ADDENDUM ITEM # 4 KEY FOCUS AREA: AGENDA DATE: COUNCIL DISTRICT(S): DEPARTMENT: Economic Vibrancy January 25, 2012

N/A City Attorney's Office Trinity Watershed Management Thomas P. Perkins, Jr., 670-3491 Jill A. Jordan, P.E., 670-5299 N/A
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CMO:

MAPSCO:

SUBJECT Authorize execution of an agreement requiring the City to repay the Department of the Army (U.S. Army Corps of Engineers) $7,000,000 of $15,000,000 that was disbursed without authorization by the Army to the City and additionally requiring the City to repay some or all of the remaining $8,000,000 disbursed without authorization, if after an independent audit, it is determined that the City is entitled to a credit of less than $8,000,000 for its design and construction of the Central Wastewater Treatment Plant and Rochester Park levees - Not to exceed $7,000,000 - Financing: U. S. Army Corps of Engineers Project Cooperation Funds BACKGROUND Congress enacted a statute authorizing construction of the Dallas Floodway Extension Project in 1965. In 1996, Congress amended the statute to authorize the Secretary of the Army to include in the project the Rochester Park and Central Wastewater Treatment Plant levees previously constructed by the City and to allow the City to receive a credit for the parts of those levees that are compatible with the project and that are required for construction of the project. In 2001, the Army and the City executed an agreement, which stated, among other things, that the Assistant Secretary of the Army had determined that some of the Citys work on the two levees was compatible with the project and that the City may be eligible for a credit in an estimated amount of $22,200,000, with the award of credit, among other things, subject to an on-site inspection by the Army to verify that the work was accomplished in a satisfactory manner and is suitable for inclusion in the project. Beginning in 2004, the Army made the first of three payments to the City, which payments totaled $15,000,000 and were not authorized by any law. In consultation with the Army, the City has spent approximately $8,000,000 of that sum to purchase properties needed for the project and has the remaining amount in an account for the project. The Army requests the City to repay it the $7,000,000 that the Army had disbursed to the City without authorization.

BACKGROUND (Continued) In addition, the Army has engaged an independent auditor to conduct an audit of the Citys expenditures for the design and construction of the Central Wastewater Treatment Plant and Rochester Park levees. The Army has agreed that the City will be credited with those expenditures against the remaining $8,000,000. If it is determined that the City is entitled to the full $8,000,000 credit, no additional amounts will be repaid to the Army. PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS) The Trinity River Project Committee was briefed in open and closed session on September 12, 2011, and again in closed session on December 12, 2011. Briefed to Council in closed session on January 18, 2012. FISCAL INFORMATION U. S. Army Corps of Engineers Project Cooperation Funds - $7,000,000

Agenda Date 01/25/2012 - page 2

COUNCIL CHAMBER

January 25, 2012 WHEREAS, Congress enacted a statute authorizing construction of the Dallas Floodway Extension Project in 1965; and WHEREAS, in 1996, Congress amended the statute to authorize the Secretary of the Army to include in the project the Rochester Park and Central Wastewater Treatment Plant levees previously constructed by the City and to allow the City to receive a credit for the parts of those levees that are compatible with the project and that are required for construction of the project; and WHEREAS, in 2001, the Army and the City executed an agreement, which stated, among other things, that the Assistant Secretary of the Army had determined that some of the Citys work on the two levees was compatible with the project and that the City may be eligible for a credit in an estimated amount of $22,200,000, with the award of credit, among other things, subject to an on-site inspection by the Army to verify that the work was accomplished in a satisfactory manner and is suitable for inclusion in the project; and WHEREAS, beginning in 2004, the Army made the first of three payments to the City, which payments totaled $15,000,000 and were not authorized by any law; and WHEREAS, the City has spent approximately $8,000,000 of that sum to purchase properties needed for the project and has the remaining amount in an account for the project; and WHEREAS, the Army requests the City to repay it the $15,000,000 that the Army had disbursed to the City without authorization; and WHEREAS, the City and the Army have agreed that the City shall repay the Army $7,000,000 within 30 days of the date this resolution takes effect and that the City, subject to appropriation, shall repay the Army some or all of the remaining $8,000,000 if after an independent audit it is determined that the City is entitled to a credit of less than $8,000,000 for its design and construction of the Central Wastewater Treatment Plant and Rochester Park levees, with the amount of this repayment being the amount the credit is less than $8,000,000, and this amount being due in three equal annual installments, with the first annual payment being due within 120 days after the date that the Army provides the City, in writing, the amount of the credit and the City exhausting its rights, if any, to appeal the determination of the amount of credit;

COUNCIL CHAMBER

January 25, 2012 Now, Therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DALLAS: Section 1. That the City Manager is authorized to execute an agreement, approved as to form by the City Attorney, authorizing the repayment of: (A) $7,000,000 to the Army within 30 days of the date this resolution takes effect, and (B) subject to appropriation, up to $8,000,000 if after an independent audit it is determined that the City is entitled to a credit of less than $8,000,000 for its design and construction of the Central Wastewater Treatment Plant and Rochester Park levees, with the amount of this repayment being the amount the credit is less than $8,000,000, and this amount being due in three equal annual installments, with the first annual payment being due within 120 days after the date that the Army provides the City, in writing, the amount of the credit and the City exhausting its rights, if any, to appeal the determination of the amount of credit. Section 2. That the City Controller is authorized to pay the Department of the Army (U.S. Army Corps of Engineers) the amount of $7,000,000 from: US Army Corps of Engineers Project Cooperation Funds Fund TP14 Dept. PBW, Unit N962, Act. TRPP Object 3571, Program #PB98N962, CT PBW98N962D2, Vendor #352290, in the amount

$7,000,000.00

Section 3. That this resolution shall take effect immediately from and after its passage in accordance with the provisions of the Charter of the City of Dallas, and it is accordingly so resolved.