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HomeMy WebLinkAbout2023-04-17 I01G_01 Facilities Reimbursement Agr_TBS No 2 RebuildAGENDA ITEM: CITY OF WAUKEE, IOWA CITY COUNCIL MEETING COMMUNICATION MEETING DATE: April 17, 2023 AGENDA ITEM:Consideration of approval of a resolution approving Facilities Reimbursement Agreement, Waukee No. 2 Station Rebuild to Unregulated Station [Northern Natural Gas Company] FORMAT:Resolution SYNOPSIS INCLUDING PRO & CON: The City has requested Northern Natural Gas (NNG) to rebuild town border station (TBS) no. 2 from its current configuration as a regulated station to an unregulated station with an increased delivery capacity of 20,000 Dth/day. This work is necessary to accommodate the anticipated additional Des Moines A Line capacity Waukee will be making a bid for during the current open season. The rebuilding of the unregulated station by NNG shall be completed by November 1, 2023. Waukee will be paying NNG an advance payment for these improvements as required by the agreement. These improvements are in the draft FY 2024-28 CIP with a total budget of $1,400,000.00. FISCAL IMPACT INCLUDING COST/BENEFIT ANALYSIS: The City will pay NNG $798,675 as set forth in Appendix A of the agreement. If actual costs are different from the estimate of Actual Costs, Waukee and NNG agree to true-up to the actual costs. COMMISSION/BOARD/COMMITTEE COMMENT: STAFF REVIEW AND COMMENT: RECOMMENDATION: Approve the resolution. ATTACHMENTS: I. Facilities Reimbursement Agreement PREPARED BY: Rudy Koester REVIEWED BY: Rudy Koester RK PUBLIC NOTICE INFORMATION – NAME OF PUBLICATION: DATE OF PUBLICATION: I1G1 THE CITY OF WAUKEE, IOWA RESOLUTION 2023- APPROVING FACILITIES REIMBURSEMENT AGREEMENT, WAUKEE NO. 2 STATION REBUILD TO UNREGULATED STATION [NORTHERN NATURAL GAS COMPANY] IN THE NAME AND BY THE AUTHORITY OF THE CITY OF WAUKEE, IOWA WHEREAS, the City of Waukee, Iowa is a duly organized municipality within Dallas County; AND, WHEREAS, The City has requested Northern Natural Gas (NNG) to rebuild town border station (TBS) no. 2 from its current configuration as a regulated station to an unregulated station with an increased delivery capacity of 20,000 Dth/day; AND, WHEREAS, accommodate the anticipated additional Des Moines A Line capacity Waukee will be making a bid for during the current open season; AND, WHEREAS, the rebuilding of the unregulated station by NNG shall be completed by November 1, 2023; AND, NOW THEREFORE BE IT RESOLVED by the City Council of the City of Waukee that the Facilities Reimbursement Agreement, Waukee No. 2 Station Rebuild to Unregulated Station [Northern Natural Gas Company] is hereby approved. Passed by the City Council of the City of Waukee, Iowa, and approved this the 17th day of April, 2023. ____________________________ Courtney Clarke, Mayor Attest: ___________________________________ Rebecca D. Schuett, City Clerk RESULTS OF VOTE: AYE NAY ABSENT ABSTAIN Anna Bergman Pierce R. Charles Bottenberg Chris Crone Larry R. Lyon Ben Sinclair Contract No. 602633-0 FACILITIES REIMBURSEMENT AGREEMENT Waukee #2 rebuild to unregulated station BETWEEN NORTHERN NATURAL GAS COMPANY AND CITY OF WAUKEE This Facilities Reimbursement Agreement (Agreement) is dated as of April 21, 2023. Pursuant to the request of City of Waukee (Customer), with respect to the Waukee #2 station (POI 78642) rebuild to unregulated station with deliverability capability of 20,000 Dth/day, Northern Natural Gas Company (Northern) shall complete the required facility changes. This Agreement is subject to the following terms and conditions: 1.Northern, or its designee, shall rebuild the Waukee #2 TBS to an unregulated station capable of delivering 20,000 Dth/day (Facilities), as soon as practicable after execution of this Agreement. Northern will use commercially reasonable efforts to have the Facilities placed in service no later than November 1, 2023. However, Northern will have no liability whatsoever if the Northern Facilities are not placed in service by such date. Northern shall provide all necessary materials and perform all work to complete the Facilities in a good and workmanlike manner in accordance with prudent industry practice. 2.The parties acknowledge that supply chain shortages in materials may adversely impact the planned completion of the Facilities. Northern will endeavor to use commercially reasonable efforts to timely acquire and install all necessary materials to complete the Facilities. Notwithstanding these efforts, consistent with other provisions of this Agreement, Northern shall not be held liable should the Facilities be placed in-service after the targeted in-service date. 3.Northern does not guarantee any specific pressure for deliveries through its facilities other than as provided in Northern’s FERC Gas Tariff as revised from time to time (Northern’s Tariff). 4.As of the date of this Agreement, the estimated cost of actual costs of the Facilities, including but not limited, (i) design, materials, labor, contract and engineering costs; (ii) abandonment of facilities; (iii) overheads; (iv) all applicable taxes; (v) income tax gross up, when applicable; (vi) allowance for funds used during construction (AFUDC), when applicable; and (vii) associated operation and maintenance costs (Actual Costs), are $798,675 as set forth in Appendix A. Customer shall pay to Northern on or before April 21, 2023, one half of the estimate of Actual Costs, or $399,338, and the balance of $399,337 on or before July 6, 2023, for the construction and abandonment of the Facilities. Upon completion of the work, if Page 2 Actual Costs are different from the estimate of Actual Costs, Customer and Northern agree to true-up to the Actual Costs (i.e., Customer agrees to pay Northern the difference if the Actual Costs are greater than the estimate of Actual Costs, or Northern will reimburse Customer the difference if the Actual Costs are less than the estimate of Actual Costs). 5. In the event the project is terminated by Customer or due to Customer’s default prior to completion, Customer shall pay Northern for all costs reasonably incurred and/or committed to for construction of the Facilities up to the date of termination, including tax gross-up if applicable. 6. Northern shall indemnify and hold Customer, including its officers, directors, employees and agents, harmless from and against any and all claims arising out of or in connection with the design, construction, ownership, operation and maintenance of Northern’s Facilities. 7. Customer will provide, own, operate and maintain all gas service equipment (including valves, pressure regulators, odorization equipment and other facilities) required downstream of Northern owned facilities. Customer is responsible for providing over-pressure protection equipment for its facilities downstream of Northern’s Facilities. Customer shall indemnify and hold Northern and Northern’s affiliates, including its officers, directors, employees, and agents, harmless from and against any and all claims arising out of or in connection with the design, construction, ownership, operation and maintenance of Customer’s facilities. Customer warrants and represents to Northern that it has the knowledge and expertise, and its employees, agents and contractors are qualified to design, construct and operate the gas service equipment required beyond the point of delivery including specifically, but not by way of limitation, the receipt of gas from Northern at Northern’s pressure. 8. Gas deliveries will be provided pursuant to effective service agreement(s) and Northern’s Tariff. Except as may otherwise be provided in effective service agreement(s), Northern shall have no obligation to provide service to Customer as the result of the construction of the Facilities. 9. Any terms not defined herein shall have the meanings set forth in Northern’s Tariff and any conflicts between this Agreement and Northern’s Tariff shall be resolved in favor of Northern’s Tariff. 10. Customer shall not reveal this Agreement or the terms and conditions thereof to any other parties except as to the interpretation, applicability, or enforcement of this Agreement before a trier of fact or as may be requested by administrative or judicial action. 11. This Agreement is subject to and conditioned upon receipt by Northern of all approvals required to construct or abandon the necessary Facilities, all necessary authorizations from federal, state, local, and/or municipal agencies or other governmental authorities. It is expressly understood that all such approvals shall be in a form and substance satisfactory to Northern and shall be final before the respective governmental authority and no longer subject to appeal or rehearing before such governmental authority unless Northern waives the requirement that the approval be final. Page 3 12. This Agreement is subject to Northern’s Tariff, all valid laws, rules, and regulations of duly constituted authorities having jurisdiction, and is subject to any and all receipts of such authorization as may be required for the construction of the Facilities. 13. AS TO ALL MATTERS OF CONSTRUCTION AND INTERPRETATION, THIS AGREEMENT SHALL BE INTERPRETED, CONSTRUED AND GOVERNED BY THE LAWS OF THE STATE OF NEBRASKA WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS. 14. TO THE FULLEST EXTENT PERMITTED BY LAW, EACH OF THE PARTIES HERETO WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH, THIS AGREEMENT. EACH PARTY FURTHER WAIVES ANY RIGHT TO CONSOLIDATE ANY ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. 15. This Agreement constitutes the entire agreement between the parties with respect to the subject matter of this Agreement and shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. No promises, agreements, or warranties additional to this Agreement other than as may be contained in Northern’s Tariff will be deemed to be a part of this Agreement, nor will any alteration, amendment, or modification be effective unless confirmed in writing by the parties. 16. This Agreement may be signed in counterparts, each of which when signed shall be an original, but all of which shall together constitute one and the same instrument. A signature delivered by facsimile, e-mail in portable document format (.pdf) or DocuSign electronic signature system shall be deemed to be an original manual signature and shall be binding and have the same legal effect as an original manual signature. 17. Any document generated by the parties with respect to this Agreement, including this Agreement, may be imaged, and stored electronically (Imaged Documents). Imaged Documents may be introduced as evidence in any proceeding as if such were original business records and neither party shall contest the admissibility of Imaged Documents as evidence in any proceeding. 18. This Agreement shall be void and of no effect if not executed and returned to Northern by April 21, 2023. Page 4 The parties hereto have executed this Agreement to indicate their acceptance. Northern Natural Gas Company City of Waukee By: _________________________ By: _________________________ Title: _______________________ Title: ________________________ Date: _______________________ Date: ________________________ Page 5 FACILITIES REIMBURSEMENT AGREEMENT Waukee #2 rebuild to unregulated station BETWEEN NORTHERN NATURAL GAS COMPANY AND CITY OF WAUKEE APPENDIX A Facilities and Estimated Costs Project Name: Waukee #2 rebuild to unregulated station Facilities Description: By November 1, 2023, Waukee #2 station will be converted to an unregulated delivery station. All existing equipment will be removed. The station equipment will be sized to flow 20,000 Dth/day at line pressure. A temporary regulator skid with a meter will be required during construction. A building will be installed around the meter. The driveway will be expanded to 20-feet to allow for pull through of vehicles. The tie-over line between IAB65002 Des Moines B line and IAB65001 Des Moines A line will be cut and removed to the edge of the station where the new take-off valve will be located. Cost Category Estimated Cost Contract Labor $302,140 Materials $118,315 Subcontract $13,200 Removal $10,000 Freight and Sales Tax $14,789 Environmental $15,000 Construction Support $52,500 District Labor and Equipment $7,500 Engineering $25,000 Right of Way $7,000 Change order request $56,544 Overheads $13,310 AFUDC $12,942 Escalation $11,818 Subtotal $660,058 Minus AFUDC ($12,942) Income Tax Gross-Up (18.66%) $118,886 Removal $10,000 O&M (10 years) ($32,973) Total Estimated Cost $798,675