As a result of recent sanitary sewer modeling efforts on behalf of the North Texas Municipal Water District (NTMWD) along Cottonwood Creek along with additional input from the City of Allen, it became apparent that capacity may not exist within the trunk system owned by NTMWD. The City contracted with Birkhoff, Hendricks, & Carter, L.L.P. to assist in the evaluation of a regional engineering analysis that includes the approximate 270-acre vacant property owned by the Howard Hughes Corporation and included the Town of Fairview.  As a result of the study, the need for a regional lift station to include flows from both the City of Allen and the Town of Fairview was identified and recommended.

Conversations with the Town of Fairview and NTMWD have led to a proposed three-way partnership that would divide the costs of the proposed project as follows:

1. City of Allen would pay for 100% design and construction of a gravity line extending from the City of Allen into Fairview to connect to the lift station.
2. Town of Fairview and City of Allen would split the costs (25% and 75%, respectively) for the design and construction of the new regional lift station.  NTMWD would own and operate the facility once constructed.
3. The NTMWD would pay for 100% of the design and construction of the force main that would extend from the new regional lift station north into McKinney to connect to another NTMWD facility for further transport to the treatment plant.

This Interlocal Cooperation Agreement sets for the terms to divide the costs associated with the design and construction of the new regional lift station (item #2, above).  Specifically, Allen will bear 75% of actual expenses and Fairview will pay 25% (expenses that will constitute reimbursement to the NTMWD, who will be contracting for design and construction of the lift station).  Allen will pay Fairview's share initially, and be repaid by the Town of Fairview within 5 years from the time payment is made to NTMWD from Allen.  Lastly, Fairview's share is capped at $2.6 million.  The NTMWD engineer selected to design the lift station estimates that Fairview will owe $2.3 million.  As we progress through design and into construction, should Fairview's share exceed $2.6 million, the arrangement will require approval by Fairview Town Council before proceeding.

The total cost of the Fairview and Allen share of this project is expected to cost $10.6 million, itemized as follows (items correlate to descriptions in the background section):   

Funding for design and construction of the lift station will be  initially borne by Allen.  The Town of Fairview will reimburse the City of Allen 25% of the lift station costs (up to $2.6 million) upon the sooner of:

1. Within five (5) years of payment to the NTMWD
2. Fairview connecting to the new regional lift station

Appropriations of funding for this effort is anticipated from a combination of wastewater impact fees and water and sewer capital funds programmed within the existing Capital Improvement Plan:

The Capital Improvement Program will need to be modified to reflect this funding strategy and will be updated to reflect this Council action with the FY2020 CIP and Annual Budget.

Staff recommends the City Council authorize the City Manager to negotiate and execute an Interlocal Cooperation Agreement with the Town of Fairview regarding the Sloan Creek Lift Station Funding.

I make a motion to authorize the City Manager to negotiate and execute an Interlocal Cooperation Agreement with the Town of Fairview regarding the Sloan Creek Lift Station Funding.