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HomeMy WebLinkAbout2005-08-25 - MinutesMayor Dan Coody City Attomey Kit Williams City Clerk Sondra Smith City Council Water & Sewer Meeting Minutes August 25, 2005 Page 1 of 8 Member Aldermen aye evi le AR KA N SA 5 City of Fayetteville Arkansas City Council Water & Sewer Committee Meeting Minutes August 25, 2005 Ward 1 Position 1 - Robert Reynolds Ward 2 Position 1 - Kyle B. Cook Ward 3 Position 2 — Robert Ferrell Ward 4 Position 2 - Lioneld Jordan A meeting of the Fayetteville City Council Water & Sewer Committee was held on August 25, at 7:00 p.m. in Room 219 of the City Administration Building located at 113 West Mountain Street, Fayetteville, Arkansas. MEMBERS PRESENT: Chairman Kyle Cook, Alderman Robert Reynolds, Alderman Robert Ferrell, Alderman Lioneld Jordan Staff Present: Steve Davis, Gary Dumas, David Jurgens, Kit Williams, Tim Conklin, and Ron Petrie Chairman Kyle Cook called the meeting to order. Item 1. Approval of the Minutes of August 1 and 4 Water/Sewer Committee Meetings Minutes of the previous meeting were approved. Item 2. WSIP Update c. Funding Update Mayor Dan Coody introduced Dennis Hunt of Stephens, Inc., who gave a presentation for financing the Wastewater System Improvements, a copy of which is attached. Alderman Ferrell asked for a bottom line on the difference between the 3% revolving loan fund and this program. Dennis Hunt replied this was the most economically efficient means for the City to generate additional money for the project. He stated that it would basically be a wash between doing the revolving loan or the financing program, and that based upon current interest rates, it might be better to use this method than it would be to go for the revolving loan. Chairman Cook asked about the legal ramifications of changing the process from what was originally planned. Dennis Hunt referred them to Gordon Wilburn who had crafted the ballot on the bond issue. 113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax) accessfayetteville.org City Council Water & Sewer Meeting Minutes August 25, 2005 Page 2 of 8 Gordon Wilburn stated that the $26,235,000 for the Series A bonds was precisely the amount that would be outstanding on the City's Series 2004 bonds. He stated that the total of the 2002, 2004, and Series B bonds add up precisely to $125 million which the City authorized. There would be no additional principal amount outstanding by adopting the financing program, and the City will have done exactly what the voters agreed to; i.e., issue $125 million in bonds to finance the project. Chairman Cook asked if the finance program was simply to refinance the old debt to gain more money and was told that was correct. Alderman Ferrell asked to hear Kit Williams' opinion on the matter. Kit Williams agreed with Mr. Wilburn, pointing out that he is a specialist hired by the City as the bond counsel and has great expertise in this area. He agreed with Mr. Wilburn that the Stephens presentation gave more flexibility and more money in the construction fund of $6.7 million than the City would otherwise have, and stated that this would mean that any other revenue bond on rates, etc., could be that much smaller. Chairman Cook asked why this was not pursued to begin with, if was such a good option. Dennis Hunt stated that he was the one that recommended that the City go with the revolving loan fund. He stated that in 2000 when the debt was issued, the investors accepted the argument that the City could pay off quicker if more money was obtained, but they did not accept the argument that the service had been scheduled based upon growth that was to happen in the future. He stated that it didn't work at that time because the City had to extend the debt out so long, the construction investment earnings were not great due to very low interest rates, and on a 36 month period the City was paying a little more in interest rates. He stated that when first approached on this financing option, he did not feel it would work; however, after reviewing the option, he feels that it does work and it makes sense for the City. Steve Davis stated that there were three things in process: the report from MG&Y; the talks about the MBR technology or alternative technology; and the construction management responses that are due to be opened August 30`h. He stated that during the next few weeks, we will be looking not only at the procurement and the technology, but also financing. He stated that the City could structure the financing and the award of the contracts to coincide all on October 4th, as was set before the Committee previously. This would provide the City with the opportunity to have a bond closing toward the end of November and allow all of the normal referendum periods to run. Mayor Coody asked if the Committee wanted to move forward with the proposed plan for refinancing. Chairman Cook asked if the financing program were accepted, would the city still move forward on the traditional re -bid process. Steve Davis stated that the financing provided options for the City to go either with the negotiated procurement process or the bid package. By changing the financing, the city is not locked in. 113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax) accessfayetteville.org City Council Water & Sewer Meeting Minutes August 25, 2005 Page 3 of 8 Chairman Cook asked if Mr. Davis felt this was the best financing option and Mr. Davis answered that this was correct. Alderman Ferrell made a motion that the Committee move forward with the financing package. Chairman Cook asked if there was any downside to the financing package, and was told by Dennis Hunt that the only downside is that the City would be dependent on interest rates. If interest rates in the next 60 days were to skyrocket, it could be a problem, but that is not expected. He stated that interest rates were the only issue that would cause this to have a different outcome in the future. Chairman Cook asked if City sales tax collections changed drastically, could that affect it also. Dennis Hunt stated that it would, but this had been discussed and they were of the opinion that there would probably be a migration of sales tax dollars going both ways and that 472 percent was realistic. Alderman Reynolds seconded the motion, and the motion carried unanimously. Item 2. WSIP Update a. West Side Treatment Plan Action Plan Dave Jurgens stated that MW&Y are continuing their bid repackaging. There is no change in what was presented at the last Committee meeting. Based on preliminary numbers, Mr. Jurgens felt that the alternative technology of the MBR's may indeed be a viable alternative. He stated that there are no firm numbers yet for either time or cost, but he felt that it was within the ball park and warranted continued investigation. Mr. Jurgens stated that he should have that information within a week or so. Alderman Ferrell stated that he felt that the original plan should be the prevalent plan, since the City had invested a lot of time, energy and resources in it. He stated that he did not have anything against the membrane type of process, but that he is reluctant to jump too quickly into anything without having more time to investigate it thoroughly. Chairman Cook asked Jim Elmore to comment on the technology briefly. Jim Elmore stated that the technology is relatively new. However, it has been extensively used in water treatment industry, but to a much less extent in the wastewater industry. He stated that they are in the process of evaluating the new technology against the plant as designed. He stated that the repackaging work is ongoing and should be done soon, and that the repackaged project will be ready to be used in the negotiation process if the Committee so desired. Mr. Elmore stated tat if the negotiation process doesn't work, it is ready to go back and re -bid and is therefore available both ways. The membrane analysis is ongoing and will be finished within a week or so. Mr. Elmore stated that the technology is very expensive and that three different vendors of that equipment were being looked at. He stated that the reason that it has some viability and the City has the opportunity to evaluate it, is that there is a tremendous amount of part of the facility as it is designed right now which could be done away with and put this process in its place. He stated that he was not sure if it will be less or more expensive and that a comparison is being made between the capital cost of the two alternatives. He stated that the 113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax) accessfayetteville.org City Council Water & Sewer Meeting Minutes August 25, 2005 Page 4 of 8 comparison will compare the operation and maintenance cost of the two alternatives, and then turn that into a present worth or equipment annual cost, which in effect impacts the bottom line to the project and the City's constituency which will use the sewer system. Mr. Elmore stated that when that is finished, he would have not only capital cost, but also operation and maintenance cost. He also stated that there will be some non -monetary issues that may warrant consideration; for instance, it is possible that it can be built faster than the other process because it has less concrete and steel in it. Item 2. WSIP Update b. Updated Time Line Dave Jurgens stated that there was no change on the timeline. The bids remain set for opening on August 30th for the alternative method and the City still has the ability to advertise the traditional method on the September 16th. He stated that decision making time is still set for approximately September 12t or 13th, as was presented in the last Committee meeting. He stated that at the next meeting, he planned to bring forward an updated timeline showing all of the contracts, all of the line work jobs, etc. He plans to have a full timeline for the entire project, including when we expect to bid them, what the updated construction costs are, and what the construction time period will be for each of those line work jobs. Item 2. WSIP Update d. Sewer Line Rerouting, COA Evaluation, Gregg to Hamestring (WL -4 Dave Jurgens presented an analysis of four alternatives to the routing of the sewer line, a copy of which is attached. After reviewing the analysis, he recommended that the Committee adopt Alternative D which consists of extending with force main from Gregg Avenue to I540, then following I540 on the north side, along the Paris Green property to intersect the current WL -4 alignment at the proposed tunnel crossing at the 1540 interchange. He asked that the Committee move to accept the alternative and allow him to approach the landowner with this alternative. Mr. Jurgens stated that he did not feel the landowner would object to this alternative since it does not impact his property. Alderman Jordan asked if there was any downside to Alternative D and Mr. Jurgens replied that there was one potential risk factor identified. He stated that not following the already planned route puts the City at some risk for wetlands issues since the planned route was already approved. However, he pointed out that Alternative D is going along the same field and he felt that the risk was minimal. Mr. Jurgens stated that he had not yet made sure that the new route would not change something in the wetlands permits. He felt that he would know within a few weeks whether this was going to be an issue. Alderman Ferrell made a motion that the Committee accept Alternative D with the proviso that a change order can be obtained and there is no problem with the wetlands permits. Alderman Jordan seconded the motion. The motion passed unanimously. 113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax) accessfayetteville.org City Council Water & Sewer Meeting Minutes August 25, 2005 Page 5 of 8 Item 2. WSIP Update e. Cinnabar Purchase Order Mr. Jurgens stated that Cinnabar has been providing excellent service in their negotiations to date. In order to continue negotiations currently in progress and complete the easement acquisitions required for the WSIP, the total amount of work required of Cinnabar will exceed $20,000. Therefore, Mr. Jurgens will request at the September 6th Council meeting, that the City Council approve an additional authorization, not to exceed $42,000 for this work. He stated that he did not feel that the $42,000 would be used completely, since they are more than 50% complete on easements. Alderman Reynolds asked if the $42,000 would give us completion and Mr. Jurgens stated that he felt that was true. Alderman Reynolds made the motion that this issue go forward to the full Council at the September 6th meeting. Alderman Ferrell seconded and the motion passed unanimously. Chairman Cook asked when the Committee members would have a report on the right-of-way and how easement acquisitions are going. Dave Jurgens stated that he had planned to have it available for this meeting, but due to the emergency Council meeting, it was not available. He stated that he did have the information for both East and West sides, and that he would put that out in writing to the Committee members next week. Item 3. Hamstring Sewer Basin Update Gary Dumas stated that it had been indicated that there would be something to present to the Council on September 6th. He stated that this is an extraordinarily complex issue, especially the funding solution, and that he did not have any firm reports to present to the Committee at this meeting and that he was still waiting on the final RJN report, which should be received next week. Mr. Dumas stated that there would be a meeting with developers in this area the following day and that it was the third such meeting. He felt that they had all been positive and a variety of funding options are being considered. He stated that Alderman Jordan had had a meeting with some developers last Monday and might wish to comment. Alderman Jordan stated that he had met with eight or nine developers and felt it was a positive meeting. The developers feel that they can come up with some possible funding solutions to the problem and that, if need be, they will help the City with funding. Alderman Jordan stated that the developers plan to give a presentation to the full Council or to the W/S Committee. He stated that he had not yet seen it. He stated that the developers realize the problem at the Hamstring station and realize that if they are going to build in that area, they are going to have to absorb some of the cost. 113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax) accessfayetteville.org City Council Water & Sewer Meeting Minutes August 25, 2005 Page 6 of 8 Alderman Reynolds asked if the developers were going to bring the presentation to the Committee before it went to the full council and Alderman Jordan stated that he would see that they did. Dave Jurgens stated that he had talked with the Health Department at some length and that they are very comfortable that (a) we are making progress and (b) that we are in control of what is happening. The Health Department representative stated that they recognize that there are two different ways of controlling sewer flows. One is by controlling the developments and the other is by controlling building permits. The Minkle report identifies the time lag between when a development is approved and when you actually start having toilets flush. What the RJN report does is identifies the anticipated flow if every house has a lot on it. So the time-lag between developed -and -improved and every house flushing is the time frame of control difference between approving a development and approving a building permit. The Health Department said that they are entirely comfortable with either method of control of wastewater flow. Mr. Jurgens stated that as long as the City is monitoring flows, which the City does probably as well or better than any city in the state, and as long as the City monitors expected flows to come from all sources, the Health Department is comfortable if with either mechanism. Right now, Hamstring Lift Station is being used at approximately 50% of its capacity. Although, based on every lot having a structure in it, it would be almost completely full. So that 50% of capacity will carry the City some time in the future and the Health Department is comfortable if the City continues approving developments up until the point the actual flows start to get close to the 90-100% number. As long as the City presents them with a plan for insuring that sewer flows going to that pump station do not exceed the capacity, they will allow the City to do whatever is deemed appropriate for controlling those flows. Alderman Jordan stated that his concern was for future growth and whether the capacity would be sufficient for that. He stated that, although we are using only 50% capacity presently, we need to consider that there are many situations approaching which will impact that. Alderman Jordan pointed out several upcoming developments, including on coming forward on September 20th for 1150 units which is to be phased in. He stated that with construction taking three years, that would put it in mid -2008 and his fear is that the City would suddenly find itself forced into a moratorium situation which could be avoided by addressing the issue now. He stated that he was not anti -development or anti -growth, but he felt that the City should be sure that no mistakes are made in this situation which would cause problems in the future. Ron Petrie stated that this was why they are having the meetings with the developers until the ultimate solution is in place, and that the ultimate solution is the West side plant. Item 4. North College Water Line Replacement Dave Jurgens stated that C-2 Projects, LLC, was the lowest of two bidders on this project with a bid of $1,377,141. This was very close to the engineer's estimate of $1,338,000. This construction contract is expected to come to the City Council on September 20th. Mr. Jurgens and Mr. Petrie both had high praise for previous dealings with C-2 Projects. Alderman Reynolds asked who the other low bidder was on the project and what their bid was. Dave Jurgens stated that it was Building Utility Contractors out of central Arkansas, and that their bid was $1,672, 000. 113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax) accessfayetteville.org City Council Water & Sewer Meeting Minutes August 25, 2005 Page 7 of 8 Ron Petrie stated that he was not asking for a vote from the Committee on this item at this time, since he needed time for staff to review the bids. Items 5. & 6. Razorback Road and Wedington Drive Water and Sewer Relocations Ron Petrie stated that McClelland Consulting Engineers had finished the preliminary design and now needs to proceed with final design and construction supervision of the water and sewer relocations required due to the AHTD Razorback Road and Wedington Drive widening project. Mr. Petrie asked the Committee for approval for the engineering contract amendment, in the amount of $116,960 for the Razorback Road relocation and in the amount of $145,793 for the Wedington Drive relocation, to be presented to the full Council. Alderman Jordan motioned to approve. Alderman Ferrell seconded the motion and the motion passed unanimously. Item 7. Standard Water/Sewer/Street/Drainage Specifications Dave Jurgens stated that is was an informational item to let the Committee know that Garver Engineers was selected by formal selection Committee on August 19th to develop the City's standard specifications, standards and regulations. The City Engineer's office has the lead on this and will get input from Transportation, Streets, Water/Sewer, etc., on different parts. Mr. Jurgens stated that they were trying to not only deal with construction specifications, but also regulations and standards so that everyone will be operating off the same set of rules up front. He stated that a great deal of time can be saved this way for engineers working for the City as well as for developers and State agencies. He stated that this will involve some ordinance changes since there are some things in the ordinances that are very out of date. For instance, the City's water/sewer ordinances still contain the rule that you can't tap into our water transmission lines, even though we have not had one since 1972. Item 8. Resolution of the City of Fayetteville as a Designated Management Agency. Dave Jurgens stated that this was also an informational item. He stated that in order to use Revolving Loan Fund monies, or any funds that is approved under the Clean Water Act, the City has to be a Designated Management Agency. He stated that it should have been done approximately 20 or 25 years ago when the Nolan plant was done in the mid -1980's, and that it may have been done in the mid -1970's when the City received some grant money for sewer rehabilitation. However, record of this has not been found yet. Mr. Jurgens stated that he has talked with both Soil & Water and the City Clerk and the search is continuing. Item 9. 36" Water Transmission Line Study Item 10. Water/SewerCapital Improvements Plan Update Dave Jurgens stated that the City has had several water breaks on the 36" transmission line in the order of magnitude of 150,000 gallons a minute, which functionally places everyone in the City at a lose of operational pressure. He stated that there have been three such leaks in the last eleven years and work is being done to identify why and what should be done about it. Black & Veatch has completed their study with short and long term recommendations. Short term 113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax) accessfayetteville.org City Council Water & Sewer Meeting Minutes August 25, 2005 Page 8 of 8 recommendations include installing SCADA control on selected valves on the 36" transmission main, installing pressure regulating valves on the 36" and 42" transmission lines, and painting the surge tank in Springdale. A copy of the Black & Veatch contract was given to the Committee but no approval was sought at this time. Mr. Jurgens pointed out that the cost of this contract was not just design, but includes evaluation of what goes in and how to make the flow control valves work in the proper fashion. The contract also includes working with Beaver Water District to control the City's pumping, to control surges, working with the Health Department to assure that the right amount of water is in the tank so that surge capacity is maintained and meets Health Department requirements. Mr. Jurgens stated that the contract with Black and Veatch is not a standard type of design contract and so cannot be compared to a normal engineering contract; that such comparison is not valid in this case. The study that Black and Veatch has done on this project was a $126,000 approved study. To date, they have actually invoiced only $92,000 of that and don't expect to be charging more than just a small amount for the rest. Mr. Jurgens stated that they are looking at $30-34,000 remaining in that contract, pointing out that Black and Veatch has been significantly under budget on this project so far. Chairman Cook stated that apparently these improvements would come to approximately $1.8 million and asked Mr. Jurgens if this money is anticipated with the current structure in the water & sewer fund. Dave Jurgens stated that this project was funded for something less than that, and that the water and sewer fund has enough money for the engineering portion thereof. He stated that the CIP for next year is being developed at present, and some fund evaluation is being done on all of projects that are ongoing because the bids have come in so much higher. He stated that the numbers are coming in higher than what had been identified in the CIP for 2004; therefore, in developing next year's budget and CIP, this is being taken into consideration. He stated that construction would not begin until next year, and it would be prioritized in the next version of the budget and CIP. Mr. Jurgens pointed out that the next CIP would be coming forward to the Committee in September and that there will be a number of unfunded projects, but that there will be a five-year plan as opposed to a plan that meets the budget. Item 11. Scheduling the Next Water/Sewer Committee Meeting The next meeting of the Water & Sewer Committee was set for September 1st and 5:30 in Room 326 of City Hall. 113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax) accessfayetteville.org