HomeMy WebLinkAbout11/06/2001, C16 - DEDICATION OF WATER FUND REVENUE FOR LOAN REPAYMENT council Nov
. 2001
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CITY OF SAN LUIS OBISPO
FROM: John Moss,Utilities Direct
Prepared By: David Pier a ater Projects Manager
SUBJECT: DEDICATION OF WATER FUND REVENUE FOR LOAN REPAYMENT
CAO RECOMMENDATION
Adopt a resolution dedicating water fund revenues for repayment of State Revolving Fund loans
for the Water Reuse Project.
DISCUSSION
The FY 2001-03 Financial Plan (Page F-2) says "During 2001-02, a project financing or a State
loan in the amount of $11.8 million is planned to pay for the Water reuse and reclaimed water
distribution project. Annual debt service requirements are estimated to be $1,066,300 beginning in
2002-03 to be paid from the Water Fund." After an initial review of our loan application
documents the State Water Resources Control Board (SWRCB) staff has indicated that
approximately 25% of the requested amount could be a grant from Proposition 13 (2000 Water
Bond) funds and the remainder would be a State Revolving Fund Loan.
Before the SWRCB approves a loan, the applicant must provide assurance that sufficient funds will
be generated and that they will be used to repay the loan. The Water Fund analysis that was
reviewed by the City Council in May 2001 and the FY 2001-03 Financial Plan anticipate an
$11,800,000 loan. The projected Water Fund revenue is sufficient to begin repayment of the loan.
The attached resolution provides assurance to the SWRCB that the City will generate sufficient
revenue to repay the loan.
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).
Attachment 1: Resolution.
g:caAwrp_dedicated reveue_car.doc
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Attachment 1
RESOLUTION NO. (2001 Series)
A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO
DEDICATING WATER FUND REVENUES FOR REPAYMENT OF THE STATE
REVOLVING FUND LOANS.
WHEREAS, the City's Water Reclamation Facility produces recycled water suitable for
irrigation and other uses, 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, and
WHEREAS, the City is seeking Grants and State Revolving Fund(SRF) loans for
completion of the required improvements, and
WHEREAS,on May 29,2001, the Council for the City of San Luis Obispo approved a
revenue program sufficient to cover repayment of the SRF loans and continued operation and
capital programs for the City's water program, and
WHEREAS,the State of California Water Resources Control Board requires dedication of
said revenues for repayment of the SRF loan.
BE IT RESOLVED the Council of the City of San Luis Obispo hereby dedicates water fund
revenues to repayment of any and all SRF loans for SRF Project No. C-06-4307-110. This
dedicated source of revenue shall remain in effect until such loan or loans are fully discharged.
Any modification or change of such dedication must be approved in writing by the State Water
Resources Control Board.
On motion of , seconded by , and on
the following roll call vote:
AYES:
NOES:
ABSENT:
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C-16-2
Resolution No. (2001 Series)
Page 2
The foregoing Resolution was passed and adopted on this day of 12001
Mayor Allen Settle
ATTEST:
APPROVED AS TO FORM:
Lee Price, City Clerk
JG./org orge e ity Attorney
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