regulatory work group's recommendation that the
economic analyses supporting major rules undergo internal peer review
has the potential to Improve the quality of EPA's rules and eliminate some
of the errors and other limitations we identified in the proposed radon
rule. EPA's National Center for Environmental Economics has already
conducied several internal peer reviews of economic analyses supporting
major rules as case studies, and EPA has found that such reviews can
produce meaningful results. For example, the center's director told us that
one of the peer reviews sexved as a forum for airing differences of opinion
among program office and legal staff on whether and how to account for
pre-existing subsidies. As a result of discussions of this issue during the
internal peer review, the proper accounting method was selected. If the
subsidies had not been properly recognized and accounted for, the costs
of the rule would have been undemtated by about $700 miifion.
The draft checklist that the center is developing to peer review economic
analyses contains many questions divided into nine sections: regulation
description, baseline, benefits, costs, economic impact analysis, equity
assessment, discounting, sensitivity analysis, and summary and critique of
the entire economic analysis. The sections on costs and the summary and
critique of the economic analysis include the following:
· Was the proper modeling approach used to assess the economic costs?
· Were relevant and high quality data sources used?
Did the analysis address all significant economic costs?
· Are all of the data sources and assumptions clearly described?
· Is the analysis generally clear and transparent?
The questions in the draft are reasonable and specifically address some of
the problems we identified with the proposed radon rule, such as the lack
of clarity and transparency. However, the questions do not incorporate
basic quality assurance checks for accuracy and consistency that could
better ensure that the agency's economic analyses do not contain errors
such as inappropriately amortized costs. The errors that EPA made in
conducting and presenting its economic analysis supporting the radon rule
Page 26 GAO4)2-333 EPA's Proposed Rule on Radon
could, in most cases, have been eas'fly avoided with basic quality
assurance checks for accuracy and consistency.
While EPA's proposed radon rule was issued before the agency started to
implement its new regulatory review process, the director of EPA's
National Center for Environmental Economics told us that the drinking
water rule on radon will be subject to the review process before the rule is
finalized.
Conclusions In developing its proposed role on radon in drinking water, EPA sought
and was generally responsive to advice from experts and stakeholdem,
which strengthened important aspects of the cost analysis supporting the
proposed rule. However, because of the limitations we identified in EPA's
cost analysis, the agency did not provide policymakers and stakeholders
with complete and reliable estimates of the expected compliance costs of
the proposed rule and who would bear them. Identi~y~g the regulatory
costs that water systems are expected to incur is particularly important in
light of the anticipated financial demands on water systems to enhance
security and comply with other pending drinking water regulations. It is
also important to accurately estimate the costs that households would
have to incur--on a voluntary basis--to remove radon from the indoor air
in their homes to reduce radon health risks as anticipated by the rule. The
limitations in EPA's cost analysis and presentation also hampered the
ability of interested parties and the public to provide informed comments
to EPA. Whether addressing these limitations would change EPA's
conclusion that the rule is economically justified is not known given that
EPA will also be revising its estimate of the benefits in the final rule, for
example, to respond to reconumendations from the Science Advisory
Board that estimates of benefits be discounted to present value.
EPA appears to be moving in the right direction by requiring internal peer
reviews of the economic analyses support'mg its major rules and starting
to develop standard procedures for these reviews. The internal peer
reviews--ff properly and routinely conducted--should improve the
credib'flity and usefulness of the agency's economic analyses and improve
its regulatory actions overall. While we continue to believe that some
economic analyses may also warrant external peer review, there are signs
that an internal peer review process could produce meaningful results at
EPA. In our view, the agency's efforts to establish standard procedures for
the reviews of economic analyses could help the agency ensure that its
reviews are thorough and consistent. Yet it is not clear whether EPA's
review procedures, as presently drafted, would be sufficiently rigorous
Page 27 GAO-02-333 EPA's Proposed Rule on Radon
and detailed to identify some of the errors we identified, such as the
accounting error that incorrectly amortized an annual cost over a 20~year
period. However, EPA still has the opportunity to build in such
procedures.
Recommendations for To improve the credibility and usefulness of its economic analysis for the
final drinkLng water rule on radon, we recommend that the administrator,
Executive Action EPA, require the Office of Water to
correct its cost estimates for testing for and treating radon in indoor air
and disclose that homeowners are expected to bear these costs,
correct its estimates of states' and water systems' costs for administration
of indoor air programs,
· include mixed water systems in its economic analysis,
· revise its economic analysis to include less optimistic assumptions about
how many water systems will use indoor air programs to comply with the
rule, and
revise its estimate of the risks from radon emitted during water treatment
by incorporating the National Academy of Sciences' increased estimate of
these risks, and by using the agency's current air quality models, and
assess the extent to which the revised risk estimate would change costs.
To better ensure the quality of economic aralyses for the radon rule and
other major rules prepared by EPA, we also recommend that the
administrator, EPA, require the agency to expeditiously implement
standard procedures for conducting internal peer reviews of its economic
analyses. These procedures should include quality assurance measures to
identify errors in calculations; check the reasonableness of assuraptions
and methodologies; and ensure that the documentation of the analyses is
clear, txansparent, accurate, and complete.
Agency Comments We provided EPA with a draft of this report for its review and comment.
In response, officials from the Offices of Water; Air and Radiation; and
Policy, Economics, and Innovation generally agreed with our findings and
recommendations. The officials provided some technical and editorial
suggestions that we have incorporated into the report, as appropriate.
However, while agreeing that the proposed rule contained the errors and
other inaccuracies we identified, the Office of Water did not agree that an
effect of these errors was reduced credibility of EPA's cost analysis. While
our repott identifies a number of strengths of EPA's cost analys'm, these
strengths do not offset or negate the effects of the errors and
Page 28 GAO~)2-333 EPA's Proposed Rule on Radon
misstatements we found. We continue to believe that, collectively, the
limitations we identified reduced both the credibility and usefulness of the
cost analysis for the radon rule. For example, we believe that the
credibility of EPA's estimates was reduced by an analytic error and a
presentation error that EPA made related to an important cost
component--the cost of testing and treating indoor air for radon. The
analytic error involved EPA estimating annual costs of $4 mkUion, when
the correct estimate is about $41 million. The presentation error involved
EPA indicating that states and local water systems would bear these costs,
when such costs would actually be borne largely by individual households.
We believe that correcting these and other errors would, in fact, improve
the credibility and usefulness of the analysis to policymakers and
stakeholders.
Scope and To assess the strengths and limitations of EPA's cost esthuate for the
November 1999 proposed radon rule, we reviewed the two primary EPA
Methodology documents describing the agency's cost analysis; namely, the proposed
rule and the agency's economic analysis supporting the rule (the
regulatory impact analysis). In addition, we reviewed key EPA documents
~' that the agency used to support its economic analysis, including
Technologies and Costs for the Removal of Radon from Drinking Water;
Methecls, Occurrence, and Monitoring Document for Radon in Drinking
Water; Technical Support Document for the 1992 Citizen's Guide to
Radon; and the October 1999 supporting statement for information
collection request for radon. We reviewed case studies identifying the
costs associated with inatnlling and maintaining aeration equipment,
including Critical Assessment of Raclon Removal Systems for Drinking
Water Supplies published by the American Water Works Association
Research Foundation and the American Water Works Association in 1998.
In addition, we met with EPA officials responsible for the proposed rule
and the economic analysis to obtain information about key assumptions
and methodologies. These officials provided us with internal documents,
such as costing models and spreadsheets that supported the analysis,
which we also reviewed. We reviewed stakeholder comments made on the
proposed rule, including those by the American Water Works Association,
the National Rural Water Association, and the Association of State
Drinking Water Administrators. We met with representatives of the
American Water Works Association and interviewed water treatment
professionals who have experience with radon removal.
Because the scope of our review was lhuited to assessing EPA's cost
estimate, we reported on, but did not evaluate, EPA's estimates of the
V P~ge 29 GAO-02-333 EPA's Proposed Rule on Radon
expected benefits of the proposed rule. As also agreed with your offices,
we reviewed the assumptions EPA used in its cost models to generate its
water treatment estimates, but we did not validate the costing models or
the data EPA used in developing its cost estimates. For several of the
analytical limitations we identified, we developed estimates of the change
in EPA's estimated costs ff EPA were to correct its analysis (see app. I).
We developed these estimates based on information from EPA's primary
documents and additional internal documents that we obtained from EPA
officials. We did not have a basis to estimate increased costs that water
systems might incur if EPA updated its estimate of the health risks from
radon that would be emitted into outdoor air as it is removed from
drinking water through aeration. We conducted our work from May 2001
through January 2002 in accordance with generally accepted government
auditing standards.
We will send copies of this report to the administrator, Epa, and make
copies available to others who request them. If you or your staff have
questions about this report, please call me on (202) 512-3841.
John B. Stephenson
Director, Natural Resources
and Environment
Page 30 GAO-02-333 EPA's ProI~osed Rule on Radon
Appendix I: Adjustments to EPXs Best
Estimates of Total National Costs to Address
Limitations in EPXs Economic Analysis
Dollars in millions
EPA's best EPA's beat
estimate corrected estimate corrected
for two accounting for two accounting
errors; including errors; including
EPA's best mixed systems; mixed systems;
estimate corrected and adjusting and adjusting
EPA's best for two accounting overly optimistic overly optimistic
estimate corrected errors and assumption from assumption from
EPA'sbest for two accounflng includingmlxed 90% of systems to 90% of systems to
Cost components estimate errors systems' 75% of systems 50% of systems
Water
Capital $23.1 $23.1 $26.0 $44.6 $75.6
Operations and 15.5 15.5 17.4 29.6 49.8
maintenance
Monitoring 14.1 14.1 15.9 15.9 15.9
System 6.1 6.1 6.3 6.3 6.3
administration
State administration 2.5 2.5 2.5 2.5 2.5
Subtotal $61.3 $61.3 $68.1 $98.8 $15{].1
Indoor air
Testing and 3.9 41.2 51.3 47.2 40.5
treatment~
System 45.1 18.6 19.1 15.9 10.6
administration of
systems' indoor air
pro,qrams
State oversight of 7.8 3.3 3.4 2.9 2.0
systems' indoor air
programs
State administration 2.9 2.9 2.9 2.9 2.9
of states' indoor air
programs=
Subtotal $59.8 $66.1 $76.7 $68.9 $56.0
Total costs $121.1 $127.4 $144.8 $167.8 $206.1
Note: Line items may not sum to totals due to rounding.
'Our estimate of the costs for mixed systems is based on an estimate that EPA developed and we
reviewed, The estimate includes 1,074 mixed water systems receiving more than 50 percent of their
water from groundwater sources. However, it does not include the costs for three systems serving
more than 1,000,000 customers that receive some of their water from groundwater soumes and that
EPA believes would incur costs to comply with the radon rule. We did not develop an estimate for
these costs, which should also be included in EPA'S cost estimate for the flna{ radon rule.
DEPA assumes that most of these costs will be borne by individual homeowners.
'EPA's best estimate assumes 25 states will have indoor air programs, but its estimate of state
administration costs is based on costs for 23 states. According to EPA, the estimate in the final rule
will include costs for 25 states.
Soume: GAO's analysis of EPA data.
Page 31 GAO-02~333 EPA's Proposed Rule on Pmdon
Appendix II: GAO Contact and Staff
Acknowledgments
GAO Contact Christine Fishldn (202) 512-6895
St~ef Other key contributors to this report include David Goldstein,
Timothy Guinane, Patricia Manthe, Cynthia Norris, and Amy Webbink.
Acknowledgments
(360041)
Psge 32 GAO~)2-333 EPA's Proposed Rule on Radon
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