HomeMy WebLinkAbout11/06/2001, C15 - AUTHORIZATION OF STATE REVOLVING FUND LOAN APPLICATION FOR THE WATER REUSE PROJECT council
Agenda Report
CITY OF SAN LUIS OBISPO
FROM: John Moss,Utilities Direct
Prepared By. David Pier ater Projects Manager
SUBJECT: AUTHORIZATION OF STATE REVOLVING FUND LOAN APPLICATION FOR
THE WATER REUSE PROJECT
CAO RECONEUENDATION
Adopt a resolution authorizing staff to apply for a grant and a low interest loan from the State Water
Resource Control Board for the Water Reuse Project.
DISCUSSION
In 1997 the Council adopted Resolution No. 8693 authorizing and directing the Utilities Director to
file a Financial Assistance Application for a grant and/or a loan from the State Water Resources
Control Board in an amount not to exceed $10,000,000. This resolution replaces Resolution 8693
and increases the amount of the loan up to $15,000,000. While the project loan and grant amount
is currently estimated at $11.8 million, authorization is being requested for up to $15 million to
allow for unforeseen cost increases as we proceed with design and also to'allow sufficient funding
authorization should we decide it would be advantageous to recover some a of the costs currently
anticipated to be handled pay as you go.
The Water Reuse Project alternative approved by the City Council is estimated to cost $14,245,000
as shown in the FY 2001-03 Financial Plan. The Financial Plan(page F-2)anticipates that a loan of
$11,800,000 will be needed to finance the project. Some of the additional amount has already been
spent and the rest will come directly from the Water Fund working capital. Staff has forwarded
loan application documents to the staff of the State Water Resources Control Board. Based on their
initial review, 25% of the amount requested could be a grant from Prop 13 (2000 Water Bond)
money and the remainder will be a State Revolving Fund Loan.
Project Costs
To-Date 2001-02 2002-03 2003-04 2004-05 Total
Environmental Review 215,000 215,000
Environmental Mitigation600,000 460,000 10,000 10,000 10,000 1,090,000
User Site Modification 200,000 300,000 500,000
Design 870,000 870,000
Construction 412,500 10,587,500 11,000,000
Construction Management 600,000 600,000
Total 1 2,097,5001 11,847,500 1 310,000 1 10,0001 10,000 1 14,275,000
gAcar\wrp_loan auth car_nov0Ldoc
Water Reuse Project—SRF Loan Application
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Once the State Water Resource Control Board has approved the application and committed funds to
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 before work to be
funded by the loan begins. The Utilities Director, through the resolution, is authorized to execute
the loan/grant agreements, consistent with Council direction and approved 2001-03 financial plan.
The loan/grant agreements will not be executed until after bids have been received and Council has
awarded the project and approved final financing. 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 IMPACT
Application for this grant and low interest loan will allow the $11,800,000 needed to finance the
Water Reuse Project to be obtained from the State Water Resources Control Board as a
combination grant and loan. Approximately 25% should be as a grant and the remainder
(approximately$9,000,000)would be a loan at an interest rate of between 2.5%and 3%rather than
at an interest rate of 5%to 7%that would be expected if the City were to sell bonds.
This combination of loan and grant will provide funding for the Water Reuse Project at a lower cost
than is planned for in the FY 2001-03 Financial Plan (page F-2), and considered by Council in the
2001 Water Fund Analysis.
Attachment 1: Resolution.
' Attachment 1
RESOLUTION NO. (2001 Series)
A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO
AUTHORIZING THE 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 suitable for irrigation and many other uses, and
WHEREAS, the State Water Resources Control Board has issued an Order approving the
City's request to recycle a portion of this water, and
WHEREAS,the Water Reuse Project will provide the facilities to distribute the recycled
water, and
WHEREAS, the State of California Water Resources Control Board provides low interest
loans.for water recycling projects.
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$15,000,0000 for the design and construction of the Water Reuse Project.
SECTION 2. The City Council finther 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.
SECTION 3. This Resolution supercedes City Council Resolution 8693 (1997 Series).
On motion of , seconded by , and on
the following roll call vote:
AYES:
NOES:
ABSENT:
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Resolution No. (2001 Series)
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The foregoing Resolution was passed and adopted on this day of , 2001.
Mayor Allen Settle
ATTEST:
APPROVED AS TO FORM:
Lee Price, City Clerk
J e . Jq g Cfy Attomey
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