HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 02/19/2019 - FIRST READING OF ORDINANCE NO. 026, 2019, AUTHORIZAgenda Item 11
Item # 11 Page 1
AGENDA ITEM SUMMARY February 19, 2019
City Council
STAFF
Eileen Dornfest, Special Projects Manager
Carol Webb, Deputy Directory, Utilities
Gerry Paul, Director of Purchasing & Risk Management
Eric Potyondy, Legal
SUBJECT
First Reading of Ordinance No. 026, 2019, Authorizing the Purchasing Agent to Enter into Contracts for
Services, Professional Services and/or Construction in Excess of Five Years for the Proposed Enlargement of
Halligan Reservoir.
EXECUTIVE SUMMARY
The purpose of this item is to authorize the Purchasing Agent, pursuant to City Code Section 8-186(a), to enter
into contracts greater than five years in length for services, professional services, and/or construction of the
proposed enlargement of Halligan Reservoir. Contracts authorized under the proposed ordinance could be
extended up to the life of the project. Preliminary design of an enlarged Halligan Reservoir will likely begin in
late 2019, and construction could begin four years later. Construction is anticipated to last approximately two
years. Under this scenario and without this proposed ordinance, the design contract would expire while the
Halligan Reservoir enlargement is under construction, a situation that would result in logistical, and cost
ramifications for the City and the project.
STAFF RECOMMENDATION
Staff recommends adoption of the Ordinance on First Reading.
BACKGROUND / DISCUSSION
The Halligan Water Supply Project (Halligan Project) is currently in the regulatory permitting phase, with
federal permitting being led by the United States Army Corps of Engineers (Corps). The enlargement of
Halligan Reservoir is the City’s preferred alternative for meeting water supply needs, due to relatively low costs
and environmental impacts, and significant opportunities for environmental improvements downstream. Other
alternatives considered have lower water quality, a larger construction footprint and infrastructure
requirements, higher operations and maintenance costs, and overall higher cost per unit of water. The Corps
is finalizing the Draft Environmental Impact Statement (EIS), which is scheduled for release in mid-2019.
The overall schedule for the Halligan Project is primarily dictated by the federal permitting process, and the
City has very limited control of the schedule until all permitting is complete. Federal permitting with the Corps
began in 2006 and preliminary indications are that permitting could be complete in 2022. In addition to the
federal permitting process led by the Corps, several other permits are needed from other federal, state, and
county agencies prior to construction. Design of the dam raise will begin in 2019 in order to collect data to
refine cost estimates and identify construction risks.
Design for a project of the size and complexity of the enlargement of Halligan Reservoir typically takes several
years and is conducted in phases. The first phase of design, Preliminary Design, is scheduled for 2019-2020
Agenda Item 11
Item # 11 Page 2
and will provide critical information needed to verify current Halligan Project assumptions, refine the current
construction cost estimate, and provide information needed for several permits required for construction.
A Request for Proposals for a design team will be released in 2019. This design team will not only design the
enlargement of Halligan Reservoir, but will also play a critical role during construction to ensure that
construction is performed in accordance with the design. If, for example, the contract for design is executed in
2019, the five-year contract limit for multi-year contracts stated in City Code Section 8-186(a) prohibits renewal
of the contract beyond 2024 unless authorized by ordinance. A preliminary project schedule is included in the
latest Halligan Project update attached and shows that construction is anticipated to be underway in 2024 and
will last approximately two years. Given this schedule and the multi-year contract limitations per City Code, the
contract for design would expire during construction. At that point, City Council could extend the contract for a
longer term, or a mid-project competitive purchasing process would be required for design. A mid-project
competitive purchasing process for the design team would at the least be disruptive to the project and incur
additional cost to the City. At most it could initiate uncertainties for issues that arise during design or
construction.
A similar scenario could develop for the construction contractor, who will join the Halligan Project team during
Preliminary Design and will be responsible for providing constructability input during design as well as
construction of the multi-year project. Extending the length of contracts for the Halligan Project up to the life of
the project will provide the City with the continuity needed for the project team to efficiently deliver this multi-
year project.
This Ordinance is being requested now, because the Draft EIS is scheduled for release in 2019, as shown in
the attached preliminary project schedule. (Attachment 1) After public comments are received on the Draft
EIS, design is anticipated to begin in late 2019. This Ordinance is being requested now, before initiation of the
competitive purchasing process for design and before any contracts are executed, in order to set the project
team up for success and continuity. The preliminary estimate for total cost of the construction contracts to
build Halligan are anticipated to be approximately $40 to $50 million. The total cost of the design contracts is
projected to be approximately 10 percent of construction costs.
Staff is preparing a presentation on the Halligan project for the April 9 work session. This presentation will
include an update on the project status and schedule, past work and project costs, upcoming work and costs,
and an update on the permitting process, including the current permit status and the items that will be released
for public review and comment in mid-2019.
CITY FINANCIAL IMPACTS
This is a cost avoidance measure. Cost efficiencies will be realized by the City if the Purchasing Agent can
enter into contracts for design or construction in excess of five years for the Halligan Project.
BOARD / COMMISSION RECOMMENDATION
At its November 15, 2018 meeting, the Water Board unanimously voted to recommend that City Council adopt
a revision to the ordinance to extend contracts related to design and construction of the Halligan Project
through completion of the project, due to the uncertainty related to the timeframe for permitting.
ATTACHMENTS
1. Permitting and Design Process (PDF)
2. Water Board Minutes, November 15, 2018 (PDF)
3. Halligan Water Supply Project Update, January 2019 (PDF)
Notice of Intent;
Agency and Public
Scoping
Develop
Purpose & Need
Conduct Baseline
Environmental
Studies
Develop
Alternatives
Develop
Common Technical
Platform
Develop and
Issue
Draft EIS
2006 2006-2012, 2015 2007-2015
2009 - 2012 2009-2015 2018-2019
Conduct
Environmental
Impact Studies
2015-2018
Public
Comment
Period
Prepare and
Publish
Final EIS
Record of
Decision
2019 2019-2021 2022
Public
Comment
Period
2021-2022
Other Permitting (e.g., 401 cert., Fish & Wildlife Mitigation,
reg. 1041, construction permits etc.)
Construction
2023-2025
Preliminary & Final Design
We are here
Halligan Water Supply Project – Permitting and Design Process
ATTACHMENT 1
Excerpt from MINUTES - WATER BOARD
REGULAR MEETING
November 15, 2018, 5:30 p.m.
222 Laporte Avenue, Colorado River Community Room
11/15/2018 – Excerpt from Unapproved DRAFT MINUTES Page 1
o Halligan Reservoir Contract Extension
(Attachments available upon request)
Special Projects Manager Eileen Dornfest provided an overview and answered
questions.
Presentation Summary: Continuity in team and design is essential to the success of the
project, which has been in the permitting process with the U.S. Army Corps of
Engineers for 13 years. Staff expects to need more than five years for the contract but
less than 10 years. Construction is slated to start in 2020 and last two years. Staff
seeks the Water Board’s recommendation to City Council for the November 20 Work
Session.
Discussion Summary: A board member commented that staff’s proposal is wise.
Board Member Jim Kuiken moved for Water Board to recommend to City Council
adoption of the ordinance authorizing the Purchasing Agent to enter into
contracts for services, professional services and construction in excess of five
years through completion of the proposed enlargement of Halligan Reservoir.
Board Member John Primsky seconded the motion.
Discussion on the Motion: None.
Vote on the motion: It passed unanimously, 7-0.
ATTACHMENT 2
HALLIGAN WATER
SUPPLY UPDATE PROJECT
January 2019
BACKGROUND
If approved, the Halligan Water Supply
Project would enlarge Halligan Reservoir,
an existing reservoir on the North Fork of
the Poudre River, to provide Fort Collins
Utilities’ water customers with a reliable
future supply for emergency, drought and
climate-change related uncertainties.
The project would expand the reservoir
by about 8,100 acre-feet by increasing the
height of the existing dam by 25 feet. For
context, an average single-family home uses
almost a third of an acre-foot of water each
year (about 108,000 gallons).
Permits are required from the U.S. Army
Corps of Engineers (Corps) and other
federal and state agencies to enlarge
Halligan Reservoir. Before issuing permits,
the Corps will produce draft and final
Environmental Impact Statements (EIS),
that will be published for public review
and comment. The EIS will describe the
environmental impacts of the project, along
with the environmental impacts of projects
identified as alternatives to enlarging the
reservoir.
2018 YEAR IN REVIEW
• Draft EIS – Portions of the draft EIS were written and present a
summary of the technical work conducted to date, including:
a. the purpose and need for the Halligan Water Supply Project
b. a description and comparison of project alternatives
c. a description of environmental and cultural resources that could
be affected by each alternative
d. direct and indirect effects of constructing each alternative
• Development of mitigation and enhancement measures – The City
will issue a Conceptual Mitigation Plan with the draft EIS.
• Reintroduction of greenback cutthroat trout – Evaluation of the
feasibility and cost of reintroducing greenback cutthroat trout, a
“threatened” species, to the North Fork of the Poudre River as a
possible project enhancement is ongoing.
• Studies on wetlands and aquatic habitat – Staff completed
additional studies on wetlands and aquatic habitat along the North
Fork, as required by the Corps. To facilitate these studies, the water
level in Halligan Reservoir was drawn down about 6 feet in May.
• Land acquisition and easements – Staff began pursuing land
acquisition and easements needed for the project.
• Community Engagement and Communications Plan – A Community
Engagement and Communications Plan was created to guide public
outreach efforts on the project in 2019.
• Outreach – Staff reached out to environmental groups and federal
and state elected officials.
2019 PLANNED ACTIVITIES
2019 will be a busy year as the project reaches a permitting milestone.
• Draft EIS release – All indications are that the federal permitting
process is on track and a draft EIS is scheduled to be released in
mid-2019.
• Finalize documents – Staff will finalize documents to be released
PROJECT SCHEDULE
Release of the draft EIS is currently anticipated in mid-2019. Construction could begin as early as 2023. Other project
milestones are shown in the timeline below.
EXPENSES ($M)1
To Date2 Future Total
Acquisition $3.3 $0.3 $3.6
Permitting & Mitigation $12.9 $8.1 $21.0
Construction - $31.3 $31.3
Debt Service3 $1.9 - $1.9
Risk Mitigation/Contingency - $16.3 $16.3
Total $18 $56 $74.1
ESTIMATED FINAL UTILITY COST ($M)
To Date2 Future Total
Project Costs $18.1 $56.0 $74.1
Less Reimbursements4 ($4.6) ($0.1) ($4.7)
Total5 $13.5 $55.9 $69.4
APPROPRIATIONS ($M)
To Date2 Future Total
Past Appropriations $37.4 - $37.4
Required Future Appropriations - $36.7 $36.7
Total $37.4 $36.7 $74.1
1. Future expenses include escalation through 2023 in each line item. Future expenses are
expected to change as new project information is obtained. Line items may not sum to total
due to rounding.
2. Life-to-date project costs through December 2019.
3. Debt service payments from 2004-2014 were allocated as Halligan Water Supply Project
expenses. Future debt service payments will not be a project cost.
4. Reimbursements were received from former project partners (North Poudre Irrigation Co. and
the
Tri-Districts) between 2005-2014; miscellaneous reimbursements have been and will be
collected from the City of Greeley and future rents. Reimbursements for project expenses
require Council action to be reappropriated to the project budget.
5. Total cost includes debt service and deducts reimbursements.
ANTICIPATED COST
The current total estimated cost of the
project is $74.1 million, based on an
updated 2018 cost estimate. A breakout
of costs is provided in the table to the
right. Most of the cost is related to
permitting, mitigation and construction.
Although current cost estimates indicate
a total project cost of $74M, standard
practices indicate costs could vary
significantly due to the conceptual nature of
the project. Costs of the project will continue
to be refined as additional information is
obtained and project requirements are
further defined. The next cost estimate
update will be performed in 2019 after
refining land acquisition and mitigation
needs. Costs will again be updated in 2020
after preliminary design is complete.
Although costs of the Halligan Project
will continue to be updated as new
information is obtained, it continues to be
a cost-effective project for meeting the
City’s water supply needs.The project is
currently anticipated to provide firm yield
at a cost of about $9,000 per acre-foot.
For comparison, the market rate for firm
-1-
ORDINANCE NO. 026, 2019
OF THE COUNCIL OF THE CITY OF FORT COLLINS
AUTHORIZING THE PURCHASING AGENT TO ENTER INTO CONTRACTS FOR
SERVICES, PROFESSIONAL SERVICES, AND/OR CONSTRUCTION IN EXCESS OF
FIVE YEARS FOR THE PROPOSED ENLARGEMENT OF HALLIGAN RESERVOIR
WHEREAS, City Code Section 8-186(a) states that no contract for services or
professional services, including all renewals, shall be made by the City for a period longer than
five years, unless authorized by ordinance, which ordinance shall not be passed as an emergency
ordinance; and
WHEREAS, City is pursuing the Halligan Water Supply Project (“Project”), which
includes the City’s preferred alternative of the enlargement of Halligan Reservoir, an existing
reservoir located on the North Fork of the Cache la Poudre River; and
WHEREAS, the enlargement of Halligan Reservoir will be a substantial undertaking that
will require significant design and construction work, the specifics of which depend on various
investigations that are planned to be completed; and
WHEREAS, the work associated with the enlargement of Halligan Reservoir, including
design and construction work, will likely take more than five years due to various factors,
including the scope of the Project and legal and regulatory requirements; and
WHEREAS, it is in the best interest of the City and the citizens of Fort Collins, including
ratepayers of Fort Collins Utilities, that the Purchasing Agent be authorized to enter into
contracts for services, professional services, and/or construction in excess of five years for the
proposed enlargement of Halligan Reservoir in order to, among other things, receive better
proposals for the design and construction work, maintain continuity of the design and
construction work throughout the Project, and therefore avoid costs related to transitions of
project team members due to contract expiration.
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 the Purchasing Agent is hereby authorized to enter into contracts for
services, professional services, and/or construction in excess of five years for the proposed
enlargement of Halligan Reservoir, but not to extend beyond the completion of the project and
any associated warranty periods.
-2-
Introduced, considered favorably on first reading, and ordered published this 19th day of
February, A.D. 2019, and to be presented for final passage on the 5th day of March, A.D. 2019.
__________________________________
Mayor
ATTEST:
_______________________________
City Clerk
Passed and adopted on final reading on the 5th day of March, A.D. 2019.
__________________________________
Mayor
ATTEST:
_______________________________
City Clerk
yield from the Colorado-Big Thompson
(CBT) Project is approximately $60,000.
Unit costs of the Northern Integrated
Supply Project (NISP) and Windy Gap
Firming Project are currently $27,500 and
$19,000 per acre-foot, respectively.
For more information, visit fcgov.com/halligan
Eileen Dornfest, Special Projects Manager • 970-416-4296 • halligan@fcgov.com
Auxiliary aids and services are available for persons with disabilities, V/TDD 711.
Esta información puede ser traducida, sin costo para usted, 970-212-2900. Utilities
‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17 ‘18 ‘19 ‘20 ‘21 ‘22 ‘23 ‘24 ‘25 ‘26
Federal Permitting
Other Federal & State Permitting
Preliminary Design
Final Design
Construction
Enlarged Halligan Operations
— Record of Decision
Purpose & Need
— Notice of Intent
Baseline Environmental Studies
Alternatives
Environmental Impact Studies
— Develop & Issue Draft EIS
— Draft EIS Comment Period
— Prepare & Release Final EIS
— EIS Comment Period
WE ARE HERE
— Purpose/Need
Project schedule is dependent on permitting schedule and subject to change.
with the draft EIS, including the Conceptual Mitigation Plan and the
Operations Plan for the Halligan Water Supply Project.
• Preliminary design – Preliminary design activities will begin,
including procuring the design team and initiating data collection
and design activities needed to refine cost estimates.
• Additional outreach – Staff will provide public outreach through a
website update in January and other targeted efforts.
• State permits – Consultation will begin with Colorado Parks &
Wildlife and Colorado Department of Health and Environment on
required state permits.
ATTACHMENT 3