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HomeMy WebLinkAboutRes2014-080 Sponsored by: Hunt CITY OF SEWARD, ALASKA RESOLUTION 2014-080 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, AUTHORIZING THE CITY MANAGER TO APPLY FOR, AND ACCEPT A LOAN FROM THE STATE OF ALASKA, DEPARTMENT OF ENVIRONMENTAL CONSERVATION,ALASKA CLEAN WATER FUND, IN THE AMOUNT OF $1,200,000 FOR SLUDGE REMOVAL AND RENOVATIONS AT THE LOWELL POINT WASTEWATER TREATMENT FACILITY WHEREAS,the Lowell Point Wastewater Treatment Facility(LPWWTF)has operated for more than two decades without significant sludge removal or renovations; and WHEREAS, previous reports from M.L. Foster and Associates indicate an urgent need to have sludge removed and renovations completed to keep us in compliance with our permit; and WHEREAS,the City of Seward was issued a Notice of Violation in January 2014 due to the low levels of dissolved oxygen, higher than allowable levels of fecal coliform and odor emissions reported to DEC, during heavy loading periods; and WHEREAS,the City has issued an Invitation to Bid for sludge removal and renovations at the LPWWTF; and WHEREAS,in June 2014, Staff filed a questionnaire with DEC,requesting$1,200,000 for the Lowell Point Lagoon Sludge Removal & Renovation project; and WHEREAS, the City of Seward ranked number 1 on the Alaska Clean Water Fund Point Source Funding Priority list with our project; and WHEREAS,without applying for the loan and accepting the loan funds,the sludge removal and renovation bid will likely exceed the amount of funds that the City currently has available; 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 Comprehensive Annual Financial Report,with the recent rate increase of 5.2%, it has adequate cash flow to cover its loan repayment obligations; and WHEREAS, the Lowell Point Lagoon will be continue to be out of compliance with the current permit, during high peak loading, until the project is completed. ,..., NOW,THEREFORE,BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY CITY OF SEWARD, ALASKA RESOLUTION 2014-080 OF SEWARD, ALASKA that: Section 1. The City Manager is hereby authorized to apply for a loan from the State of Alaska Department of Environmental Conservation, Alaska Clean Water Fund, in the amount of $1,200,000 for the LPWWTF sludge removal and renovation project. Section 2. The City Manager is hereby authorized to execute any and all documents that may be necessary to reflect the $1,200,000 loan from ADEC ACWF,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 $ 69,673. Section 3. This resolution shall take effect immediately upon adoption. PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 22nd day of September, 2014. THE CITY OF SEWARD, ALASKA J2--eozit) idLC6 u can Bardarson, Mayor AYES: Keil, Casagranda, Terry, Squires, Darling, Bardarson NOES: None ABSENT: Butts ABSTAIN: None ATTEST: A f J i,hanna Ki may, CMC ty Clerk (City Seal) 0,,,,,"°''•. :.•GO •2 = a i T .*471.E. • eat OF cot °.��. Council Agenda Statement Meeting Date: September 22, 2014 Through: Jim Hunt, City Manager From: W.C. Casey, Public Works Director Agenda Item: Authorizing the City Manager to apply for a loan in the amount of $1,200,000 and accept a Loan offer from the State of Alaska Department of Environmental Conservation, Clean Water Fund, and execute necessary loan documentation. BACKGROUND & JUSTIFICATION: Several years ago, the City of Seward Public Works department utilized M.L. Foster and Associates to evaluate the health and needs of the Lowell Point Wastewater Treatment Facility (LPWWTF). Reports regarding the sewer system were submitted to conclude the assessment. The reports indicated a pressing need to remove the sludge as it is necessary for good housekeeping, reducing energy consumption, freeing up displaced volume and improving performance during peak organic loadings from transient populations. In January 2014, the City of Seward was issued a Notice of Violation for low dissolved oxygen levels, higher than allowable fecal coliform and odor complaints from residents, all of which occurred during heavy loading periods. In our Corrective Action Plan, we indicated sludge removal as one of our steps to remedy the situation. 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 (ACWF). The submitted loan questionnaire was accepted, offering the City an opportunity to submit an application for a $1,200,000 loan at 1.5% interest, with a 20-year repayment. The Wastewater Department does not have adequate cash reserves to fund this type of project without assistance. However, the most recent Comprehensive Annual Financial Report shows that with the recent 5.2% increase in the wastewater rates, the fund will have adequate cash flow to cover existing and potential loan obligations. Accepting the loan up to $1,200,000 is in the best interest of the City, allowing the City to utilize the funds to remove and dispose of the accumulated sludge at the LPWWTF and complete renovations to improve the levels of oxygen so that we remain in compliance with our current permit. INTENT: Authorize the City Manager to apply for a loan in the amount of $1,200,000 and accept a loan offer from the State of Alaska Department of Environmental Conservation’s ACWF, for the sludge removal and renovations at LPWWTF. CONSISTENCY CHECKLIST: Yes No N/A Comprehensive Plan (document source here): Page 27. Follow 1.X recommendations of the Water and Sewer System Analysis (2000) Strategic Plan (document source here): Page 18 Promote a Safe 2.X Community Other (list): Seward Wastewater Evaluation, Wastewater Facilities 3.X Operations & Maintenance Plan (a permit requirement) FISCAL NOTE: $1,200,000 will be combined with other funding to compile the monies that will be needed to complete the LPWWTF sludge removal and disposal project. Funds will be reimbursed to the City and will not be utilized if they are not needed. 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 payments not to exceed $ 69,673. Approved by Finance Department: __________________________ ATTORNEY REVIEW: Yes________ No___X______ RECOMMENDATION: City Council approve Resolution 2014-080, authorizing the City Manager to apply for a loan in the amount of $1,200,000 and accept a Loan offer from the State of Alaska Department of Environmental Conservation, Clean Water Fund, and execute necessary loan documentation.