HomeMy WebLinkAbout07/15/1997, C-5 - WATER REUSE PROJECT - APPLICATION FOR STATE REVOLVING FUND LOAN. council
July , 1997
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C I TY OF SAN LU IS 0 B I S P 0
FROM: John Moss,Utilities Director
Prepared By: David Pierce,Wastewater Reclamation Coordinator
SUBJECT: Water Reuse Project-Application For State Revolving Fund Loan.
CAO RECONEAENDATION
Adopt a resolution authorizing staff to apply for a low interest loan from the State Water Resource
Control Board for the Water Reuse Project
DISCUSSION
Adopting a resolution will allow staff to make application for a low interest loan from the State
Water Resource Control Board to finance the work on the Water Reuse Project.The CIP Budget for
FY 1995-96 includes funds for preliminary and fust phase design of the Water Reuse Project.
Funds for this portion of the design are available from fund balance of the water fund. The CIP
Budget for FY 1997-98 includes funds for construction of the first phase of the Water Reuse
Project The CIP Financial Plan for FY 1998-99 includes additional fimds for the design and
construction of the second phase of the project. Construction and second phase design are to be
debt financed with repayment by the users through the water fund. The cheapest source of finding
for this project is a low interest loan through one of the programs managed by the State Water
Resource Control Board. In order to submit a Financial Assistance Application,the City Council
needs to designate an individual to conduct business with the State Water Resources Control Board.
This resolution will authorize the Utilities Director to execute the documents required to obtain a
low interest loan.
The Capital Improvement Program approved by the City Council includes the following
expenditures for the Water Reuse Project:
To be funded from current fund balance
FY 1995-96 $700,000. Preliminary design and design of phase I.
To be finded through debt financing:
FY 1997-98 $50,000 Completion of Environmental Review and Permitting
$200,000 Mitigation Measures
$6,100,000 Construction of phase I
FY 1998-99 170,000 Design of phase 11
600,000 Mitigation Measures
2,300,000 Construction of Phase II
Total 9,420,000
Once the State Water Resource Control Board has approved the application and committed funds to
Water Reuse Project—RFI- nor Design Services
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this project, money will only be released to the City for payment of the contractors and design
consultants in accordance with contracts that must be approved by the City Council before the
consultant or contractor begins work. The Utilities Director will return to City Council with the
final loan agreement before it is executed.John Moss has extensive experience with the SWRCB
loan process as the project manager for the recent upgrade of the Water Reclamation Facility which
was funded with State Revolving Fund loans.
This resolution allows the process of establishing that commitment from the State to begin.
FISCAL BIPACT
Application for this low interest loan will allow the $9,420,000 needed to finance the Water Reuse
Project to be obtained at an interest rate between 2.5% and 4%rather than at an interest rate of 5%
to 7% that would be expected if the City were to sell bonds. Current interest rates for State
Revolving Fund Loans is 2.8%
Project funding as described is included in the City's approved budgets and financial plans(page E-
5 of the FY 1995-97 Financial Plan and page E-5 of the FY 1997-99 Financial Plan)and the
repayment of project financing has been included in the fund analysis and water rates already
approved by the Council in May 1997.
Attachment: Resolution.
gAcaftw loan.doc
RESOLUTION NO. (1997 Series)
A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO
AUTHORIZING TBE APPLICATION FOR A LOAN FROM
THE STATE WATER RESOURCES CONTROL BOARD
FOR THE WATER REUSE PROJECT
WHEREAS,the City's Water Reclamation Facility produces a tertiary reclaimed water which is
discharged to San Luis Obispo Creek under a National Pollution Discharge Elimination permit,and
WHEREAS,this water is suitable for irrigation and many other uses,and
WHEREAS,the City has need for non-potable water for irrigation and other uses,and
WHEREAS,the Water Reuse Project can provide the facilities to distribute the recycled water,and
V REREAS,the State of California Water Resources Control Board provides low interest loans for
water recycling projects.
NOW,THEREFORE,BE IT RESOLVED by the Council of the City of San Luis Obispo as
follows:
SECTION 1. The City Council hereby authorizes and directs the Utilities Director or his designee
to sign and file,for and on behalf of the City of San Luis Obispo,a Financial Assistance Application for
a loan/grant from the State Water Resources Control Board in an amount not to exceed$10,000,0000 for
the design and construction of the Water Reuse Project.
SECTION 2. The City Council further authorizes the Utilities Director or his designee to negotiate
and execute.a loan/grant contract and any amendments or change orders thereto on behalf of the City of
San Luis Obispo.
On motion of ,seconded by and on the
following roll call vote:
AYES:
NOES:
ABSENT:
The foregoing Resolution was passed and adopted on this day of 1997.
ATTEST: Mayor Allen Settle
APPROVED AS TO FORM:
City Clerk,Bonnie Gawf
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