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HomeMy WebLinkAboutR-2006-059 Washington Public Works Trust Fund Loan Application AgreementA RESOLUTION RESOLUTION NO. R-2006- 59 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 $2,000,000 for improvements to the Wastewater Treatment Plant and other documents related to this project. WHEREAS, the City of Yakima has developed and adopted a plan for wastewater collection and treatment 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 $2 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 Page 1 of 2 NOW THEREFORE, 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 Manager is duly authorized to sign the application, loan agreements and amendments, and other documents relating to Wastewater Facility construction projects for the 2006 — 2007 Public Works Trust Fund loan program. ADOPTED BY THE CITY COUNCIL this 4th day of April, 2006 ATTEST: .Ci. City Clerk Page 2 of 2 David Edler, Mayor PUBLIC WORKS TRUST FUND CONSTRUCTION LOAN AGREEMENT NUMBER PW -07-962-019 CITY OF YAKIMA PART I: ENTIRE AGREEMENT This agreement, and incorporated attachments contains all terms and conditions agreed to by the WASHINGTON STATE PUBLIC WORKS BOARD (referred to as the "BOARD") and the CITY OF YAKIMA (referred to as the "BORROWER") and no other statements or representations, written or oral, shall be deemed a part thereof. This contract includes ATTACHMENT I: SCOPE OF WORK, which consists of a description of local project activities, certification of the project's useful life, estimated project costs and fund sources; and ATTACHMENT II: ATTORNEY'S CERTIFICATION. These attachments are, by this reference, incorporated into this agreement as though set forth fully herein. The PUBLIC WORKS BOARD and the BORROWER have executed this agreement as of the date and year last written below. APPROVED AS TO FORM ONLY This 6th Day of March, 2007 Rob McKenna Attorney General By: Signature on File Andrew Scott Assistant Attorney General BORROWER Print Name Date 9/-606/293 Federal Taxpayer Identification Number CITY OF YAKIMA Page 1 3/12/2007 PART II: INTRODUCTION This loan agreement is made and entered into by and between the BOARD, or its successor, and the BORROWER. Acting under the authority of Chapter 43.155 RCW, the BOARD has awarded the BORROWER a Public Works Trust Fund loan for an approved public works project. PART III: PURPOSE The BOARD and the BORROWER have entered into this agreement to undertake a local public works project that furthers the goals and objectives of the Washington State Public Works Trust Fund Program. The project will be undertaken by the BORROWER and will include the activities described in ATTACHMENT I: SCOPE OF WORK. The project must be undertaken in accordance with PART IV: TERMS AND CONDITIONS, and all applicable state and local laws and ordinances, which by this reference are incorporated into this agreement as though set forth fully herein. PART IV: TERMS AND CONDITIONS The parties to this agreement agree as follows: 4.01 Rate and Term of Loan The BOARD, using funds appropriated from the Public Works Assistance Account, shall loan the BORROWER a sum not to exceed $2,300,000. The interest rate shall be 0.5% per annum on the outstanding principal balance. The term of the loan shall not exceed 20 years, with the final payment due July 1, 2027. 4.02 Eligible Project Costs and Local Project Share The BORROWER pledges to use an amount of local funds as local project share of not less than 15% of the total eligible portion of the project cost not funded by federal or state grants as identified in ATTACHMENT I: SCOPE OF WORK. The amount of the local funds will be verified at project closeout. Any increase in the percentage of local funds may require an adjustment in the loan amount or interest rate charged, or both. The interest rate adjustment will apply to the remaining payments beginning the fiscal year of closeout. The BORROWER agrees to execute the Certified Closeout Amendment as an amendment to this agreement adjusting the loan amount or interest rate, as appropriate. Eligible project costs must consist of expenditures eligible under WAC 399-30-030 and be related only to project activities described in ATTACHMENT I: SCOPE OF WORK. Only those costs incurred after execution of this loan agreement can be reimbursed with Public Works Trust Fund monies. Expenditures made up to twelve (12) months prior to the execution of the loan agreement and verified at the time of project close out may be used as match for local project share. CITY OF YAKIMA Page 2 3/12/2007 4.04 Interest Earned on Public Works Trust Fund Monies All interest earned on Public Works Trust Fund Monies held by the BORROWER shall accrue to the benefit of the BORROWER and be applied to the eligible costs of the approved project. Benefits shall accrue in one of two ways: 1. Reduce the amount of the Public Works Trust Fund loan, or 2. Pay any part of eligible project costs that are in excess of ATTACHMENT I: SCOPE OF WORK estimates, if there is an overrun of project costs. The BORROWER shall establish procedures to ensure that all monies received from the Public Works Trust Fund loan can be readily identified and accounted for at any time during the life of this loan agreement. Such procedures shall consist of the establishment of a separate fund, account, sub -account or any other method meeting generally accepted accounting principles. In event of termination, all principal, interest earned on invested loan principal, and accrued interest payable shall be repaid in full within 30 days by the BORROWER. 4.05 Time of Perfouurance The BORROWER shall begin the activities identified within ATTACHMENT I: SCOPE OF WORK no later than three (3) months after loan agreement execution. No later than Twenty- four (24) months after loan agreement execution, the BORROWER must issue a Public Works Trust Fund Notice to Proceed, which follows the formal award of a construction contract. No later than forty-eight (48) months after the date of agreement execution the BORROWER must reach project completion. Failure to meet Time of Performance shall constitute default of this agreement. In the event of extenuating circumstances, the BORROWER may request, in writing, that the BOARD extend the deadline for project completion. The BOARD may, by a two-thirds vote, extend the deadline. The term of this agreement shall be for the entire term of the loan, regardless of actual project completion, unless terminated sooner as provided herein. 4.06 Repayment Loan repayment installments are due on July 1st of each year during the 20 -year fixed term of the loan. The first loan repayment is due July 1, 2008. Interest only will be charged for this payment if a draw is made prior to this date. All subsequent payments shall consist of principal and accrued interest due on July 1st of each year during the remaining term of the loan. Repayment of the loan under this agreement shall include an interest rate of 0.5% per annum based on a 360 day year of twelve 30 day months. Interest will begin to accrue from the date each warrant is issued to the BORROWER. The final payment shall be on or before July 1st, 2027, of an amount sufficient to bring the loan balance to zero. The BORROWER has the right to repay the unpaid balance of the loan in full at any time or make accelerated payments without penalty. CITY OF YAKIMA Page 4 3/12/2007 The BORROWER will repay the loan in accordance with the preceding conditions through the use of a check, money order, or equivalent means made payable to the Washington State Department of Community, Trade and Economic Development, or its successor. 4.07 Default in Repayment Loan repayments shall be made on the loan in accordance with Section 4.06 of this agreement. A payment not received within thirty (30) days of the due date shall be declared delinquent. Delinquent payments shall be assessed a monthly penalty beginning on the first (1St) day past the due date. The penalty will be assessed on the entire payment amount. The penalty will be one percent (1%) per month or twelve percent (12%) per annum. The same penalty terms shall apply at project closeout if the repayment of loan funds in excess of eligible costs are not repaid within 30 days as provided for in Section 4.03. The BORROWER acknowledges and agrees to the BOARD'S right, upon delinquency in the payment of any annual installment, to notify any other entity, creditors, or potential creditors of the BORROWER of such delinquency. The BORROWER shall be responsible for all legal fees incurred by the BOARD in any action undertaken to enforce its rights under this section. 4.08 Loan Security This loan is a revenue obligation of the BORROWER payable solely from the net revenue of the Sanitary Sewer system. Payments shall be made from the net revenue of the utility after the payment of the principal and interest on any revenue bonds, notes, warrants or other obligations of the utility having a lien on that net revenue. As used here, "net revenue" means gross revenue minus expenses of maintenance and operations. The BOARD grants the BORROWER the right to issue future bonds and notes that constitute a lien and charge on net revenue superior to the lien and charge of this loan agreement. This option may be used only if the entire project is a domestic water, sanitary sewer, storm sewer or solid waste utility project. Nothing in this section shall absolve the BORROWER of its obligation to make loan repayments when due, and to adjust rates, fees, or surcharges, if necessary, to meet its obligations under this agreement. 4.09 Recordkeeping and Access to Records The BOARD, the BOARD's agents, and duly authorized officials of the State shall have full access and the right to examine, copy, excerpt, or transcribe any pertinent documents, papers, records, and books of the BORROWER and of persons, firms, or organizations with which the BORROWER may contract, involving transactions related to this project and this agreement. The BORROWER agrees to retain all records pertaining to this project and this agreement for a period of six years from the date of project closeout. If any litigation, claim or audit is started before the expiration of the six-year period, the records shall be retained until all litigation, claims, or audit findings involving the records have been resolved. CITY OF YAKIMA Page 5 3/12/2007 4.10 Reports The BORROWER, shall furnish the BOARD with quarterly progress reports, a Certified Closeout Amendment and other periodic reports at such times and on such forms as the BOARD may require, pertaining to the activities undertaken pursuant to this agreement. Failure to file periodic reports as requested may result in termination of this agreement as per Section 4.13. 4.11 Indemnification The BORROWER will defend, protect, indemnify, save, and hold harmless the BOARD, and the state of Washington from and against any and all claims, costs, damages, expenses, or liability for any or all injuries to persons or tangible property, arising from the acts or omissions of the BORROWER or any of its contractors or subcontractors, or any employees or agents in the performance of this agreement, however caused. In the case of negligence of both the BOARD and the BORROWER, any damages allowed shall be levied in proportion to the percentage of negligence attributable to each party. 4.12 Amendments, Modifications, Assignments, and Waivers BORROWER may request an amendment to this agreement, which does not increase the amount of the loan, for the purpose of modifying the ATTACHMENT I: SCOPE OF WORK or for extending the time of performance as provided for in Section 4.05. Neither this agreement nor any claims arising under this agreement may be transferred or assigned by the BORROWER without prior written consent of the BOARD. No conditions or provisions of this agreement may be waived unless approved by the BOARD in writing. No amendment or modification shall take effect until approved in writing by both the BOARD and the BORROWER and attached hereto. 4.13 Termination for Cause If the BORROWER fails to comply with the terms of this agreement, or fails to use the loan proceeds only for those activities identified in ATTACHMENT I: SCOPE OF WORK, the BOARD may terminate the agreement in whole or in part at any time. The BOARD shall notify the BORROWER in writing of its determination to terminate, the reason for such termination, and the effective date of the termination. Nothing in this section shall affect the BORROWER's obligation to repay the unpaid balance of the loan. 4.14 Termination For Convenience The BOARD may teuninate this agreement in the event that federal or state funds are no longer available to the BOARD, or are not appropriated for the purpose of meeting the BOARD'S obligations under this agreement. Termination will be effective when the BOARD sends written notice of termination to the BORROWER. Nothing in this section shall affect BORROWER obligations to repay the unpaid balance of the loan. CITY OF YAKIMA Page 6 3/12/2007 4.15 Governing Law and Venue This agreement shall be construed and enforced in accordance with, and the validity and performance hereof shall be governed by, the laws of the state of Washington. Venue of any suit between the parties arising out of this agreement shall be the Superior Court of Thurston County, Washington. The prevailing party is entitled to recover costs in accordance with Washington State Law (Chapter 4.84 RCW). 4.16 Severability If any provision under this agreement or its application to any person or circumstances is held invalid by any court of rightful jurisdiction, this invalidity does not affect other provisions of the agreement which can be given effect without the invalid provision. 4.17 Project Completion and Closeout Amendment The BORROWER shall initiate a Closeout Amendment when the activities identified in ATTACHMENT I: SCOPE OF WORK are completed. The BOARD will supply the BORROWER with the Certified Closeout Amendment documents upon request. The BORROWER will provide the following information to the BOARD: 1. A certified statement of the actual dollar amounts spent, from all fund sources, in completing the project as described. 2. A certified statement that the project, as described in the Loan Agreement's Scope of Work, is complete and has been designed/constructed to required standards. 3. Certification that all costs associated with the project have been incurred. Costs are incurred when goods and services are received and/or contract work is performed. 4. Provide status of performance measures identified in ATTACHMENT I: SCOPE OF WORK. 5. In accordance with Section 4.03 of this agreement, the BORROWER will submit, together with the Certified Closeout Amendment, a request for a sum not to exceed the loan amount or refund of any excess loan funds. Any final disbursement shall not occur prior to the completion of all project activities. 6. Repayment of excess loan funds disbursed to the BORROWER must be made within 30 days of completion of the Certified Closeout Amendment. 4.18 Contractor Requirement The BORROWER shall be responsible to ensure that their contractor(s) are in compliance with the Department of Revenue and the Department of Labor & Industries requirements. CITY OF YAKIMA Page 7 3/12/2007 4.19 Audit Audits of the BORROWER'S project activities may be conducted by the Municipal Division of the State Auditor's Office in accordance with state law and any guidelines the Department of Community, Trade and Economic Development, or its successor, may prescribe. Payment for the audit shall be made by the BORROWER. 4.20 Project Signs If the BORROWER displays, during the period covered by this agreement, signs or markers identifying those agencies participating financially in the approved project, the sign or marker must identify the Washington State Public Works Trust Fund as a participant in the project. 4.21 Nondiscrimination Provision During the performance of this contract, the BORROWER shall comply with all federal and state nondiscrimination laws, including, but not limited to Chapter 49.60 RCW, Washington's Law Against Discrimination, and 42 U.S.C. 12101 et seq, the Americans with Disabilities Act (ADA). In the event of the BORROWER'S noncompliance or refusal to comply with any applicable nondiscrimination law, regulation, or policy, this contract may be rescinded, canceled, or terminated in whole or in part, and the BORROWER may be declared ineligible for further contracts with the BOARD. The BORROWER shall, however, be given a reasonable time in which to cure this noncompliance. 4.22 Historical and Cultural Artifacts Borrower agrees that Borrower is legally and fmancially responsible for compliance with all laws, regulations, and agreements related to the preservation of historical or cultural artifacts and agrees to hold harmless the State of Washington in relation to any claim related to such historical or cultural artifacts discovered, disturbed, or damaged as a result of Borrower's public works project funded under this agreement. The BORROWER agrees that, unless Borrower is proceeding under an approved historical and cultural artifacts monitoring plan or other memorandum of agreement, if historical or cultural artifacts are discovered during construction, the BORROWER shall immediately stop construction and notify the local historical preservation officer and the state's historical preservation officer at the Washington State Department of Archaeology and Historic Preservation (DAHP). The BORROWER shall require this provision to be contained in all contracts for work or services related to ATTACHMENT I: SCOPE OF WORK. In addition to the requirements set forth in this agreement Borrower agrees to comply with Revised Code of Washington (RCW) 27.44 regarding Indian Graves and Records; RCW 27.53 regarding Archaeological Sites and Resources; RCW 68.60 regarding Abandoned and Historic Cemeteries and Historic Graves; and, Washington Administrative Code (WAC) 25- 48 regarding Archaeological Excavation and Removal Peri -nits. CITY OF YAKIMA Page 8 3/12/2007 In addition to the requirements set forth in this agreement Borrower shall, in accordance with Executive Order 05-05, coordinate with DAHP, including any recommended consultation with any affected tribe(s), during project design and prior to construction to determine the existence of any tribal cultural resources affected by the proposed public works project. Borrower agrees to avoid, minimize, or mitigate impacts to the cultural resource as a continuing pre -requisite to receipt of funds under this agreement. Borrower agrees to furnish to the Board copies of any monitoring plan or agreement arising from Borrower's coordination and consultation with DAHP or an affected tribe. Failure by Borrower to fully comply with the requirements set forth in this provision to the satisfaction of the Board shall result in a suspension of loan disbursements or termination of this agreement if not timely cured. PART V: SPECIAL CONDITION None PART VI: SPECIAL ASSURANCES The BORROWER assures compliance with all applicable state and local laws, requirements, and ordinances as they pertain to the design, implementation, and administration of the approved project. Of particular importance are the following: 5.01 Competitive Bidding Requirements The BORROWER shall comply with the provisions of RCW 43.155.060 regarding competitive bidding requirements for projects assisted in whole or in part with money from the Public Works Trust Fund program. 5.02 Eligible Project Costs The BORROWER assures compliance with WAC 399-30-030 which identifies eligible costs for projects assisted with Public Works Trust Fund loans. CITY OF YAKIMA Page 9 3/12/2007 PUBLIC WORKS TRUST FUND ATTACHMENT 1: SCOPE OF WORK LOAN NUMBER PW -07-962-019 YAKIMA REPLACEMENT OF CHLORINE GAS W/ UV DISINFECTION 1. Provide a clear description of the project to be financed in part by a Public Works Trust Fund loan. (Attach additional sheets if necessary): The existing gaseous chlorine disinfection system and gaseous sulfur dioxide dechlorination system will be replaced with a new UV disinfection system to complete the first phase of the Yakima Regional WWTP — Phase I Facility Improvements that are now under construction. A new UV disinfection process will be constructed in one half of the existing chlorine contact basin and will house the following facilities and equipment: o Three new channels and associated hydraulic control structures. o Low-pressure, high output UV lamp systems sized and configured for meeting effluent disinfection limits at peak flow conditions. o Associated electrical and control systems. o Relocated plant process water pumps. The City's engineering consultant Black & Veatch has already designed the Replacement of Chlorine Gas with Ultraviolet Disinfection, but sufficient funding was not available at the time of the Bid opening to be included in the Yakima Regional WWTP — Phase I Facility Improvements that are currently beginning construction. This project will be added to the current construction project as a change order. Document2 SCOPE OF WORK Page 2 PW -07-962-019 2. Identify the project's performance measure. (See examples 1-3 below.) What are you Measuring Completion of this project will eliminate on-site storage and handling of chlorine gas and sulfur dioxide. Amount of Change 100% elimination of gaseous chlorine and sulfur dioxide. Expected date to reach Performance Measure — Month/Year March 2008 Document2 1 01/29/2007 15:23 5095756116 SCOPE OF WORK Page 3 PW -07-962-019 VAKIMA 4JWTP PAGE 02/02 3. The term of this loan will be based on an engineer's certification of the expected useful life of the improvements, as stated below, or 20 years, whichever is less. If the local government prefers the term of its loan to be less than either 20 years or the useful life of the improvements, the preferred loan term should be indicated: yeaxs- 4. 1, V0.6 e v - qt 3 tf/„,( , licensed engineer, certify that the average expected useful life for the improvements described above is 20 - years, Signed: Date: Telephone: (2-06- 31Y- 38 g7 Professional taagixieer License Number Document2 SCOPE OF WORK Page 4 PW -07-962-019 Estimated Project Costs: Engineering Environmental Review Land/R-O-W Acquisition Public Involvement/Information Other Fees Construction Construction Inspection Contingency (10%) 1. Other (Specify) 2. Other (Specify) 3. Other (Specify) TOTAL ESTIMATED COSTS Anticipated Fund Sources: A. Federal Grants State Grants Complete Building Permit Taxes @ 8.2% O&M manual Prep. Docs/Change Order B. Locally Generated Revenue General Funds Capital Reserves Other Fund Rates Assessments (LID, RID, ULID) Special Levies Federal Loan(s) from: (identify all) State Loan(s) from: (identify all) Other: (identify sources) TOTAL LOCAL REVENUE C. PUBLIC WORKS TRUST FUND LOAN Document2 Total Costs $ NA $ 10,000 $ NA $ 17,000 $ 2,310,988 $ 90,000 $ 231,099 $ 177,201 $ 14,594 $ 20,000 $ 2,870,882 570,882 $ nuawnooa 0 0 570,882 $ 2,300,000 J SCOPE OF WORK Page 5 PW -07-962-019 Calculating Local Percentage: Notes: 1. Grant funds cannot be counted as local match. Calculate as follows: Total Local Revenue PWTF Loan + Total Local Revenue The local contribution must be at least: — Local Percentage 19.9% Five percent (5%) for a loan interest rate of 2% Ten percent (10%) for a loan interest rate of 1% Fifteen percent (15%) for a loan interest rate of 0.5% Document2 / YAKIMA PW -07-962-019 Loan Security Please indicate which option will be used for securing repayment of your loan and return this with your completed Scope of Work. 1. General Obligation: The loan will be secured by general obligation of the BORROWER. OR 2. Revenue Obligation: The loan will be secured by utility revenue payable solely from the utility system indicated below. Payments shall be made from the net revenue of the utility after the payment of the principal and interest on any revenue bonds, notes, warrants or other obligations of the utility having a lien on that net revenue. As used here, "net revenue" means gross revenue minus expenses of maintenance and operations. The BOARD grants the BORROWER the right to issue future bonds and notes that constitute a lien and charge on net revenue superior to the lien and charge of this loan agreement. Please choose one of the following utility systems: Water /Sanitary Sewer (Wastewater) Stormwater Water/Sanitary Sewer Stormwater/Sanitary Sewer Solid Waste NOTE: This option may be used only if the entire project is a domestic water, sanitary sewer, storm sewer or solid waste utility project. BORROWERS performing a storm sewer project that have not created a storm sewer utility or a combined sanitary sewer/storm sewer utility may not use this option. Projects providing for a mixture of bridge, road, domestic water, sanitary sewer, and storm sewer activities may not use this option. OR 3. Local Improvement District: Pursuant to RCW 35.51.050, the BORROWER pledges to repay this loan from assessments collected from a Local Improvement District, Local Utility District or other similar special assessment district in which the improvements financed by this loan are located. The name of the special assessment district is Public Works Trust Fund ATTACHMENT I1: ATTORNEY'S CERTIFICATION I, l ei f.'e- , hereby certify: am an attomey at law admitted to practice in the State of Washington and the duly appointed attomey of the( (the LOCAL GOVERNMENT); and I have also examined any and all documents and records which are pertinent to the loan agreement, including the application requesting this financial assistance. Based on the foregoing, it is my opinion that: 1. The LOCAL GOVERNMENT is a. public body, properly constituted and operating under the laws of the State of Washington, empowered to receiveand expend federal, state and local funds, to contract with the State of Washington, and to receive and expend the funds involved to accomplish the objectives set forth in their application. 2. The LOCAL GOVERNMENT is empowered to accept the Public Works. Trust Fund financial assistance and to provide for repayment of the loan as set forth in the loan agreement. 3. There is currently no litigation in existence seeking to enjoin the commencement or completion of the above-described public facilities project or to enjoin the LOCAL GOVERNMENT from repaying the Public works Trust Fund loan extended by the DEPARTMENT with respect to such project. The LOCAL GOVERNMENT is not a party to litigation which will materially affect its ability to repay such loan on the terms contained in the loan agreement. 4. Assumption of this obligation would not exceed statutory and administrative rule debt limitations applicable to the LOCAL GOVERNMENT. Name Z,00 S. 34 ST. (A -k t x.,44 Lt)la °(BRaj Address 3/Zo 1° Sit. ass 4s r� LLr( BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. %8 For Meeting Of: April 4, 2006 ITEM TITLE: 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 $2 million to replace our current chlorine disinfection system with Ultra Violet disinfection and complete the implementation of 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 $ 2 million (0.5% interest) construction loan from the state Public Works Trust Fund to supplement revenue generated from the current wastewater rate structure for replacement of the current chlorine disinfection system with Ultra Violet disinfection. 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 $2 million. BOARD/COMMISSION RECOMMENDATION: COUNCIL ACTION: Resolution adopted. RESOLUTION NO. R-2006-59 1 Continued from previous page Currently the following improvement projects have been identified, prioritized, bid and awarded for constructionto begining this spring. • Centrifuge Dewatering in new solids handling building with odor control — A new centrifuge is required to maintain compliance when the older centrifuge is out of service. 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 be used for redundancy requirements for both dewatering and thickening. • Standby Power Capacity Addition - The emergency power system supplies a backup source of power to assure that minimum treatment is provided during a power failure. An additional generator set is required to operate the minimum treatment process. • New Blowers in New Blower Building — Existing VFDs that operate the four 400 horsepower blowers are far Tess efficient 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. In addition, to redundancy projects the following projects have been identified as critical projects for renewal, safety and efficiency of operations. • Replace SCADA System — Major SCADA (communications) system components will be replaced, including PLCs, computer hardware and software, HMI software, and historical data logging software for better reliability and safety. • Upgrade the WWTP power Distribution system to be more reliable and efficient. • Digester piping improvements will allow existing bottlenecks and blockages to be resolved for better digester operation and safety. The total cost for the project above is approximately $14,240,000. The costs were identified in the adopted Draft 2004 Wastewater Facility Plan. Approximately $2,500,000 has been appropriated and expended on Engineering design costs to date leaving approximately $11,850,000 to complete this project. Budget appropriations for 2006 and projected revenues for 2007 and 2008 cover the remaining expenses to complete this phase and are being financed with $10 million from a 2003 Series B Revenue Bond and revenues generated from the current wastewater rate structure. This projects were identified in the facility planning process as the most critical facilities requiring mandatory redundancy along with Ultra Violet (UV) disinfection. The Wastewater division does not have sufficient funding to construct the UV disinfection system at present. In 2008 a major loan will be paid for allowing the division to borrow an additional $2,000,000 to finance the remainder of the UV system. The Wastewater Division can apply now for a $2,000,000 low interest loan from the Public Works Trust Fund, PWTF, in May 2006, and make debt payments in 2007 without raising rates. The design for the Ultra Violet disinfection system is complete and obtaining a loan will complete the funding package 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