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HomeMy WebLinkAbout07998ORDINANCE NO. 7998 AN ORDINANCE BUDGETING AND APPROPRIATING THE AMOUNT OF $4,500,000.00 FROM THE SEWER USER FUND RESERVE FOR PROFESSIONAL ENGINEERING SERVICES INCIDENT TO THE DESIGN AND CONSTRUCTION MANAGEMENT OF THE JAMES R. DIIORIO WATER RECLAMATION FACILITY AMMONIA REMOVAL PROJECT BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1. The amount of $4,500,000.00 is hereby budgeted and appropriated from the Sewer User Fund Reserve for professional engineering services incident to the design and construction management of the Ammonia Removal Project at the James R. Dilorio Water Reclamation Facility. SECTION 2. The amount of $4,500,000.00 shall be budgeted and appropriated to the capital improvement account in the Sewer User Fund for said project. SECTION 3 Funds from loans made under the American Reinvestment and Recovery Act of 2009 and the State Revolving Fund shall upon receipt by the City be transferred to the Sewer User Fund Reserve. $4,500,000.00 in Sewer User Fund Reserves are hereby budgeted and appropriated for the Project, said funds are to be held in a separate reserve fund subject to transfer by Resolution of the City Council. A77ESTED SY: CITY CLERK INTRODUCED: April 13, 2009 BY: Randy Thurston Councilperson APPR t)' 40 �- PRESIDENTof City Council PASSED AND APPROVED: April 27, 2009 L) 4 Background Paper for Proposed ORDINANCE AGENDA ITEM # 28 DATE: April 13, 2009 DEPARTMENT: WASTEWATER DEPARTMENT Gene Michael, Director TITLE AN ORDINANCE BUDGETING AND APPROPRIATING THE AMOUNT OF $4,500,000.00 FROM THE SEWER USER FUND RESERVE FOR PROFESSIONAL ENGINEERING SERVICES INCIDENT TO THE DESIGN AND CONSTRUCTION MANAGEMENT OF THE JAMES R. DIIORIO WATER RECLAMATION FACILITY AMMONIA REMOVAL PROJECT ISSUE Should the City Council budget and appropriate the amount of $4,500,000.00 from the Sewer User Fund Reserve for design and construction management of the James R. Dilorio Water Reclamation Facility Ammonia Removal Project. RECOMMENDATION Approval of this ordinance BACKGROUND Pueblo operates the James R. Dilorio Water Reclamation Facility under a discharge permit issued by the State of Colorado to treat wastewater generated within the community. The discharge permit is issued for a period of five years, and contains numeric limits for maximum concentrations of specific chemicals that can be discharged in the effluent from the treatment facility. In 2005 the State of Colorado adopted a new water quality rule establishing more restrictive standards for ammonia. Pueblo's new discharge permit will contain numeric limits for ammonia that the existing treatment facility cannot attain reliably. Maintaining compliance will require constructing new treatment facilities. In addition, Pueblo is considering an optional project converting the existing gaseous chlorine disinfection process to disinfection via ultraviolet radiation, to be constructed only if federal funding is available. Both projects require substantial professional engineering work for detailed facility design, plan approval by the State of Colorado, and development of bidding documents for selection of construction contractors through a competitive bidding process. The Black & Veatch Corporation was selected in 2005 through a competitive bidding process to serve as the Wastewater Department's Engineer of Record, and will be responsible for providing these engineering services. In addition, these projects will entail large -scale industrial construction that exceeds the scope and expertise of the City's inspectors. The City will need to retain expert construction management assistance to ensure these projects are constructed properly, timely, and within budget. Black & Veatch will also provide construction management services. The State of Colorado has a process for establishing its funding priority list and disbursing funds that is expected to result in making loans available by October 2009. However, due to the current national economic downturn, there is significant pressure to rush more money into circulation. To accomplish this goal, loan programs require that construction projects be started within short time frames. In addition, the economic downturn has created an extremely favorable bidding environment, and it is greatly to the City's advantage to move quickly to take advantage of these conditions. Preparing the projects for construction will require professional engineering work immediately, in advance of receipt of the expected loans. In order to pay for these advance engineering services, this ordinance budgets and appropriates a sum of $4,500,000 from the Sewer User Fund Reserve. FINANCIAL IMPACT The Sewer User Fund has a reserve balance of approximately $6,500,000. Funds are available for appropriation. Costs for facility design and construction are reimbursable through State Revolving Fund Loans and through loans made under the American Reinvestment and Recovery Act of 2009. Pueblo is included in Colorado's Intended Use Plan for funding through a conventional State Revolving Fund loan in 2009. In addition Pueblo is eligible for a principal- forgiveness loan in the amount of $2,000,000.00 under the American Reinvestment and Recovery Act of 2009, and for additional interest -free loans under the American Reinvestment and Recovery Act of 2009. These loans will be used to reimburse the Sewer User Fund for the cost of final engineering design and construction management.