Authorize Execution of an Engineering Agreement with Gupta and Associates, Inc. in the Amount of $741,777.00 for the Design of the Phase II Electrical Improvements at the Village Creek Water Reclamation Facility, Adopt Reimbursement Resolution and Adopt Appropriation Ordinance (COUNCIL DISTRICT 5)

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 Village Creek Water Reclamation Facility (VCWRF) Phase II Electrical Improvements (C02648); and
    
2. Adopt the Attached Appropriation Ordinance increasing estimated receipts and appropriations in the Water and Sewer Commercial Paper Fund in the Amount of $941,777.00; and
    
3. Authorize execution of an Engineering Agreement with Gupta and Associates, Inc., in the amount of $741,777.00, for the Design of Phase II Electrical Improvements at the Village Creek Water Reclamation Facility (City Project No. C02648).

The City of Fort Worth owns and operates the Village Creek Water Reclamation Facility (VCWRF).  The VCWRF was originally constructed in the 1950s as a 5 million gallon per day (MGD) plant and expanded in incremental steps over time to its present rating of 166 MGD.  Electrical equipment and components have been installed as the plant has expanded, with some equipment nearing 40 years in age. 

On September 24, 2013 (M&C C-26477), the City Council authorized an engineering agreement with National Field Services to conduct a power study.  The scope of work included an electrical infrastructure condition assessment that identified various electrical equipment and components recommended for replacement and upgrade.  On May 17, 2016 (M&C C-27720), the City Council authorized an engineering agreement with Gupta and Associates, Inc., for the VCWRF Phase I Electrical Improvements, which consisted of electrical improvements to the primary treatment area.  On January 9, 2018 (M&C C-28536), the City Council awarded a construction contract with Texsun Electrical Contractors, Inc. for the Phase 1, and is currently under construction.  

This VCWRF Phase II Electrical Improvements will include replacement and upgrade of electrical equipment and infrastructure within the following areas: Return Sludge Pump Stations 1, 2, and 7; Service Water Pump Station 2; Storm Drain Pump Station 2; and Chlorine Area.  As part of this work, Gupta and Associates, Inc. will develop plans and specifications and provide bidding assistance for the above identified fee. The City Staff considers this fee to be fair and reasonable for the scope of services proposed. 

In addition to the contract amount, $200,000.00 is required for project management and associated staff time for the Water Department.  This project is included in Water Department capital improvement plan, with construction anticipated to start in FY 20, and an expected construction duration of 18 months.  It is anticipated that this project will not increase the operating budget for the VCWRF.

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.

M/WBE OFFICE - Gupta and Associates is in compliance with the City's BDE Ordinance by committing to 25 percent SBE participation on this project. The City's goal on this project is 21 percent.  Additionally, Gupta and Associates is a certified M/WBE firm. 

This project serves the entire city and is located in COUNCIL DISTRICT 5, Mapsco 90J.