HomeMy WebLinkAboutA007 - Council Action form dated November 8m 2022 ITEM # 28
DATE: 11-08-22
COUNCIL ACTION FORM
SUBJECT: SETTING DATE OF PUBLIC HEARING FOR DRINKING WATER STATE
REVOLVING FUND LOAN IN AN AMOUNT NOT TO EXCEED $8,500,000
FOR NEW WATER WELLS
BACKGROUND:
As old wells fail and need to be replaced and as demand for treated water increases,
additional water supply wells must be constructed. This project will provide a combination of
new and replacement water supply capacity by the addition of three new wells and
interconnecting pipeline to the water treatment plant. The project will also include new fiber
optic communication conveyed to the water treatment plant for well controls and security
measures. The three new wells, to be located north of North River Valley Park, will be
connected to the existing standby generator located at the Water Treatment Plant to provide
emergency power to the wells. This project was bid previously, but the bids that were
received were significantly greater than the Engineer's estimate, predominately related to the
electrical work. The project engineer believes now is a better time to bid the project in order
to receive more favorable bids.
A Drinking Water State Revolving Fund (DW SRF) Loan in the amount of $8,500,000 has
been identified as the funding source for the construction of these new wells. Repayment of
the loan will be from water utility revenues. The not-to-exceed amount was established to
cover potential cost increases and change orders; the City will only borrow the amount
actually needed to fund the project. A public hearing is required to proceed with the SRF
loan.
ALTERNATIVES:
1. Set November 22, 2022, as the date of public hearing to enter into a Drinking Water
State Revolving Fund Loan agreement in an amount not to exceed $8,500,000.
2. Take no action to proceed with the loan agreement at this time and provide further
direction to staff regarding the future of this project.
MANAGER'S RECOMMENDED ACTION:
Use of the Drinking Water State Revolving Fund (DW SRF) to finance the construction of a
new well field has been identified as the most appropriate financing vehicle for this project.
The principal and interest payments related to the load have been accounted for in the Water
Fund rate design. Therefore, it is the recommendation of the City Manager that the City
Council adopt Alternative No. 1 , as described above.