Explanation
1. BACKGROUND
This ordinance authorizes the Director of Public Utilities to enter into a professional engineering services contract modification with Brown and Caldwell Ohio, LLC, for services during construction for the Southerly Waste Water Treatment Plant (SWWTP) Organics Receiving and Bioenergy Utilization Facility project, CIP #650353-100007, in an amount up to $14,914,610.09.
The original contract was for preliminary and detailed design services and provided a preliminary design report and design for the installation of Digesters 8 and 9, replacement of the floating covers on Digesters 1-5 and 7, a Fats, Oils, and Grease (FOG) and high strength organic waste (HSW) receiving station, a combined heat and power (cogeneration) facility to utilize the digester gas, new waste gas burners, and relocation of the gravity bypass at the Southerly Wastewater Treatment Plant.
This modification is to fund services for Step 3 - Services during Construction. This will include submittal review, review and answering of Requests For Information, preparation and review of Request For Proposals, and other engineering support services to ensure a successful construction project.
The Community Planning Area: 64 Far South.
1.1. Amount of additional funds to be expended: $14,914,610.09
Cost summary:
Original Contract (ORD 1297-2023; PO388455) $21,224,775.42
Modification No. 1 (current) $14,914,610.09
Modification No. 2 (future) $17,375,250.79
CONTRACT TOTAL $53,514,636.30
1.2. Reason other procurement processes are not used
This contract was awarded via the City’s Request for Proposal process and intended to last throughout construction of the project. This modification is a planned modification to add funding for Services during Construction. Another procurement process is not needed.
1.3. How cost of modification was determined
A cost proposal was provided by Brown and Caldwell, based upon existing contract job titles, rates of pay, and allowable expenses. The proposal was reviewed by the Project Team and was deemed acceptable.
1.4. Updated Timeline
The total term of the Step 1 Preliminary Design and Step 2: Detailed Design Services contract was twenty one months after the notice to proceed was given. A Notice To Proceed was given in June of 2023 with bidding completed in September of 2024. This contract modification will partially fund Step 3: Services during Construction and is anticipated to be for six years, ending in September of 2031. A future, second modification will be requested to fully fund this phase of the project.
2. ECONOMIC IMPACT/ADVANTAGES; COMMUNITY OUTREACH; PROJECT DEVELOPMENT; ENVIRONMENTAL FACTORS/ADVANTAGES OF PROJECT
This project was created by combining the SWWTP Cogeneration, SWWTP Digester Expansion, Phase III project, and SWWTP FOG/HSW Receiving Station projects. These projects were combined and accelerated in order to take advantage of the Inflation Reduction Act (IRA) rebate program. Under the current guidance provided from the IRS, this project is eligible for up to 50% rebate on the total construction cost. This rebate is expected to save the City of Columbus at least $120,000,000 on the construction and engineering of facilities that were already in the capital budget.
In addition to IRA rebates, this project is eligible for additional funding and grants due to greenhouse gas reductions, electrical usage reduction, and FOG diversion from landfills.
The creation of a FOG receiving station will generate a revenue stream from the tipping fees associated with the acceptance of the material. There will also be a reduction in outside electricity demands from the biogas powered generators that will be installed.
From an environmental perspective, this project will reduce SWWTP’s greenhouse gas footprint by capturing methane from the digesters.
3. CONTRACT COMPLIANCE INFORMATION
Brown and Caldwell’s contract compliance number is CC010815 and expires 10/10/25.
4. MINORITY AND WOMAN OWNED BUSINESS ENTERPRISE & SMALL LOCAL BUSINESS ENTERPRISE PROGRAM
This contract was bid with an anticipated City of Columbus MBE/WBE Program goal of 15% as assigned by the City’s Office of Diversity and Inclusion (ODI). After ODI’s review of the Utilization Plan and other related information the contractor submitted with their bid response, ODI approved an MBE/WBE Program goal of 13.95% for this contract. Failure by the contractor to meet this goal subjects the contractor to the Penalties for Non-Compliance as described in the “City’s Minority and Women-Owned Business Enterprise & Small Local Business Enterprise Program Manual” and in the bid documents for this contract.
Brown and Caldwell Ohio, LLC listed the following companies as subcontractors for this project:
Company Name City/State ODI Certification Status
DLZ Ohio, Inc. Columbus, Ohio MBE
Jacobs Engineering Group, Inc. Columbus, Ohio MAJ
Black &Veatch Corporation Columbus, Ohio MAJ
Arcadis U.S., Inc. Columbus, Ohio MAJ
Advanced Engineering Consultants, Ltd. Columbus, Ohio MBE
Regency Construction Services, Inc. Columbus, Ohio WBE
Resource International, Inc. Columbus, Ohio WBE
T&M Associates Dublin, Ohio MAJ
The certification of the above companies was in good standing at the time the contract modification.
5. EMERGENCY DESIGNATION
Emergency designation is requested for this ordinance. This project is eligible for a Federal Infrastructure Recovery Act (IRA) rebate of at least $120,000,000.00. A requirement of the IRA is continuity of construction, meaning once construction starts it must be continuous through the completion of the project or eligibility for the IRA rebate is lost. Construction of equipment to be installed as part of this project began third quarter 2024, starting the continuity of construction requirement. The construction contract for the facility was bid, only one bid was received, and negotiations were conducted with that bidder to reduce the cost of the facility construction. The cost reduction resulted in changes to the way the project will be built, requiring design documents to be modified. These changes to the design documents were unanticipated and must be completed prior to start of the facility construction. Construction of the facility must begin prior to the equipment construction being completed or continuity of construction will not be achieved and the eligibility for the IRA rebate will be lost. Therefore, work must begin on modifying the design documents as soon as possible to prevent a loss of continuity of construction and jeopardizing the IRA rebate.
6. FISCAL IMPACT
Funding for this contract will be obtained through the Ohio Water Development Authority (OWDA) Direct Loan Program. City Council authorized applying for these types of loans and the acceptance of the loan funding via Ordinance 0652-2024, passed by Council on 3/25/24. This specific project was added to the list after the ordinance was approved. Per Section 2 of that Ordinance, Council authorized the Director of Public Utilities to add or subtract projects from the list per department need without seeking Council approval to change the list. Council approval for this loan is requested via this ordinance. This loan is expected to be approved at the March 2025 OWDA Board meeting.
The Ohio Water Development Authority (OWDA) Direct Loan Program is a reimbursement program. Purchase orders will need to be established to Brown and Caldwell Ohio, LLC for these contracts. Public Utilities will need to pay invoices directly to Brown and Caldwell Ohio, LLC and then submit reimbursement requests based upon these paid invoices to OWDA for OWDA to reimburse Public Utilities.
This ordinance is an emergency ordinance certifying funds against reserve funds so the contract and purchase order can be approved prior to approval by the OWDA Board approval of the loan. A transfer of funds from the Sanitary Reserve Fund, Fund 6102, to the Sanitary-Fresh Water Market Rate Fund, Fund 6124 in the amount of $ 14,914,610.09 is needed to fund this project. This transaction is a temporary measure that is required until a loan is executed with the OWDA to reimburse the Sanitary Reserve Fund. These funds will also need to be appropriated to be transferred and then appropriated after transfer to the new fund.
Title
To authorize the Director of the Department of Public Utilities to enter into a professional engineering services contract modification with Brown and Caldwell Ohio, LLC, for the Southerly Waste Water Treatment Plant Organics Receiving and Bioenergy Utilization Facility project; to authorize the Director of the Department of Public Utilities to apply for, accept, and enter into a loan agreement with the Ohio Water Development Authority; to authorize the appropriation and transfer of funds from the Sanitary Sewer Reserve Fund to the Sanitary-Fresh Water Market Rate Fund; to authorize the appropriation of funds within the Sanitary-Fresh Water Market Rate Fund; to authorize the expenditure of up to $14,914,610.09 from the Sanitary-Fresh Water Market Rate Fund to pay for the project; and to declare an emergency. ($14,914,610.09).
Body
WHEREAS, the Department of Public Utilities is engaged in the Public Sanitary Sewers for SWWTP Organics Receiving and Bioenergy Utilization Facility project; and
WHEREAS, Contract No. PO388455 was authorized by Ordinance No. 1297-2023, for design of the SWWTP Organics Receiving and Bioenergy Utilization Facility project; and
WHEREAS, a contract modification is needed to fund continued professional engineering services; and
WHEREAS, it is necessary for Council to authorize the Director of Public Utilities to modify the professional engineering services agreement with Brown and Caldwell Ohio, LLC for the SWWTP Organics Receiving and Bioenergy Utilization Facility project; and
WHEREAS, City Council authorized loans to be obtained to finance Public Utilities projects from the Ohio Water Development Authority Direct Loan Program via Ordinance 0652-2024, passed by City Council on 3/25/24; and
WHEREAS, a loan for this project was not listed as one of the projects anticipated to be funded via OWDA in Ordinance 0652-2024; and
WHEREAS, this Ordinance seeks City Council approval to obtain a loan from the OWDA Direct Loan program to finance this project; and
WHEREAS, it is necessary to both appropriate funds from the Sanitary Sewer Reserve Fund and to authorize the transfer of said funds into the Sanitary-Fresh Water Market Rate Fund in order to temporarily fund this expenditure, until such time as the City is able to execute a loan for the above stated purpose and reimburse the Sanitary Sewer Reserve Fund; and
WHEREAS, the funds transferred into the Sanitary-Fresh Water Market Rate Fund must be appropriated; and
WHEREAS, the City anticipates incurring certain Original Expenditures (as defined in Section 1.150-2(c) of the Treasury Regulations (the “Treasury Regulations” promulgated pursuant to the Internal Revenue Code of 1986, as amended)) with respect to the Project described in this Ordinance (collectively, the “Project”); and
WHEREAS, it is necessary to authorize an expenditure of funds from the Sanitary-Fresh Water Market Rate Fund to pay for the project; and
WHEREAS, an emergency exists in the usual daily operation of the Department of Public Utilities in that it is immediately necessary to execute the contract modification to achieve continuity of construction on the project to maintain eligibility for the Infrastructure Recovery Act rebate of at least $120,000,000.00, for the immediate preservation of the public health, peace, property, and safety; NOW, THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
SECTION 1. That City Council authorizes the Director of the Department of Public Utilities to apply for a loan from the Ohio Water Development Authority (OWDA) Direct Loan program to finance a design contract modification for the SWWTP Organics Receiving and Bioenergy Utilization Facility, CIP #650353-100007, to accept the loan funding if offered under terms agreeable to the City of Columbus, and to execute documents needed to accept the loan.
SECTION 2. That from the unappropriated monies and from all monies estimated to come into said fund from any and all sources and unappropriated for any other purpose during the fiscal year ending December 31, 2025, the sum of $14,914,610.09 is appropriated in the Sanitary Reserve Fund, Fund 6102, per the account codes in the attachment to this ordinance.
SECTION 3. That the transfer of $14,914,610.09, or so much thereof as may be needed, is hereby authorized between the Sanitary Reserve Fund, Fund 6102, and the Sanitary-Fresh Water Market Rate Fund, Fund 6124, per the account codes in the attachment to this ordinance.
SECTION 4. That the appropriation of $14,914,610.09, or so much thereof as may be needed, is hereby authorized in the Sanitary-Fresh Water Market Rate Fund, Fund 6124, per the accounting codes in the attachment to this ordinance.
SECTION 5. That the Director of the Department of Public Utilities is hereby authorized to enter into a professional engineering services contract modification for the SWWTP Organics Receiving and Bioenergy Utilization Facility project with Brown and Caldwell Ohio, LLC, 445 Hutchinson Ave. Suite 540, Columbus, OH 43235, in an amount up to $14,914,610.09; in accordance with the terms and conditions of the contract on file in the Department of Public Utilities.
SECTION 6. That the expenditure of $14,914,610.09, or so much thereof as may be needed, is hereby authorized to pay for this contract per the accounting codes in the attachment to this ordinance.
SECTION 7. That upon obtaining other funds for the purpose of funding sewer system capital improvement work, the City Auditor is hereby authorized to repay the Sanitary System Reserve Fund, Fund 6102, the amount transferred above (Section 3), and said funds are hereby deemed appropriated for such purposes.
SECTION 8. That the City intends that this Ordinance constitute an "official intent" for purposes of Section 1.150-2(e) of the Treasury Regulations, and that the City reasonably expects to reimburse itself for certain Original Expenditures incurred with respect to the Project from the proceeds of obligations to be issued by the City in a principal amount currently estimated to be $14,914,610.09 (the "Obligations").
The City intends to make a reimbursement allocation on its books for the Original Expenditures not later than eighteen months following the later to occur of the date of the Original Expenditure to be reimbursed or the date the Project for which such Original Expenditures were made is "placed in service" within the meaning of Treasury Regulations Section 1.150-2(c). Upon the issuance of the Obligations, the proceeds of such Obligations shall be used to reimburse the Sanitary Reserve Fund, Fund 6102, which is the fund from which the advance for costs of the Project will be made.
SECTION 9. That funds are hereby deemed appropriated and expenditures and transfers authorized to carry out the purposes of this ordinance and the City Auditor shall establish such accounting codes as necessary.
SECTION 10. That the City Auditor is authorized to make any accounting changes to revise the funding source for all contracts or contract modifications associated with this ordinance.
SECTION 11. That the City Auditor is hereby authorized to transfer the unencumbered balance in a project account to the unallocated balance account within the same fund upon receipt of certification by the Director of the Department administering said project that the project has been completed and the monies are no longer required for said project.
SECTION 12. That for the reasons stated in the preamble hereto, which is made a part hereof, this Ordinance is declared to be an emergency measure and shall take effect and be in force from and after its passage and approval by the Mayor, or ten (10) days after passage if the Mayor neither approves nor vetoes this Ordinance.