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More funds needed to finish Waller project

Wednesday, May 11, 2016 by Jo Clifton

City Council will be considering seven items on Thursday’s agenda with a combined financial impact of $7.5 million for completing the Waller Creek Project, which has been fraught with difficulties since the discovery that the intake tunnel had been designed and built in a way that obscured a view of the Capitol.

During Tuesday’s work session, representatives from the Watershed Protection and Public Works departments explained the items that Council is set to consider and gave an update. If Council approves all of the items on Thursday, the city will issue $7.5 million in certificates of obligation to pay for the construction-related expenditures.

Public Works Director Howard Lazarus told Council that he is confident that staff will not be back to ask it for more money during construction. Following the work session, Lazarus emphasized, “What we laid out today will get us to the completion of construction.”

The project actually involves four separate construction projects: the Fourth Street inlet and tunnel; the Eighth Street Creek inlet; Waterloo inlet and park improvements; and the tunnel outlet, which is complete.

According to Lazarus, the city can expect to recover a significant portion of the $7.5 million that will be sought on Thursday. The city has been in mediation with contractors over various contract issues.

The project total comes to between $157 million and $158 million, “but there’s recovery coming back to us as well, after we settle all these issues,” Lazarus said. He declined, however, to give a figure on how much the city might expect to get back in negotiations with contractors, saying that any comments about that could jeopardize the city’s position.

Council Member Don Zimmerman pulled each of the seven items for discussion, but when he tried to get into questions about allegations between the city and its contractors, Lazarus suggested that Council go into executive session. Zimmerman said he didn’t want to do that on Tuesday but might want to do so on Thursday. However, later in the meeting, Zimmerman said he was going to have to leave Thursday’s meeting early in order to drive to Dallas.

“We’re in the position, if this funding is approved, to be able to work with the joint venture and share funding for these costs,” Lazarus said. “The contractor, I don’t think, is in a position to come back and try to reopen its case,” he explained.

Waller Creek has been the scene of severe flooding, erosion and water quality problems for decades. Once completed, the Waller Creek Tunnel will remove more than 28 acres of downtown land from the 100-year floodplain, according to Joe Pantalion, director of the Watershed Protection Department.

Council Member Pio Renteria asked about the TIF (tax increment financing reinvestment zone) for the area. Pantalion said once those acres are no longer in the floodplain, their value is expected to increase by between $2.5 billion and $2.9 billion during the 20-year life of the TIF, which will conclude in 2028. Once the tunnel is paid off, the TIF will end and the city will be able to collect all of that tax money, Pantalion said.

Pantalion, a longtime Austinite, recalled that city voters approved $25 million in bonds in 1999 to begin the project.

Staff is asking for an additional $5 million for construction of the Waterloo Park inlet, the facility that will divert floodwaters into the tunnel and remove trash and debris from the creek. It is also designed to recirculate water from Lady Bird Lake back to the creek to create a constant flow of water. Staff expects the inlet to be completed by the end of this year.

According to the city’s website, the Fourth Street inlet diverts stormwater into chambers that filter the trash and debris before entering the tunnel. The estimated completion date for this inlet is also the end of 2016.

The Eighth Street Creek inlet will divert additional flows downstream of Waterloo Park and also collect debris. Staff estimates it will be completed in May 2017. They estimated completing the contract resolution process in November 2017.

Photo by Dan Keshet

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