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HomeMy WebLinkAboutRes2012-056 Sponsored by: Hunt fi. CITY OF SEWARD, ALASKA RESOLUTION 2012 -056 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, STATING AN INTENT TO FUND $490,000 FOR THE LOWELL POINT AND SMIC LAGOONS SLUDGE REMOVAL PROJECT, SUBJECT TO RECEIVING A LOAN IN THAT AMOUNT, AUTHORIZING A LOAN APPLICATION WITH THE ALASKA CLEAN WATER FUND AND AUTHORIZING THE CITY MANAGER TO ACCEPT A LOAN OFFER FROM THE ALASKA CLEAN WATER FUND WITH PAYMENTS SUBJECT TO ANNUAL APPROPRIATION WHEREAS, throughout 2010 and 2011, M.L. Foster and associates submitted reports evaluating the health and needs of Seward's sewer system including: Seward Wastewater Evaluation, Wastewater Facilities Operations & Maintenance Plan (a permit requirement) and a SMIC Lagoon Sludge Survey used to assess the health of the lagoon; and WHEREAS, the Lowell Point lagoon sludge has not been removed in 18 years; and WHEREAS, the SMIC lagoon sludge has not been removed in its 24 -year life; and imam WHEREAS, removal and disposal of sludge are necessary for good housekeeping, will reduce energy consumption, free up displaced volume, may result in improved performance during peak organic loadings from transient populations and for protection of uninterrupted operation of the nearby prison; and WHEREAS, the Wastewater Department does not have adequate cash reserves in its wastewater fund to finance the project, however, according to the most recent Financial Capacity Assessment it has adequate cash flow in this fund to cover its repayment obligations; and WHEREAS, the City of Seward obtained the necessary financial assistance to complete these projects by way of obtaining a loan from the State of Alaska, Department of Environmental Conservation's Alaska Clean Water Fund; and WHEREAS, the loan money may be used to provide contractual services, engineering, design, planning, permitting, project support and construction management; and WHEREAS, accepting the total loan amount of $490,000 from the Department of Environmental Conservation Clean Water Fund is in the best interest of the city by allowing the city to utilize the funds to invest in critical infrastructure, follow regulations set forth by the Alaska Department of Environmental Conservation and remain in compliance with the current permit; and WHEREAS, the Lowell Point Lagoon will be out of compliance with the current permit if CITY OF SEWARD, ALASKA RESOLUTION 2012 -056 the sludge removal project is not completed by the end of 2012. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA that: Section 1. The City Manager is authorized to apply for a loan in the amount of $490,000 from the State of Alaska Department of Environmental Conservation, Clean Water Fund, for the Lowell Point and SMIC Lagoons sludge removal and disposal. Section 2. The City Manager is hereby authorized to execute any and all documents that may be necessary to reflect the $490,000 loan from ADEC, the terms of its repayment over 20 years at a rate of interest equal to 1.5% subject to annual appropriations, including but not limited to an agreement for the loan and a promissory note, with annual payments not to exceed $26,000. Section 3. This resolution shall take effect thirty (30) days following its adoption. PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 23` day of July, 2012. THE CITY OF SEWARD, ALASKA c David Seaward, yor AYES: Bardarson. Keil, Shafer, Casagranda, Seaward NOES: None ABSENT: Terry, Valdatta ABSTAIN: None ATTEST: ohanna Kinney, CMC � _ so ws r. % •� City Clerk ����`t of sEk; . 100 4 4 1 (City Seal)'v _-s- e g • I SEAL • -♦-' •` i 41 4 ft - .5811111110 • Council Agenda Statement 1 o f sF Meeting Date: Jul 23, 2012 4% �0 g July y 7 Through: City Manager Jim Hunt q me From: William Casey, Public Works Director Agenda Item: Authorizing the City Manager to apply for a loan in the amount of $490,000 and accept a Loan Offer from the State of Alaska Department of Environmental Conservation, Clean Water Fund, and Execute Necessary Loan Documentation BACKGROUND & JUSTIFICATION: The City of Seward Public Works department utilized M.L. Foster and Associates to evaluate the health and needs of the Lowell Point and SMIC Sewer Pond. Reports regarding the sewer system were submitted to conclude the assessment. The reports indicated a pressing need to removed the aged sludge from both lagoons because it is necessary for good housekeeping, reducing energy consumption, free up displaced volume and may improve performance during peak organic loadings from transient populations. Removing the sludge in the SMIC lagoon also helps ensure uninterrupted operation of the nearby prison. This project will also keep the Lowell Point lagoon in compliance with the current permit. Unfortunately the Wastewater Department does not have adequate cash reserves to fund the project without assistance. However, the most recent Financial Capacity Assessment found the fund to be healthy enough to cover existing and potential loan obligations. In an effort to obtain funding, city staff applied for a loan from the State of Alaska Department of Environmental Conservation's Clean Water Fund. The submitted loan questionnaire was accepted giving the City an opportunity to submit an application for $490,000 loan with 1.5% interest. Accepting the total loan amount of $490,000 is in the best interest of the city by allowing the city to utilize the funds to invest in critical infrastructure, follow regulations set forth by the Alaska Department of Environmental Conservation and remain in compliance with the current permit INTENT: Authorize the City Manager to apply for a loan in the amount of $490,000 and accept a loan offer from the State of Alaska Department of Environmental Conservation, Clean Water Fund, for the Lowell Point and SMIC Lagoon sludge removal and disposal CONSISTENCY CHECKLIST: Yes No N/A 1 Comprehensive Plan (document source here): Page 27: Follow X recommendations of the Water and Sewer System Analysis (2000) 2 Strategic Plan (document source here): Page 18 Promote a Safe X Community Other (list): Seward Wastewater Evaluation, Wastewater Facilities 3. Operations & Maintenance Plan (a permit requirement) and a SMIC X Lagoon Sludge Survey used to assess the health of the lagoon FISCAL NOTE: $490,000 represents the total project cost and the loan amount requested from the State of Alaska Department of Environmental Conservation Clean Water Fund. The terms of repayment are over 20 years at a rate of interest equal to 1.5% subject to annual appropriations, including but not limited to, an agreement for the loan and a promissory note, with annual payment payments not to exceed $26,000. Approved by Finance Department: eZ.;f,��,�c ATTORNEY REVIEW: Yes No X RECOMMENDATION: City Council approve Resolution 2012- Authorizing the City Manager to apply for a loan in the amount of $490,000 from the State of Alaska Department of Environmental Conservation, Clean Water Fund, for the Lowell Point and SMIC Lagoon sludge removal and disposal and accept a loan offer from the Alaska Clean Water Fund.