Consider and take action on Ordinance No. 2026-14, amending the City of Texas City's 2025-2026 fiscal year budget to allocate funds for the FM 517 Water Plant Phase 2A project.

At its regular meeting on February 21, 2024 the City Commission approved a cost-sharing agreement with Galveston County Municipal Utility District No. 53 (GCMUD 53) for the design and construction of the FM 517 Water Plant Expansion Phase 2. The expansion is necessary to serve the growth anticipated within the area of the water plant. GCMUD 53 encompasses the boundaries of the Lakeside Bayou Subdivision, located west of FM 3436 and south of FM 646. The City desires certain components of the water system expansion, specifically the water well and the ground storage tank, to be designed and constructed to provide for additional regional capacity in excess of the capacity required to serve the Lakeside Bayou Subdivision. The project is designed and being constructed in two steps, Phase 2A and Phase 2B.

To provide for the additional regional capacity, the City agreed to share in the construction costs of the project on a pro rata basis, up to $1,500,000, upon the terms and conditions outlined in the Cost Sharing Agreement. The cost share is allocated $900,000 to Phase 2A and $600,000 to Phase 2B.

ARKK Engineering designed and prepared the construction drawings and specifications for the FM 517 Water Plant Expansion Phase 2A in accordance with applicable city standards. GCMUD 53 advertised and received bids for the project on April 22, 2026. ARKK Engineering reviewed the bids received and recommended concurrence in the award to Eagle Contracting by GCMUD 53, which concurrence was approved by the Texas City Commission at the May 6, 2026, commission meeting. The GCMUD 53 is entering into contracts with Eagle Contracting for construction of the project.

The FM 517 Water Plant Expansion Phase 2 Project is included in the 2022 Update to the City’s Capital Improvement Plan and is eligible for funding from impact fees in Zone 2 Water. Funds are available in the unrestricted fund balance for Zone 2 Water. 
 

Staff recommend the City Commission approve the budget amendment to allocate $900,000 for the City's cost share obligations for the construction of the FM 517 Water Plant Expansion Phase 2A Project.

Finance has reviewed the request and recommends approval of the budget amendment.