Authorize Execution of Design Procurement Agreement with Legends of Hanna Ranch, Ltd., with City Participation in the Amount of $458,771.30, for Engineering Design for Replacing Public Sanitary Sewer Mains M-295 and M-329, Located in Village Creek Basin; Adopt Resolution Expressing Official Intent to Reimburse Expenditures with Proceeds of Future Debt and Adopt Appropriation Ordinance (COUNCIL DISTRICT 8)

It is recommended that the City Council:

1. Authorize the execution of a Design Procurement Agreement with Legends of Hanna Ranch, Ltd., with City Participation in the amount of $458,771.30, for the Engineering Design for replacing public sanitary sewer mains M-295 and M-329 located in the Village Creek basin; 
2. Adopt the attached Resolution Expressing Official Intent to Reimburse Expenditures with Proceeds of Future Debt; and
3. Adopt the attached Appropriation Ordinance increasing estimated receipts and appropriations in the Water and Sewer Commercial Paper Fund in the amount of $483,775.00.

The purpose of this Mayor and Council Communication (M&C) is for the City to participate with Legends of Hanna Ranch, Ltd (Developer), in the engineering design cost for replacing and upsizing public sanitary sewers M-295 and M-329, which provide service to the City of Fort Worth as well as the City of Everman in the Village Creek basin.  The City Council adopted Capital Improvement Plan includes the replacement and upsizing of these sewer mains (“Project”), with funding identified through the Callable Commercial Paper ("CP") program to be reimbursed with future revenue bonds.  The Project will replace a fifty year old sanitary sewer main and provide additional capacity for future growth within the basin.

The developer is designing and constructing the Hanna Ranch Development ("Development") located southeast of I-35W and E. Altamesa Blvd. The Development requires 0.69 MGD sewer capcity, which will be provided as part of the sewer main replacements in the Project.  The Developer has agreed to design and construct the Project as part of the Development.  The Developer has selected Huitt Zollars, Inc., as the engineering consultant to perform the design of the Project. The estimated fee for the City’s portion of the engineering design, topographic survey, easement document preparation, construction documents and public bidding is $458,771.30. 

The engineering design will be reviewed through the City’s Infrastructure Plan Review process. The City will manage the easements aquisitions related to the City Participation portions of the Project.  Staff concurs that the fees charged by Huitt Zollars, Inc., are fair and reasonable for the work to be performed.

In addition to the amount of $458,771.30 needed for the design Project, $25,003.70 is required for project management and real property staff cost for a total cost of $483,775.00.

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 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.

Upon completion of the design, the construction of the Project will be publicly bid.  Staff will present an M&C to the City COuncil seeking approval for the City to enter into a Community Facility Agreement with City Particiation for the construction of the Project.

This project is located in COUNCIL DISTRICT 8, Mapsco 106F-G-K-L-M.