Report to Carson Reclamation Authority
Thursday, July 18, 2024
Discussion
SUBJECT:
Title
CONSIDER AUTHORIZING EXECUTIVE DIRECTOR LETTER AMENDMENT TO AMENDED AND RESTATED ENVIRONMENTAL REMEDIATION AND DEVELOPMENT MANAGEMENT AGREEMENT, DATED JUNE 20, 2019 (THE “ORIGINAL AGREEMENT”), BETWEEN THE CARSON RECLAMATION AUTHORITY (“CRA”) AND RE SOLUTIONS, LLC (“RES”)
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I. SUMMARY
The CRA and RES entered into a Settlement Agreement, dated October 31, 2022 (as subsequently amended, the “Settlement Agreement”). Part of the Settlement Agreement was tied to the CAM-Carson, LLC (“CAM”) project on Cell 2 moving forward. In March 2024 CAM elected to terminate the Second Amendment to Conveyancing Agreement prior to the expiration of the due diligence period, so the previously executed Settlement Agreement between the CRA and RES has terminated pursuant to its terms. Therefore, RES and the CRA seek to into an amendment to the Original Agreement (“Letter Amendment”) to establish the terms upon which the Original Agreement shall continue as contemplated by Section 2.2 of the Settlement Agreement.
Also, as of the effective date of this Letter Amendment, the parties are in negotiations regarding a potential second letter amendment to the Agreement regarding the performance of specified construction management/Development Services (if such document is approved and executed by the parties, the “CM Letter Amendment”).
This Letter Amendment is presented in draft, as the Authority Counsel and RES’ attorneys are still working on language related to the termination provisions. The final signed copy will be in a form acceptable to the Authority Counsel but will deviate only slightly from this draft. The scope of services is unaffected. The term shall commence on July 26 2024 and shall expire on June 1 2026, unless earlier terminated by either party.
II. RECOMMENDATION
Recommendation
1. APPROVE a Letter Amendment to Amended and Restated Environmental Remediation and Development Management Agreement, dated June 20, 2019 (the “Original Agreement”), between the Carson Reclamation Authority (“CRA”) and RE Solutions, LLC (“RES”), in a form acceptable to the Authority Counsel.
2. AUTHORIZE the Executive Director to execute the Letter Agreement.
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III. ALTERNATIVES
TAKE another action the Board deems appropriate.
IV. BACKGROUND
In 2023, the CRA anticipated the wind-down of the contract with RES as Development Manager, with post-closure tasks such as overseeing the O&M contractor and providing regular reports to the environmental regulators to be performed by CRA (City) staff. This would have included absorbing the onsite secretary as a Senior Clerk and adding three new positions: (1) an Administrative Analyst to work on day-to-day contracting issues; (2) an Environmental Engineer to work with the on-site manager, O&M contractor, and Environmental Advisor on permits and regulatory issues related to the landfill systems; and (3) a Development Manager to oversee the broad range of real-estate, contractual, and regulatory responsibilities of the Authority.
Under the Letter Agreement, RES will expand its Project Management/On-Site Management responsibilities to include directly performing the O&M work (now under contract with WSP-Golder USA, Inc., which contract is ending), while retaining all the site coordination among and between the private developers and the CRA.
RES already provides, under the current scope, for On-Site Management. The On-Site Development Manager on the site includes overseeing the O&M work (now under contract with WSP-Golder USA, Inc., which contract is ending), plus all the site coordination among and between the private developers and the CRA. An example of this site coordination is air quality/dust monitoring and noise & vibration monitoring, which will be performed by the CRA during construction but billed back to the developers on a pro rata basis. Neither monitoring program is an O&M activity so shouldn’t fall under the O&M contract. The remainder of the Site Management and O&M work over the next year will be performed by RES and its subcontractors.
In addition, the RES contract covers certain monthly site management costs, including trailer rental, fencing, and basic maintenance. These are pass-through costs and not compensation to RES. Other subcontractors on the site come under the Site Management area of responsibility and are not O&M, which is specific to the remedial systems. These non-remedial costs include:
A. Site Security. Because of its status as an unclosed landfill with active O&M facilities and operations, the CRA maintains 24/7 security on the site. Site security will expand this year as construction begins, as the second entry gate will open to service visitors and construction workers, while the other gate will be for specific construction-related traffic.
B. Weed Abatement and SWPPP. Contractors provide services for weed abatement and assist during the rainy season with SWPPP compliance, managing the stormwater. Once construction on Lenardo and on Cells 3, 4, and 5 commence, the contractors on those sites will be responsible for the construction of stormwater capture facilities, but the CRA will retain the responsibility for pumping and discharging stormwater, as the holder of the permit. The CRA also retains a Qualified SWPPP Practitioner who produces the annual stormwater management plan and maintains the records with the Water Board.
Under the Letter Agreement, RES will now directly perform the following services with respect to the O&M Obligations:
A. RES shall provide all labor, materials, tools, equipment, machinery, and other items necessary to perform the O&M Obligations required under the DTSC Documents and Environmental Laws in a diligent and workmanlike manner utilizing qualified personnel and good and sufficient materials and equipment. Such services are generally described as follows:
Task 1: O&M Management Services (includes regulatory coordination, permitting and reporting for DTSC, SCAQMD, LACSD, LACPW, Cal-EPA, and the local CUPA, a well as updates to the CRA)
Task 2: O&M of Landfill Cap System ("Cap")
Task 3: O&M of the Gas Collection and Control System ("GCCS")
Task 4: O&M of the Groundwater Extraction and Treatment System ("GETS")
Task 5: Groundwater Monitoring
Task 6: Perimeter Air and Noise Monitoring
Task 7: Allowances and Contingency
B. Such services shall be performed in strict compliance with all federal, state, and local agency regulations and requirements (including, without limitation, DTSC regulations/requirements, DTSC Documents, Environmental Laws, the AQMD, LACSD, LACPW, CAL-EPA, the local CUPA, LEA, LACFD, and CRA requirements and regulations). Subject to its right to reimbursement, RES shall be responsible for coordinating and paying the costs of laboratory testing required.
C. RES shall be responsible for submitting applications, coordinating, and maintaining necessary permits and approvals (each in the name of the CRA) required to perform the work required under Tasks 1 -7 and specifically to operate and maintain the existing Remedial Systems and any modifications thereto during the Term of this Letter Amendment or any extension thereof. RES shall be responsible for permit renewal in a timely fashion in the event such permits are subject to expiration or require renewal during the Term of this Letter Amendment.
V. FISCAL IMPACT
The estimated cost of O&M including operation of the Landfill Operation Center (the groundwater system and the gas collection system) and other daily testing and monitoring; the basic contractual cost is $195,000 a month plus up to $1,000,000 annually in “time and materials” allowances (“Task 7 Allowances”).
This amount was already approved in the CRA’s adopted FY 2024-2025 Budget.
VI. EXHIBITS
1. Letter Amendment to Amended and Restated Environmental Remediation and Development Management Agreement, dated June 20, 2019 (the “Original Agreement”), between the Carson Reclamation Authority (“CRA”) and RE Solutions, LLC (“RES”)(pgs. 5-21)
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Prepared by: John S. Raymond, Executive Director