HomeMy WebLinkAbout05/04/2010 08 50% Principle Forgiveness Loan from the DOE State Revolving Fund; WA Public Works Trust Fund Loan •
• BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No. O
For Meeting of May 4, 2010
ITEM TITLE: Consideration of a resolution authorizing execution of documents and
agreements pursuant to a 50% principle forgiveness loan offer from the
Department of Ecology State Revolving Fund (SRF) totaling $1 million and for a
loan application to the Washington Public Works Trust Fund (PWTF) for $5
million.
SUBMITTED BY: Dave Schneider, Assistant Wastewater Manager &
Max Linden, Wastewater Utility Engineer
CONTACT PERSON /TELEPHONE: Max Linden, Wastewater Utility Engineer,(509) 249 -6814
SUMMARY EXPLANATION:
Staff respectfully requests permission from City Council for the consideration of a resolution to
accept a 50% principle forgiveness loan offer from the Department of Ecology and apply for a
. $5 million (0.5% interest) construction loan from the PWTF.
• The Yakima Regional Wastewater Treatment Plant needs to replace its aging methane gas
system. Methane is used to fire the facility boilers and heat digesters and plant buildings. The
boilers are continually breaking down due to poor gas conveyance and moisture issues. The
Wastewater Division wishes to implement a co- generation or fuel cell process at the plant to
better utilize the methane generated at the facility. These processes generate electricity and
reduce or eliminate methane emissions thus complying with new green house gas standards to
be required for WWTPs. An application was submitted to the Department of Ecology for
approximately $5 million to fund this project. We did not receive our full funding request, but
were offered a $1 million 50% principle forgiveness loan. In addition, the Wastewater Division
will submit a loan application to PWTF for $5 million. The estimated total cost of this project is
$8.3 million. A substantial existing loan will be paid in 2011 allowing the Wastewater Division to
finance these loans without increasing debt service for this project.
Resolution X Ordinance _ Contract Other (Specify)
Funding Source: Fund 473 — Wastewater Operations Fund
APPROVED 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 Department
of Ecology SRF 50% principle forgiveness loan totaling $1 million, and loan application to the
PWTF for $5 million.
0 BOARD /COMMISSION RECOMMENDATION:
COUNCIL ACTION:
® RESOLUTION NO. R -2010-
•
A RESOLUTION authorizing, the City Manager to execute documents and agreements
pursuant to a loan and grant offer from the Department of Ecology of
50% principle forgiveness ban totaling $1 million and to a loan
application to the Washington Public Works Trust Fund (PWTF) for. $5
million.
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
f or Washington State Public Works Trust Fund loan financing; and
WHEREAS, a 50% principle forgiveness loan offer for approximately $1 million to fund a
portion of this project was received from the Department of Ecology; and
WHEREAS, another $5 million is required to fund this project; and
WHEREAS, the amount of local match funds provided will allow the City a generous
interest rate of 0.5% on the $5 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
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 Department of Ecology State
Revolving fund and loan agreement with the Public Works Board, provided that the terms and
conditions for a State Revolving Fund and Public Works Trust Fund agreement are satisfactory
to all parties; now, therefore
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA:
The City Manager is hereby authorized to execute all applicable documents and agreements
pursuant to a 50% principle forgiveness loan offer from the Department of Ecology totaling $1
million and to a loan application to the Washington Public Works Trust Fund for $5 million.
ADOPTED BY THE CITY COUNCIL this 4 of May, 2010.
Micah Cawley, Mayor
ATTEST:
City Clerk
•