Authorize Acceptance of Funds in the Amount of $110,745.00 from Centex Homes for its Share of Design Costs Related to the Northside IV 24-inch Water Transmission Main Along Bowman Roberts Road from Santa Gertrudis Street to Haltom Bailey Boswell Road, Authorize Execution of an Engineering Agreement with Freese and Nichols, Inc., in the Amount of $386,311.00 for Engineering and Design Services and Provide for Staff Costs, Property Acquisition, Utility Coordination and Material Testing for a Design Phase Amount of $589,000, Adopt a Resolution Expressing Official Intent to Reimburse Expenditures with Proceeds of Future Debt for the Northside IV 24-Inch Water Transmission Main Along Bowman Roberts Road from Santa Gertrudis Street to Haltom Bailey Boswell Road Project and Adopt Appropriation Ordinances (COUNCIL DISTRICTS 2 and 7)

It is recommended that the City Council:

1.  Adopt the attached appropriation ordinance increasing estimated receipts and appropriations in the Water and Sewer Community Facilities Agreement Fund in the amount of $110,745.00 from available funds;

2.  Adopt the attached appropriation ordinance increasing estimated receipts and appropriations in the Water and Sewer DPN Fund in the amount of $478,255.00 from available funds;

3.  Adopt the attached resolution expressing official Intent to Reimburse expenditures with proceeds of future debt for costs related to the Northside IV 24-Inch Water Transmission Main along Bowman Roberts Road from Santa Gertrudis Street to Haltom Bailey Boswell Road Project; and

4.  Authorize execution of an Engineering Agreement with Freese & Nichols, Inc., in the amount of $386,311.00 for Northside IV 24-inch Water Transmission Main along Bowman Roberts Road from Santa Gertrudis Street to Haltom Bailey Boswell Road.

This Mayor and Council Communication (M&C) is to authorize the preparation of plans and specifications for a 24-inch Water Transmission Main from the Eagle Mountain Water Treatment Plant along Bowman Roberts Road from Santa Gertrudis Street to Haltom Bailey Boswell Road. The proposed water main is the first phase of a 24-inch water Transmission main from the treatment plant to serve points in the northern growth areas of the City.

The proposed scope of services includes design for the following:

• Hydro-pneumatic tank;
• Meter installation at the treatment plant;
• Transfer valve station with motorized valve and SCADA controls;
• Geotechnical investigation; and
• Traffic control.

Freese and Nichols, Inc., proposes to provide the necessary design services for a lump sum fee of $386,311.00.  Staff considers the proposed fee to be fair and reasonable for the scope of services proposed.

In addition to the contract amount, $202,689.00 is required for project management, utility coordination, property acquisition and material testing.

Engineering for the Northside IV 24-inch Water Transmission Main along Bowman Roberts Road Project is one component of the overall project that includes project management, easement acquisition, utility coordination, material testing, inspection, construction and contingencies.  The overall project budget is $4,500,000.00.  Design is expected to start in January 2017 and be completed by June 2017.  Construction is anticipated to commence in August 2017 and be completed by October 2018.

In accordance with the Developer Funding Agreement for Northside IV 24-inch Water Main Extension Bowman-Roberts Road (City Secretary Contract No. 48320) between CENTEX HOMES and the City, CENTEX HOMES will contribute $110,745.00 towards the engineering cost for this project.

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 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 Direct Purchase Note 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.

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).  This City Council 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 Statements, 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 other 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.

This project will have no impact on the Water Department's operating budget.

M/WBE OFFICE:  Freese and Nichols, Inc., is in compliance with City's BDE Ordinance by committing to 15 percent SBE participation.  The City's SBE goal on this project is 12 percent.

The project is located in COUNCIL DISTRICTS 2 and 7, Mapsco 32L, 32Q, 32U, 32V, 32Y and 32Z.