Fort Walton Beach Council agenda — 02-08-05 — reading text

Wheeler St. Waynel Cir. Okahatchee Cir. 440 $ 5, 970 East Miracle Strip Alconese Ave. Brooks St. First St. 600 $ 8, 140 3, 250 $ 48, 060 2008/ 09 Ferry Park Stacy Cir. Okaloosa Rd. Okaloosa Rd. 900 $ 12, 150 Ferry Park Laurie Dr. Hollywood Blvd. Okaloosa Rd. 750 $ 10, 125 Choctawhatchee Ferry Park Kepner Dr. Okaloosa Rd. Rd. 1, 700 $ 22, 950 3, 350 $ 45, 225 The total anticipated cost for both of these projects is approximately $ 1, 025, 000. Adding these two to the projects proposed debt issuance at this time coincides with the program objectives and makes the best sense for the City. By adding the two projects, the City reduces a large annual expenditure and spreads the cost of the improvements out over the useful life of the infrastructure. Using this approach, future utility customers will pay their proportionate share of the improvements throughout the 25- 30 year debt period. In addition, the proportionate share of the debt service for these two projects is significandy less than the annual budgeted expenditures, thereby freeing money for other capital projects or reducing the overall budget. 3 Recommendation: Request authorization to include the next five years of sewer line rehabilitation and replacement of 2_1/ inch water lines capital improvement projects in the proposed Series 2005 Utility Revenue 4 Bonds as outlined in the backup report. The total amount of these projects is estimated at 1, 025, 000 and have a useful life of 25 years or greater. The addition of these projects is authorized under the debt funding methodology previously approved by City Council through resolution 04- 33. OJ- J- OS- Date 2/ 3/ 0,S- Date Reviewed and Concur: J rl 2{; Manager Date Attachments: 1. October 25, 2004 Staff Report 2. Resolution 04- 33 4  City of Fort Walton Beach Memorandum To: Joyce Shanahan, City Manager From: i Michael J. Burton, Finance Directorr- Subject: Water and Wastewater Improvements - Intent to Debt Finance Date: October 25, 2004 BACKGROUND: The City of Fort Walton Beach owns and operates water and sewer facilities for the benefit of its citizens and to support economic' growth in southern Okaloosa County. The City began development of its water and sewer infrastructure in the early 1950s to service the needs of a small and centralized. population hub along San~ Rosa Sound. AB the area grew and corporate limits expanded,. the demand for additional infrastructure increased. Today, the City' s water and sewer utility services the demand of over 20, 000 people in a distribution network bounded by the City of Mary Esther to the west, Santa Rosa Sound to the south, Choctawhatchee Bay to the east, and unincorporated areas ofOkaloosa County t~ the north. The City' s water and sewer facilities have not undergone major expansion or renovation in more than 20 years. The last water well constructed (Well # 11) began service in 1982 and the wastewater treatment plant opened for service in 1980. Other than routine maintenance and the addition of a reuse system, there have been no substantial modifications to the water: and sewer system. While growth projections limit our need to expand water production and increase sewage treatment capacity, the City must continue to plan for future needs and address the concerns of an aging infrastructure. Realizing this need, Council directed staff to secure consulting services for variousplani1ing, designing, and,engineering studies for the City' s water and sewer infi'astructure. The FY 2004- 05 Capital Improvements Plan identified two major projects: Phase One - Water Transmission & Stora2:e The City Council elected to reprioritize the proposed water system improvements during a Special Council Meeting held on September 5, 2000. Council approved funding for the Water Transmission and. Storage project during the November 28, 2000 regular Council Meeting. Currently, the engineering and design work for this project is complete. The Water Transmission and Storage project is the most critical improvement needed for the City' s water system at this time. The ability to move water from the City' s largest productionzone in the golf course area is vitally important in the event some or all of the coastal wells are lost to saltwater intrusion. While we can produce the water needed from the well network in this area, we are restricted in our ability to deliver water due to the piping and storage restrictions previously noted. Additional limitations in elevated storage capacity will occur once the elevated storage tank located at Well # 3 is converted to a reuse water storage tank as part of the HurlburtJFWB Reuse Water Line project scheduled to begin later this year. The Water Transmission and Storage project will correct these deficiencies as well as enable the City to move more water from north to south if there is a need in the future to develop the sand and gravel aquifer as an alternative supply. Lastly, the two existing downtown elevated storage tanks must be removed from service or renovated. The Water Transmission and Storage project will improve the system by accommodating more elevated storage in both the north ~ d south zones and by providing redundancy in the distribution piping between the two areas. The proposed 18" water main linking the north zone with the south zone will provide this needed redundancy and allow the continued movement of water should we lose the existing 16" water, line along Cinco Bayou Bridge to catas1rophic failure. Lastly, the proposed project will eliminate two aging and smaller elevated water storage tanks in the downtown area which will be replaced by a new pedestal type elevated tank with increased storage capacity. Currently, we have ' delayed the needed maintenance to the two older tanks in anticipation of their expected replacement. Fabre Engineering' s ( FEl)construction cost estimate for this project is approximately $ 3, 001, 200 which does not include a contingency factor or non- construction related costs. The estimated cost for the total project including a 5% contingency plus non- construction related costs is approximately 3, 251, 260. . Phase Two - Wastewater Treatment Plant UD2rades The City' s wastewater facility was built in 19,80 to replace an aging facility. Since 1996, the City has invested nearly $ 1, 000, 000 in its 1reatment facility through a series of Capital Improvement Programs. This investment was required in order to maintain operations and environmental compliance with the FDEP. If major renovations are not undertaken in the next few years, the facility will require a similar investment in order to sustain operations. The City' s wastewater treatrilent facility is aging and the secondary 1reatment process contiIiues to experience mechanical failures which severely hamper the facility' s reliability. During the May 28, 2002 Gity Council Meeting, , Council awarded a Wastewater Treatment Plant ( WWTP) Facilities Plan to the engineering firm of Hartman & Associates Incorporated (HAI). The Facilities Plan was a comprehensive evaluation of the City' s wastewater facility and provided recommendations ,for improvement and renovation. The WWTP Facilities Plan was completed in April 2003 and was presented to Council during the April 29, 2003 Council Workshop. Subsequent adoption of the final Facilities Plan by Council followed during the May 13, 2003 regular Council Meeting. Based on Council' s formal adoption of the Facilities Plan, 'our goal is to replace the aging secondary process with a new Oxidation Ditch 1reatment facility. In addition, the plan calls for renovating the existing ancillary equipment for a total plant rehabilitation and renovation package. Together, these tr;leasureswill reduce a growing operation and maintenance budget for the facility and aid in reducing annual capital outlay ,expenditures. As a side benefit, the proposed facility places the City in a better position for meeting more stringent discharge standards being considered by the Environmental Protection Agency and the FDEP. Current estimates place the cost to dismantle the exisfug1reatment system (Rotating Biological Contactors) and construct a new Oxidation Ditch facility at approximately $ 4, 793, 750. This estimate includes approximately $ 531, 250 in renovations to ancillary equipment. However, these estimates are considered rough approximations since actual engineering and design work is not yet complete. DISCUSSION: The preliminary cost estimate of these projects is approximately $ 8, 045, 010. Staff is also exploring the feasibility of investing an additional $ 1, 000,000 ( over a three to five year period) for ongoing inflow and infiltration improvements. The planned funding methodology is long-term debt over a twenty- five or thirty year period. In addition, certain bond covenants may require the establishment of a cash reserve fund, estimated in the $450, 000-$ 500, 000 range. Page 2 The design work is complete for the water improvements and is ready to bid. The City' s