M&C Review


COUNCIL ACTION:  Approved on 1/15/2019 - Ordinance No. 23525-01-2019 & Resolution No. 5029-01-2019

DATE: 1/15/2019 REFERENCE NO.: **C-28990 LOG NAME: 60MARINECREEKPIIP1-VENUS
CODE: C TYPE: CONSENT PUBLIC HEARING: NO
SUBJECT:   Authorize Execution of a Contract with Venus Construction Company, Inc., in the Amount of $2,897,370.00 for Marine Creek Interceptor M-279A & M-365 Improvements, Phase II, Part 1, Provide for Project Costs, Materials Testing and Contingencies for a Total Amount of $3,375,830.00, Adopt Resolution Expressing Official Intent to Reimburse Expenditures with Proceeds of Future Debt and Adopt Appropriation Ordinance (COUNCIL DISTRICT 2)

RECOMMENDATION:

It is recommended that the City Council:

  1. Adopt the attached Resolution Expressing Official Intent to Reimburse Expenditures with Proceeds of Future Debt for the Marine Creek Interceptor M-279A & M-365 Improvements Phase II, Project; and

  2. Adopt the attached Appropriation Ordinance increasing  appropriations in the Marine Creek Interceptor M-279A & M-365 Improvements Phase II Project in Water and Sewer Commercial Paper Fund in the amount of $3,375,830.00; and

  3. Authorize execution of a contract with Venus Construction Company, Inc., in the amount of $2,897,370.00 for Marine Creek Interceptor M-279A & M365 Improvements Phase II, Part 1 (City Project No. 100274).
 
DISCUSSION:

This Mayor and Council Communication provides for the construction of a 42-inch & 36-inch sewer main, extending from Ten Mile Bridge Road and proceeding northerly 5,190 feet. The project will provide additional wastewater capacity to the Marine Creek drainage basin.

On April 18, 2017 (M&C C-28194), the City Council authorized an engineering agreement in the amount of $291,579.00 with Halff Associates, Inc., for design of Marine Creek Interceptor M-279A & M-365 Improvements, Phase II. The agreement was subsequently revised by Amendment No. 1 in the amount of $133,294.00 authorized January 9, 2018 (M&C C-28528).

The Agreement requires additional funding to cover costs associated with Amendment No. 2 in the amount of $70,000.00, that provides for inspection assistance on the project.

Construction of the project was advertised for bid on August 9, 2018 and August 16, 2018 in the Fort Worth Star-Telegram. On September 6, 2018, the following bids were received:

BidderAmountTime of Completion
Venus Construction Company, Inc.$2,897,370.00270 Calendar Days
William J. Schultz, Inc., dba Circle C Construction Company$2,915,310.00
S.J. Louis Construction of Texas, Ltd.$3,047,961.50
Ark Contracting Services, LLC$3,137,505.00
Condie Construction Company, Inc.$3,600,216.00
Mountain Cascade of Texas, LLC$4,144,242.00
Thalle Construction Company$4,493,139.50

In addition to the contract amount, $333,591.00 is required for project management, material testing and city inspection and $144,869.00 is provided for project contingency.

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 Fiscal Year 2018-2022 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 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 for Phase II, Part 1 is anticipated to commence in March 2019 and be completed by December 2019. This project is part of the Water Department's Sanitary Sewer Overflow Initiative Program. This project will have no impact on the Water Department's Operating Budget when complete.

M/WBE OFFICE – Venus Construction Company, Inc., is in compliance with the City's BDE Ordinance by committing to eight percent MBE participation and documenting good faith effort. Venus
Construction Company, Inc., identified several subcontracting and supplier opportunities. However, the firms contacted in the areas identified did not respond or did not submit the lowest bids. The City's MBE goal on this project is 25 percent.

The project is located in COUNCIL DISTRICT 2.


 
FISCAL INFORMATION/CERTIFICATION:

The Director of Finance certifies that upon approval of the above recommendations and adoption of the attached appropriation ordinance, funds will be available in Water & Sewer Commercial Paper Fund for the Marine Creek Interceptor M-279A & M-365 Improvements, Phase II Project. The Water and Sewer Commercial Paper Fund includes authority of $150,000,000 for the purpose of providing interim funding for Water and Sewer Capital Projects. After this transfer, the balance will be $97,858,130.00 for future capital projects. Funding for the Marine Creek Interceptor M-279A & M365 Improvements, Phase II project is as depicted below:

FUND

Existing Appropriations

Additional Appropriations

Project Total*
Water & Sewer Capital Projects Fund 56002

$604,873.00

$0.00

$604,873.00

Water & Sewer Commercial Paper Fund 56016

$0.00

$3,375,830.00

$3,375,830.00

Project Total

$604,873.00

$3,375,830.00

$3,980,703.00

* Numbers rounded for presentation purposes.

TO
    Fund Department
ID
Account Project
ID
Program Activity Budget
Year
Reference #
(Chartfield 2)
Amount

FROM
    Fund Department
ID
Account Project
ID
Program Activity Budget
Year
Reference #
(Chartfield 2)
Amount

Submitted for City Manager's Office by:
Jay Chapa (5804)
Originating Department Head:
Chris Harder (5020)
Additional Information Contact:
Walter Norwood (5026)

 
 
ATTACHMENTS
  60MARINECREEKPH2P1-VENUS- REIMB RESOLUTION.docx
  60MARINECREEKPIIP1-VENUS _56016_AO19Rev.docx
  60MARINECREEKPIIP1-VENUS Form 1295 2018-426757_Redacted.pdf
  60MARINECREEKPIIP1-VENUS Map.pdf