HomeMy WebLinkAboutStaff Report 5.B 04/03/20065.13
CITY OF PETALUMA, CALIFORNIA April 3, 2006
AGENDA BILL
Agenda Title: Ellis Creek Water Recycling Facility Meetine Date: April 3, 2006
a. Resolution Dedicating a Revenue Source for Repayment of a
State Revolving Fund Loan for the Ellis Creel: Water
Recycling Facility Project. Meetine Time: N 3:00 PM
b. Resolution Establishing a Wastewater Capital Reserve Fund ❑ 7:00 PM
in Accordance with the State Water Board's Requirements
of the State Revolving Fund Loan Program.
Cateeory (check one): N Consent Calendar ❑ Public Hearing ❑ New Business
❑ Unfinished Business
Department:
Water Resources &
Conservation
Cost of Proposal: N/A
Amount Budeeted: N/A
❑ Presentation
Director:
Michael Ban, P.E.
r
Attachments to Aeenda Packet Item:
Contact Person: Phone Number:
Margaret Orr, P.E. 778-4392
Agenda Report
Resolution A — Dedicating a Source of Revenue
Resolution B — Capital Reserve Fund
Account Number:
8299-C500402-54151
Name of Fund:
Wastewater Funds
Summary Statement: The City is applying for a low-interest loan through the State Water Resources
Control Board's State Revolving Fund (SRF) Program to finance the Ellis Creek Water Recycling Facility
Project. The State requires the City to dedicate a source of revenue for repayment of the loan and the City
is required to establish a wastewater capital reserve fund in accordance with the State Water Board's
requirements of the State Revolving Fund Loan Program. The use of an SRF loan is estimated to save the
City approximately $46 million because the payment does not begin until one year after the project is
operational, the pay back period is 20 instead of 25 years thus reducing interest payments, and the interest
rate is typically about half that required from typical municipal bonds.
Recommended Citv Council Action/Sueeested Motion: City Management recommends the City
Council adopt the resolution dedicating a revenue source for repayment of a State Revolving Fund loan for
the Ellis Creek Water Recycling Facility and resolution establishing a wastewater capital reserve fund in
accordance with the State Water Board's requirements of the State Revolving Fund Loan Program.
Reviewed by Admin. Svcs. Dir:
Dat,.
Todav's Date:
3/21/06
Reviewed by City Attornev:
4n1
n Date:
Revision # and Date Revised:
#
ADDroved,bly 0tv Manaeer:
Date:
File Code: SAwater resources &
conservation\Wastewater\9012\phase 3 -
eonstmction\City CounciMpril 3, 2006\cc report
dedicating revenue source for repayment SRF loan
agenda bill & cc report (draft 2).doc
CITY OF PETALUMA, CALIFORNIA
APRIL 3, 2006
AGENDA REPORT
FOR
ELLIS CREEK WATER RECYCLING FACILITY:
A) RESOLUTION DEDICATING A REVENUE SOURCE FOR REPAYMENT OF A
STATE REVOLVING FUND LOAN FOR THE ELLIS CREEK WATER
RECYCING FACILITY PROJECT
B) RESOLUTION ESTABLISHING A WASTEWATER CAPITAL RESERVE FUND
IN ACCORDANCE WITH THE STATE WATER BOARD'S REQUIREMENTS
OF THE STATE REVOLVING FUND LOAN PROGRAM
PROJECT NO. C500402
EXECUTIVE SUMMARY:
The City is applying for a low-interest loan through the State Water Resources Control Board's
State Revolving Fund (SRF) Program to finance the Ellis Creek Water Recycling Facility
Project. The State requires the City to dedicate a source of revenue for repayment of the loan and
the City is required to establish a wastewater capital reserve fund in accordance with the State
Water Board's requirements of the State Revolving Fund Loan Program. The use of an SRF loan
is estimated to save the City approximately $46 million because the payment does not begin until
one year after the project is operational, the pay back period is 20 instead of 25 years thus
reducing interest payments, and the interest rate is typically about half that required from typical
municipal bonds.
City Management recommends the City Council adopt the resolutions dedicating a revenue
source for repayment of a State Revolving Fund loan for the Ellis Creek Water Recycling
Facility and resolution establishing a wastewater capital reserve fund in accordance with the
State Water Board's requirements of the State Revolving Fund Loan Program.
2. BACKGROUND:
The Federal Clean Water Act provides for the creation of a State Revolving Fund (SRF) Loan
Program. In California, the SRF Loan Program is administered by the California State Water
Resources Control Board (Board). The primary purpose of the SRF Loan Program is to assist in
the financing of wastewater treatment facilities necessary to prevent water pollution and thereby
protect and promote the health, safety, and welfare of the inhabitants of the State of California.
The SRF Loan Program provides the following key benefits:
Low interest rates, typically around 2.5%; and
The first payment is not due until one year following the completion of construction
date.
The City of Petaluma has been working with the State Water Resources Control Board since
2002 to secure an SRF Loan for the Ellis Creels Water Recycling Facility Project. In support of
the loan application, Petaluma has submitted the following documents required by the State:
Project Report
Environmental Documentation
Water Conservation Program Information
Revenue Program Documentation
Value Engineering Report
Project Plans and Specifications
The State ceased issuing new SRF loans in July 2003. Delays in implementing the program
continued through Summer 2005, which prompted the City to seek interim financing for the Ellis
Creels Project. Through the Summer of 2005, City officials continued to work with the State to
re-initiate the program, and enlisted the support of Assemblymember Joe Nation. In response,
the State began reviving the program in October 2005, and is now issuing SRF loans again.
The next step in the process for Petaluma is to adopt the two attached resolutions dedicating a
source of revenue for repayment of the SRF loan and establishing a wastewater capital reserve
fund. These actions are required by the State. The City cannot obtain an SRF loan without
taking these actions.
ALTERNATIVES:
1. Adopt resolutions dedicating a revenue source for repayment of the SRF loan and
establishing a wastewater capital reserve fund.
2. Take other action as directed by the City Council.
4. FINANCIAL IMPACTS:
PRIJ
CONCLUSION:
Adopting the resolutions will allow the City to procure funds in support of the Ellis Creek Water
Recycling Facility Project from the State Water Board.
6. OUTCOMES OR PERFORMANCE MEASUREMENTS THAT WILL IDENTIFY SUCCESS OR
COMPLETION:
Completion of construction of the Ellis Creek Water Recycling Facility.
RECOMMENDATION:
City Management recommends that the City Council adopt the resolutions dedicating a revenue
source for repayment of a State Revolving Fund loan for the Ellis Creek Water Recycling
Facility Project and establishing a wastewater capital reserve fund in accordance with the State
Water Board's requirements of the State Revolving Fund Loan Program.
RESOLUTION DEDICATING A REVENUE SOURCE FOR REPAYMENT OF A
STATE REVOLVING FUND LOAN FOR THE ELLIS CREEK WATER RECYCLING
FACILITY PROJECT
(PROJECT NO. C500402)
WHEREAS, on August 1, 2005, the City Council awarded a contract to Kiewit Pacific Co. for
the construction of the Ellis Creels Water Recycling Facility Project, Project No. C500402
("Project"); and
WHEREAS, the project involves the construction of the Ellis Creels Water Recycling Facility;
and
WHEREAS, the City has applied for a low-interest loan through the State Water Board's
(`Board") State Revolving Fund (SRF) loan program for this project; and
WHEREAS, the Board has designated this project as State Project No. C-06-4693-110; and
WHEREAS, the Board requires the City to dedicate a source of revenue for repayment of the
SRF loan; and
WHEREAS, the City operates a Water Pollution Control Fund from service charges which is
used to fund operation and maintenance of the wastewater system and capital improvements, and
collects wastewater connection fees which are used to fund capital improvements; and
WHEREAS, such loan shall not be a debt of the City of Petaluma or a charge, lien or
encumbrance on any of its property or income or revenues other than the revenues which are
pledged to payment herein;
NOW BE IT RESOLVED by the City Council of the City of Petaluma as follows:
1. The above recitals are true and correct and hereby declared to be findings of the City
Council of the City of Petaluma.
2. The City will repay SRF Loan No. C-06-4693-110 and any other associated SRF
loans from the income received from a combination of the Water Pollution Control
Fund and wastewater connection fees collected, and that these sources of revenue
shall remain in effect until such loan or loans are fully discharged unless modification
or change of such dedication of these sources of revenue is approved in writing by the
Board, or is otherwise required by State or Federal law. Further, such loan shall not
be a debt of the City of Petaluma or a charge, lien or encumbrance on any of its
property or income or revenues other than revenues which are pledged to repayment
herein.
The Water Pollution Control Fund shall be administered by the City of Petaluma as
required by the "Policy for Implementing the State Revolving Fund for Construction
of Wastewater Treatment Facilities" adopted by the State Water Board on June 18,
1998.
4. This resolution shall become effective immediately.
All portions of this resolution are severable. Should any individual components of this resolution
be adjudged to be invalid and unenforceable by a body of competent jurisdiction, then the
remaining resolution portions shall be and continue in full force and effect, except as to those
resolution portions that have been adjudged invalid. The City Council of the City of Petaluma
hereby declares that it would have adopted this resolution and each section, subsection, clause,
sentence, phrase and other portion thereof, irrespective of the fact that one or more section,
subsection, clause, sentence, phrase or other portion may be held invalid or unconstitutional.
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RESOLUTION ESTABLISHING A WASTEWATER CAPITAL RESERVE FUND IN
ACCORDANCE WITH THE STATE WATER BOARD'S REQUIREMENTS OF THE
STATE REVOLVING FUND LOAN PROGRAM
WHEREAS, on August 1, 2005, the City Council awarded a contract to Kiewit Pacific Co. for
the construction of the Ellis Creek Water Recycling Facility Project, Project No. C500402
("Project"); and
WHEREAS, the project involves the constriction of the Ellis Creek Water Recycling Facility;
and
WHEREAS, the City has applied for a low-interest loan through the State Water Board's
(`Board") State Revolving Fund (SRF) loan program for this project; and
WHEREAS, the Board has designated this project as State Project No. C-06-4693-110; and
WHEREAS, the City Council of the City of Petaluma authorized the City Manager to apply for
a State Revolving Fund (SRF) loan to fund all or a portion of the cost of expansion and
improvement of the Ellis Creek Water Recycling Facility; and
WHEREAS, the State Water Board requires, as a condition of approval of the loan, the
establishment of a Wastewater Capital Reserve Fund for future expansion, major repair or
replacement costs:
NOW THEREFORE BE IT RESOLVED by the City Council of the City of Petaluma that:
1. The above recitals are true and correct and hereby declared to be findings of the City
Council of the City of Petaluma.
2. A dedicated Wastewater Capital Reserve Fund shall be created, and,
3. Said Wastewater Capital Reserve Fund shall be administered by the City of Petaluma,
as required by the "Policy for Implementing the State Revolving Fund for
Construction of Wastewater Treatment Facilities" adopted by the State Water Board
on June 18, 1998.
4. This resolution shall become effective immediately.
All portions of this resolution are severable. Should any individual components of this resolution
be adjudged to be invalid and unenforceable by a body of competent jurisdiction, then the
remaining resolution portions shall be and continue in full force and effect, except as to those
resolution portions that have been adjudged invalid. The City Council of the City of Petaluma
hereby declares that it would have adopted this resolution and each section, subsection, clause,
sentence, phrase and other portion thereof, irrespective of the fact that one or more section,
subsection, clause, sentence, phrase or other portion may be held invalid or unconstitutional.
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