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ITEM 2 |
City Council Memorandum Government Relations & Transportation Policy Memo No.
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Date: |
January 24, 2022 |
To: |
Mayor and Council |
Thru: |
Joshua H. Wright, City Manager Ryan Peters, Strategic Initiatives Director |
From: |
Alexis Apodaca, Government Relations Senior Program Manager |
Subject: |
Resolution No. 5548, Revised Joint Project Agreement with the State of Arizona for the Loop 101 and 202 Freeway Waterline and Sewer Rehabilitation and Repealing Resolution No. 5538 |
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Proposed Motion: |
Move City Council pass and adopt Resolution No. 5548, repealing resolution No. 5538 and authorizing the City of Chandler to enter into a revised Joint Project Agreement with the State of Arizona for the Loop 101 and 202 Freeway Waterline and Sewer Rehabilitation Project in the amount of $8,000,000, and authorize the City Manager or designee to take actions necessary on behalf of the City of Chandler to carry out the intent of the Agreement, and approve a contingency appropriation transfer of $4,000,000 from the Water Operating Fund, Non-Departmental, Contingency Account (605.1290.5911) to Capital Grants Fund, Water Capital Project Cost Center, Main & Valve Replacements Program (417.3820.6714.0.6WA023) to supplement the existing appropriation for spending of the State allocated funds. |
Background/Discussion: |
On February 7, 2018, the City of Chandler responded to a water main break near the Loop 202/Price Road Interchange. This water main is an important component of the City's utility infrastructure and lies under a heavily traveled freeway, a significant State asset, that is utilized to access Price Road and the rest of the East Valley. This water main was installed less than 20 years ago by contractors working on the construction of the freeway and was not funded or regulated by the City of Chandler. The failure caused millions of gallons of water to be released onto the Loop 202 Freeway, leading to severe flooding and traffic delays. The City has already invested $1,746,503 to date on emergency repairs and assessments, however, approximately $8,000,000 of additional funding is needed to reconstruct the pipes and preserve the infrastructure. City elected officials and staff met frequently with legislators from Legislative Districts 17 and 18, legislative leadership, and the State of Arizona via the Governor's Office and the Arizona Department of Administration (ADOA) to identify appropriate solutions to ensure the infrastructure is appropriately reconstructed and to protect the long-term viability of the State's freeway asset. Through the State budget process over the past two years, "State and Local Fiscal Recovery Funds (SLFRF)" from the "American Rescue Plan Act (ARP)" were identified by the State as the most appropriate use of resources to support this project, since these federal funds can be used for multiple items including "necessary investments in water, sewer, or broadband infrastructure." City staff worked with ADOA to develop the attached revised Joint Project Agreement (JPA) and ensure that all relevant federal guidelines are adhered to. The City Council previously approved an agreement with the State for this project on December 9, 2021. After that meeting, ADOA officials declined to execute the agreement and requested additional technical changes. These changes are not substantive in nature and clarify that the agreement does not exercise any joint powers and can be entered into under ADOA's authority vested in A.R.S. Title 41. Nevertheless, these changes require that City Council repeal the previous resolution and adopt a new resolution and agreement. |
Financial Implications: |
The revised JPA provides no more than $8,000,000 in SLFRF from ARPA to be used for applicable project costs, utilizing a reimbursement model and based on specific milestones identified in the JPA. The original estimate planned for $4,000,000 in grant funding through the budget process, but since then the project costs have been determined to be about $8,000,000. This requires a contingency appropriation transfer of $4,000,000 from the Water Operating Fund, Non-Departmental, Contingency Account (605.1290.5911) to Capital Grants Fund, Water Capital Project Cost Center, Main & Valve Replacements Program (417.3820.6714.0.6WA023) to supplement the existing grant appropriation for spending of the State allocated funds. |
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