On May 2, 2017, Mayor and Council Communication (M&C C-28212) the City Council authorized the City Manager to execute a contract in the amount of $1,250,000.00, with the option of two renewals, with William J. Schultz, Inc. d/b/a Circle C Construction Company for 2017 Sanitary Sewer Emergency Response Contract. On February 20, 2018, Mayor and Council Communication (M&C C-28590) the City Council authorized the City Manager to execute the first of two optional contract renewals in the amount of $1,250,000.00, with William J. Schultz, Inc. d/b/a Circle C Construction Company for the 2017 Sanitary Sewer Emergency Response Contract. The City and the Contractor desire to exercise the second and final renewal of the contract in the amount of $1,250,000.00 and with the same terms and conditions. This renewal increases the total project amount to $3,750,000.00 The work to be performed under this contract consists of replacing and/or relocating large diameter sanitary sewer mains and other pertinent construction required in response to emergency sanitary sewer incidents. In addition to the contract amount, $250,000.00 is required for design, survey, project management, material testing and inspection. This project will have no impact on the Water Department's operating budget when completed. Construction is expected to start October 2018 and be completed by October 2019 or when the contract amount is exhausted. 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 Callable Commercial Paper Program (CP) 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 CP 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 FY2018-2022 Five-Year Capital Improvement Plan on September 26, 2017. This City Council adopted plan includes this specific project, with funding identified through the CP 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 is located in ALL COUNCIL DISTRICTS.
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