It is recommended that the City Council:

1.  Adopt the attached resolution expressing official Intent to Reimburse expenditures with proceeds of future debt for entire the Northside II 48-inch Water Main, Phase II Improvement Project;

2.  Authorize an amendment to the Fiscal Year 2016 Water Capital Improvement Plan to add additional funding to the Northside II 48-inch Water Main Project in the amount of $5,463,911.00;

3.  Adopt the attached appropriation ordinance increasing estimated receipts and appropriations in the Northside II 48-Inch Water Main, Phase II, Part 2 Project of the 2016 Water Capital Projects Improvement Plan in the amount of $5,463,911.00 from available funds; and

4.  Authorize the execution of a contract with S.J. Louis Construction of Texas, Ltd., in the amount of $14,220,423.00 for the Northside II 48-inch Water Main Phase II, Part 2 from Wagley Robertson Road to Parkview Hills Lane.

On December 9, 2014 (Mayor and Council Communication (M&C) C-27124), the City Council authorized an Engineering Agreement with Freese & Nichols, Inc., for the preparation of plans and specifications for Northside II 48-inch Water Main Phase II, from Heritage Trace Parkway to Longhorn Road.  The proposed water main will increase water delivery and reliability to the Northside II pressure plane.

In order to expedite construction, the Phase II project was divided into the following three parts:

• Part 1, 48-inch water main from Heritage Trace Parkway to Wagley Robertson Road.
• Part 2, 48-inch water main from Wagley Robertson Road to Parkview Hills Lane (this project).
• Part 3, 48-inch water main from Parkview Hills Lane to Longhorn Road.

Phase II, Part 2, consists of the following:

• Installation of a 48-inch water main beginning from Wagley Robertson Road to Parkview Hills Lane
• Construction of the north bound half of Old Decatur Road from Bailey Boswell Road to Parkview Hills Lane in accordance with an Inter-Local Agreement between the City of Fort Worth and the City of Saginaw (City Secretary Contract No. 47705).

This project was advertised for bids on March 10, 2016 and March 17, 2016 in the Fort Worth Star-Telegram.  On March 31, 2016 the following bids were received:

Bidder	Amount	Time of completion
S.J. Louis Construction of Texas, Ltd.	$14,220,423.00	540 Calendar Days
William J. Shultz, Inc. d/b/a Circle "C" Construction Company	$14,456,642.50
Oscar Renda Contracting, Inc.	$14,560,900.00
Thalle Construction Company, Inc.	$16,390,059.30
Jackson Construction, Ltd.	$18,635,112.50
Atkins Bros. Equipment Company, Inc.	$26,274,050.00

In addition to the contract cost, $1,208,700.00 is required for project management, material testing and inspection and $426,700.00 is provided for project management

This project requires additional funding in the amount of $5,463,911.00 for increased construction cost as well as related easements, inspection, contingency and project management cost as depicted by the table below.  Staff recommends these additional funds come from funds in the Water / Sewer DPN fund.

M&C number or log name	DPN Funding required
M&C L-15915 adopted 6/14/2016	$     581,000.00
20MARINE CREEK PARKWAY	$  3,428,295.00
60NSII48PH2A1-FNI	$    2 43,593.00
60NSH48WPH2P2-SJLOUIS	$15,855,823.00
Sub Total	$20,108,711.00
Funding allotted M&C G-18625	$14,644,800.00
Funding shortage	-$ 5,463,911.00

This project is anticipated to be included in a future revenue bond issue for the Water and Sewer Fund.  Available cash within the Water and Sewer portfolio and the City's portfolio along with the appropriation authority authorized under the Direct Purchase Note (DPN) Program will be used to provide interim financing for this project until debt is issued.  To the extent resources other than the Water and Sewer portfolio are used to provide interim financing, the Water and Sewer Fund will be charged interest that is equivalent to the overall rate of return being earned by the City portfolio (currently approximately one-percent annually).  Should the City's portfolio not support the liquidity needed to provide an interim short-term financing source, another funding source will be required, which could mean issuance of securities under the DPN Program or earlier issuance of Water and Sewer revenue bonds than is currently planned.  Once debt associated with this project is sold, bond proceeds will be used to reimburse the Water and Sewer portfolio and the City's portfolio in accordance with the attached Reimbursement Resolution, which encompasses the entirety of Phase II.

The City Council adopted the Water Department's Fiscal Year 2016 - 2020 Five-Year Capital Improvement Plan on February 2, 2016 (M&C G-18662).  Adopted plan includes this specific project, with funding identified through the DPN Program to be reimbursed with future revenue bonds.  In accordance with the provisions of the Financial Management Policy Statement, Staff anticipates presenting revenue-supported debt issuances to the City Council for consideration within the next three years.  This debt must be issued within approximately three years to provide reimbursement for these expenses.  If that does not occur, the costs will no longer be reimbursable by issuing tax-exempt debt and the funding source will have to be made whole through budgetary methods.  Adoption of this resolution does not obligate the City to sell bonds, but preserves the ability to reimburse the City from tax-exempt bond proceeds.

Construction is anticipated to commence in August 2016 with a contract time of 540 calendar days, the project is estimated to be complete by the end of December 2017.

This project will have no impact on the Water Department Operating Budget when complete.

M/WBE OFFICE:  S.J. Louis Construction of Texas, Ltd., is in compliance with City's BDE Ordinance by committing to nine percent MBE participation.  The City's MBE goal on this project is nine percent.

The project is located in COUNCIL DISTRICT 7, Mapsco 3E, 4E, 5E, 6E, 7E and 8E.