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Agenda Item: 15(a) |
Prepared By: Jeffrey E. Poteet, General Manager, Water & Sewer |
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Business: City Council Item |
Department: Water & Sewer |
Subject:
Title
Discussion with Council Action - Recommended Next Steps for Advanced Wastewater Treatment (AWT) Implementation and Funding Strategy - Jeffrey E. Poteet, General Manager, Water & Sewer
Body
BACKGROUND:
On May 4, 2026, the City Council approved an ordinance formally authorizing the City to move forward with planning and implementation of Advanced Wastewater Treatment (“AWT”) improvements at the Marco Island Reclaimed Water Production Facility (“RWPF”). This action reflects the City’s continued commitment to environmental stewardship, long-term regulatory preparedness, protection of surrounding waterways and groundwater resources, and continued investment in critical utility infrastructure.
As part of this effort, the City retained Black & Veatch to perform an Advanced Water Treatment Evaluation of the RWPF. The evaluation assessed the current performance of the facility, identified future regulatory considerations associated with advanced nutrient removal requirements, and evaluated feasible treatment alternatives capable of achieving future AWT standards for Total Nitrogen (“TN”) and Total Phosphorus (“TP”). The study also considered operational reliability, constructability, long-term operational complexity, life-cycle costs, expandability, and compatibility with the City’s existing treatment infrastructure.
The Black & Veatch evaluation concluded that the RWPF is currently a well-operated and high-performing facility that already incorporates advanced treatment technologies, including membrane bioreactor (“MBR”) processes, and continues to provide effective nutrient removal and environmental protection. The evaluation further concluded that all three proposed AWT alternatives are technically feasible and capable of achieving future AWT nutrient standards.
The next phase of the project will focus on selection of the preferred treatment alternative, development of a funding strategy, advancement into preliminary engineering and permitting, and continued coordination with regulatory agencies.
Staff is requesting City Council direction on the following items:
1. Confirmation of Preferred AWT Alternative for Design Advancement
With City Council authorization to proceed with Advanced Wastewater Treatment (“AWT”) implementation, staff requests direction regarding which treatment alternative should advance into preliminary engineering, design, permitting, and regulatory coordination.
As part of the City’s AWT Evaluation, Black & Veatch analyzed multiple treatment alternatives capable of achieving future AWT nutrient removal standards while considering long-term operational reliability, constructability, compatibility with the existing treatment infrastructure, operational complexity, and overall life-cycle cost.
The dollar amounts below, associated with each alternative represent the mean Total Expenditure (“TOTEX”) values identified in the Black & Veatch Evaluation Report (Page 5-27). TOTEX reflects the estimated combined life-cycle costs associated with capital improvements together with projected long-term operation and maintenance expenses for each alternative.
The Black & Veatch evaluation identified the following alternatives:
• Alternative 1 - Four-Stage Bardenpho + S2EBPR ($18,839,647.74):
Identified as the preferred and most cost-effective long-term alternative due to its lower overall life-cycle cost, reduced chemical dependency, and operational compatibility with the existing treatment process.
• Alternative 2 - Four-Stage Bardenpho + Chemical Phosphorus Removal ($26,086,810.70):
Considered operationally simpler to implement but associated with higher long-term operating costs due to ongoing chemical addition requirements.
• Alternative 3 - PdNA + Chemical Phosphorus Removal ($21,845,500.34):
Utilizes newer and emerging nitrogen removal technology capable of high performance but with greater operational complexity and limited full-scale implementation history.
Staff recommends Council provide direction regarding whether to:
• Proceed with Alternative 1 as the baseline recommended alternative for preliminary design; or
• Authorize additional refinement and evaluation of Alternatives 2 or 3 prior to advancement into design.
2. Direction Regarding Funding of AWT Improvements
Staff requests Council direction regarding the preferred funding strategy for the AWT project.
Potential funding sources may include:
• Water and Sewer enterprise fund reserves;
• State Revolving Fund (“SRF”) financing;
• Revenue bonds;
• Legislative appropriations;
• State and federal grant opportunities;
• Water and Sewer rate adjustments; and/or
• A phased funding approach utilizing multiple funding sources.
Staff also notes anticipated reimbursement and recovery of previously awarded external funding associated with resiliency and utility infrastructure improvements, including:
• Approximately $2.1 million related to portable generator grant funding; and
• Approximately $900,000 associated with the South Water Treatment Plant High Service Pump Station (“SWTP HSPS”).
These anticipated reimbursements may provide additional financial flexibility and could potentially offset future capital expenditures, reduce borrowing requirements, or support implementation of the AWT improvements.
3. Authorization to Advance Preliminary Design and Regulatory Coordination
Following Council direction regarding the preferred treatment alternative and funding strategy, staff is also requesting direction regarding the preferred project delivery methodology for design and construction of the AWT improvements.
Traditionally, the Water and Sewer Department has utilized the Design-Bid-Build (“DBB”) project delivery method for major utility infrastructure projects. Under the DBB approach, the City separately procures engineering design services, completes final construction documents, and subsequently bids the project for construction.
However, due to the technical complexity, operational sensitivity, regulatory coordination requirements, and schedule considerations associated with the RWPF AWT improvements, staff believes the project may be better suited for a Design-Build (“DB”) delivery approach.
Under the Design-Build methodology, the City would procure a qualified team consisting of both design professionals and construction contractors working collaboratively under a single contract. Staff believes this approach may provide several advantages for the AWT project, including:
• Improved coordination between design and construction activities;
• Greater flexibility in integrating specialized treatment technologies;
• Enhanced constructability review during the design process;
• Reduced risk of design conflicts and change orders;
• Accelerated project delivery schedules;
• Improved cost control and budgeting certainty; and
• Greater ability to phase construction while maintaining continuous operation of the existing RWPF.
Given that the project involves modifications and upgrades to an active wastewater treatment facility that must remain operational throughout construction, the Design-Build process may provide additional efficiencies and reduce operational risks compared to the traditional Design-Bid-Build approach.
If Council concurs with utilizing the Design-Build delivery method, staff requests authorization to begin the Request for Qualifications (“RFQ”) process for procurement of Design-Build services in accordance with applicable Florida procurement requirements, including Section 287.055, Florida Statutes (the “Consultants’ Competitive Negotiation Act” or “CCNA”), and other applicable public procurement regulations governing Design-Build projects.
The RFQ process would allow the City to solicit and evaluate qualified Design-Build teams with specific experience in advanced wastewater treatment facilities, membrane bioreactor systems, nutrient removal processes, and complex treatment plant upgrades. Following evaluation of qualifications, staff would return to City Council with recommendations regarding shortlisted firms, final procurement steps, contract negotiations, and subsequent authorization to proceed with preliminary design and engineering services.
4. Public Communication and Stakeholder Outreach
As the project advances, staff will continue public outreach and stakeholder communication efforts regarding:
• Environmental and groundwater protection benefits associated with AWT;
• Long-term regulatory preparedness;
• Continued operational reliability of the RWPF;
• Financial impacts and potential funding options; and
• Anticipated project implementation schedules and milestones.
The Black & Veatch evaluation confirmed that the RWPF possesses significant existing treatment infrastructure and operational capabilities that can be leveraged for future AWT conversion, thereby minimizing the need for construction of an entirely new treatment facility and supporting a cost-effective long-term implementation strategy.
FUNDING SOURCE / FISCAL IMPACT: N / A
RECOMMENDATION:
Staff recommends that City Council approve Alternative 1 - Four-Stage Bardenpho + S2EBPR as the preferred Advanced Wastewater Treatment (“AWT”) alternative for advancement into preliminary design and permitting. Based on the Black & Veatch evaluation, Alternative 1 represents the most cost-effective long-term solution due to its lower total life-cycle cost, reduced chemical dependency, compatibility with the existing treatment process, and overall operational reliability.
Staff further recommends that the City initially fund the preliminary phases of the project utilizing available Water and Sewer enterprise fund reserves while simultaneously pursuing alternative external funding opportunities intended to reduce the overall financial impact to the Water and Sewer System and its customers. Such funding opportunities may include legislative appropriations, state and federal grants, State Revolving Fund (“SRF”) financing, and other available infrastructure funding programs. Staff will also continue efforts to secure reimbursement and recovery of previously awarded grant funding, including approximately $2.1 million associated with portable generators and approximately $900,000 associated with the South Water Treatment Plant High Service Pump Station (“SWTP HSPS”).
Because the ultimate project cost will be significantly influenced by the selected project delivery methodology and final scope of improvements, staff recommends that, following advancement of preliminary design and confirmation of anticipated construction costs, the City retain a qualified utility financial consultant to perform a comprehensive revenue sufficiency and utility rate study. The purpose of the study will be to evaluate the financial impacts of the AWT improvements, confirm the long-term financial sustainability of the Water and Sewer System, evaluate funding alternatives, and ensure that utility rates remain sufficient to support future operational, maintenance, capital improvement, reserve, and debt service requirements while minimizing impacts to customers to the greatest extent practicable.
Staff also recommends that City Council authorize staff to proceed with issuance of a Request for Qualifications (“RFQ”) for procurement of Design-Build (“DB”) services for the AWT project. Due to the technical complexity of the proposed treatment improvements, the need to maintain continuous operation of the existing RWPF during construction, schedule considerations, and the benefits associated with integrated design and construction coordination, staff believes the Design-Build project delivery methodology represents the most efficient and effective approach for implementation of the project.
The RFQ process will allow the City to identify and evaluate qualified Design-Build teams with demonstrated experience in advanced wastewater treatment facilities, membrane bioreactor systems, biological nutrient removal technologies, and complex treatment plant upgrades. Following evaluation of qualifications and development of the procurement process, staff will return to City Council with recommendations regarding shortlisted firms, contract negotiations, and authorization to proceed with preliminary design services.
Finally, staff recommends continued public outreach and stakeholder engagement efforts throughout the planning and implementation process in order to provide ongoing communication regarding project objectives, environmental benefits, regulatory considerations, anticipated schedules, funding strategies, and potential customer impacts associated with the AWT improvements.
POTENTIAL MOTION:
“I move that City Council approve Alternative 1 - Four-Stage Bardenpho + S2EBPR as the preferred Advanced Wastewater Treatment (“AWT”) alternative for advancement into preliminary design, permitting, and regulatory coordination for improvements to the Marco Island Reclaimed Water Production Facility (“RWPF”).
I further move that City Council authorize staff to utilize available Water and Sewer reserves for initial project funding while pursuing grants, legislative appropriations, SRF financing, and other external funding opportunities to reduce project costs.
I further move that City Council authorize staff to proceed with the Request for Qualifications (“RFQ”) process for procurement of Design-Build services for the AWT project and to return to Council with future recommendations regarding project costs, financing, and implementation.
Finally, I move that City Council authorize staff to continue public outreach, stakeholder coordination, and to retain a utility financial consultant, once project costs are refined, to perform a revenue sufficiency and utility rate study related to the AWT improvements.”