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HomeMy WebLinkAboutR-2005-068 Washington State Public Works Trust Fund Loan ApplicationA RESOLUTION RESOLUTION NO. R-2005- 68 authorizing the City Manager to execute applications, certifications and agreements pursuant to an application for a construction loan from the Washington State Public Works Trust Fund in the amount of $4,000,000 for improvements to the Wastewater Treatment Plant and other documents related to this project. WHEREAS, the City of Yakima has developed a plan for wastewater collection, treatment, disposal for the Yakima Regional Urban Area; such plan being necessary to determine the needs of the area for health, safety and well being of the people; and WHEREAS, the plan was developed in accordance with the requirements of WAC 173-240; and WHEREAS, the plan identifies facilities and systems required to be constructed, improved and rehabilitated at the Yakima Wastewater Treatment Facility that address present and future growth and mandated (regulatory and renewal/safety) requirements; and WHEREAS, the Washington State Public Works Fund has made low interest loan funds available for sanitary sewer construction projects; and WHEREAS, the cost of construction of the Wastewater Treatment Facilities are eligible for Washington State Public Works Trust Fund loan financing; and WHEREAS, the amount of local match funds provided will allow the City a generous interest rate of 0.5% on the $4 million loan; and WHEREAS, it is necessary that certain conditions be met as part of the application process; and WHEREAS, RCW 43.155.060 requires that the project will be advertised for competitive bids and administered according to standard local procedure; and WHEREAS, the loan will not exceed the maximum amount allowed by the Board of eligible costs incurred for the project; and WHEREAS, any loan arising from this application constitutes a debt to be repaid, and Max Linden, Wastewater Division Utility Engineer has reviewed and concluded it has the necessary capacity to repay such a loan; and WHEREAS, the information provided in this application is true and correct to the best of the government's belief and knowledge and it is understood that the state may verify information, and that untruthful or misleading information may be cause for rejection of this application or termination of any subsequent loan agreement(s); and WHEREAS, the City of Yakima certifies that it meets these requirements, and further that it intends to enter into a loan agreement with the Public Works Board, provided that the terms and conditions for a Public Works Trust Fund loan are satisfactory to both parties; now, therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA: The City Manger is duly authorized to sign the application, loan agreements and amendments, and other documents relating to Wastewater Facility construction projects for the 2005 — 2006 Public Works Trust Fund loan program. ADOPTED BY THE CITY COUNCIL this 3rd day of May, 2005: ATTEST: Karen S. Roberts, City Clerk 2 Paul P. George, Mayor . For City Council Information April 18, 2005 To: Honorable Mayor, City Council and City Manager From: Max Linden, Wastewater Utility Engineer Subject: Wastewater Facility Improvements This memo will provide an update on Wastewater Facility Improvements and justification for additional funding. The Wastewater division wishes to request permission to submit an application for a $4,000,000 loan from PWTF for council approval at the May 3rd 2005 City Council meeting. Implementation of the adopted 2004 Wastewater Facility Plan is dependent on development of a realistic and sustainable Capital Facilities Plan which takes into account various internal sources of revenue such as rates, fees and connection charges as well potential external sources such as grants and loans. The implementation and financing program is based on analyses of the wastewater collection and treatment systems, projected growth rates and recommended and required improvements for sustaining growth and meeting regulatory requirements. The Wastewater Facility Plan provides a general overview of past rates analyses, financial policies of the City of Yakima's Wastewater Utility and an overview of the revenue requirements associated with completion of the projects outlined herein are provided. In addition, project implementation costs are evaluated and potential revenue alternatives that may be available to the City are discussed. A summary of recommended improvements to the Yakima Regional WWTP and the collection system have been identified in section 12 of the 2004 Wastewater Facility Plan. Improvements have been divided into near term (0-6 years), mid- term (7-12 years) and long range (13-20 years) recommendations that are further broken down into key treatment feature projects, other wastewater treatment facilities projects and collection system improvements. Project prioritizations were determined based 011 relative need and regulatory requirements associated with each. Over the 20 -year planning horizon recommended improvements to the Wastewater Treatment Facility include a variety of projects totaling an estimated $41 million in regulatory, capacity upgrade, health and safety features and regular renewal and replacement projects with approximately $31 million in improvements scheduled for the 0-6 year near-term capital improvement program. The 2004 Wastewater Facility Plan identifies the improvements, estimates costs, relative schedules and the primary reason for installation or upgrade. Indication of the reason for the upgrade should be a primary determination in deciding the type of funding to be utilized for each project. General speaking, upgrades that are mandated by regulation are most suitable for loan and grant financing, while smaller projects and regular renewal and replacements are most commonly financed from available cash and rates. This does not, however, preclude the packaging of several related improvements into funding applications that allow similar projects to be accomplished simultaneously. The inclusion of a variety of projects into one application also allows the more serious of the issues being addressed to help sell less significant aspects of the overall project through the competitive processes. Analysis of the treatment systems perfoiiaied as part of the facility plan indicates the need to provide redundancy to several operations within the treatment plant. Redundancy is required to meet Washington State Department of Ecology criteria for provision of backup facilities to major treatment processes to assure compliance with the City's NPDES permit and associated rules and regulations. The following areas, scheduled for the 0-6 near term planning horizon, have been identified and prioritized in the planning process as the most critical facilities requiring redundancy. These projects are included in the Series B bond proceeds funding received in 2003. • Centrifuge Dewatering in new solids handling building (Project 23) — Currently only one of the two centrifuges is function for dewatering biosolids and this requires extensive maintenance to continue operating. A new centrifuge is required to maintain compliance when the older centrifuge is out of service. The new centrifuge will be located in a new solids handling building. The older centrifuge will be used for redundancy requirements for dewatering and thickening. • Solids Thickening (Projects 21 and 22) — The waste activated sludge thickening process reduces the total volume sent to the digestion process, and directly impacts regulatory compliance. Currently only one dissolved air flotation thickener (DAFT) unit is in place to thicken secondary sludge. The older centrifuge will also be used as a second thickening unit to meet redundancy criteria. • Standby Power Capacity Addition (Project 38) - The emergency power system supplies a backup source of power to assure that minimum treatment is provided during a power failure. The existing generator set was installed in 1980 and at a minimum, requires a complete inspection/overhaul. An additional generator set is required to operate the minimum treatment process. This unit will be housed in the new blower building. • New Blowers in New Blower Building (Project 7) — Existing VFDs that operate the four 400 horsepower blowers are far less efficient and generate more harmonic distortion on the electrical power system than newer technology. The blowers and VFDs are all at the end of their useful life, are difficult to find replacement parts for and require replacement. Construction of a new structure to accommodate new blowers is recommended. In addition, to redundancy projects the following projects, also scheduled for the 0- 6 near term planning horizon, have been identified as critical projects for renewal, safety and efficiency of operations. • Replace SCADA System (Project 39) — Major SCADA system components will be replaced, including PLCs, computer hardware and software, HMI software, and historical data logging software. • UV Disinfection (Project 40) — UV disinfection facilities will be installed to replace chlorine disinfection, reducing safety and security concerns. • New Grease Receiving Facility, Replacement of Digester Gas Piping, Valves and Flow Meters — The digester gas collection piping is over 20 years old and needs to be upsized. The projects above, identified as part of the near term (0-6 yrs.) priority improvements in the 2004 Wastewater Facility Plan, are being packaged as one project. This package includes having our engineer upgrade the plants SCADA system (currently under way), two pre -procurement bid packages to pre -purchase blowers and a centrifuge (ready to go out for bid) and a construction bid package planned to be advertised for bid in October of 2005. The total cost of this will be approximately $13,796,000. (See highlighted projects on Table 3-4 Capital Improvement Projects) In 2003, the City of Yakima implemented a new rate structure to increase revenues to the wastewater utility. Additional funding assistance for future projects comes from the approximate $18 million in revenue bonds that were issued by the City in 2003. These bonds were divided into two distinctive series with approximately $7.46 million in proceeds from Series A bonds being used to pay for the settlement of previous litigation relating to odor control within the sewer system. Approximately $10 million in proceeds from sale of Series B Bonds is being used to fund a variety of projects and capital improvements involving the City's wastewater treatment plant. Projects dedicated to resolving issues related to regulatory requirements are often financed by government administered grant and low interest loan financing programs. In competitive financing programs such as Public Works Trust Fund, Centennial Clean Water and State Revolving Fund programs, regulation mandated projects tend to receive higher scores than renewal and replacement or growth driven projects. Growth related system improvements are generally funded through property assessments, connection charges and development fees. None of the specific improvements mentioned above are growth related only. Long term fmancing strategies will include continuing to apply for grant and low interest funding, where appropriate, and maintaining current and equitable connection charges and fees so that growth can finance required system expansions. The 2004 Wastewater Facility Plan presents a historical and projected budget for the City of Yakima Wastewater Utility. This simplified budget overview is intended to provide order of magnitude costs and assist the City in its on-going decision making, project prioritization and budgeting. More detailed consideration of available funds and revenue requirements occurs bi-annually in the City's established rate review and cost -of -service analysis and periodic review and adjustment of connections charges. As discussed previously the 2003 bond issue provides a significant source of revenue ($10,000,000) for immediate improvements to the wastewater treatment plant. The overall cost of this first phase of (0-6 yr) priority projects is estimated to be $13,796,000. Another $4,000,000 is needed to fund this work through 2008. The Wastewater Division can apply now for a $4,000,000 low interest loan from the Public Works Trust Fund, PWTF, in May 2005, and make debt payments without raising rates. The Table titled Wastewater System Debt Service shows our existing debt service and coverage along with projected future loans. The new loans would not add to our debt coverage, only to our debt service, and in 2008, 2011, 2013, and 2015 existing loans and bonds will be paid for. With the addition of the three project loans (shown on Table 3-3) our obligation to these debts will only increase by approximately $200,000/yr. for three years, which can be covered without raising rates, and then will decrease over the life of these loans. After 2008 Long term financing strategies will include continuing to apply for grant and low interest funding, where appropriate, and maintaining current and equitable connection charges and fees so that growth can fmance required system expansions. TABLE 3-3 FUND 478 Wastewater Treatment Facility Description 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Actual Balance Forward 10,117,173 10 241,001 9,468272 4,799,539 3209,509 3,720,497 2,876,766 ' 2,715,966 1,390,698 1,641,217 4,679,815 5,055,424 REVENUE Interest from Investments 6,096 5200 5,000 473,449 239277 190,475 ! 186,025 143,838 135,798 89,535 82,061 233,991 252,771 0.05 Gain on Investments 0 Crr 0 0 0 0 0 0 0 0 0 0 0 Interest from Contracts 550 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000, 5,000 5,000 5,000 Transfers From Fund 473 1,640,000 300,000 150,000 200,000 1200200 1200,000 1200,000 1200,000 1200,000 1,000,000 1,000,000 1,000,000 1200,000 Debt Coverage TH 37,722 38,610 38,610 38,610 38,610 38,610 38,610 38,610 38,610 38,810 38,610 38,610 38,610 Debt Coverage UG 76,387 78,185 78,185 78,185 78,185 78,185 78,185 78,185 78,185 78,185 78,185 78,185 78,185 _ Debt Coverage UG/RR 3,149 3,124 3,124 3,124 3,124 3,124 3,124 3,124 3,124 3,124 3,124 3,124 3,124 Transfers from Connection Charges (473) 231,908 150,000 150,000 157,500 165,375 173,644 182,326 191,442 201,014 211,065 221,618 232,899 244,334 1.05 CCRC 8,667 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 1 PWTF/SRF Loans 4,000,000 3,000,000 5,000,000 Bond 10,017,896 Total Revenue 584,919 , 434,919 4,960,868 1,535,271 1,494,038 4,498,270 1,465,200 1,466,732 1,410,519 6,433,598 1,598,609 1,627,024 Total Available Funds 10,702,092 10,675,920 14,429,840 6,334,810 5,303,547 ; 8,218,766 4,341,986 4,182,698 ' 2,801,217 8,074,815 6,276,424 6,682,448 I EXPENSES Treatment Facility See TABLE 3-4 461,091 1,206,948 9,630,301 2,525,301 1,583,050 5,342,000 1,626,000 2,792,000 1,160,000 3,395,000 1,221,000 5,409,000 36,351,691 r - Fund Balance -End of Year 10,241,001 9,468,972 j 4,799,539 3,809,509 3,720,497 2,876,766 2,715,966 1,390,698 1,641,217 4,679,815 5,055,424 1,273,448 L Fund 478 may be used for planning for and major capital projects on the Treatment FaclIity. 4/21/2005 TABLE 3-4 Wastewater Treatment Facility Capital Improvement Projects Cites Project ELEMENT Func Estimated Total 2004 2005 2006 2007 2008 2009 2010 2011 i 2012 2013 2014 2015 Total Cost 2015 # FUND 472 0000 Minor CaQitat Improvements 472 $600,000 5600,000 $0 i 5100,000 550,000 $50,000 $50,000 $50,000 550,000 $50,000 $50,000 550,000 550,000 $50,000 0000 1 Equipment Replacement 472 5944,000 $944,000 i 510,000 534,000 550,000 550000 5100,000 $100,000 5100,000 5100,000 $100,000 $100,000 $100000 $100,000 Subtotal ,472 $1,544,000 $1,544,000 $10,000 5134,000 $100,000 $100000 $150,000 $150,000 5150,000 5150,000 5150,000 $150,000 5150,000 $150,000 includes TH&UG FUND 478 In Addition to Facilities Plan 0000 Professional Services 478 5140,000 5265000 510,000 $15,000 815,000 $25,000 $25,000 525,000 525,000 525,000 825,000 $25,000 $25,000 $25,000 Subtotal 478 $140,000 $265,000 $10,000 $15,000 $15,000 825,000 525,000 525,000 525,000 825,000 525,000 $25,000 525,000 525,000 Facility Improvements 2055 Phase One (0-6yrs) Professional services (Engineering) $371,091 $371,091 $371,091 Laboratory/Instrumentation $80,000 580,000 580,000 SCADA improvements $1,346,550 $1,346,550 5203,948 $988,000 $571,301 $571,301 Blower procurement $988,000 5988,000 Centrifuge procurement $650,000 5650,000 $650,000 Blower Bldg/E-power 52,860,000 $2,860,000 j $2,860,000 Solids Handing Building 53,929,000 $3,929,000 $2,000,000 51,929,000 UV Disinfection $3,534,000 53,534,000 $3,534,000 'Centrate Storage Tanks 1 $2,172,000 $2.172,000 • $2,172,000 Cake Storage Facility ; $2,564,000 $2,564,000 • $2,564,000 Grease Receiving Station $214,000 5214,000 5214,000 'Digestor Gas Piping $271,000 5271,000 , $271,000 Trickling Filter Door/Walkway Covers $50,000 550,000 $50,000 $72,800 5159,250 Replacement of secondary scumpurnts $72,800 $72,800 RAS Pump Improvements 5159250 $159,250 Odor Control Improvements/weather protection 51,162,000 $1,162,000 $581,000 $581,000 5195,000 - - Upgrade secondary clarifier launders $195,000 $195,000 Secondary clarifier spray nozzle installation $15,000 $15,000 $15,000 'Phase Two (7-12yrs) Retrofit Primary split box IIIIII 5428,000 $428,000 I 5428,000 Preplacement of Primary clarifier collector Mech. j♦ $2,275 000 ' 52,275,000 $2,275,000 Structural Repairs to Aeration Basins 1-3 MI $1,173,000 51,173,000 51,173,000 Refurbish Secondary Calder Bull -Gears MI $130,000 $130,000 -�� 5130,000 Replace Secondary Clarifier Skimmer Mech./scum box 111111 5362,000 5362,000 • 5362,000 New secondary Clarifier 53,370,000 $3,370,000 • 5118 000 $49000 $3,370,000 Retrofit Grit Storage hopper 5118,000 $118,000 Primary digestor Bldg Lighting Replacement $49,000 849,000 Refurbish Daft Air compressor/Pipelines $65,000 $5,384,000 $250,000 51,196,000 $68,000 565,000 55,384,000 5250,000 51,196,000 $68,000 $65,000 $250,000 568,000 I $1,196,000 $5,384,000 New Primary Digestor Raise intermediate Degritter Center Wall al New centrifuge to replace existinQunit Replacement of Waste Gas Flare Adiministration Bldg Modifications $500,000 $500,000 t $500,000 Laboratory/Instrumentation 1111 $85,0001 $85,000 $85,000 Subtotal 478, $36,086,691 536,086,691 $451,091 51,191,948 $9,615,301 52,500,301 81,558,050 55,317,000 $1,601,000 52,767,000 51,135,000 53,370,000 $1,196,000 155,384,000 TOTAL 478 836,226,691 536,351,691 ! 8461,091 81,206,948 ! $9,630,301 52,525,301 51,583,050 $5,342,000 81,626,000 82,792,000 I 81,160,000 $3,395,000 , 81,221,000 I 55,409,000 includes TH&UG 4/21/2005 page 1 of 1 Year Prin. 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 TOTAL Wastewater Debt Service EXISTING Wastewater Wastewate Wastewate Wastewate TOTAL Debt Debt Debt Debt Coverage Service Service Service Obligation EXISTING NEW NEW NEW New 30,080,064 12,575,525 4,000,000 3,000,000 5,000,000 46,655,589 1,525,080 866,967 2,885,635 1,417, 750 2,868,954 1,413,329 2,864,624 1,413,191 220,000 2,854,987 1,409,891 219,000 2,847,439 1,408,904 218,000 2,421,146 1,043,004 217,000 165,000 2,410,114 1,037,617 216,000 164,250 2,411,034 1,041,883 215,000 163,500 1,885,180 538,983 214,000 162,750 1,819,431 539,358 213,000 162,000 275,000 1,642,387 538,478 212,000 161,250 273,750 1,601,411 539,500 211,000 160,500 272,500 1,394,987 538,100 210,000 159,750 271,250 1,394,013 537,900 209,000 159,000 270,000 1,395,789 538,800 208,000 158,250 268,750 1,395,066 538,700 207,000 157,500 267,500 1,396,842 539,600 206,000 156,750 266,250 1,348,500 539,400 205,000 156,000 265,000 1,345,250 538,100 204,000 155,250 263,750 1,349,250 539,700 203,000 154,500 262,500 0 0 202,000 153,750 261,250 201,000 153,000 260,000 0 152,250 258,750 151,500 257,500 150,750 256,250 0 255,000 253,750 252,500 251,250 0 41,057,121 17,519,153 4,210,000 3,157,500 5,262,500 70,955,023 2,392,047 4,303,385 4,282,283 4,497,815 4,483,878 4,474,343- 3,846,150 ,474,343,3,846,150 3,827,980 3,831,417 2,800,913 3,008,789 2,827,865 2,784,911 2,574,087 2,569,913 2,569,589 2,565,766 2,565,442 2,513,900 2,506,350 2,508,950 617,000 614,000 411,000 409,000 407,000 255,000 253,750 252,500 251,250 Power Distribution Center (PDC) Powers each bank of modules. Heavy -gauge stainless steel enclosure mounted across the channel. Consists of a service entrance and a bus bar power distribution system for incoming power. Power is relayed from the bus bar to individual UV modules through stainless steel receptacles. All UV modules are individually ground -fault and overload protected for safety. Like all Trojan UV3000TMPlus components, the PDC can be installed outdoors and requires no shelter or air conditioning. Electronic Ballasts The vaF/ab/e-output, electronic ballast is mounted in its own Type 6P -rated enclosure within the module frame, Features "qui4 connect" electrical connectio poi tooling is by convection. • ActiCleann" Cleaning System The optional ActiCleanrM Chemical/Mechanical Cleaning' System consists of two components: Hydraulic System Center (HSC) 7e Hydraulic System Center (HSC) :tuates the cleaning system. Located ase to the channel in a stainless 'el enclosure, it contains the pump, Ives and ancillaries for the cleaning stem. Hydraulic fluid is pumped to inifolds located on the underside of Power Distribution Center (PDC). tend and retract hoses run from the inifolds to the wiper drive nn ranch 2 ActiC/eanTM Wiper Assembly A submersible wiper drive on each UV module drives the wiper carriage assembly along the module. Attached wiper canisters surround the quartz sleeves, and are filled with Trojan's ActiClean'' Gel, which uses food grade ingredients, contacts the lamp sleeves between the two wiper seals. Cleaning takes place while the lamps Ultra Violet Disinfection UV Modules UV lamps are mounted on modules installed in open channels. The lamf are enclosed in quartz sleeves, and positioned horizontally and parallel 1 water flow. A bank is made up of multiple modules placed in parallel positions. All ballast and lamp wiring runs in.cirtn !ha mnrhdn r. New Single Stage Centrifugal. Blowers BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. '1 ID ei For Meeting Of: May 3, 2005 PURPOSE: Consideration of a resolution authorizing the City Manager to execute documents and agreements pursuant to a loan application to the Washington Public Works Trust Fund (PWTF) for $4 million to implement the first project phase of construction improvements at the City of Yakima Wastewater Treatment Facility. SUBMITTED BY: Doug Mayo, Wastewater Division Manager Max Linden, Wastewater Division Utility Engineer CONTACT: Doug Mayo, 575-6077 Max Linden, 249-6814 SUMMARY EXPLANATION: The Wastewater Division of the City respectfully requests permission to apply for a $4 million (0.5% interest) construction loan from the state Public Works Trust Fund to supplement the 2003 Revenue Bond for improvements to the Wastewater Treatment Facility. This first group of projects recommended to be constructed were identified in the adopted 2004 Wastewater Facility Plan as priority improvements in the 0-6 year near term portion of the overall 20 year Facility Plan. Continued Resolution X Ordinance Contract Other: Funding Source: Fund 473 - Wastewater Operation Fund Approval for Submittal: City Manager STAFF RECOMMENDATION: Staff respectfully requests City Council approve this resolution authorizing the City Manager to execute documents and agreements pursuant to a loan application to the Washington Public Works Trust Fund (PWTF) for $4 million. BOARD/COMMISSION RECOMMENDATION: COUNCIL ACTION. Resolution adopted. RESOLUTION NO. R-2005-68 1 Along with revenues generated from the current wastewater rate structure additional funding assistance for this package of projects comes from bonds. Approximately $10 million in proceeds from sale of the Series B Bonds is being used to fund this package of projects and capital improvements involving the City's wastewater treatment plant. The improvements have been identified as part of the near term (0-6 yrs.) priority improvements in the 2004 Wastewater Facility Plan, and are being packaged as one project. This package includes having our engineer upgrade the plants SCADA system (currently under way), two bid packages to pre -purchase blowers and a centrifuge (ready to go out for bid) and a construction bid package planned to be advertised for bid in October of 2005. The construction package includes buildings for the pre -purchased equipment, emergency power, converting to Ultra Violet disinfection, adding a grease receiving facility, and upgrades to digester piping. The total cost of this will be approximately $13,796,000. With the $10 million bond available an additional $4,000,000 low interest loan (at 0.5%) from the Public Works Trust Fund is required to complete funding for this $13,796,000 package. This is the first opportunity we have had to apply for this low interest loan in several years and cannot afford to miss this opportunity. With existing revenues and payment of existing loans and bonds in 2008 the Wastewater Division will be able to make debt payments for the $4 Million loan without raising existing monthly wastewater service rates or connection charges. This package consisting of the bond and loan will provide funding for improvements to the Wastewater Treatment Plant through 2008, then additional funding for identified future required improvements to the Wastewater Treatment Plant over the 20 -year planning process would continue to be required. Long term financing strategies will include continuing to apply for grant and low interest funding, where appropriate, and maintaining current and equitable connection charges and fees so that growth can finance required system expansions 2