HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 11/20/2018 - FIRST READING OF ORDINANCE NO. 143, 2018, AUTHORIZAgenda Item 13
Item # 13 Page 1
AGENDA ITEM SUMMARY November 20, 2018
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. 143, 2018, 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, which is the preferred alternative for the Halligan Water Supply
Project. The request for a longer contract period is due to the large scope of the project and the uncertainties
related to the schedule for design and construction. Any contracts authorized under the proposed ordinance
would be no longer than ten years in length.
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 schedule for
construction of the enlargement of Halligan Reservoir is primarily dictated by the permitting process, and the
City has very limited control of the schedule until all permitting is complete. Permitting with the Corps began in
2006 and is anticipated to be complete by 2021, with a Record of Decision issued 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. To expedite transition from permitting to construction, design of the
enlargement of Halligan Reservoir will be conducted in parallel with permitting, beginning in 2019.
Design for a project 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
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.
Following Preliminary Design and cost estimate refinement, the design will be advanced through Final Design
at a schedule that will allow construction to begin as soon as all necessary permits are obtained.
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 play a critical role during construction to ensure that construction is
performed in accordance with the design. If the contract for design is executed in 2019, the current five-year
contract limit stated in City Code Section 8-186(a) would terminate the contract in 2024. A best-case project
Agenda Item 13
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schedule is presented in the latest Halligan Project update (Attachment 1), which shows that construction is
anticipated to be underway in 2024 and will last approximately two years. This scenario would require a mid-
project competitive purchasing process for the Halligan Project design team. Such a mid-project competitive
purchasing process would be disruptive to the project and would incur additional cost to the City. If a new
team is chosen by a mid-project competitive purchasing process, the change would result in significant costs
related to onboarding new team members, as well as uncertainties related to liability for any issues that arise
during design or construction. A similar scenario could develop for the construction contractor, who will join
the Halligan Project team during design and will be responsible for construction of the multi-year project.
Extending the length of contracts for the Halligan Project up to ten years for services, professional services
and/or construction will provide the City with the continuity needed for the project team to efficiently deliver this
multi-year project.
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 services, professional services and/or construction in excess of five years for the
Halligan Project.
ATTACHMENTS
1. Halligan Council Update October 2018 (PDF)
HALLIGAN WATER
SUPPLY UPDATE PROJECT
October 2018
BACKGROUND
The Halligan Water Supply Project will
enlarge Halligan Reservoir, an existing
reservoir on the North Fork of the Poudre
River, to help meet future water supply
needs. The population for Fort Collins
Utilities’ Service Area is projected to
increase by 45,000 by 2065, and the
current water supply is not enough to
support that growth under City policy,
especially during a drought.
The project would expand the reservoir by
about 8,100 acre-feet (AF) by increasing
the height of the existing dam by 25 feet.
For context, an average single-family home
served by Utilities uses almost a third of an
AF of water each year.
To enlarge Halligan Reservoir, permits
are required from the U.S. Army Corps of
Engineers (Corps) and other federal and
state agencies. Before issuing permits, the
Corps will produce an Environmental Impact
Statement (EIS), which will be published
for public review and comment. The EIS
will describe the environmental impacts
of the project, along with impacts of other
alternatives to enlarging Halligan.
HALLIGAN RESERVOIR SURFACE AREA
Halligan Dam
Existing Surface Area
Enlarged Surface Area
PROGRESS UPDATE
City staff, consultants and the Corps made significant progress during the
first three quarters of 2018. Developments include:
• All indications are that the federal permitting process for the
enlargement of Halligan Reservoir is on track and a Draft EIS is
scheduled for mid-2019.
• Continued developing mitigation and enhancement measures for
the project. The City will issue a Conceptual Mitigation Plan at the
same time as the Draft EIS.
• Writing Chapters 1 through 4 of the Draft EIS, which will present
a summary of the technical work conducted to date, including
1) definition of purpose and need for the project, 2) identification
and comparison of alternatives to the Halligan Water Supply Project,
3) a description of environmental and cultural resources that could
potentially be affected by each alternative, and 4) direct and indirect
effects of constructing each alternative.
• Staff initiated an evaluation of the feasibility and cost of
reintroduction of greenback cutthroat trout, a “threatened”
species, to the North Fork of the Cache la Poudre River as a possible
enhancement measure to the Halligan project.
• Completed additional studies on wetlands and aquatic habitat
along the North Fork of the Poudre River, as required by the Corps. To
facilitate these studies the water level in Halligan Reservoir was drawn
down approximately 6 feet in May.
• Investigated land acquisition needed for the project.
• Developed plans for completing the design of dam enlargement.
An April 6, 2018 memo to City Council provided revised cost estimates for the Halligan Reservoir enlargement. The total
estimated cost for the project has increased to $74.1 million, indicating a need for $36.7 million in future appropriations. A
breakout of costs is provided in the table
to the right. Most of the cost increases are
attributable to construction cost escalation,
which is compounded by delays in the
federal permitting process, and revised
estimates of costs required to address
project uncertainties.
Considering the revised cost of the project,
the unit cost of the Halligan Water Supply
Project remains significantly lower than
that of other water supply options. The
Halligan Project will provide firm yield at
a cost of $8,800 per AF. For comparison,
the market rate for firm yield from the
Colorado-Big Thompson, Northern
Integrated Supply Project (NISP) and
Windy Gap projects is $60,000, $25,000
and $14,000 per AF, respectively.
Year-to-date expenditures through
September are $550,000.
PROJECT SCHEDULE
BUDGET
Release of the draft EIS is currently anticipated in April 2019. Construction could begin as early as 2023. Other project
milestones are shown in the timeline below.
EXPENSES ($M)1
To Date2 Future Total
Acquisition $3.3 $0.3 $3.6
Permitting & Mitigation $12.7 $8.4 $21.1
Construction - $31.3 $31.3
Debt Service3 $1.9 - $1.9
Risk Mitigation/Contingency - $16.3 $16.3
Total $17.9 $56.1 $74.1
ESTIMATED FINAL UTILITY COST ($M)
To Date2 Future Total
Project Costs $17.9 $56.1 $74.1
Less Reimbursements4 ($4.6) ($0.1) ($4.7)
Total5 $13.3 $56.0 $69.4
APPROPRIATIONS ($M)
To Date2 Future Total
Past Appropriations $37.4 - $37.4
Required Future Appropriation - $36.7 $36.7
Total $37.4 $36.7 $74.1
1. Expenses include escalation through 2023 in each line item. Line items may not add up to the total
due to rounding.
2. Through September 2018.
3. Debt service payments from 2004 to 2014 were allocated as Halligan Project expenses. All future debt
service payments will not be counted as a project cost.
4. Reimbursements were received from former project partners (North Poudre Irrigation Co. and the
Tri-Districts) between 2005 and 2014; miscellaneous reimbursements have been and will be collected
from the City of Greeley and from rents in the future. Reimbursements for project expenses require
Council action to be re-appropriated to the project budget.
5. Total Utility cost includes debt service and deducts reimbursements.
For more information, visit fcgov.com/halligan
Eileen Dornfest, Special Projects Manager • 970-416-4296 • edornfest@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
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Federal Permitting - Draft EIS
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ORDINANCE NO. 143, 2018
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 City 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 and professional services in excess of five years, but not to exceed ten (10) years, for the
proposed enlargement of Halligan Reservoir.
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Introduced, considered favorably on first reading, and ordered published this 20th day of
November, A.D. 2018, and to be presented for final passage on the 4th day of December, A.D.
2018.
__________________________________
Mayor
ATTEST:
_______________________________
City Clerk
Passed and adopted on final reading on the 4th day of December, A.D. 2018.
__________________________________
Mayor
ATTEST:
_______________________________
City Clerk
Federal Permitting - Final EIS
Federal Permitting - Final Decision
Other Federal & State Permitting
Preliminary Design
Final Design
Construction
Enlarged Halligan Operations
• Provided outreach on the project to environmental groups and federal
and state elected officials.
N
ATTACHMENT 1