RECOMMENDATION: Approve the 2024 Operations and Maintenance Budget for the Luce Bayou System Project, operated by the Coastal Water Authority (CWA), in the amount of $6,683,475.00.
NOTICE/JUSTIFICATION: CWA operates the raw surface water transportation system for the City of Houston (“City”) and provides conveyance for many governmental and industrial users. CWA plays an essential role in the City’s program of increased surface water use.
On January 30, 2009, the City and CWA entered into a Projects Contract (“Projects Contract”) approved by City Council on January 28, 2009 by Ordinance No. 2009-0053, pursuant to which the Parties agreed to cooperate in the planning, design, property acquisition, construction, and financing of the Luce Bayou Interbasin Transfer Project (“Luce Bayou System Project”). The City and CWA entered into an Operating Contract (Operating Contract”) approved by City Council on November 4, 2015 by Ordinance 2015-1072, pursuant to which CWA agreed to operate and maintain the Luce Bayou System Project on an annual cost basis.
Section 205 of the Operating Contract requires CWA to prepare and submit to the City an annual operating budget setting forth in detail proposed expenditures for the operation, maintenance, administration, capital improvements, and renovation and repair costs associated with the Luce Bayou System Project. CWA presented the City with the proposed 2024 operations and maintenance (“O&M”) budget for the Luce Bayou System Project in the amount of $6,683,475.00. This budget reflects a funding increase of $898,675.00 as compared to CWA’s Luce Bayou 2023 budget of $5,784,800.00, which was approved by City Council on March 1, 2023, Motion No. 2023-0149.
This increase is primarily due to an increase in electrical costs associated with the increase in water demand and including the impact of an anticipated electricity rate increase in 2024. There is also a need to upgrade security throughout this system with a security guard upgrade and additional security equipment.
Houston Public Works (HPW) met with CWA officials to review the submitted budget and concluded that the budget presented by CWA is reasonable given the work proposed.
The funds are allocated in the HPW budget according to CWA’s annual budget submittal during the month of October. CWA’s Fiscal Year 2024 starts on January 1, 2024 and ends on December 31, 2024. Six months of CWA’s budget are allocated to the City’s FY24 Budget (January 2024 to June 2024), and the remaining six months are allocated to the City’s FY25 Budget (July 2024 to December 2024). Payments made to CWA are based upon documented actual monthly O&M expenditures.
This Project was described and briefed to the Transportation, Technology and Infrastructure Committee on November 9, 2023.
It is recommended that City Council approve the 2024 CWA O&M budget for the Lake Houston Facilities in the amount of $6,683,475.00.
FISCAL NOTE: Funding for this item is included in the FY24 Adopted Budget. Therefore, no Fiscal Note is required as stated in the Financial Policies.
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Carol Ellinger Haddock, P.E., Director
Houston Public Works
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Estimated Spending Authority
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Department
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FY2024
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Out Years
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TOTAL
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Houston Public Works
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$3,341,737.50
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$3,341,737.50
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$6,683,475.00
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