HomeMy WebLinkAboutA047 - Council Action Form dated January 10, 2023 I
ITEMM 10
DATE: 01-10-23
DEPT: FIN
COUNCIL ACTION FORM
SUBJECT: RESOLUTION AUTHORIZING AND APPROVING A LOAN
DISBURSEMENT AGREEMENT AND PROVIDING FOR THE ISSUANCE
AND SECURING THE PAYMENT OF $8,357,000 OF SEWER REVENUE
BONDS, SERIES 2023B
BACKGROUND:
The City's Capital Improvement Plan includes a program for the rehabilitation and
reconstruction of deficient sanitary sewers and deteriorated manholes at various locations
throughout the City. A State Revolving Fund (SRF) Clean Water Loan in the amount of
$8,357,000 was identified as the funding source for the sanitary sewer collection system
improvements included in the FY 2018/19 and FY 2019/20 capital budgets.
A public hearing was held on November 22, 2022, and a Council resolution is now
necessary to enter into the agreement to receive the requested funding for these
projects.
The SRF program provides competitive interest rates to support publicly financed water and
sewer projects. This resolution authorizes and approves the issuance of the bonds and
disbursement agreement with a 20-year term and an interest rate of 2.75%. The agreement
also includes a 0.25% annual servicing fee and a one-time initiation fee of 0.5%. The annual
debt service varies over the course of the bond repayment schedule, but once fully
amortized will result in annual debt service payments of approximately $583,000. Due to
the timing of the debt issuance, this bond series will be issued as taxable and the rate
will be 2.75% versus the 1.75% for the FY 2022123 project. Funding for the annual debt
service payments will be included in the Sanitary Sewer Utility's annual budget.
ALTERNATIVES:
1 . Approve the State Revolving Fund Clean Water Loan agreement in an amount not to
exceed $8,357,000.
2. Do not approve the loan agreement and direct City staff to identify other sources to
fund the project.
CITY MANAGER'S RECOMMENDED ACTION:
Approval of this loan agreement will ensure that funding is available to carry out the sanitary
sewer system improvements as previously approved by Council. Therefore, it is the
recommendation of the City Manager that the City Council approve Alternative No. 1 as
described above.