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HomeMy WebLinkAboutRes2013-057 Sponsored by: Hunt CITY OF SEWARD, ALASKA RESOLUTION 2013 -057 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, STATING AN INTENT TO FUND $500,000 FOR THE MAPLE STREET WATER LINE PROJECT SUBJECT TO RECEIVING A LOAN IN THAT AMOUNT, AUTHORIZING A LOAN APPLICATION WITH THE ALASKA DRINKING WATER FUND AND AUTHORIZING THE CITY MANAGER TO ENTER INTO A LOAN AGREEMENT WITH THE ALASKA DRINKING WATER FUND WITH ANNUAL PAYMENTS NOT TO EXCEED $55,000, AND SUBJECT TO ANNUAL APPROPRIATION WHEREAS, in 2010 city staff identified several issues necessitating the addition of 850 linear feet of gravity water main on Maple Street; and WHEREAS, in 2012 staff completed and submitted the required questionnaire to compete for loan monies being offered by the Alaska Drinking Water Fund; and WHEREAS, the City of Seward seeks to obtain the necessary financial assistance to complete the Maple Street Water Main Extension by obtaining a loan from the State of Alaska, Department of Environmental Conservation's Alaska Drinking Water Fund. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA that: Section 1. The City of Seward hereby confirms its commitment to the State of Alaska (ADEC), and its intent to fund a $500,000 Maple Street water extension project, subject to receiving a loan from the ADEC. Section 2. The City Manager is authorized to apply for a loan in the amount of $500,000 from the State of Alaska Department of Environmental Conservation, Drinking Water Fund, for the water system improvement known as Maple Street Water Main Extension. Section 3. The City Manager is hereby authorized to execute any and all documents that may be necessary to affect the $500,000 loan from ADEC, the terms of its repayment over 10 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. Annual loan payments shall not exceed $55,000. Section 4. The City Manager is directed to report to the City Council a payment schedule and final loan amount before execution. r, Section 5. This resolution shall take effect immediately upon adoption. CITY OF SEWARD, ALASKA RESOLUTION 2013-057 PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 8 day of July, 2013. THE CITY OF SEWARD, ALASKA I i it"--( David Seaward, Mayor AYES: Valdatta, Bardarson, Keil, Shafer, Terry, Seaward NOES: Casagranda ABSENT: None ABSTAIN: None seri ATTEST: /4f ( 1A. ,/ _ r en d a J. Ba I�• Acting City Clerk (City So Of S F.... •* G� . O •P O •••T . • i C• Q • SEAL L•= 1�. i •��, . , k d ! �P eti A.P." .......... % •.ri Council Agenda Statement r O F SF Meeting Date: July 8, 2013 k Through: City Manager, Jim Hunt '''' From: Public Works Director, W.C. Casey Agenda Item: Intent to fund $500,000 for the Maple Street Water Main Project, subject to receiving an Alaska Department of Environmental Conservation Loan for that amount, authorizing a loan application with the Alaska Drinking Water Fund and authorizing the City Manager to enter into a loan agreement with the ADEC. BACKGROUND & JUSTIFICATION: In the past thirteen years there have been two water system evaluations and two wastewater system evaluations by two separate engineering firms. The purpose of the water and wastewater system evaluations performed in 2000 (CRW Engineering) was to investigate sizing and routing requirements for water and sewer infrastructure in the Gateway and Forest Acres subdivisions, as well as evaluating other water /wastewater components. These two subdivisions are the largest undeveloped areas left on the west side of Resurrection Bay and could provide substantial growth for the City if water and wastewater services could be provided. To move forward with the Water /Wastewater system maintenance and development of the Capital Improvement Program that was delineated and recommended by the 2000 study, the City contracted with another engineering firm in 2009 (M.L. Foster & Assoc.). M.L. Foster was tasked with identifying areas that needed corrective actions and presenting their recommendations in a report (Water Compliance Study). M.L. Foster's study included an "Implementation Plan" that documents background information and results from field investigations, evaluates specific elements of the water system, permit renewal processes, identifies trouble spots, recommends improvements and provides a summary of priority projects. City staff utilized both of these studies to create a master project list and identify potential funding sources. The Maple Street Water Main extension was placed on the master project list because of several issues outlined in both reports and staff observations. On July 23 2012 the City Council approved Resolution 2012 -058 authorizing the City to enter into a loan agreement with the Alaska Clean Water Fund (ACWF) through ADEC for $400,000. This will fund the addition of 850 linear feet of sewer main on Maple Street. With approval of an additional $500,000 loan through the Alaska Drinking Water Fund (ADWF), we will be able to provide both sewer and water service to Maple Street residents. If approved, we could potentially reduce the cost of both the water main and sewer line projects by completing them simultaneously. This would not only save money, but the residents of Maple Street and surrounding side streets would only be affected once. If the City is successful in procuring funding, it will construct 850 linear feet of water main, which will serve lots that are currently subdivided, as well as a large un- subdivided parcel. Because of the b proximity of a production well to the subdivision individual septic systems are not acceptable. This is a source water protection area, making this infrastructure development necessary if residential development is going to happen on these properties The water main extension will also provide much needed redundancy for the Long Term Care Facility and the Afognak Subdivision development and improve fire fighting capability. INTENT: Secure available funding for the Maple Street Water Main Extension through the Alaska Department of Environmental Conservation, Drinking Water Fund Loan Program. CONSISTENCY CHECKLIST: Yes No N/A 1 Comprehensive Plan (document source here): Volume 1 PG 20, 22 and X 27 2. Strategic Plan (document source here): Page 10 X 3. Other (list): 2011 M.L. Foster Water Compliance Study X FISCAL NOTE: This loan requires the City commit to repayment of $500,000 from the State of Alaska Department of Environmental Conservation, Drinking Water Fund. The terms of repayment are over 10 years at a rate of interest equal to 1.5% resulting in annual payments of approximately $54,200. This debt payment was not previously budgeted in the Water Fund. After payments for existing debt service and transfers to other funds, the Water Enterprise Fund does not generate sufficient cash flow to make the annual debt service payments on this debt. Repayment of this debt will need to come from the Fund's cash reserves. The cash balance in the Water Enterprise Fund at 6/28/13 is $797,157 and in the Water MRRF Fund is $212,546. In addition, the Water Fund has an outstanding loan receivable from the Seward Mountain Haven Fund of $1,973,360. Approved by Finance Department: ATTORNEY REVIEW: Yes No X RECOMMENDATION: The City of Seward City Council adopt resolution 2013 -0 6 approving funding in the amount of $500,000 for the Maple Street Water Main Line Extension Project, subject to receiving an ADEC Loan for that amount, authorizing a loan application with the Alaska Drinking Water Fund and authorizing the City Manager to enter into a loan agreement with the ADEC.