HomeMy WebLinkAboutResolution 4629-05-2016 A Resolution
NO. 4629-05-2016
STATEMENT EXPRESSING
OFFICIAL INTENT TO REIMBURSE
EXPENDITURES WITH PROCEEDS OF FUTURE DEBT FOR THE
VILLAGE CREEK WATER RECLAMATION FACILITY SWITCHGEAR
REPLACEMENT PROJECT
WHEREAS, the City of Fort Worth, Texas (the "City") is a home-rule municipality and
political subdivision of the State of Texas; and
WHEREAS, the City expects to pay expenditures in connection with the design,
planning, acquisition and construction for the Village Creek Water Reclamation Facility
Switchgear Replacement project as shown on the attached map (the "Project") prior to the
issuance of obligations by the City in connection with the financing of the Project from
available funds; and
WHEREAS, the City finds, considers, and declares that the reimbursement of the City
for the payment of such expenditures will be appropriate and consistent with the lawful
objectives of the City and, as such, chooses to declare its intention, in accordance with the
provisions of Section 1.150-2 of the Treasury Regulations, to reimburse itself for such
payments at such time as it issues obligations to finance the Project;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF FORT WORTH, TEXAS:
Section 1. The City reasonably expects debt, as one or more series of obligations, may
be issued or incurred by the City with an aggregate maximum principal amount not to exceed
$750,000.00 for the purpose of paying the aggregate costs of the Project.
Section 2. All costs to be reimbursed pursuant hereto will be capital expenditures. No
obligations will be issued by the City in furtherance of this Statement after a date which is later
than 18 months after the later of (1) the date the expenditures are paid or (2) the date on which
the property, with respect to which such expenditures were made, is placed in service.
Section 3. The foregoing notwithstanding, no obligation will be issued pursuant to this
Statement more than three years after the date any expenditure which is to be reimbursed is
paid. 4d4W ot,_aur4
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Adopted this 17`h day of May' 2016. op��°°°QO°0,0
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City of Fort Worth, Texas
Mayor and Council Communication
COUNCIL ACTION: Approved on 5/17/2016 - Ordinance No. 22212-05-2016 & Resolution
No. 4629-05-2016
DATE: Tuesday, May 17, 2016 REFERENCE NO.: **C-27720
LOG NAME: 60VCWRF SWITCHGEAR IMPROVEMENTS - PH1 PRIMARY AREA
SUBJECT:
Authorize Execution of an Engineering Agreement with Gupta and Associates, Inc., in the Amount of
$517,782.00 for Design of the Replacement, Removal and/or Modification of the Primary Area Switchgear
at the Village Creek Water Reclamation Facility, Adopt Reimbursement Resolution and Adopt
Appropriation Ordinance (COUNCIL DISTRICT 5)
RECOMMENDATION:
It is recommended that the City Council:
1. Authorize execution of an Engineering Agreement with Gupta and Associates, Inc., in the amount of
$517,782.00, for design of the replacement, removal and/or modification of the primary area switchgear at
the Village Creek Water Reclamation Facility; and
2. Adopt the attached resolution expressing official intent to reimburse expenditures with proceeds of
future debt for the Replacement, Removal and/or Modification of Primary Area Switchgear at Village
Creek Water Reclamation Facility Project and adopt the attached appropriation ordinance increasing the
estimated receipts and appropriations in the Water& Sewer Bond 2015A Fund in the amount of
$5,000.00.
DISCUSSION:
The City of Fort Worth owns and operates the Village Creek Water Reclamation Facility (VCWRF). The
VCWRF was started in the 1950's as a five million gallons per day (MGD) plant, currently permitted for an
annual average flow rate of 166 MGD and a two hour peak flow of 369 MGD. The VCWRF has a complex
electrical system with a medium voltage dual feed system, with sub-stations for each process or facility
including single or dual transformers and two 5 MW turbine generators. Most of the electrical equipment
has been in service for over 40 years and has reached the end of its useful life. Much of it is obsolete,
difficult to maintain or obtain spare parts for and showing signs of corrosion. In addition some of electrical
equipment is undersized for the current plant load and may not be safe to operate or maintain.
On September 24, 2013 (Mayor and Council Communication (M&C) C-26477), the City Council awarded
the execution of an Engineering Agreement with National Field Services to conduct a power study, which
included an electrical equipment evaluation, short circuit study, protective device coordination study, arc
flash analysis, field labeling of arc flash hazards and SKM Model development and training. That study
identified several electrical areas needing attention, including the need to replace some equipment.
Because of the size of the project and financial limitations, these improvements will be designed and
implemented in a number of phases organized in terms of critical needs and process areas. Phase 1 has
been identified to be the primary area switchgear electrical system, which is also the oldest and in most
need of improvements. It is anticipated that this project will not increase the operating budget for the
Logname: 60VCWRF SWITCHGEAR IMPROVEMENTS - PHI PRIMARY AREA Page I of 4
VCWRF and this Engineering Agreement will determine if there will be any long-term future operating
budget impact.
Gupta and Associates, Inc. (Gupta and Associates) has been selected as the consulting firm to develop
the design plans as well as prepare the construction documents for the various electrical equipment
improvements at the VCWRF. Gupta and Associates is proposing to do the necessary design and
prepare the construction contract documents for the primary area switchgear equipment for the above
identified fee. City staff considers this fee to be fair and reasonable for the scope of services proposed.
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 (DPN) 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 DPN 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 financing 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.
Funding for the Replacement, Removal and/or Modification of Primary Area Switchgear at VCWRF Project
is depicted in the following table:
Existing Additional Future
F Description j Appropriations Appropriations Appropriations Project Total*
Engineering _ $517,782.00 i $ 0.00 1 $ 300,000.00 _ $ 817,782.00
Construction F $ — 0.00 $ 0.00 $7,000,000.00 $7,000,000.00
Project Planning, Project
Management, Inspection,
Testing and
Contingencies j $95,018.00 _ $5,000.00 $ 200,000.00 $ 300,018.00
I Project Total 1 $612,800.00 $5,000.00 $7,500,000.00 (—$8,117,800.00
*Numbers rounded for presentation purposes.
Funding for the Replacement, Removal and/or Modification of Primary Area Switchgear at VCWRF Project
is depicted in the following table by fund:
Fund ppropriations*
(Water/Sewer DPN FUND 56005 ( $ 612,800.00
Logname: 60VCWRF SWITCHGEAR IMPROVEMENTS - PHI PRIMARY AREA Page 2 of 4
Water&Sewer Bond 2015A 56007 $ 5,000.00
Future Revenue Bond $7,500,000.00
Project Total $8,117,800.00
* Numbers rounded for presentation.
Engineering services are anticipated to commence in May 2016. With a contract time of 12 months, it is
estimated to be completed by April 2017. The construction is anticipated to start in August 2017, with an
estimated construction time of 12 months.
M/WBE OFFICE - Gupta and Associates is in compliance with the City's BDE Ordinance by committing to
32 percent SBE participation on this project. The City' s goal on this project is 12 percent. Additionally,
Gupta and Associates is a certified M/WBE firm.
In addition to the contract amount, $64,218.00 is required for project contingency allowance and
$30,000.00 is required for project management and associated Staff time for the Water Department. An
additional $5,000.00 is required to clear negative balances for Staff salaries.
This project serves the entire city and is located in COUNCIL DISTRICT 5, Mapsco 90J.
FISCAL INFORMATION /CERTIFICATION:
The Director of Finance certifies that funding in the Water and Sewer DPN is already appropriated and
available in the project as directed by the Fiscal Year 2016 Water& Wastewater Capital Improvement
Plan and that, upon approval of the attached appropriation ordinance, funds are available as directed by
M&C G-18375 in the Water& Sewer Bond 2015A Fund for the transfer from unspecified funding to the
Replacement, Removal and/or Modification of Primary Area Switchgear at VCWRF Project as depicted in
the table below:
Existing Additional F Future Project
FUND Appropriations ppropriations Appropriations Total
ater/Sewer
DPN FUND
6005 $612,800.00 $ 0.00 $ 0.00 F$ 612,800.00
ater&
Sewer Bond
015A
6007 $ 0.00 $5,000.00 $ 0.00 $ 5,000.00
Future
Revenue
Bond $ 0.00 $ 0.00 $7,500,000.00 $7,500,000.00
Project 800.00 5,000.00 $7,500,000.00 $8,117,800.00
Total $612,
* Numbers rounded for presentation purposes.
FUND IDENTIFIERS (FIDg):
TO
Fund Department Account Project Program Activity Budget Reference # Amount
_ ID ID , Year Charti-ield 2
56007 0700430 4905430 CO2648 C03030 2016 $5,000.00
56007 0700430 5110101 CO2648 C03030 2016 $5,000.00
56005 0700430 5330500 CO2648 C03030 2016 P517,782.00
2)1560051 0700430 15110101 CO2648 I C03030 2016 $95,018.00
Logname: 60VCWRF SWITCHGEAR IMPROVEMENTS - PHI PRIMARY AREA Page 3 of 4
FROM
Fund Department Account Project Program ctivity Budget Reference # Amount
ID ID Year Chartfield 2
11)560051 0700430 5330500 CO2648 C03030 2016 $517,782.001
CERTIFICATIONS:
Submitted for City Manager's Office by: Jay Chapa (5804)
Originating Department Head: John Carman (8246)
Additional Information Contact: Farida Goderya (8214)
Logname: 60VCWRF SWITCHGEAR IMPROVEMENTS - PHI PRIMARY AREA Page 4 of 4