DATE: November 16, 2016
TO: Board of Mayor and Aldermen
FROM: Eric Stuckey, City Administrator
Vernon Gerth, Assistant City Administrator
SUBJECT:
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*Consideration of Resolution 2016-77, a Resolution authorizing the City of Franklin to contribute $400,000 to the Goose Creek Sanitary Sewer Extension Project as part of the Lampo Group Corporate Headquarters Project. (Deferred from 11/08/16 WS; 11/22/16 WS)
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Purpose
The purpose of this memorandum is to provide information to the Franklin Board of Mayor and Aldermen (BOMA) concerning site conditions of the future Lampo Group Corporate Headquarters located within the Reams-Fleming Tract of Berry Farms and the opportunity to contribute to the installation of an additional Goose Creek Sanitary Sewer main to serve the Lampo Group Corporate Headquarters property and, a broader area east and south of Reams-Fleming Tract. The Reams-Fleming Tract is the 200 acres located in the southeastern quadrant of Goose Creek/I-65 interchange.
Background
In 2005, the engineering firm of Smith Seckman Reid Inc. completed a sanitary sewer study for the Goose Creek Drainage Basin. Subsequently, in 2008 the City of Franklin entered into two separate Sanitary Sewer Off-Set Agreements with Boyle Investments and their respective Berry Farms partnerships to facilitate the design and installation of the Goose Creek Sanitary Sewer. The installation of this sewer is complete in accordance with the agreements. During the past several months, the Lampo Group announced that they would be relocating their corporate headquarters to the Reams-Fleming Tract in Berry Farms. The Lampo Group has purchased the southernmost approximately 50 acres of the Reams-Fleming Tract for their corporate headquarters.
The Lampo Group hired the engineering firm Gresham Smith to design their site and determined the existing topography of the property required either a pump station or, increasing the elevation of the site to allow for gravity sanitary sewer to serve the property. Staff was included in these discussions and determined serving the Lampo Group property site from the west with sanitary sewer, which requires boring under I-65, is the desired option, long-term.
In assessing the various options staff considered the costs associated with the three options, long-term reliability, maintenance, and future growth in the area.
Estimated Out-of-Pocket Costs Associated with each sanitary sewer option to the Lampo Group (all of these expenses would be incurred by the developer/owner):
Serving Property from the north with gravity sewer - $1.6 million. Includes raising the site (grade) and lowering the sewer from the north. The depth required for this gravity sewer would be extremely deep and well beyond City standards.
Serving Property with a Pump Station - $600,000 plus operating and replacement costs. Includes pump, structure, 10 years of maintenance and monitoring. Replacement of pump is inevitable in 15 - 20 years (additional $ 300,000 for a single replacement).
Serving Property from west under I-65 - $1.8 million. The cost associated with extending the sewer from Stream Valley, boring under I-65 through bedrock, and completing the installation to the southernmost property line of the Lampo parcel. It is estimated cost of boring under I-65, without any consideration for rock is $400,000.
Reliability and Maintenance:
From a reliability and maintenance standpoint, gravity sewer takes precedence. It is the City’s policy to utilize gravity wherever practical. The routine maintenance, required monitoring, and replacement costs, long-term does not make the installation of a pump a desirable option compared to gravity sewer. In this situation, a gravity sewer is a viable option and provides service to a broader area that is likely to develop in the future.
Future Development in Area:
While the property to the south and east of the Lampo Property is not within the City of Franklin Urban Growth Boundary, selecting the option to extend the sewer under I-65 allows the City to provide sanitary sewer to a broader area in the Goose Creek Drainage Basin, whether or not these properties are annexed. Based on discussion with property owners in the area, interest exists for additional development and is likely to occur at this major interchange.
Financial Impact
The estimated sanitary sewer access fees to be generated from the Lampo Group Corporate Headquarters project will total approximately $270,000. In considering the options and costs for serving this property with gravity sanitary sewer from the north as well as serving the property from the west, which requires boring under I-65, staff recommends extending the sanitary sewer under I-65 which allows the City to provide sanitary sewer to a broader area in the Goose Creek Drainage Basin. The boring under I-65 is estimated to cost $400,000 without any consideration for rock and does require the Lampo group to upsize the sewer main and extend it to their southernmost property line, including easements. When taking into consideration the $270,000 the City will receive from the Lampo Group in sanitary sewer access fees, staff is recommending the City contribute the difference, an additional $130,000 from the Sanitary Sewer Fund to assist in completing this work. Depending on the timing and type of development activity in this area, the City will recapture and exceed the value of this contribution as the area develops. Additionally, in accordance with the City’s Municipal Code should the option for extending sanitary sewer to the property be selected, the Lampo Group would be eligible to recapture the material cost for “upsizing” the sanitary sewer needed to serve future development in the area. The incremental value associated with upsizing the sanitary sewer is estimated to be $30,000 and the recapture would not occur until other development commences to the south or west of the Lampo property.
Recommendation
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Staff recommends approval of Resolution 2016-77 utilizing $400,000 in the Sanitary Sewer Fund to assist the Lampo Group in completed the extension of this sanitary sewer under I-65 payable within sixty (60) days of acceptance.