HomeMy WebLinkAboutResolution 5169-12-2019 A Resolution
NO. 5169-12-2019
STATEMENT EXPRESSING
OFFICIAL INTENT TO REIMBURSE
EXPENDITURES WITH PROCEEDS OF FUTURE DEBT FOR THE VILLAGE
CREEK WATER RECLAMATION FACILITY BIOSOLIDS MANAGEMENT AND
BENEFICIAL REUSE
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 Biosolids Management and Beneficial Reuse Project (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, THAT:
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 $67,000,000.00 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.
Adopted this loth day of December 2019.
ATTEST: ��
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Mary J. Kayse , �ity-Secretary ` �S
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Village Creek
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Biosolids Processing Facility
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Village Creek Water f&tow
Reclamation Facility(VCWRF)
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60VCWRF BIOSOLIDS MGMT REUSE PROJ DBOM
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City of Fort Worth, Texas
Mayor and Council Communication
DATE: 12/10/19 M&C FILE NUMBER: M&C 19-0381
LOG NAME: 60VCWRF BIOSOLIDS MGMT REUSE PROJ DBOM
SUBJECT
Authorize Execution of a Contract for Design-Build-Operate-Maintain Services with Synagro of Texas-CDR, Inc.,for the Village Creek Water
Reclamation Facility Biosolids Management and Beneficial Reuse Project, Including Design-Build Costs of$58,001,558.00 for Construction of a
Dryer Facility, an Operations Charge of$396.50 per Dry Ton prior to the Dryer Going into Service and an Operations Charge of$169.51 per Dry
Ton after the Dryer Goes into Service,Adopt Resolution Expressing Official Intent to Reimburse Expenditures with Proceeds of Future Debt and
Adopt Appropriation Ordinance(COUNCIL DISTRICT 5)
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 Village Creek
Water Reclamation Facility Biosolids Management and Beneficial Reuse Project;
2. Adopt the attached Appropriation Ordinance increasing estimated receipts and appropriations in the amount of$58,001,558.00 for the
Village Creek Water Reclamation Facility Biosolids Management and Beneficial Reuse Project in the Water and Sewer Commercial Paper
Fund;and
3. Authorize the execution of a 12.5 year design-build-operate-maintain(DBOM)contract with Synagro of Texas-CDR, Inc.,for the Village
Creek Water Reclamation Facility Biosolids Management and Beneficial Reuse Project,with the design-build costs totaling$58,001,558.00,
an operations charge of$396.50 per dry ton prior to the dryer going into service and an operations charge of$169.51 per dry ton after the
dryer goes into service,with provisions for up to two additional 5-year terms for continued operations and management. (City Project No.
101961)
DISCUSSION:
The Village Creek Water Reclamation Facility(VCWRF)is the City of Fort Worth's only wastewater treatment plant,serving a growing population
of retail and wholesale customers. Currently, biosolids produced at the VCWRF are pumped to a city-owned processing facility where they are
dewatered using belt filter presses and chemically conditioned for pathogen and odor control. The final product is loaded onto trucks and
transported to agricultural land application sites located in eight counties in North Texas. Farmers and ranchers request that biosolids be land
applied on their fields to improve soil quality and boost production.
The dewatering and disposal process has been utilized for the past 25 years. The City of Fort Worth holds the permit for the long-term solids
dewatering, processing and disposal issued by the Texas Commission on Environmental Quality(TCEQ)(Permit No.WS0010494013).The City
entered into a contract with Renda Environmental, Inc. (Rends)on May 27, 1994(CSC No.30908)for operation and maintenance of the City's
biosolids processing facility and to provide beneficial land application of the material. The City has amended and renewed its contract with Renda
over time and is now in its final five year renewal option,which expires on March 31,2020.
In recent years,the dewatered biosolids have generated more frequent odor complaints from the public and governmental officials near the land
application sites. Recent complaints have been investigated by the TCEQ,which issued the City notices of violation (NOV)that are expected to
be resolved by an Agreed Order. As the region continues to become more urban, it is anticipated that complaints of this nature will increase over
time. Additionally,costs to dewater and land apply biosolids have also increased substantially over time.
In order to evaluate long term alternatives to the current biosolids management process,the City Council authorized an engineering agreement
(April 2,2013, M&C C-26187)for development of the VCWRF Biosolids Master Plan. Development of the master plan was ongoing for two years
with the purpose of reviewing alternative methods for managing biosolids.The plan was not finalized at the conclusion of the process,however,as
the City elected to extend the existing biosolids management contract with Renda from 2015 until March 31,2020. ,The amended contract was
approved by City Council on May 5,2015(M&C C-27287;CSC No.30908-E1A1).
On November 14, 2017(M&C C-28475),the City Council authorized continuation of the VCWRF Biosolids Master Plan project. The biosolids
master plan evaluated numerous alternatives to the city's current process,with the overall goal to produce a high quality product at a reasonable
cost that can be marketed to a diversified customer base and minimize future complaints. After a thorough review of alternatives,the consultant
recommended thermal direct drum drying of the material. Benefits of this process include the capability of producing durable granules that can be
used in fertilizers and soil conditioners with good revenue potential, reduced trucking costs due to a lighter weight end product and the real
likelihood of reduced odors over the current process. The Biosolids Master Plan was finalized in January 2019.
A design-build-operate-maintain (DBOM) method was selected in order to procure proposals from the most qualified firms for short-term
management of the current dewatering/land application process, simultaneous design and construction of the biosolids drum drying facility and
long-term management of the new facility including disposal of the end product. IR 10214 was presented to the Council on January 15,2019
providing detailed background information regarding the process and setting out the schedule for procurement of the recommended drum dryer
system. Following Texas procurement law, a request for qualifications(RFQ)was properly advertised in the Fort Worth Star-Telegram in January
2019. The biosolids master plan was included as part of the RFQ. On March 7,2019 a total of three responses to the RFQ were received by the
City,which after evaluation,resulted in three firms:Synagro of Texas-CDR, Inc.(Synagro),NEFCO,and EQ Renewables,LLC(of which Renda
Environmental was a part)being invited to participate in the second step request for proposals(RFP)process.
The RFP was issued to the three firms on June 7,2019. Proposals were received from all three firms on September 5, 2019. An evaluation
committee performed a detailed review and scored the proposals. The technical score consisted of 25% of the total score and consisted of
pass/fail,as well as scored categories such as:Design Plan,Construction Plan, Operations and Maintenance Plan, Redundancy, Reliability,and
Beneficial Product, By-Product and Diversion of Feedstock Management.The technical scores were as follows:
Category 1�Syna7groNEFCO EQ
Renewables
Total Ranked Score of Technical 891 906
Submission and Scored Categories a
The separately sealed financial submissions were then opened and scored based on the design cost,construction cost,and the net present value
(NPV)of the operations,maintenance and utility costs over the next 22 years(OMR).The financial score consisted of 75%of the total score.The
financial scores were as follows:
Category Synagro NEFCO EQ Renewables
Design Cost $4,000,000.00 $5,425,480.00 $4,000,000.00
Construction $53,601,558.00 $45,778,534.00 $59,700,000.00
Cost
NPV of OMR
Cost(22 $126,197,862.00$139,575,808.00*$158,191,035.00*
years)
Total
Proposal $183,799,420.00 $190,779,822.00 $221,891,035.00
Price(NPV)
Proposal Price 1000 963 828
Score
*It should be noted that each of the proponents attempted the final NPV of the OMR cost calculations as part of their submittal. Errors were
detected in the calculations of NEFCO and EQ Renewables,which were corrected by the City's consultant and presented in the table above. The
NPV value included with their proposals were:
Synagro NEFCO EQ Renewables
NPV of OMR
Cost(22 years) $126,197,862.00$139,500,274.00 $145,988,999.94
(as calculated by
the Proponent)
The technical and financial scores were then tabulated to determine the rankings. Based on the total score,Synagro was ranked highest,followed
by NEFCO and then EQ Renewables.
Category Synagro NEFCO EQ
newables
Final Score of Technical Submission 250 223 227
(25%)
Final Score of Financial Submission 750 722 621
(75%)
Final Proposal Score 1000 945 F 8 88
The three firms were notified of their respective ranking on September 27,2019.City staff and Synagro began negotiating the detailed terms of
the DBOM contract on October 3,2019. IR 10329,October 15,2019,informed the Council of these actions. Negotiations are now essentially
complete allowing for this M&C recommendation to come forward at this time.
Since the VCWRF naturally creates biogas,the City requested that Synagro furnish and install equipment necessary to utilize biogas as a fuel
source,should that become feasible in the future. Synagro provided a price proposal of$400,000,which staff feels is fair and reasonable. This
price has been added to the design-build cost.
This DBOM contract will be executed immediately after award via this M&C so that Synagro can begin the formal design work and prepare to take
over operations and maintenance during the transition period, beginning on April 1, 2020. During the transition period, Synagro will be the
operator of the existing dewatering facility,will oversee design and construction of the dryer facility,followed by a ten-year term of operation and
maintenance of the dryer facility(initial term). The contract may be extended for up to two five-year terms.The contract provides 30 months to
complete the design and construction of the dryer facility,subject to environmental clearance. From April 1,2020 until the acceptance of the dryer
facility,the Contractor will perform dewatering and land application of the biosolids at a cost of$396.50 per dry ton. After completion of the dryer
facility,the Contractor will thermal dry and dispose of dried biosolids at a cost of$169.51 per dry ton. The operating charges are subject to an
annual inflation adjustment.
In addition to these costs,as per the RFP,the Contractor has stipulated the maximum utility usage(water,reclaimed water,gas,and electricity)on
a dry ton basis. The contract calls for the City to pay for the cost of utilities, up to the maximum amount per dry ton. Usage above the maximum
amount will be at the Contractor's cost. The contract also requires the Contractor to pay for all maintenance-related expenses for the initial term,
unless due to circumstances beyond their control, as defined in the contract. The City has agreed that costs for five specific drum dryer
equipment-related major maintenance items are eligible for reimbursement by the City to the Contractor during the renewal terms so that the
equipment will be more likely to exceed a 20-year life span.
The Water Department's Fiscal Year 2020-2024 Five Year Capital Improvement Plan includes this specific project,with funding identified through
the Texas Water Development Board's Clean Water State Revolving Fund Loan(SRF)program. It is the City's intent to provide interim commercial
paper funding until the SRF loan with the TWDB is funded in early 2020. The Water and Sewer Callable Commercial Paper Program (CP)
includes authority of$150,000,000.00 for the purpose of providing this type of interim funding for Water and Sewer Capital Projects. On
September 25, 2018,the City Council approved Resolution No.4988-09-2018 requesting financial assistance from the TWDB for this project.
TWDB approval is anticipated in January 2020,with loan closing anticipated to occur shortly thereafter.
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.
In accordance with the provisions of the Financial Management Policy Statements, 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.
MWBE OFFICE: Synagro of Texas-CDR,Inc.(through Freese and Nichols, Inc.,design engineer),is in compliance with the City's BDE Ordinance
by committing to 15 percent SBE participation on the design phase and 10 percent MBE participation on the construction phase(through Archer
Western Contractors, General Contractor) of this design-build project. The City's SBE goal on the design phase is 15 percent and on the
construction phase is 10 percent.
This project is located in COUNCIL DISTRICT 5 and serves the entire city.
FISCAL INFORMATION I CERTIFICATION:
The Director of Finance certifies that upon approval of the recommendations and adoption of the attached appropriation ordinance,funds will be
available in the Water&Sewer Commercial Paper Fund for the Village Creek Water Reclamation Facility Biosolids Management and Beneficial
Reuse Project. Prior to any expenditure being incurred,the Water Department has the responsibility to validate the availability of funds.
Submitted for City Manager's Office by: Dana Burghdoff 8018
Originating Business Unit Head: Chris Harder 5020
Additional Information Contact: Chris Harder 5020