HomeMy WebLinkAboutA009 - Council Action Form dated June 14, 2022 ITEM # 54
DATE: 06-14-22
COUNCIL ACTION FORM
SUBJECT: PUBLIC HEARING ON PROPOSAL TO ENTER INTO WATER REVENUE
LOAN AND DISBURSEMENT AGREEMENT TO BORROW MONEY
THEREUNDER IN A PRINCIPAL AMOUNT NOT TO EXCEED $3,500,000
BACKGROUND:
During the design of the new water treatment plant, City staff made a commitment to
demolish the old treatment facility as soon as practical to prevent it from becoming an
abandoned eyesore for the neighborhood. The new water treatment plant started
operation in Fall 2017, and it is time to demolish the old water treatment plant.
This project will demolish the filter building, chemical feed building, external treatment
basins, administrative offices, and 3/ million-gallon ground reservoir. Improvements to the
site distribution and raw water piping will be included in this project as well. The high
service pump station, two million-gallon storage reservoir, and five million-gallon storage
reservoir will remain. The City's Capital Improvements Plan includes $2,663,476 for this
demolition project.
A State Revolving Fund (SRF) Drinking Water Loan in the amount of $3,500,000 has
been identified as the funding source for the demolition of the old water plant. Repayment
of the loan will be from water utility revenues. The not-to-exceed amount for the public
hearing has been established at an amount to cover possible cost increases; the City will
only borrow the amount needed to fund the project. A public hearing is required to
proceed with the SRF loan.
ALTERNATIVES:
1 . Adopt a resolution to take additional action for the authorization of a loan and
disbursement agreement and the issuance of Not to Exceed $3,500,000 Water
Revenue Bonds (SRF loan).
2. Do not authorize proceeding with loan and disbursement agreement.
CITY MANAGER'S RECOMMENDED ACTION:
Authorizing the loan and disbursement agreement will allow the City to access State
Revolving Funds as a way to finance the demolition of the old water plant facilities. This
is the most cost-effective approach to completing this demolition work. The principle and
interest payments related to this loan have been accounted for in the Water rate design.
Therefore, it is the recommendation of the City Manager that the City Council approve
Alternative No. 1 as described above.