HomeMy WebLinkAbout(0087) M&C 20-0414City of Fort Worth,
Mayor and
DATE: 06/16/20
Texas
Council Communication
LOG NAME: 60VCDBM325P2CO1-MCKEEUC
SUBJECT
M&C FILE NUMBER: M&C 20-0414
Authorize the Execution of Change Order No. 1 in the Amount of $135,060.00 and the Addition of 45 Calendar Days to a Contract with McKee
Utility Contractors, Inc. for the Village Creek Drainage Basin Main 325 Parallel Relief Sewer, Part 2 Project, for a Revised Contract Cost of
$13,323,507.00, Adopt Resolution Expressing Official Intent to Reimburse Expenditures with Proceeds of Future Debt and Adopt Appropriation
Ordinance (COUNCIL DISTRICTS 6 and 8)
RECOMMENDATION:
It is recommended that the City Council:
1. Authorize the execution of Change Order No. 1 in the amount of $135,060.00 and the addition of 45 additional calendar days to City
Secretary Contract No. 52970 with McKee Utility Contractors, Inc. for the Village Creek Drainage Basin Main 325 Parallel Relief Sewer, Part
2 project for a revised contract cost of $13,323,507.00;
2. Adopt the attached Resolution Expressing Official Intent to Reimburse Expenditures with proceeds of Future Debt for the Village Creek
Drainage Basin Main 325 Parallel Relief Sewer, Part 2 project; and
3. Adopt the attached appropriation ordinance increasing appropriations in the Water and Sewer Bond 2020A Fund in the amount of
$135,060.00, from available funds, to fund the Village Creek Drainage Basin Main 325 Parallel Relief Sewer, Part 2 project (City Project No.
C01333).
DISCUSSION:
On September 24, 2019, Mayor and Council (M&C 19-0204) authorized a contract with McKee Utility Contractors, Inc., in the amount of
$13,188,447.00 (City Secretary Contract No. 52970) for the Village Creek Drainage Basin Main 325 Parallel Relief Sewer, Part 2 project.
Change Order No. 1 will provide for the installation of a segment of the project sewer main under a gas well and pad site by boring instead of
open -cut in order to avoid disrupting truck traffic flow into the facility.
On September 24, 2019, Mayor and Council (M&C 19-0204) authorized a contract with McKee Utility Contractors, Inc., in the amount of
$13,188,447.00 (City Secretary Contract No. 52970) for the Village Creek Drainage Basin Main 325 Parallel Relief Sewer, Part 2 project.
Change Order No. 1 will provide for the installation of a segment of the project sewer main under a gas well and pad site by boring instead of
open -cut in order to avoid disrupting truck traffic flow into the facility.
This project is included in a pending revenue bond issue for the Water & Sewer Fund. The Water and Sewer System has a Council -authorized
system to allow it to initiate capital projects that will ultimately be bond funded, using available cash within the Water and Sewer portfolio and the
City's portfolio, along with the authority under the Callable Commercial Paper Program (CP) to provide interim financing for this project until the
debt is issued. To the extent resources other than the Water and Sewer portfolio are used to provide interim financing, the Water & Sewer Fund will
be charged interest that is equivalent to the overall rate of return being earned by the City portfolio (currently approximately 2.3 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 approved the Water Department's Fiscal Year 2020-2024 Five Year Capital Improvement Plan on September 17, 2019. This City
Council approved plan includes this specific project, with funding identified through the CP program to be reimbursed with future revenue bonds.
Debt must be issued within approximately three years of an expense being incurred in order to provide reimbursement. If that does not occur, costs
are no longer be reimbursable by issuing tax-exempt debt, and the funding source must be made whole through budgetary methods. Adoption of a
reimbursement resolution does not obligate the City to sell bonds but preserves the ability to reimburse the City from tax-exempt bond proceeds.
In this case, because the bonds that will provide the ultimate funding have already been authorized and sold (with a total interest cost (TIC) of
1.89%) but the closing has not yet occurred, what had been the Water & Sewer Commercial Paper Fund (56017) has already been renamed to
reflect the bond sale.
Funding for the Village Creek Drainage Basin Main 325 Parallel Relief Sewer, Part 2 project is as depicted in the table below:
Fund
Existing
Appropriations
Additional
Appropriations
Project Total*
Water & Sewer Bond
2017A - Fund 56011
$2 275,012.00
$0.00
$2,275,012.00
W&S Capital Project
2018 - Fund 56014
$1,431,441.00
$0.00
$1,431,441.00
Clean Water SRF
$60,835.00
$0.00
$60,835.00
Fund 59602
Sewer Capital
Legacy - Fund 59607
$197,500.00
$0.00
$197,500.00
Water & Sewer
Commercial Paper
$14,314,152.00
$135,060.00
$14,449,212.00
Fund 56017
Project Total
$118,278,940.00]1
$135,060.00
$18,414,000.00
*Numbers rounded for presentation purposes.
MWWBE OFFICE: A Waiver of the goal for MBE/SBE subcontracting requirements was requested by the Department and approved by the OBD, in
accordance with the MWBE or BIDE Ordinance, because the purchase of goods or services is from sources where subcontracting or supplier
opportunities are negligible.
The project is located in COUNCIL DISTRICTS 6 and 8.
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 the Water and Sewer Bond 2020A Fund for the Village Creek Drainage Basin Main 325 Parallel Relief Sewer, Part 2 to fund
this change order. 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: John Kasavich 8480