BOARD BRIEFING SUMMARY

SUBJECT: AGENDA ITEM #:

AGENDA DATE:

DEPARTMENT: PRESENTER:

SUMMARY:

Outstanding MRE Cost and/or Real Estate Issues with COH

5/22/14

Engineering and Capital Projects Roberto Trevio

The METRO Rail Expansion (MRE) project has the following 5 cost and/or Real Estate issues that remain to be resolved withthe City of Houston:

1) Cost of Monitoring Waterlines: The COH expects METRO to assist with the cost associated with the installation and/ormonitoring of the leak detection system on the COH's large diameter (84 and 66 inch) water transmission lines located near theMETRO Light Rail Lines.

2) COH Permit Fees: METRO and the COH need to recalculate the City Fee for permits, plan reviews, etc. for the MREProject. The METRO/COH Consent Agreement reads as follows:

In lieu of charging METRO for City permit fees, permit coordination, inspection fees, Project Plan review, Lane Closure Feesand any other fee for City approval associated with the Project (City Fees), the City shall assign a workforce of City employeesor contract for professional services for the Project (METRO Workforce) and METRO shall pay the city the annual lump sumamount of $600,000 in equal quarterly installments for all City Fees on the basis of Phase II constructed value of $600 million.Quarterly payments shall begin within 30 days of countersignature of this Agreement and shall continue for 5 years or the actualperiod of construction, whichever is greater. If construction continues past 5 years or exceeds a total of $600 million in totalconstructed value, the parties will negotiate in good faith to recalculate the City Fee.

Quarterly payments shall begin within 30 days of countersignature of this Agreement and shall continue for 5 years or the actualperiod of construction, whichever is greater. If construction continues past 5 years or exceeds a total of $600 million in totalconstructed value, the parties will negotiate in good faith to recalculate the City Fee."

Original projected fee to COH (based on $600M over 5 years) was $3,000,000 or one half of 1%. By using the same formulaand the July 2013 in-ground cost of $750,614,737, METRO cost for fees should be $3,753,074. To be calculated at project end.

3) East End Clock Tower: During demolition of an existing structure on the East End Line, a request was made to METRO topreserve a clock tower on the facility. The clock tower was removed and turned over to the City Parks and RecreationDepartment. METRO provided a signed agreement to fund $83,500 to a non-profit organization which was to be selected bythe community.

4) Hernandez Tunnel Property: CRV Hardy Yards and the COH has requested the use of METRO's property on Main Streetover the Hernandez Tunnel. Their project entails shortening the tunnel to bring Main Street up to an elevation whereby it willintersect with Burnett Street. The property was originally purchased by METRO from UPRR.

METRO and the City of Houston has signed an Access and Use Agreement. METRO acquired the Hernandez Tunnel for$476,000.00. The proportionate square foot value of the corner clips is $11,245.00.

Engineering & Capital Projects

Outstanding METRO Rail Expansion Cost and

Real Estate Issues with City of Houston

May 2014

The METRO Rail Expansion Project has the

following four cost and/or real estate issues that

remain unresolved with the City of Houston:

1. Cost associated with Installation of

Monitoring System on Large Diameter

Waterlines near METRO Rail Lines

2. City of Houston Permit Fees

3. East End Clock Tower

4. Hernandez Tunnel Property

2

Installation of Monitoring System:

At Issue: To what degree should METRO pay to install and/or monitor the leak detection system

on the City of Houstons large diameter water transmission lines located near the Light Rail

Lines.

66 inch waterline along Richmond Avenue (University Line)

84 inch waterline along Harrisburg Boulevard (East End Line)

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Installation of Monitoring

System Contd. CITY OF HOUSTON POSITION:

City of Houston staff and METRO staff appeared before City Council on December 14, 2007 to discuss the 66 inch waterline along Richmond and METROs University Corridor. The City of Houston conclusion was that the potential risks of a rail line in proximity to large diameter waterlines could be mitigated if a condition assessment was performed and a monitoring system placed prior to construction activities.

Based on review of East End Corridor plans in August 2009 the City of Houston expedited the installation of a monitoring system and allowed METRO to commence construction in its vicinity.

The City of Houston believes that METRO staff agreed in principle to pay for the engineering and construction cost of $635,618 for the installation of a monitoring system on the 84 inch line along the East End Line in a March 24, 2011 meeting.

The City of Houston also requests that METRO pay $1,668,868 in long term monitoring cost of the system. Both parties agreed to further discussions on the long term monitoring costs.

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Installation of Monitoring System

Contd. METROs POSITION

A November 6, 2007 engineering study by Aviles Engineering Corp. which evaluates both live and dead loads on the 84 waterline adjacent to portions of METROs East End Light Rail Line concludes that the Houston LRV should not have an

adverse impact on the existing 84-inch diameter water line.

METRO staff letter to the City of Houston in response to the May 24th meeting states that the engineering and construction costs

have been reviewed and necessary approvals cannot proceed

until long term monitoring costs are resolved.

METRO staff does not have the authority to commit to these costs without Board approval.

The are no provisions in the City of Houston-METRO Consent Agreement that require METRO to provide condition

assessments or monitoring systems.

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City Permit Fee Negotiations The METRO/City of Houston Consent Agreement

requires negotiation of permit fees should the project continue past 5 years or exceed a total of $600 million in constructed value: In lieu of charging METRO for City permit fees, permit

coordination, inspection fees, Project Plan review, Lane Closure Fees and any other fee for City approval associated with the Project (City Fees), the City shall assign a workforce of City employees or contract for professional services for the Project (METRO Workforce) and METRO shall pay the City the annual lump sum amount of $600,000 in equal quarterly installments for all City Fees on the basis of Phase II constructed value of $600 million. Quarterly payments shall begin within 30 days of countersignature of this Agreement and shall continue for 5 years or the actual period of construction, whichever is greater. If construction continues past 5 years or exceeds a total of $600 million in total constructed value, the parties will negotiate in good faith to recalculate the City Fee.

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City Permit Fees Contd. The METRO Rail project has now run longer than 5 years and exceeded $600 million in constructed value.

Original projected fee to City of Houston (based on $600M over 5 years) was $3,000,000 or one half of 1%.

By using the same formula and the July 2013 in-ground cost of $750,614,737; METRO cost for fees should be $3,753,074.

METRO contends that such things as Light Rail Vehicles, Design, Professional Services, Non-Civil Systems, and City of Houston Betterments should not be considered in-ground construction costs and therefore should not be included in the recalculation of the City Fee

The City of Houston actual costs to date exceed $10M and forecast costs to exceed $11M at project completion.

Final re-calculations should be completed at the end of the project based on final in-ground construction costs.

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East End Clock Tower

In September of 2009, Metro signed an agreement

with the City of Houston to

pay $83,500 to assist in the

preservation of a clock-

tower on the East End Line.

Since that time the clock

tower has been in storage.

To date the City of Houston

has not executed the

agreement.

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Clock Tower Contd. History:

In 2009 during the demolition of an existing structure at 4819 Harrisburg for the Metro Rail Expansion Project, the community

requested an old, but non-historic clock tower that was

attached to the facility, be preserved.

Thru a letter agreement from METRO to Houston Parks & Recreation Department, the clock tower was dismantled and

turned over to the City Parks & Recreation Department.

METRO provided a signed agreement to fund $83,500 to a non-profit which was to be chosen by the community. It was

assumed, although not stated in the agreement that the money

was a contribution for the permanent installation of the tower at

a new location. To date, the clock tower is still in storage and

the City of Houston has not executed the agreement.

Per the agreement, METROs obligation was to remove and deliver the clock tower facade to a storage location designated

by the community.

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Clock Tower Contd.

History Continued:

The agreement further states All economic cost associated with the rental, maintenance, upkeep and insurance of the

storage location and storage of the faade, as designated by

the community, shall be borne by the Houston Parks and

Recreation Dept.

To date the money has not been paid due to the fact that we have not received an executed agreement back from the City of

Houston.

The City of Houston has stated that Final Acceptance of the East End Rail Line not be approved until this issue is resolved.

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Hernandez Tunnel Property

CRV Hardy Yards and the City of Houston have requested the use of METROs property on Main Street over the Hernandez Tunnel.

Access and Use Agreement has been signed by METRO.

Settlement Costs to be determined.

METRO acquired Hernandez Tunnel for $476,000.

Proportionate Square Foot Value of Corner Clips is $23,659.

Required Real Estate dedications are hatched in red.

Main Street Property

Corner Clips

Place Holder for Photo

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