HomeMy WebLinkAbout05-15-2018 Item 10 - Resolution amending the WRRF project loanMeeting Date: 5/15/2018
FROM: Carrie Mattingly, Utilities Director
Prepared By: Brigitte Elke, Utilities Business Manager
SUBJECT: WATER RESOURCE RECOVERY FACILITY PROJECT – SRF LOAN
RESOLUTION AMENDMENT
RECOMMENDATION
Adopt a resolution amending the language of Resolution No . 10762 (2016 Series), pledging
sewer fund revenues and the Sewer Fund to the State Water Resources Control Board for the
financing of the Water Resource Recovery Facility project.
DISCUSSION
Background
On December 13, 2016, the City Council adopted Resolution No. 10762 (2016 Series)
(Attachment A), pledging sewer fund revenues to the State Water Resources Control Board
(Board) for a Water Resource Recovery Facility (WRRF) project loan for $140 million. The
resolution is an integral part of the application that was subsequently submitted to the Board.
In December 2017, the SWRCB confirmed that the SRF loan would be granted and the
application has since made its way through the various approval departments at the Board.
However, there is one change that the Board since has implemented that affects the revenue
pledge resolution passed on December 13, 2016.
In order to have more flexibility, the Board now requires that the loan is secured by not only the
net rate revenue, but the Sewer Fund as a whole. As an Enterprise Fund, the Sewer Fund carries
unrestricted working capital or fund equity that could be used by Council action. Should the
Sewer Fund for any reason fall short on net revenue on any given year, the resolution
(Attachment B) will allow the fle xibility to tab the unrestricted working capital to secure the
loan.
FISCAL IMPACT
There is no fiscal impact to this action. The resolution is part of the application package to
receive a SRF loan for the WRRF project.
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Item 10
ALTERNATIVE
The City Council could choose not to secure the loan with Sewer Fund equity. This is not
recommended as the loan approval depends on the language in the resolution being amended.
Attachments:
a - Resolution No. 10762 (2016 Series)
b - Amended Resolution for Revenue Pledge
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RESOLUTION NO. 10762 (2016 SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, PLEDGING SEWER FUND REVENUES TO THE
STATE WATER RESOURCES CONTROL BOARD FOR THE
FINANCING OF THE WATER RESOURCE RECOVERY FACILITY
UPGRADE
WHEREAS, the City of San Luis Obispo's Water Resource Recovery Facility is in need
of upgrades to fulfill its regulatory mandates and capacity requirements for full build -out of the
City; and
WHEREAS, the City Council desires to finance the construction phase of the Water
Resource Recovery Facility upgrade through the State Water Resources Control Board; and
WHEREAS, the City Council directed staff to submit an application to the State Water
Resources Control Board for the applicable financing.
NOW, THEREFORE, BE IT RESOLVED, by the Council of the City of San Luis
Obispo as follows:
SECTION 1. The City of San Luis Obispo will dedicate and pledge sewer rate revenue
from its Sewer Fund to payment of any and all Clean Water State Revolving Fund financing for
the Water Resource Recovery Facility Upgrade project (the "Project").
SECTION 2. The City of San Luis Obispo commits to collecting such revenues and
maintaining the Sewer Fund throughout the term of such financing and until the City of San Luis
Obispo has satisfied its repayment obligation thereunder unless modifications or change is
approved in writing by the State Water Resources Control Board.
SECTION 3. So long as the financing agreement is outstanding, the City of San Luis
Obispo's pledge hereunder shall constitute a lien in favor of the state Water Resources Control
Board on the foregoing fund and revenue without any further action necessary. So long as the
financing agreement is outstanding, the City of San Luis Obispo commits to maintain the Sewer
Fund and its revenue at levels sufficient to meet its obligations under the financing agreement.
Upon motion of Council Member Christianson, seconded by Council Member Pease, and on the
following roll call vote:
AYES: Council Members Christianson, Gomez and Pease,
Vice Mayor Rivoire, and Mayor Harmon
NOES: None
ABSENT: None
R 10762
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Resolution No. 10762 (2016) Page 2
The foregoing resolution was adopted this 13th day of December 2016.
A:If-
yPrHeidi Ha n
ATTEST:
djulju-j\
Carrie Gallagher
City Clerk
APPROVED AS TO FORM:
XChrnistineetrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City
of San Luis Obispo, California, this Oj St day of T)&+,ht1, , Q,,a I (.
Carrie Gallagher
City Clerk
R 10762
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Item 10
R ___________
RESOLUTION NO. (2018 Series)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, PLEDGING SEWER FUND REVENUES TO THE
STATE WATER RESOURCES CONTROL BOARD FOR THE
FINANCING OF THE WATER RESOURCE RECOVERY FACILITY
UPGRADE.
WHEREAS, the City of San Luis Obispo’s Water Resource Recovery Facility is in need
of upgrades to fulfill its regulatory mandates and capacity requirements for full build -out of the
City.
WHEREAS, the City Council approved the upgrade capital project initially in 2013 and
subsequently approved the final project for construction on August 16, 2016.
WHEREAS, the City Council desires to finance the construction phase of the Water
Resource Recovery Facility upgrade through the State Water Resources Control Board.
WHEREAS, the City Council directed staff to submit an application to the State Water
Resources Control Board for the applicable financing.
NOW, THEREFORE, the City Council of the City of San Luis Obispo, California, does
resolve and certify as follows:
SECTION 1. The City of San Luis Obispo will dedicate and pledge sewer net revenues
from its Sewer Fund and the Sewer Fund to payment of any and all Clean Wat er State Revolving
Fund financing for the Water Resource Recovery Facility Upgrade project (the “Project”).
SECTION 2. The City of San Luis Obispo commits to collecting such revenues and
maintaining the Sewer Fund throughout the term of such financing and until the City of San Luis
Obispo has satisfied its repayment obligation thereunder unless modifications or change is
approved in writing by the State Water Resources Control Board.
SECTION 3. So long as the financing agreement is outstanding, the City of San Luis
Obispo’s pledge hereunder shall constitute a lien in favor of the state Water Resources Control
Board on the foregoing fund and revenue without any further action necessary. So long as the
financing agreement is outstanding, the City of San Luis Obispo commits to maintain the Sewer
Fund and its revenue at levels sufficient to meet its obligations under the financing agreement.
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Item 10
Resolution No. ________ (2018 Series) Page 2
R ___________
SECTION 4. Resolution No. 10762 (2016 Series) is hereby superseded in its entirety.
On motion of ____________, seconded by ____________, and on the following roll call
vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was adopted this _____ day of _____________________ 2018.
____________________________________
Mayor Heidi Harmon
ATTEST:
Teresa Purrington
City Clerk
APPROVED AS TO FORM:
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City
of San Luis Obispo, California, this ______ day of ______________, _________.
____________________________________
Teresa Purrington,
City Clerk
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