DATE: December 3, 2024
TO: Mayor and City Council
FROM: Director of Public Works
SUBJECT
Title
Adopt a Resolution Appropriating Funds from the Wastewater Operating Fund to 1) Prepay the 2016 Clean Water State Revolving Fund Loan Related to the Financing of the Recycled Water Project in a Not-to-Exceed Amount of $14.1 million and 2) Establish an Interfund Loan to Finance the Prepayment
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RECOMMENDATION
Recommendation
That Council adopts a resolution (Attachment II):
1. Appropriating funds from the Wastewater Operating Fund 610 and approving prepayment of the 2016 Clean Water State Revolving Loan (2016 SRF Loan) related to financing the Recycled Water Project in an amount not-to-exceed $14.1 million.
2. Establishing an interfund loan to finance the prepayment.
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SUMMARY
The City's Wastewater Enterprise periodically pursues loans to finance major capital projects. In 2016, the City sought a low interest loan through the Clean Water State Revolving (SRF) Loan program to finance the construction of a new recycled water system. Payments on the 2016 SRF Loan, secured by the Wastewater Enterprise, are paid by the newly established Recycled Water Enterprise. The 2016 SRF Loan has a current balance of approximately $14.1 million.
The City is now pursuing a loan through the federal Water Infrastructure Finance and Innovation Act (WIFIA) program to finance a set of wastewater capital projects, collectively known as the Water Resource Recovery Facility Improvements - Phase II Project (Phase II Project). The City seeks to maintain flexibility to operate the recycled water improvements, financed by the 2016 SRF loan, either as a separate enterprise or as part of the City's Water Enterprise in the future. As such, staff is recommending that the Wastewater Enterprise pay off the remainder of the 2016 SRF Loan to remove its debt obligation related to the Recycled Water Enterprise. Staff is also recommending the establis...
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