HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 07/02/2019 - SECOND READING OF ORDINANCE NO. 075, 2019, MAKINGAgenda Item 2
Item # 2 Page 1
AGENDA ITEM SUMMARY July 2, 2019
City Council
STAFF
Link Mueller, Utilities Special Projects Manager
Carol Webb, Deputy Director, Utilities
Eric Potyondy, Legal
SUBJECT
Second Reading of Ordinance No. 075, 2019, Making Appropriations and Authorizing Transfers of
Appropriations for the Drake Water Reclamation Facility Sidestream Treatment Project and Related Art in
Public Places.
EXECUTIVE SUMMARY
This Ordinance, unanimously adopted on First Reading on June 4, 2019, appropriates additional funding for
the Drake Water Reclamation Facility (DWRF) Sidestream Treatment Project. This request is necessary to
complete the permit-required project within the required timeframe to meet DWRF’s National Pollution
Discharge Elimination System (NPDES) phosphorus compliance schedule deadline of December 31, 2020.
Successful operation of this infrastructure will also earn regulatory credits to delay future capital project
expenses by upwards of 10 years.
STAFF RECOMMENDATION
Staff recommends adoption of the Ordinance on Second Reading.
ATTACHMENTS
1. First Reading Agenda Item Summary, June 4, 2019 (w/o attachments) (PDF)
2. Ordinance No. 075, 2019 (PDF)
Agenda Item 10
Item # 10 Page 1
AGENDA ITEM SUMMARY June 4, 2019
City Council
STAFF
Link Mueller, Utilities Special Projects Manager
Carol Webb, Deputy Director, Utilities
Eric Potyondy, Legal
SUBJECT
First Reading of Ordinance No. 075, 2019, Making Appropriations and Authorizing Transfers of Appropriations
for the Drake Water Reclamation Facility Sidestream Treatment Project and Related Art in Public Places.
EXECUTIVE SUMMARY
The purpose of this item is to request an appropriation for additional funding for the Drake Water Reclamation
Facility (DWRF) Sidestream Treatment Project. This request is necessary to complete the permit-required
project within the required timeframe to meet DWRF’s National Pollution Discharge Elimination System (NPDES)
phosphorus compliance schedule deadline of December 31, 2020. Successful operation of this infrastructure
will also earn regulatory credits to delay future capital project expenses by upwards of 10 years.
STAFF RECOMMENDATION
Staff recommends adoption of the Ordinance on First Reading.
BACKGROUND / DISCUSSION
The purpose of this agenda item is to request an appropriation of $1.1 million for additional funding for the Drake
Water Reclamation Facility (DWRF) Sidestream Treatment Project. The current project budget is $4.3 million.
The additional $1.1 million appropriation will increase the project budget to $5.4 million. The cost estimate at
60% project design, completed in January 2019, for the Sidestream Treatment project is greater than the
approved budget.
Key Project Drivers
The Sidestream Treatment Project is necessary for DWRF to meet future nutrient water quality regulations by
the Colorado Department of Public Health and Environment (CDPHE). The DWRF NPDES permit includes a
phosphorus compliance schedule to ensure the City is successful in meeting the required phosphorus limits by
January 1, 2021. The Sidestream Treatment Project is a necessary addition required for DWRF to meet these
proposed phosphorus standards.
Nutrient removal projects have been identified as part of the Utility’s Capital Improvement Planning (CIP) and
Master Planning efforts for the last ten years. The current CIP-identified Nutrient Removal Projects required to
meet future nutrient limits by the Environmental Protection Agency (EPA) and CDPHE and have future potential
costs of approximately $70 million by 2028. The Wastewater Utility has been actively planning to minimize this
cost as much as possible through participation in the CDPHE Nutrient Incentive Program and the American
Water Works Association Clean Water Partnership. Participation in these programs could provide the City both
schedule and financial relief of up to 10 years.
ATTACHMENT 1
Agenda Item 10
Item # 10 Page 2
Rationale for Appropriation Request
A conceptual class 5 cost estimate of $4.3 million was developed for the 2017-2018 BFO cycle based upon
capacity, modeling, analogous projects and the available sidestream treatment technologies. As stated in the
BFO offer, the design was based on a conceptual design and a complete design could result in an increase or
decrease of the cost to meet the design deliverables. As design progressed, additional detail, including
equipment selection, and other specifications resulted in increased project costs. A contingency in the additional
budget request has been included, appropriate for the current level of design. The following three major factors
impacted the budget requiring this appropriation request:
1. A new sludge feed pump station was required in addition to other improvements increasing construction
costs approximately $625,000. It had been anticipated, but not feasible, that the existing sludge pumps could
be used. Thus, staff has now determined that their use is not feasible.
2. Completion of the 60% design cost estimate (class 2) revealed an error in the original BFO class 5 estimate
allowing the original BFO request to be approximately $325,000 under-funded. In the future, BFO offer
estimates, including backup documentation, will be provided to management staff for review.
3. The retirement of the Utilities’ lead programming engineer impacted the ability to self-perform all the process
programming, integration, and operator interface requirements of the plants. Additional support from the
equipment manufacturers and consulting engineers is required for process programming and integration
costing approximately $150,000.
For the 2019-2020 BFO budget cycle, staff initiated a process where larger projects will start with a “design only”
phase so that better construction estimates can be obtained prior to appropriation. This practice will address the
budgeting issues that occurred for this project.
The current DWRF NPDES permit requires the City to comply with nutrient regulations by January 1, 2021. The
permit’s compliance schedule also indicates the construction must begin by December 31, 2019. It is critical to
begin construction as soon as possible in 2019 in order to give facility staff adequate time to optimize the system
to comply with required nutrient limits by the January 1, 2021 deadline.
ENVIRONMENTAL IMPACTS
In March 2013, CDPHE promulgated Regulation #85, requiring Publicly Owned Treatment Works (POTWs) with
greater than 2 million gallons per day capacity to meet more stringent effluent water quality standards. The
regulation mandates that existing POTWs limit their effluent discharge on a monthly median value of Total
Phosphorus to 1.0 mg/L and Total Inorganic Nitrogen (TIN) of 15 mg/L. DWRF currently meets the TIN limit, but
the improvements installed with the Sidestream Treatment Project are necessary to help meet the Total
Phosphorus limit.
While phosphorus and nitrogen are building blocks of organic life, high concentrations in lakes, reservoirs, and
receiving waters can lead to lower dissolved oxygen levels, poison aquatic life, and eutrophication. POTWs are
only one of three major sources of nutrient contamination of receiving waters (urban and agricultural non-point
source run-off being the other two) but are the easiest to regulate being a point source contributor.
ALTERNATIVE ANALYSIS
As project design evolved and the need for additional funding became apparent, the project team evaluated the
following project alternatives:
1. Value engineering. The project team, including City staff, the general contractor, and the design engineer
evaluated construction and design variables that could be eliminated and/or reduced and still deliver an
effective project. While numerous items were removed or revised, this evaluation was not successful in
bringing the overall project costs down to within the available budget.
2. Not complete the project. This alternative would jeopardize not only immediate regulatory compliance
performance but future nutrient compliance issues as well.
Agenda Item 10
Item # 10 Page 3
3. Request $1.1M as an off-cycle appropriation request. This is the preferred and recommended alternative by
City staff. This alternative is also recommended by the City’s Water Board.
CITY FINANCIAL IMPACTS
This Ordinance appropriates $1,111,000 of Wastewater Fund Reserves for the DWRF Sidestream Treatment
Project (which includes $11,000 for Art in Public Places). Adequate funds exist in the Wastewater Fund reserves
to cover this request for additional appropriations. In the latest 10-year Wastewater Capital Improvement
Program (CIP), $80-$100 million of capital improvements were identified and this is a relatively small increase.
A rate increase beyond what is already planned will not be required as a result of this request.
BOARD / COMMISSION RECOMMENDATION
At its April 18, 2019, meeting, the Water Board voted unanimously to recommend approval of the appropriation.
(Attachment 2)
At its May 20, 2019, meeting, the Council Finance Committee supported the additional appropriation.
(Attachment 3)
ATTACHMENTS
1. 2017-2018 BFO Offer (PDF)
2. Water Board minutes, April 18, 2019 (draft) (PDF)
3. Council Finance Committee minutes, May 20, 2019 (draft) (PDF)
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ORDINANCE NO. 075, 2019
OF THE COUNCIL OF THE CITY OF FORT COLLINS
MAKING APPROPRIATIONS AND AUTHORIZING TRANSFERS OF
APPROPRIATIONS FOR THE DRAKE WATER RECLAMATION FACILITY
SIDESTREAM TREATMENT PROJECT AND RELATED ART IN PUBLIC PLACES
WHEREAS, the City is pursuing the Drake Water Reclamation Facility Sidestream
Treatment Project (“Project”) in order to meet anticipated future water quality standards under
regulations promulgated by the Water Quality Control Commission of the Colorado Department
of Public Health and Environment; and
WHEREAS, a conceptual cost estimate of $4.3 million for the Project was developed for
the 2017-2018 Budgeting for Outcomes cycle based on capacity, modeling, analogous projects,
and available sidestream treatment technologies; and
WHEREAS, the total cost for the Project has since increased as design progressed,
requiring an additional appropriation in order to complete the Project; and
WHEREAS, there are unappropriated prior year reserves in the Wastewater Fund that are
available to be appropriated for the Project; and
WHEREAS, Article V, Section 9 of the City Charter permits the City Council to
appropriate by ordinance at any time during the fiscal year such funds for expenditure as may be
available from reserves accumulated in prior years, notwithstanding that such reserves were not
previously appropriated; and
WHEREAS, the City Manager has recommended the appropriation described herein and
determined that funds for this appropriation are available and previously unappropriated from the
Wastewater Fund and that this appropriation will not cause the total amount appropriated in the
Wastewater Fund to exceed the current estimate of actual and anticipated revenues to be received
in that fund during any fiscal year; and
WHEREAS, Article V, Section 10 of the City Charter authorizes the City Council to
transfer by ordinance any unexpended and unencumbered appropriated amount or portion thereof
from one fund or capital project to another fund or capital project, provided that the purpose for
which the transferred funds are to be expended remains unchanged; the purpose for which the
funds were initially appropriated no longer exists; or the proposed transfer is from a fund or capital
project in which the amount appropriated exceeds the amount needed to accomplish the purpose
specified in the appropriation ordinance; and
WHEREAS, this Project involves construction estimated to cost more than $250,000, as
such, Section 23-304 of the City Code requires one percent of these qualified appropriations to be
transferred to the Cultural Services and Facilities Fund for a contribution to the Art in Public Places
program; and
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WHEREAS, in accordance with Article V, Section 10 of the City Charter, the appropriation
of reserves for the Project from the Wastewater Fund and the transfer of a portion of those
unexpended and unencumbered appropriated funds to the Art in Public Places program established
by City Code Section 23-304(a) will be used for Wastewater purposes and improvements in
connection with the Project.
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT
COLLINS as follows:
Section 1. That the City Council hereby makes and adopts the determinations and
findings contained in the recitals set forth above.
Section 2. That there is hereby appropriated for expenditure from prior year reserves
in the Wastewater Fund the sum of ONE MILLION ONE HUNDRED ELEVEN THOUSAND
DOLLARS ($1,111,000) for the Drake Water Reclamation Facility Sidestream Treatment Project
as follows:
Drake Water Reclamation Facility Sidestream Treatment
Project
$1,100,000
Art in Public Places Project (Artwork) 8,580
Art in Public Places Project (transfer to Cultural Services
Fund for APP Operations)
2,200
Art in Public Places Project (transfer to Cultural Services
Fund for APP Maintenance)
220
TOTAL $1,111,000
Section 3. That the unexpended appropriated amount of TWO THOUSAND TWO
HUNDRED DOLLARS ($2,200) in the Wastewater Fund is authorized for transfer to the Cultural
Services and Facilities Fund and appropriated therein for the Art in Public Places Program
Operations.
Section 4. That the unexpended appropriated amount of TWO HUNDRED TWENTY
DOLLARS ($220) in the Wastewater Fund is authorized for transfer to the Cultural Services and
Facilities Fund and appropriated therein for the Art in Public Places Program Maintenance.
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Introduced, considered favorably on first reading, and ordered published this 4th day of
June, A.D. 2019, and to be presented for final passage on the 2nd day of July, A.D. 2019.
__________________________________
Mayor Pro Tem
ATTEST:
_______________________________
City Clerk
Passed and adopted on final reading on the 2nd day of July, A.D. 2019.
__________________________________
Mayor
ATTEST:
_______________________________
City Clerk