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Item 4CItem 4C CITY OF SOUTHLAKE MEMORANDUM (February 3, 2015) To: Shana Yelverton, City Manager From: Robert H. Price, P.E., Director of Public Works Subject: Approve amendment to the wholesale water purchase contract with the City of Fort Worth in an amount not to exceed $4,000,000 Action Requested: Approve amendment to the wholesale water purchase contract with the City of Fort Worth in an amount not to exceed $4,000,000. Background Information: Southlake's water system master plan adopted as part of the Southlake 2030 plan projects the City's ultimate water demand will be just over thirty-four million gallons per day (34.2 MGD). In order to meet this demand capacity, staff programmed funding in the 2014 and 2015 utility capital improvement program for participation in a large diameter pipeline project with the City of Fort Worth to increase capacity at Southlake's Caylor meter station. Three other wholesale customers (Keller, Trophy Club, and Westlake) will also share capacity and a proportional construction cost on this project. Because the final phase of the pipeline construction project is expected to be complete late Summer 2015, the proposed amendment to the wholesale water contract is intended to finalize the percent participation for each city. Also, because the last phase of the project has not been bid and right-of-way acquisition is not complete, the cost for each participant in the table below is an estimate based on capacity and does not include all easements or possible change orders. Percent Share of Requested Percent of Total Cost Wholesale Capacity Pipeline Capacity ($15,959,000 Customer (M GD) (60 M GD) EST.) SDuthlake 21.7% $ 3,457,783 5.8% $ 930,942 4.0% $ 638,360 14.2% $ 2,260,000 13 Keller 3.5 Trophy Club 2.4 Westlake 8.5 Southlake's ultimate water demand of 34.2 million gallons per day will be met with the completion of this project. Financial Considerations: Funding for this project is provided in the 2014 and 2015 utility fund capital improvement program. The current balance in the project account is $2,500,000 and this Summer's bond sale will bring the project fund to the full $4,000,000 available for the project. Strategic Link: Providing an adequate supply of water to meet the needs of the community links to the city's strategy map relative to the focus area of infrastructure. The specific corporate objective that is met by this project is investing to provide and maintain high quality public assets. Citizen Input/ Board Review: N/A Legal Review: Yes Alternatives: The City Council may approve or deny this amendment. Supporting Documents: Amendment to the 2010 Wholesale Water Contract 2010 Wholesale Water Contract Staff Recommendation: Approve amendment to the wholesale water purchase contract with the City of Fort Worth in an amount not to exceed $4,000,000. Staff Contact: Robert H. Price, P.E., Public Works Director Chuck Kendrick, Deputy Director of Public Works - Operations THE STATE OF TEXAS KNOW ALL BY THESE PRESENTS COUNTY OFTARRANT AM ENDM ENT TO CITY SECRETARY CONTRACT NO. 41110 FOR WATER SERVI CE BETWEEN TH E CI TY OF FORT WORTH AND TH E CI TY OF SOUTH LAKE FOR TH E CONSTRUCTI ON OF A NORTHSI DE 11 48-1 NCH WATER MAIN AND ALLOCATED CAPACITY This First Amendment to City Secretary Contract No. 41110 ("AMENDMENT") is made and entered into by and between the City of Southlake, acting herein by and through its Mayor, John Terrell, hereinafter referred to as CUSTOMER and the City of Fort Worth, acting herein by and through its Assistant City Manager, Fernando Costa, hereinafter referred to as FORT WORTH, all of Tarrant County, State of Texas, (collectively the "PARTIES"). WHEREAS, FORT WORTH and CUSTOMER have entered in an Agreement for Water Service known as Fort Worth City Secretary Contract No. 41110 ("CONTRACT"); and W H EREAS, the PARTIES recognize that there is a need for additional water capacity in the northeast sector of Fort Worth and in Southlake; and WHEREAS, to address this need FORT WORTH is constructing a 48-inch water main from Heritage Trace Parkway to Alta Vista and Timberland Boulevard, approximately 11,713 linear feet as shown in EX I BI T F.2a; and W H EREAS, CUSTOMER has requested capacity in the proposed water main which will increase its total projected water demand; and W H EREAS, Section 3.3 of the CONTRACT states that CUSTOMER shall pay for each new or enlarged or additional connection to the FORT WORTH system, including the cost of the wholesale meter and CUSTOMER's proportionate share of the improvements required for that service; and WHEREAS, CUSTOMER recognizes that the City of Keller, Trophy Club Municipal Utility District No. 1 and the Town of Westlake have also requested capacity in the proposed Northside II 48-inch water main; and WHEREAS, the PARTIES agree that CUSTOMER's cost and participation for the Northside II 48-inch water main shall be as stated in this AMENDMENT. NOW THEREFORE, THE PARTI ES AGREE TO AM END THE CONTRACT AS FOLLOWS: The CONTRACT shall be amended to include the following as EX H I BI T F.2: EXH I BIT F.2 ALLOCATION OF COST AND CAPACITY FORTH E NORTH SIDE 11 48-1 NCH WATER M AI N 1.) FORT WORTH shall be responsible for the preparation of plans and specifications (together with any modifications required during construction) and contract documents for the construction of the Northside II 48-inch water main, shown on Exhibit F.2a. 2.) CUSTOMER shall be entitled to an additional 13 MGD capacity in the Northside II 48-inch water main, increasing its existing capacity of 20 MGD to a total of 33 MGD at the Caylor Tank meter location shown on Exhibit A to the CONTRACT. The additional 13 MGD equals 21.7 percent of the proposed Northside II 48-inch water main's 60 MGD capacity. The estimated total engineering and construction cost of the Northside II 48-inch water main is $15,959,000. Customer agrees to pay FORT WORTH 21.7 percent that equals $3,457,783 as its proportionate share of the cost. 3.) Because the completion of the Northside II 48-inch water main is not expected before the peak summer demand period of 2015, FORT WORTH shall remove the existing orifice plate (which restricts the flow to less than 20 MGD) prior to May 1, 2015. CUSTOMER agrees to continue to limit the flow rate at the Caylor Tank meter to 20 MGD or less until the proposed Northside II 48-inch water main is placed in service. Once the Northside II main is placed in service, CUSTOMER will be allowed to utilize a total of 33 MGD through the Caylor Tank meter. 4.) The cost of easements, appraisal fees, and right-of-way acquisitions shall be shared by FORT WORTH, CUSTOMER, Keller, Trophy Club Municipal Utility District No.l and Westlake proportionately. 5.) The estimated engineering and construction costs stated herein are for planning purposes. Actual Project cost may differ and shall be adjusted to reflect the final cost of engineering, construction, easements, appraisals, and right-of-way acquisition and financing. CUSTOMER will be responsible for 21.7 percent of the Actual Project cost. 6.) Nothing contained herein shall be construed to prevent FORT WORTH from including the costs it incurs hereunder as system costs as that term is defined in the CONTRACT. 7.) Upon completion of the Northside II 48-inch water main, FORT WORTH will submit an invoice to CUSTOMER detailing CUSTOMER's percentage of the costs. CUSTOMER shall pay FORT WORTH such costs within 30 days from the date the invoice is received. A payment is late if not paid within 10 days from the Amendment:F.2 Northside II 48-inch Water main Page 2 (01/05/15) due date. Late payments shall accrue interest at the rate of one and one-half percent (1-1/2%) per month until paid. 8.) If CUSTOMER exceeds the 33 MGD capacity at the Caylor Tank wholesale meter, then the CUSTOMER will be required to provide additional cost participation toward the Northside II 48-inch water main. The additional cost participation will be required prior to CUSTOMER increasing the rate of flow at the Caylor Tank meter. This AMENDMENT shall become effective upon full and complete execution of each party below: EXECUTED this day of )2015. CITY OF FORT WORTH CITY OF SOUTH LAKE FERNANDO COSTA ASSISTANT CITY MANAGER DATE: APPROVED AS TO FORM AND LEGALITY CHRISTA LOPEZ-REYNOLDS SR. ASSISTANT CITY ATTORNEY ATTEST MARY KAYSER CITY SECRETARY JOHN TERRELL MAYOR DATE: APPROVED AS TO FORM AND LEGALITY BY: ATTORNEY ATTEST Lori Payne CITY SECRETARY Amendment:F.2 Northside II 48-inch Water main Page 3 (01/05/15) EX H BI T 66F.2a" 48-inch water main from Heritage Trace Parkway to Alta Vista and Timberland Boulevard Amendment:F.2 Northside II 48-inch Water main Page 4 (01/05/15)