R2020-209 2020-10-12 RESOLUTION NO. R2020-209
A Resolution of the City Council of the City of Pearland, Texas, authorizing
the submittal of a funding assistance application to the Texas Water
Development Board Clean Water Revolving Fund, for the costs associated
with the design and construction of the John Hargrove Water Reclamation
Facility ("JHWRF") Expansion Project, in the amount of$75,000,000.00.
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS:
Section 1. That the City council hereby authorizes the submittal of a funding assistance
application to the Texas Water Development Board Clean Water Revolving Fund, for the costs
associated with the design and construction of the John Hargrove Water Reclamation Facility
("JHWRF") Expansion Project, in the amount of$75,000,000.00.
Section 2. That the City Manager or his designee is hereby authorized to execute a
funding assistance application to the Texas Water Development Board.
PASSED, APPROVED, AND ADOPTED this 12th day of October, A.D., 2020.
TOM REID
MAYOR
I',
7STA ROAN, TRY C `., R
ITY SECRETARY /(< ........ �O
APPROVED AS TO FORM: = `
DARRIN M. COKER ,,,,,,,,, ,,,,,,,,,
CITY ATTORNEY
TWDB-0201A
Rev 11/16
Application Filing and Authorized Representative Resolution
A RESOLUTION by the City Council of the
City of Pearland requesting financial assistance from the Texas Water
Development Board; authorizing the filing of an application for assistance; and making certain findings in
connection therewith.
BE IT RESOLVED BY THE CITY COUNCIL OF
THE CITY OF PEARLAND •
SECTION 1: That an application is hereby approved and authorized to be filed with the Texas Water
Development Board seeking financial assistance in an amount not to exceed $75,000,000.00 to provide
for the costs of design and construction of the JHEC WRF Expansion
SECTION 2: That City Manager, Deputy City Manager and Assistant City Manager be and is hereby
designated the authorized representative of the City of Pearland,Texas for purposes
of furnishing such information and executing such documents as may be required in connection with the preparation
and filing of such application for financial assistance and the rules of the Texas Water Development Board.
SECTION 3: That the following firms and individuals are hereby authorized and directed to aid and assist
in the preparation and submission of such application and appear on behalf of and represent the
City of Pearland before any hearing held by the Texas Water
Development Board on such application,to wit:
Financial Advisor: BOK Financial Securities, Inc.
1401 McKinney St., Suite 1000, Houston,TX 77010
Engineer: Ardurra-Mr. Christopher M. Munson, P.E.
2032 Buffalo Terrace, Houston,TX 77019
Bond Counsel: Orrick, Herrington &Sutcliffe, LLP
609 Main St.,40th Floor, Houston,TX 77002
4‘1.--"--W.PASS. . • I APP' I VED,this the day of ,20 0.20
4,6
4. '
: i
1 October 2020
To: Mayor and City
Memo Coucnil members
Much background, but basically, a revision to the
of r TWDB loan amount is needed to cover the
+ 1,>y To: Clay Pearson, City Ma .ger project cost potential, secure incredibly low long-
co term interest rates through TWDB. The actual
wataigiFrom: Cara Davis, Sr Proj,ct Manager—borrowed amount can be adjusted down to
TEX AS what's needed. Clay
est. sq% CC: Trent Epperson ssistant City Mateo.
Robert D Upto , P.E., Director of Engineering & Projects
Skipper Jon:., Assistant Director of Capital Projects
John McC. er, Interim Director of Finance
Clarence ittwer, Director of Public Works
David V:n Riper, Assistant Director of Public Works
Date: Oct•ser 1, 2020
Re: John Hargrove Environmental Center (JHEC) Wastewater
Treatment Plant Expansion —TWDB Funding Application
Purpose
This memo provides information about progress on the John Hargrove Environmental Center
(JHEC) Wastewater Treatment Plant Expansion project and the proposed request to revise
Resolution 2020-28 previously approved January 27, 2020 increasing the authorized loan
amount from $64 million to $75 million for the Texas Water Development Board (TWDB)
funding application for the project.
Background
The JHEC Water Reclamation Facility (JHWRF) currently has a current capacity of 4 million
gallons per day (MGD). Ardurra Group provided the engineering services for a Preliminary
Engineering Report (PER) submitted in January 2017, assessing development/population driven
capacity requirements for the plant and originally recommending a capacity expansion of 5 MGD
to meet ultimate building out requirements assuming annexation of areas south of existing city
limits located in the ETJ.
A Project Information Form (PIF)was submitted to Texas Water Development Board (TWDB) in
March 2017 requesting $75 million based on the PER cost estimate, for the proposed 5 MGD
expansion, that identified probable construction costs and a total project cost, including design,
construction, testing and construction management. When annexations laws were changed later
in 2017 a Technical Memorandum amending the original findings of the PER was submitted in
September 2018 recommending a 2 MGD expansion for a total of 6 MGD plant capacity. The PIF
document and its cost estimates were based on original capacity requirements developed in the
Preliminary Engineering Report for a 5 MGD expansion. The reduced recommendation contained
in the September 2018 PER Amendments reduced the anticipated construction cost of the project
to$56.4 and with final design, construction,testing and construction management the total prosect
cost was estimated to be$64 million. At that time Staff requested Council authorize an application
for TWDB Clean Water State Revolving Funds, in January 2020, of$64 million (total project cost).
The project included planning and design for the expansion of the Sequential Batch Reactors
(SBR)treatment basins adding two new basins, significant rehabilitation and modifications to both
influent lift stations, modifications to the multiple sub-systems including the headworks structure
and screens, adding a grit removal system, tertiary treatment and adding a second channel of UV
filters to allow future expansion, if required, to be done without plant shutdown.
As final design began, the site was also identified for storage of Emergency Operations
equipment, such as rescue vehicles and generators, and to house a limited number of emergency
operations personnel for staging, briefings and deploying during such events. The Operations
building was scheduled to be expanded in the initial project due to the lack of separation of clean
space for office and record storage as well as food preparation and consumption. This expansion
offered the opportunity to provide dual use space.
• Emergency vehicle and generator storage was added to the site plan
• Operations building was expanded to be capable of performing as a Staff shelter, staging
and briefing center for EOC operations.
Additionally, Staff sought to ensure the plant expansion would leave the facility capable for future
expansion, estimated at an additional 2MGD due to growth within the existing City limits projected
out after 10 years,without the need to schedule plant shutdowns, a situation that greatly increases
the construction costs due to risks assumed by the contractor. Several process modifications
were added to the original scope to cover this contingency, including:
• Replacement of Ultra Violet disinfection equipment to replace end of life system
• Upgrades were added to the tertiary treatment equipment (Aqua Aerobics fabric filters)
• Headworks size was increased to prevent modifications in any future expansion
• Replacement of pipe headers at Influent Lift Stations, added gates
• Added Odor Control at the influent lift station
• Modified the design of the planned splitter box (replacing with yard piping)
• Added Sludge Transfer Station to provide operational flexibility
• Added Pre-Rotation Pump in Influent Lift Station-1
• Include SCADA under CMAR project
In March 2020, the CMAR provided its 30% Opinion of Probable Construction Cost (OPCC)
incorporating the above additions beyond what had been included in the original PER and the
amending Technical Memorandum estimate from the Engineer. The revised construction
estimate came in at $64.5 million. Early indications were that this cost could go down as the
design evolved and matured.
In April, with the results of the sewer basin model and new operational concerns, new additions
were made to the scope. These additions included:
• Pre-Rotation pump equipment was added to Influent Lift Station 2 to ensure uptake of
solids to reduce contracted solids removal costs and prevent cavitation of the pumps
• Fine screen channels were added to the Headworks to provide future process flexibility
• Control Building/Lab rehab and expansion was added to meet ADA compliance
• Increase width of fire lane from 20' to 24' to meet Fire Department access requirements
• SCADA Allowance increased from $300k to $600k to ensure adequate budgeting
• Non-Potable Water System Yard Pipe system was expanded to capture sufficient water
for process use
In July, at the 60% Design Review meeting, the CMAR presented updated cost estimates
reflecting the full scope as modified by the above additions. The 60% OPCC was estimated to be
$69,744,336.
Upon the receipt of the 60% OPPC, Staff determined that a major value engineering (VE)exercise
was necessary to verify the need and value of these additions to the design and to attempt to get
the project back into the original budget range. Multiple items were identified for reduction,
removal or alteration that would reduce costs. Over the course of three weeks a very successful
series of VE meetings were conducted with the CMAR removing, reducing or altering system
components, including:
• SBR Foundations -Vibratory Piles in Lieu of Auger Cast Pile Design, geotechnical agreed
• Sludge Building Structural - First floor will be precast concrete with CMU block infill.
Second floor will be pre-engineered metal building (PEMB) (insulated metal panels) with
partial walls (open to atmosphere)
• Reduce Demo of existing Surge Basin Slab to holes - vs -full slab removal
• Sludge Building polymer Mono Rail Hoist removal;
• Open Canopy structure for Vehicle & Equipment Storage Area (Delete)
• Pre-Cast Lone-Star Building or E-Building, Electrical BB-1
• A Risk Reduction change was made at the corner of the Electrical and Blower Building
No. 2 Electrical Room Modifications to omit the need for a deep excavation at that location
• Operations Building changed to pre-engineered metal structure retaining EOC space
• Reduce Site Paving and Existing Demo (less Paving)
• Bid Packages Strategy & Early Works Packages
• Eliminate channels at Headworks for future fine screens
• Add Splitter box to reduce 24" screened Raw Sewage Pipe
• Eliminate one Belt Filter Press (not conveyor)
• Use HDPE for Raw Sewage & Screened Raw Sewage Pipe instead of Ductile Iron Pipe
• Remove Odor Control—Due to the location of the site and lack of residential or commercial
development in close proximity, this component could be removed without issue. New
technology to include mixers in the lift station will minimize solids and assist with odors.
• Remove Pump Pit at Aerated Sludge Holding Tanks Nos. 1 and 2
The review exercise for the VE items produced an estimated savings of$(5,322,681). However,
there are related design costs to make the revisions to existing designs in the amount of$367,100
and equipment allowances estimated at$108,424, which provides a net savings of$(4,847,158).
Although not final at this point, the revised estimate in now trending at$64,897,178.
Costs already encumbered on the project that are slated for reimbursement with loan funds
include the design contract for Ardurra, $3,775,000 and the CMAR contract for PLW, $828,960.
Estimated costs for construction, construction management/inspection, and construction
materials testing are $64,897,178, $3,612,000 and $450,000 respectively. The total estimated
project costs currently stand at$73,563,138. For that reason, Staff are requesting that Council
revise the authorized TWDB loan request amount from $64 million to $75 million to cover all
anticipated costs as currently estimated including design, construction, testing and construction
management. The requested loan amount can be decreased if market conditions reduce costs
but, it cannot be increased without a new loan application.
Current Status
The TWDB loan application is in place but the amount must be adjusted before the end of October
in order to be scheduled for the November TWDB Board meeting where it will be considered.
The CMAR's GMP, based on 90% plans and specifications is due in late February 2021. The
CMAR is planning to begin his bidding process leading to the creation of his GMP in November.
The schedule for loan closing is set for February. The total loan funding request can be adjusted
down at any time before loan closing, based on more accurate pricing after the GMP is received
and accepted. The current approved FY21 CIP budget has been revised to account for all
current costs anticipated for construction and the current wastewater rates account for
this cost. Increasing the authorized loan amount to $75 million will allow the City to benefit from
the historically low interest rates versus supplementing with higher interest rate revenue bonds.
The loan application is for Clean Water State Revolving Fund Non-Equivalency funds that are
currently trending at 1.3 basis points below market rates given City of Pearland's AA rating.
Current interest rates indicate that the loan would be funded with an interest rate in the area of
0.29%. Rates are locked in 45 days prior to loan closing. The loan requirements include a 1.75%
loan origination fee, the adoption of Water Conservation and Drought Contingency Plans (which
are already in place), the preparation of an Environmental Assessment (completed with the
Expansion design), and construction requirements such as Davis-Bacon wage rates, and
compliance with the EPA's American Iron and Steel provisions that are not required for the City's
normal bond funding.
Budget Information
Current budget information reflects early construction costs estimated during the CMAR process.
This estimate was developed during the 30% design phase and contains a significant contingency
to cover unknowns. As with other CMAR led projects cost estimating and refinement of cost-
effective design and construction methodologies are primary scope components for the CMAR.
These figures will change as the project progresses and ultimately produces the CMAR's GMP at
which time the City may accept that price and issue a contract for construction.
Funding Sources Series To Date Future _ Total Budget
General Revenue-Cash
W/S Revenue Bonds 2016A 752.500 752.500
W/S Revenue Bonds 2018B 2,111,526 2,111,526
W/S Revenue Bonds 34,765,000 34,765,000
Impact Fee—Cash 2,111,525 2,111,525
Impact Fee—Debt 2016A 752,500 752,500
Impact Fee—Debt 34,765,000 34,765,000
Other Funding Sources 386,949 386,949
Total Funding Sources 6,115,000 69,530,000 75,645,000
Expenditures To Date Future Total
PER 475,000 475,000
Land -
Design 3,775,000 710,000 4,485,000
Construction 828,960 64,897,178 65,726,138
Construction Management/Inspection 3,612,000 3,612,000
Construction Materials Testing 450,000 450,000
FF&E 500,000 500,000
Total Expenditures 5,078,960 70,169,178 75,248,138
Project Balance/Contingency 396,862
Schedule Info:
Base Line Current
Design Start March-19 April-19
Bid Start November-20 September-19
Construction Start November-20 April-21
Proposed Construction Completion October-23
This project was procured through the Construction Manager at Risk(CMAR)process.The original base line
schedule was projected using the design-bid-build process.
Recommendation
At the October 12, 2020 City Council meeting, Staff will recommend that Council authorize a
revision to the previous resolution to authorize the submittal of an application for TWDB funding
in the amount of $75 million. Following this authorization, the application will be updated and
forwarded immediately to TWDB to be included in the November Board agenda for approval.
Council will have an additional opportunity to approve the final loan application and amount when
the loan is scheduled for closing in early 2021.
JOHN HARGROVE WATER RECLAMATION FACILITY
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TWDB-0201A
Rev 11/16
Application Filing and Authorized Representative Resolution
A RESOLUTION by the City Council _ of the
City of Pearland requesting financial assistance from the Texas Water
Development Board; authorizing the filing of an application for assistance; and making certain findings in
connection therewith.
BE IT RESOLVED BY THE CITY COUNCIL OF
THE CITY OF PEARLAND
SECTION 1: That an application is hereby approved and authorized to be filed with the Texas Water
Development Board seeking financial assistance in an amount not to exceed $75,000,000.00 to provide
for the costs of design and construction of the JHEC WRF Expansion
SECTION 2: That City Manager, Deputy City Manager and Assistant City Manager be and is hereby
designated the authorized representative of the City of Pearland,Texas for purposes
of furnishing such information and executing such documents as may be required in connection with the preparation
and filing of such application for financial assistance and the rules of the Texas Water Development Board.
SECTION 3: That the following firms and individuals are hereby authorized and directed to aid and assist
in the preparation and submission of such application and appear on behalf of and represent the
City of Pearland before any hearing held by the Texas Water
Development Board on such application,to wit:
Financial Advisor: BOK Financial Securities, Inc.
1401 McKinney St.,Suite 1000, Houston,TX 77010
Engineer: Ardurra-Mr.Christopher M. Munson, P.E.
2032 Buffalo Terrace, Houston,TX 77019
Bond Counsel: Orrick, Herrington&Sutcliffe, LLP
609 Main St.,40th Floor, Houston,TX 77002
PASSED AND APPROVED,this the day of ,20
ATTEST: - By:
niw
waterworks
October 1,2020
Cara Davis
City of Pearland, Sr. Project Manager
3519 Liberty Drive
Pearland, Texas 77581
RE: Request for Proposal No. 0919-66
JHEC WRF Expansion CMAR Services
60%OPCC Confirmation
Dear Ms. Davis,
PLW Waterworks(PLW)has finalized our 60% Opinion of Probable Cost model for the City of
Pearland JHEC WRF Expansion Contract. In July,PLW presented our OPCC that indicated a
cost trend over our original 30%OPCC. Together with the City and EOR,the team worked
through August to identify opportunities to align the scope and cost in a direction closer to the
original 30% OPCC.
30%OPCC $64,459,970 (March Update)
60%OPCC $69,744,336 (July Update)
August Trends ($4,855,658) (Value Engineering)
60% OPCC $64,888,678 (Current Update)
PLW is pleased to inform you through the efforts of the team, August trends from the July 60%
OPCC has aligned with original 30%OPCC expectations and currently stands at$64,888,678.
Should you have any questions or comments,please feel free to contact me at 713-569-0738, or
tfisher@plwus.com
Sincerely,
Todd Fisher
Director of Alternative Delivery
PLW Waterworks I a division of Nebber
Attachment: March 2020 30%OPCC
July 2020 60% OPCC
August VE Log