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R-99-12-16-13D4 - 12/16/1999RESOLUTION NO. R- 99- 12- 16 -13D4 WHEREAS, the City of Round Rock, by Resolution No. R- 99 -11- 09-10D3, has previously approved a proposal from Hagler Bailly Services, Inc. for professional consulting services for a toll study of State Highway 130, a State Highway 45 implementation strategy, a railroad relocation feasibility study, and an implementation plan for the 10 -year roadway plan (Phase I), and WHEREAS, the City now wishes to approve Phases I - V of the above - described services, and WHEREAS,Hagler Bailly Services, Inc. has submitted a letter of agreement to provide Phases I - V of the needed services, and WHEREAS, the City Council desires to enter into said letter of agreement with Hagler Bailly Services, Inc., Now Therefore BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK, TEXAS, That the Mayor is hereby authorized and directed to execute on behalf of the City, a letter of agreement with Hagler Bailly Services, Inc. for professional consulting services for Phases I - V of a toll study of State Highway 130, a State Highway 45 implementation strategy, a railroad relocation feasibility study, and an implementation plan for the 10 -year roadway plan, a copy of said letter of agreement being attached hereto and incorporated herein for all purposes. R:\ WPDOCS \RESOLVPI \R9121614.WPD /ec The City Council hereby finds and declares that written notice of the date, hour, place and subject of the meeting at which this Resolution was adopted was posted and that such meeting was open to the public as required by law at all times during which this Resolution and the subject matter hereof were discussed, considered and formally acted upon, all as required by the Open Meetings Act, Chapter 551, Texas Government Code, as amended, and the Act. RESOLVED this 16th day of December, 1999. ATTEST: E LAND, City Secretary 2 City of Round Rock, Texas :01 Hagler Bailly Hagler Bailly Services, Inc. 1530 Wilson Boulevard Arlington, Virginia 22209 October 19, 1999 (Amended December 10, 1999) Tom Word Chief Engineer City of Round Rock 2008 Enterprise Dr. Round Rock, TX 78664 Dear Tom: In follow up to completion of our Phase I Assessment as authorized on November 9 I am pleased to set out an amended scope of services and timetable for Phases 2 -4 that are responsive to the issues and priorities identified. These have been documented in the memorandum that accompanies this letter. We have focused and greatly reduced the level of detail associated with the scope of services. In addition, we have made one personnel change to better align skills with the needs of the engagement as we now understand them. Gary Erenrich will not be involved in the assignment. David Earley, a senior financial analyst and Hagler Bailly Manager has been added to the team. David has work closely with Matt Scott and Pamela Bailey on engagements requiring sophisticated financial /fiscal modeling and transaction structuring. A Columbia University MBA, David is deeply familiar with public finance and related capital markets having served in the finance departments of Maryland DOT and Arlington County, Virginia before joining the firm in early 1997. David will be part of the senior engagement team. Other than this introductory paragraph and contents related to Phases 2 -4, this engagement letter is identical to the original dated October 19, 1999. The integrated set of tasks below have been developed by Hagler Bailly based on our work and practical experience in closely analogous situations. This approach integrates road development (planning, funding/financing and implementation), land use regulation and planning and job generation (or in Round Rock's case, job accommodation) in a single interactive process. It is based on Hagler Bailly's experience with helping our clients deal comprehensively with rapid growth issues, It focuses on careful identification of needs, prioritization and staged implementation of solutions. Our bias is to make maximum use of "traditional" methods of funding and operation. At the same time, we do not hesitate to propose non - traditional solutions if these will meet needs equally well and accomplish objectives faster. As shown in our attached qualifications, we combine analytic excellence with a zeal to help implement solutions. Several of our current assignments deal with similar issues in Broomfield/Arvada, Colorado (location of the new world headquarters of Sun Microsystems and Level 3 Communications), Professional Services Worldwide Tel 703- 351 -0300 Fax 703 - 351 -0342 Chesapeake/Virginia Beach, Virginia (explosive tourism/employment growth that has caused an imbalance between the economic health of the two cities and the transportation systems that serve them) and Fairfax/Loudoun County, Virginia (new world headquarters location of MCIWorldCom, AOL and PSlNet). At the same time, we are completing a year -long regional transportation planning assignment in Nashville, Tennessee that was stimulated by Dell Computer's decision to locate major facilities in that community. We are deeply knowledgeable about the needs of these communities with high tech, high growth businesses, Key Hagler Bailly personnel that will be assigned to the Round Rock engagement include: Pamela Bailey Campbell, Matteson Scott, David Earley and myself Our colleague, Richard Mudge will be available to the engagement team in a senior advisory capacity on matters related to federal highway funding flows and innovative funding options associated with new federal programs. I will be responsible to you for the overall conduct and satisfactory outcome of the engagement. As you know, my experience with TxDOT provides intimate knowledge of highway and rail development, highway funding and management of transport facility delivery in Texas. Through my network of contacts in Austin and throughout the State, 1 will provide access to decision - makers in relevant subject areas. Through my professional activities on the National level, I will bring insights into the best and most innovative practices and methods that are responsive to the issues Round Rock is facing. Pamela Bailey Campbell was CFO /COO of the E -470 Public Highway Authority in Denver Colorado for 9 years before Hagler Bailly. Her current consulting assignments include leading our work for Arvada and Broomfield and work for Chesapeake/Virginia Beach. Pamela has hands -on experience successfully guiding projects from initial feasibility through procurement, financing and successful implementation. Pamela has been responsible for large innovative, structured financings; development, negotiation and administration of design build contracts and operations contracting and technology procurement of projects as well as relations with public - private partners, Wall Street, and regional capital markets. She has also dealt head -on with numerous challenges on the implementation of projects including changes in planned alignment of roadways. Matt Scott has a long career as an advisor to large, complex real estate developments and prior to joining Hagler Bailly in 1997, was Partner in Charge of Arthur Andersen's Infrastructure Advisory practice. In that capacity, he worked with both the Dulles Greenway (Fairfax/Loudon County, Virginia) and E -470 Toll Highway projects evaluating real estate (commercial and residential) and related development values stimulated by alternative alignment and interchange configurations. His work was used to support successful financings in each case. He is currently directing the firm's engagement in Chesapeake/Virginia Beach and with Pamela, Matt is leading development aspects of the engagements in Broomfield and Arvada. Hagler Bailly Other Hagler Bailly managers and staff from our 80- person transportation practice will support senior members of the team. To the extent it is cost effective and with your prior consent, we may retain the services of a local firm to assist in secondary data gathering and information processing. I will supervise the work of such a subcontractor from my office in Austin. With this background, we understand that you would like Hagler Bailly to: 1. Develop methods by which Round Rock can accomplish Plan priorities, 2. Prepare business case for early completion of SH45, 3. Set out innovative financing methods by which Round Rock can successfully leverage city financial resources including your dedicated sales tax, 4. Carefully evaluate the SH130 Toll Highway project alignments with consideration to toll revenues and develop the strongest possible case for the "Eastern" Alignment. Develop a presentation of the case for the TxDOT Commission, 5. Similarly, develop the case to re- locate the UP rail line to the east of I -35 and assist Round Rock in securing the funding to implement the relocation, and 6. Provide other rapid response support . TASKS AND SCHEDULE Our firm is very conscious that time is of the essence. Round Rock faces immediate highway and access issues that demand solutions that you can act on swiftly. While the phased approach and associated outline of tasks that follows are detailed, many of the activities listed can be implemented and completed concurrently; thereby saving time. Our intent is to be sure you are comfortable with the process we are proposing and with work products developed through the process. To assure quick, useful outcomes, frequent coordinating meetings will guide our work with you and others you may designate. These coordinating meetings will occur on a weekly basis (in person and by conference telephone). To accomplish the six specific objectives, we propose to undertake the following tasks in 5 major phases and within the approximate time frames noted Phase 1: Initial Assessment —three -four weeks to review background information, conducting executive -level interviews, meet with Round Rock officials to assure synchronization of objectives, and preparation/review of initial conclusions and more specifically target next steps Phase 2a. Meet with Round Rock officials to confirm Issues and Priorities identified in Phase 1. Amend as needed. Conduct meetings with appropriate officials and staff Hagler Bailly to exchange information on analytic and forecasting models to be used in subsequent work. Jointly develop a schedule for critical activities and coordinating meetings from December 15 to March 1. Phase 2b. Expand the Evaluation of Baseline Conditions begun in Phase 1. — Within three weeks expand and organize the fact base related to the individual projects, agreements and understandings concerning those projects, current conditions in land use, economic and real estate development activities that will impact road use, transportation network characteristics, Round Rock's financial resources and constraints and requirements of major employers and citizen stakeholders. Phase 2c. Begin preparation of a business/financial case for early completion of SH 45. This will be conducted in parallel with 2a and take approximately six weeks. The focus will be on developing a strategic approach that covers all issues now identified with this project and providing specific financial/ implementation solutions. Phase 2d. Undertake selected activities in support of effective Round Rock participation in the SH130 EIS public hearing process as this concerns Alignment alternatives; to be undertaken concurrently with 2a -c. Phase 2e. Concurrently, conduct critical outreach meetings with Williamson County, Travis County, Austin and other jurisdictions. Continue dialogue with TTA and CAMPO. Phase 2f Immediately conclude arrangements to secure a traffic and revenue forecast "run" for Loop 1 /SH45 and SH130 suitable for Round Rock planning purposes that includes an independent assessment of previously used demographic /land use inputs and road network. The focus of the analysis will be to determine if there is a financial "headroom" that may be used to support alternatives desired by Round Rock. These activities will occur concurrently with 2a -d. Phase 2g. Develop and evaluate ROW acquisition issues including estimated cost, funding possibilities and cost sharing formulas. Develop a specific ROW acquisition strategy and funding/financing plan. To be completed concurrently with 2f Phase 3a: Develop, Analyze, Compare Alternative Approaches and Develop Initial Recommendation/Solutions for "best case" technical scenarios —four weeks beginning in mid - January. Work will include an in depth review and analysis of SH130 and the UP rail right of way relocation alternative "cases" in addition to refinement of the SH45 case, as needed. Phase 3b. Concurrently with 3a, prepare specific forecasts of financial /fiscal impact to test "affordability" relative to Round Rock and other funding resources including private participation. Prepare a financial matrix to evaluate trade -off opportunities among scenarios. Hagler Bailly Phase 3c. Concurrently with 3a -b prepare detailed implementation scenarios and evaluate for speed of execution, complexity of decision making, requirements for counter party agreements, legal implications and political viability. Phase 3d. Consistent City policy and practices review promising scenarios and business solutions with critical "stakeholders" to secure their inputs and buy in. Phase 4: Refine Solutions, Prepare and Document Recommendations and Presentations in Draft Form. — two weeks. Phase 5: Finalize Plan Recommendations and Presentation Strategy and Collateral Materials. Participate in Presentations, Meetings and Develop responses to comments and questions. Otherwise assist Round Rock in executing the implementation Program. Senior members of the engagement team will be available on an as- needed basis to participate in meetings, presentations and other forums used by Round Rock to communicate results of the work effort. The same senior personnel will be available to assist with in negotiations. Technical staff will be available to develop responses to questions or comments. The entire team will be available to assist Round Rock test alternatives and develop strategic responses to proposals by TxDOT, TTA and others. Timetable- as needed. At the conclusion of each of the proceeding work Phases, we propose to prepare brief, management oriented memos setting out essential findings and recommendations together with supporting quantitative exhibits. These will serve as the basis for City officials to react to the work, comment on it and provide direction for next steps. The contents are assumed to be for internal use only and will not be designed for distribution to third parties. Materials prepared in Phase 4 will be designed for third party distribution after they have been reviewed and refined by Round Rock officials. While highly professional, these will be strategic documents setting out a strong advocacy position and designed to generate support for an outcome that is desired by Round Rock. Therefore, the materials will require several iterations in draft form and refinements before they receive final approval by the City as to form and content. As a general direction, we propose to prepare 4 forms of documentation: 1. Working memos and quantitative exhibits for internal review and direction 2. Brief, highly polished reports with summary text, graphics and quantitative exhibits for general distribution 3. Presentations with high quality graphics for briefings of TxDOT and other parties. Hagler BaiIly FEE BUDGET We propose to undertake this engagement on a time and materials basis with professional time charged as needed, at our normal billing rates for strategic advisory engagements, up to a maximum amount. Direct expenses for travel, hotels, food and other expenses while in travel status, long distance communication and delivery charges, production and reproduction charges and acquisition of data or research materials acquired solely in connection with the engagement will be charged in addition to professional time charges at our cost which includes a 10% handling fee. As a firm policy for domestic engagements, we seek to access lowest cost airfares (consistent with scheduling requirements) and stay in moderately priced hotel accommodations. We will make maximum use of Hagler Bailly's Houston office and technical staff in support of the engagement. Based on our experience with engagements of similar scope and complexity, a budget for professional time of $340,000 for Phases 1 -4. Activities in Phase 5 that are inherently unpredictable will be billed on a time and materials basis in response to you specific directions. A strategic planning engagement properly requires close coordination and frequent interaction between client and consultant. As a result, direct expenses will typically equal 15 -18% of the budget for professional time. However, my office in Austin will allow us to plan for the lower end of this range without affecting the frequency of interaction. Among Phases 1 -4, an refined budget allocation would be: Phase 1: $30,000 Phase 2: $110,000 Phase 3: $150,000 Phase 4: $50,000 The professional fees are for services performed by Hagler Bailly. If specialized skills are required outside the competence of the firm, the cost for such sub - consultants would be in addition to these amounts and would be incurred only after receiving your specific authorization. We are very pleased to have the opportunity to submit this refined proposal to Round Rock. We are ready to move forward immediately as noted in my covering memorandum. If these arrangements are satisfactory, please so indicate by signing in the space provided below and returning one copy to me for our files. Hagler Bailly I look forward to your advise on next steps. Very truly yours, 2 0-4L5 ,1 a 5L Frank Smith Manager Accepted for the City of Round Rock (Phases 2 -5). By: Title: m y ©I ) Date: / — I3 - 0O CC: Pamela Bailey Campbell Matteson Scott David Earley Hagler Bailly Compilation of Issues and Observations Schedule 1. STRATEGIC ISSUES 1. Related to Retention and Accommodation of Dell and Other High Growth Employers • Traffic congestion is severe at Dell Headquarters site and will worsen rapidly with completion of LaFrontera retail mall. • There is little confidence on the part of the City or Dell in the capacity of TxDOT/TTA to produce timely relief with early completion of Loop 1,SH45 and I- 35/SH45 Interchange Improvements. • Dell has stopped hiring and has postponed further headquarters site construction. • Dell wants a definitive commitment on both SH130 & SH45 before they will go through with their building program • There is a realistic possibility of DELL moving operations if SH45 Delivery Schedule and SH130 Alignment are not settled soon. • In addition to sales tax revenues coming directly from Dell — there is a reputation issue for Round Rock. "Why did Dell reduce its presence or leave Round Rock ?" This could make it very difficult for Round Rock to recruit similar companies to the community. • Not only does Round Rock benefit from Dell presence but Austin does as well with manufacturing facilities. Dell is reported to be looking hard at other locations to geographically diversify facilities. (For example, they are currently opening a facility in Tennessee.) • George Town Railroad operations create daily east -west congestion problems. Round Rock's relocation strategy for the Railroad would resolve this problem and create potentials for a multimodal employment corridor with the capacity to accommodate a new generation of companies if developed in conjunction with SH130- Eastern Alignment. Financing is an issue to be resolved. Hagler Bailly 2. Related to Rights of Way Acquisition • Present City /County agreements to pay for required ROW are old (mid- 1980's) and were made in the context of much lower land values and delivery of a a different kind of project for SH130. • TTA asserts that previously signed Minute Orders are still valid and that the "1 st step" for speedy project implementation should be for Round Rock and Williamson County to commit to the ROW acquisition called for in those Orders. • Purchases by Round Rock and Williamson County for SH45. Will Williamson County have the funds to purchase the ROW? Will Round Rock purchase ROW within the current city boundaries if requested to do so by Williamson County. • Will the City of Austin and Travis County be willing to purchase Loop 1 ROW? They have not signed Minute Orders to do so. • In general, what obligations exist that run to Round Rock specifically? In addition, what is the legal standing of Minute Orders relating to ROW obligations for SH45 and SH130 regardless of who they run to? Round City Attorney is not sure they are enforceable. Need resolution. • TTA takes the view that although the SH45 ROW obligations are Williamson County's, the county has transferred that responsibility to Round Rock. • There may be a "fairness" issue that will require resolution if TTA demands specific performance under existing Minute Orders from Round Rock and Williamson County as a condition of beginning SH45 project work and then, treats Austin and Travis County's Loop 1/SH45 implicit ROW obligations differently. • Develop Round Rock's concept of exchanging the "assumed obligation" of ROW purchase for SH45 frontage roads to be developed at City cost. 3. Related to SH 130 Alignment Selection • In 1991 when SH130 was included in ISTEA, it was stated that SH130 was a "road to relieve congestions on 1 -35." The Western Alignment serves this purpose better than the Eastern Alignment according to TTA's technical studies Hagler Bailly thatindicate a differential of 46,000 ADT between the Eastern and Western alignments in 2020. • The technically preferred Alignment that best meets TTA's test of purpose and need is the Western Alignment, based on their current studies. • A change in the Transportation plan for Round Rock has allowed development in the corridor previously reserved for the Western Alignment. TTA also is concemed about plans for North —South arterials planned in Round Rock and their impact on toll operations and alignment choices. • TTA Staff realizes that political support is on the Eastern Alignment at this point. TTA can't move forward with the Eastern alignment without meeting the purpose and need criteria. The real issue is to take a fresh look at purpose and need for each alignment to determine if the differential can be materially reduced. • It has been suggested that the only real veto power on the Eastern alignment may come via the CAMPO because the highway is not currently in the TIP. Speed is critical since the CAMPO Board has already asked the MPO staff to make a recommendation on the alignment. • Dell has indicated the resolution of SH130 is of equivalent importance to SH45. • TTA would build the Eastern alignment if the business solution could be found that deals with any reduction in revenue and the purpose and need requirements of the EIS can be met by that alignment. • The decisions on Eastern and Western alignments are further complicated by the fact that it is four different pieces because the decisions on alignment could be: East -East, East -West, West -West or West -East. It is important to have an independent, stand alone Eastern Alignment solution for Round Rock first, which could be either East -East or East -West. If the Eastern alignment for Round Rock's section is accepted as the preferred alignment, is it then possible to maintain the Western Alignment in Austin? The Eastern Alignment in Austin has a much greater drain on the financing. Develop a case supporting the Eastern alignment in Round Rock and the Western Alignment in Austin, if possible. Strategically, make no overtures or commitments to Austin in the meantime. . • Develop a back -up strategy if the Eastern alignment for SH130 is not accepted. 4. Related to Speed with which SH 45 /Loop 1 and 1 -35 /SH 45 Interchange can be delivered Can Round Rock develop an affordable, stopgap solution that can be implemented quickly and provide short -term relief to congestion. Round Rock's Hagler Bailly Estimated Cost: Frontage Roads @$20M plus additional ROW = $29.3M according to preliminary Public Works estimates. • Strategies to be evaluated for SH45: • Round Rock buys the ROW ▪ Round Rock builds the Frontage Roads • TTA does everything ▪ TTA builds Frontage Roads early ▪ Round Rock creates a toll road authority(special legislation) or some other non -TTA approach. • A critical collateral issue that could delay implementation is that the Austin area has failed air quality conformance tests and as of July 2000, the area is expected to be a non - conforming plan. The State has not started developing a replacement plan. It could take 2'/ - 3 years to get a plan approved for the Austin area during which time approval of all new projects would be stopped. • It appears that TTA is trying to get all of the design work completed on SH45 in the hope of meeting the July conformity deadline and avoid a stay of approval on that project; need to assess the likelihood of success. • SH45 — Frontage Roads accelerated construction. Need to build a case to convince TTA this is a good idea. Concems will center on engineering and environmental conformance issues because design work is not complete. • TxDOT's willingness to financially participate in construction of SH45/1 -35 Interchange will be a critical issue to successfully finance SH45. 5. Related to Intergovernmental Matters Define and secure agreement on precise requirements for Round Rock and Williamson County with reference to ROW obligations. • Round Rock has limited financial capacity. The City cannot pay for ROW and Frontage Roads for SH45. Is there a "regional" approach to share financial responsibility? Is there a 4 party cost sharing "deal" that could be the same for Travis County, Austin, Williamson County and Round Rock? Round Rock has had very little interaction with Austin with regard to Austin's concerns. Mindful that the Eastern alignment for Round Rock will be an easier sell on the traffic side without the Eastern in Austin, ultimately a joint strategy Hagler Bailly may be needed to either improve performance of the Austin Eastern alignment with an east -west connection to downtown or other facilitating arrangement. 6. Related to Environmental Impact Statement(EIS)Process and Approvals • There are currently draft EIS documents for SH45 and Loop1. • TTA has delivered a preliminary draft EIS for SH130 to FHWA. TTA expects the Final Draft EIS to be released within 2 -4 weeks with a recommended alignment (TTA won't state that it is the Westem Alignment although this is likely). FHWA must approve document before it is released to the public and there is a public hearing. • TTA assessment of the EIS work is that both alignments are roughly equivalent in terms of environmental impact. Therefore, the real "purpose and need" issue is that the bottom line for SH130 is as a reliever of congestion on 1 -35 and the Western Alignment will carry double the traffic as a free road and 60 percent more traffic as a toll road. • Public hearings are scheduled for January that will have major impact on decisions. Round Rock citizens in support of Eastern Alignment for SH130 must show up in numbers. Round Rock feels that there will be 500 -1000 people at a public hearing protesting the Western alignment. • This places pressure on our team to move very fast to develop solutions on these major issues and have useful preliminary inputs for the political process. Hagler Bailly Schedule 2. TECHNICAL ISSUES 1. Related to Traffic and Revenue Forecasts • Determine how to overcome (if possible), extreme differences in traffic and revenue between Eastern and Western Alignments for SH130. Need new traffic runs to determine how the changes in network and perhaps development patterns impact this issue. Examine discrete alignment segments since variation in differences is significant from segment to segment. Traffic Forecasts completed to date have used CAMPO model. Alliance Texas now controls has the SH130 model according to TTA. A new CAMPO model will incorporate SH130 in both alignments. Refined output from new modeling by Alliance Texas is required using Round Rock's Master Plan and more current development values. 2. Related to Project Definitions (Alternatives) • Need more information on financing & construction start schedules from TTA on SH45 and SH130 • Based on conversations with TTA a likely phasing of SH130 is as follows: 1 — 79 or 45 to 290 2 — 290 to 71 3rd 79 to Georgetown 4th — to southern terminus in stages. The Railroad relocation ties in very closely to the Eastern Alignment of SH130 and may only work if that alignment occurs due to economic synergies assumed. On the Western Alignment, could grade separate in 2 locations but cannot fix the location at McNeil without rebuilding the Interstate which could be a $50 million proposition. 3. Other Issues • There is a general feeling that TxDOT is not responsive. Williamson County has just put together a bond issue based on the fact that they can't rely on TxDOT; • All parties are concerned about any commitment of TTA to accelerate frontage roads because TTA has not demonstrated the ability to move quickly even on small projects. 4. Economic /Fiscal Impacts • According to information from TTA, Insight Research studied the economic impacts of both alternatives by going to each local entity and reviewing each intersection. Their study showed that there is $56 Billion of economic development value on the Western Alignment over 30 years and only $36 Billion on the Eastern. Careful review is required since indirect benefits are so much higher on Westem Alignment. DATE: December 10, 1999 SUBJECT: City Council Meeting — December 16, 1999 ITEM: 13.D.4. Consider a resolution authorizing the Mayor to execute a supplemental engagement letter with Hagler- Bailly for a toll study of SH -130, for SH -45 Implementation Strategy, railroad relocation feasibility study, and an implementation strategy for a 10 year roadway plan. Staff recommends approval. Staff Resource Person: Jim Nuse, Public Works Director.