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Capital Loan Notes (SRF Program) $18M Upper Bee Branch Creek Railroad Culverts Project Stormwater Copyrighted February 18, 2019 City of Dubuque Public Hearings # 4. ITEM TITLE: Upper Bee Branch Creek Railroad Culverts Project Stormwater Management Utility Revenue Capital Loan Notes (SRF) Program) SUMMARY: Proof of publication on notice of public hearing to consider approval of the suggested proceedings for the public hearing on the issuance of Stormwater Utility Revenue Capital Loan Notes (State Revolving Loan Program) prepared by Bond Counsel and to present a resolution for City Council to adopt entitled "Resolution Instituting Proceedings to Take Additional Action for the Authorization of a Loan and Disbursement Agreement and the Issuance of Not to Exceed $18,000,000 Stormwater Management Utility Revenue Capital Loan Notes; and the City Manager recommending approval. RESOLUTION Instituting proceedings to take additional action for the authorization of a Loan and Disbursement Agreement and the issuance of Not-to-Exceed $18,000,000 Stormwater Management Utility Revenue Capital Loan Notes SUGGESTED DISPOSITION: Suggested Disposition: Receive and File; Adopt Resolution(s) ATTACHMENTS: Description Type NNM Memo City Manager Memo Staff Memo Staff Memo Letter of Instructions_Ahlers Supporting Documentation Resolution Resolutions THE CITY OF Dubuque � All-America City UB E � r � Mas terpiece on the Mississippi Zoo,.2012.Zo13 TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Proceedings to Hold Public Hearing on the Issuance of Not to Exceed $18,000,000 Storm Water Utility Revenue Capital Loan Notes (State Revolving Loan Fund Program) for Upper Bee Branch Creek Railroad Culverts Project and Midtown Transfer and Catfish Creek Watershed Pervious Alley Construction Sponsorship Project DATE: February 13, 2019 Finance Director Jean Nachtman is recommending City Council approval of the suggested proceedings for the public hearing on the issuance of Stormwater Utility Revenue Capital Loan Notes (State Revolving Loan Program) prepared by Bond Counsel and to present a resolution for City Council to adopt entitled "Resolution Instituting Proceedings to Take Additional Action for the Authorization of a Loan and Disbursement Agreement and the Issuance of Not to Exceed $18,000,000 Stormwater Management Utility Revenue Capital Loan Notes." Over 60% of Dubuque residents live or work in the Bee Branch Creek Watershed. There have been six Presidential Disaster Declarations related to flooding in this watershed since 1999. The Upper Bee Branch Creek Railroad Culverts Project (Project) represents the final contract associated with the Bee Branch Creek Restoration Project, a major component of the Bee Branch Creek Watershed Flood Mitigation Project. The improvements will allow for the efficient flow of floodwaters from the recently competed Upper Bee Branch Creek improvements, through the railroad yard on GarField Avenue, to the Lower Bee Branch Creek. The Upper Bee Branch Culvert project cost is estimated to be $30,208,431 and project funding includes $10,563,823 HUD CDBG National Disaster Resiliency Grant, State Revolving Fund Loan $16,300,000, and the Flood Mitigation Grant (State Sales Tax Increment) $3,344,608. In August of 2017, the City Council adopted Resolution 294-17 authorizing the submission of a Clean Water SRF Sponsorship program application in order to secure $1,000,000 in funding for green alley construction in the Bee Branch and Catfish Creek watersheds. Funding would also be used to pay for the pervious drives associated with the proposed Midtown Transfer. While funding was initially deferred due to the number of applications, in May of 2018 the City's application was approved. The sponsorship program is made possible through Clean Water State Revolving Fund (CWSRF) loans. On a typical CWSRF loan, the City would borrow the principal using it to construct the improvements and repays principal (the loan) plus interest and fees. On a CWSRF loan with a sponsored project, the principal loan is increased to pay for both the original improvement project and the sponsored project. However, through an interest rate reduction, the interest on the loan is reduced such that the City does not pay any more than they would have for just the original improvements. Instead, two water quality projects are completed for the cost of one. The maximum amount allowed for sponsored project is the lesser of 10°k of the amount of the loan request at the time of the sponsored project application, 10°k of the FINAL amount drawn on the loan, or the calculated amount determined by the reduction of the interest rate by up to 1°k. The total estimated State Revolving Fund Loan for the Upper Bee Branch Creek Railroad Culverts Project is $18,000,000, which includes $16,300,000 for the project, $1 ,000,000 as a Clean Water SRF Sponsorship program for green alley construction in the Bee Branch and Catfish Creek watersheds, and $700,000 in contingency funds for loan issuance costs and change in project costs. The proceedings have been prepared on the basis that no objections or petitions calling for an election on the bond proposal will be filed with the City Clerk. If there are objections, we will need to summarize them. The Mayor will then declare the hearing on the issuance of said bonds closed. Immediately following, and assuming no petitions have been filed, a resolution is to be introduced and adopted entitled "Resolution Instituting Proceedings to Take Additional Action for the Authorization of a Loan and Disbursement Agreement." In the event the Council decides to abandon the proposal to issue said bonds, then the form of resolution included in said proceeding should not be adopted. In this event, a motion needs to be adopted to the effect that such bond proposal is abandoned. I concur with the recommendation and respectfully request Mayor and City Council approval. �t�.�'2t+`�'t �tvh Michael C. Van Milligen MCVM/jml Attachment cc: Crenna Brumwell, City Attorney Cori Burbach, Assistant City Manager Teri Goodmann, Assistant City Manager Jennifer Larson, Budget Director Jean Nachtman, Finance Director THE CITY OF DUUUC1Ue DuB E �� I � � Ie Masterpiece on the Mississippi �oo,•zo,z•�o„ TO: Michael C. Van Milligen, City Manger FROM: Jean Nachtman, Finance Director SUBJECT: Proceedings to Hold the Public Hearing on the Issuance of Not to Exceed $18,000,000 Storm Water Utility Revenue Capital Loan Notes (State Revolving Loan Fund Program) for Upper Bee Branch Creek Railroad Culverts Project and Midtown Transfer and Catfish Creek Watershed Pervious Alley Construction Sponsorship Project DATE: February 12, 2019 INTRODUCTION: The purpose of this memorandum is to provide suggested proceedings for a public hearing on the issuance of a not to exceed $18,000,000 Stormwater Revenue Capital Loan Notes. The proceedings of which will be used to pay the costs for the Upper Bee Branch Creek Railroad Culverts Project and a sponsorship project for Midtown Transfer and Catfish Creek Watershed Pervious Alley Construction Project. A letter from attorney Kristin Cooper detailing information on the public hearing is enclosed. DISCUSSION The Upper Bee Branch Creek Railroad Culverts Project (Project) represents the final contract associated with the Bee Branch Creek Restoration Project. The improvements will allow for the efficient flow of floodwaters from the recently competed Upper Bee Branch creek improvements, through the railroad yard on Garfield Avenue, to the Lower Bee Branch Creek. Since 2007, the City has been corresponding with the owner of the Dubuque Works rail yard at 506 Garfield Avenue. During that time, the ownership of the railroad changed hands two times. After years of negotiations, the City has reached an agreement with Canadian Pacific and can move forward with the project. The Project involves the installation of six, 8-foot diameter culverts under the railroad tracks using tunneling methods. This will allow the railroad operation to continue unimpeded by the construction of the Project. In addition to the culverts under the railroad tracks, the Project includes the extension of the box culverts installed under Gartield Avenue as part of the Upper Bee Branch Creek improvements to a new buried junction chamber, or transition structure where the flow from the Upper Bee Branch will join with flow from the Bee Brach storm sewer from Pine Street. The combined flow will then flow under the railroad track through the tunneled pipes mentioned previously into the Lower Bee Branch Creek. An outfall structure will be constructed where the water will flow inter the Lower Bee Branch. This will include a headwall for the culverts, a flood gate with the pump station to control the depth of water in the Upper Bee Branch Creek, topped by a concrete pad that will allow access to the culverts and gate from above wile also providing a plaza area for citizens to overlook the Lower Bee Branch Creek. The Project also incorporated the existing box culverts underneath the railroad tracks into the flood control system. The design will allow the existing box culverts to serve dual functions: flood control and as a hike/bike function as a spillway should floodwaters overflows within the Upper Bee Branch Creek. It will also serve as a surface access to the existing box culverts for maintenance and for a public hike/bike path. In addition to retaining wall, the Project also includes lighting and security cameras. The project funding is summarized as follows: Funding Source Amount HUD CDBG NDR Grant $10,563,823 U.S. EPA Clean Water SRF Loan 16,300,000 �,z State Sales Tax Increment Funding 2,629,949 State Sales Tax Increment Bond 714,659 Total $30,208,431 �$16.3 million is the maximum amount of SRF debt the City will utilize. Through the FY20 budget process, the City is looking at using stormwater utility fee revenue to minimize the amount of the SRF debt. zThe U.S. EPA Clean Water SRF loan will be paid back using stormwater utility fee revenue. In August of 2017, the City Council adopted Resolution 294-17 authorizing the submission of a Clean Water SRF Sponsorship program application in order to secure $1 ,000,000 in funding for green alley construction in the Bee Branch and Catfish Creek watersheds. Funding would also be used to pay for the pervious drives associated with the proposed Midtown Transfer. While funding was initially deferred due to the number of applications, in May of 2018 the City's application was approved. The sponsorship program is made possible through Clean Water State Revolving Fund (CWSRF) loans. On a typical CWSRF loan, the City would borrow the principal using it to construct the improvements and repays principal (the loan) plus interest and fees. On a CWSRF loan with a sponsored project, the principal loan is increased to pay for both the original improvement project and the sponsored project. However, through an interest rate reduction, the interest on the loan is reduced such that the City does not pay any more than they would have for just the original improvements. Instead, two water quality projects are completed for the cost of one. The maximum amount allowed for sponsored project is the lesser of 10°k of the amount of the loan request at the time of the sponsored project application, 10°k of the FINAL amount drawn on the loan, or the calculated amount 2 determined by the reduction of the interest rate by up to 1 h. The chart below displays a visual on how a sponsorship project is financed with no additional overall cost. S�a,av,av ormopai Se,000,000 ����ane ta,000000 p �a 5- 5]G9mlllio�P45Wloa� 363n o'�soza Est Loan Funtletl ImprovemeMs Principal Amoun[ Upper Bee Branch Creek Railroad Culverts Project $iQ30Q000 Loan Principal for Green Alleys $ 1,000,000 Total $17,30Q000 The recommendation is to approve the selling of up to $iQ00Q000 in Stormwater Utility Revenue Capital Loan Notesto provide contingency funding. ACTION TO BE TAKEN I respectfully recommend the holding ofthe public hearing and apprwe the resolution. Attachments cr Crenna Brumwell, City Attorney Teri Goodmann, Assistant City Manger Cori Burbach, Assistant City Manger Jenny Larson, Budget Director Gus Psihoyos, City Engineer Deron Muerhing Civil Engineer 3 Ahlers&Cooney,P.C. A H L E R S C O O N E Y Attorneys at Law 100 Court Avenue, Suite 600 A T T O R N E Y S Des Moines, lowa 50309-2231 Phone: 515-243-7611 Fax: 515-243-2149 www.ahlerslaw.com Kristin B. Cooper 515.246.0330 kcooper@ahlerslaw.com January 30, 2019 VIA EMAIL Ms. Jenny Larson Budget Director City of Dubuque 50 West 13th Street Dubuque, Iowa 52001 RE: Dubuque, Iowa-Not to Exceed $18,000,000 Stormwater Management Utility Revenue Capital Loan Notes (State of Iowa Revolving Fund Loan) Dear Jenny: Enclosed are proceedings for the day of the public hearing scheduled for February 18, 2019. The hearing procedure is prepaxed on the assumption that no petition for election on the proposed action of the Council to issue the Notes will be filed. If no petition is filed, the Council should proceed to adopt the resolution instituting proceedings to take additional action for the issuance of the Notes. In the event the Council decides to abandon the proposal to issue the Notes, then the resolution should not be adopted. We would suggest that, in this event, a motion merely be adopted to the effect that the Note proposal is abandoned. To qualify, a petition must be signed by at least three percent(3%) of the registered voters of the City. If such a petition has been received and if the Council decides not to abandon the proposal to issue said Notes, a form of resolution should be introduced and adopted, to adjourn the matter to permit preparation of the resolution to call an election. Please see that we are advised as soon as possible if a petition is filed bearing signatures of a sufficient number of eligible electors. The Resolution taking additional action also acknowledges and approves of the terms of the SRF loan program. As you know, the terms of the loan being offered to the City are established primarily by reference to two external sources: the Authority's administrative rules governing the SRF Program and, to a lesser extent, by the terms of the bonds issued by the Autharity to fund the City's loan. These loan terms are not negotiable by individual borrowers, and the City's decision to participate in the SRF Program effectively commits it to accept a loan on the stated terms. WISHARD & BAILY - 1888; GUERNSEY $i BAILY - 1893; BAILY $ STIPP - 1901; STIPP, PERRY, BANNISTER & STARZINGER - 1914; BANNISTER, CARPENTER, AHLERS Ei COONEY - 1950: AHLERS, COONEY� DORWEILER, ALLBEE, HAYNIE H� SMITH - 1974; AHLERS, COONEY, DORWEILER, HAYNIE, SMITH Si ALLBEE, P.C. - 1990 January 30, 2019 Page 2 Also enclosed is an extra copy of the proceedings to be filled in as the original and certified back to this office. If you have any questions concerning the enclosed proceedings or the SRF Program, please do not hesitate to contact me. Very truly yours, Ahlers & Cooney, P.C. � Kri tin Billingsley Cooper FOR THE FIRM KBC:seb Enclosures cc: Jean Nachtman, Finance Director, City of Dubuque Tami Lansing, Assistant Finance Director, City of Dubuque Anita Gonyier, Confidential Account Clerk, City of Dubuque Tionna Pooler, Independent Public Advisors, LLC Deron L. Muehring, Civil Engineer, City of Dubuque Kevin S. Firnstahl, City Clerk, City of Dubuque 01�51437-1\10422-198 ITEMS TO INCLUDE ON AGENDA CITY OF DUBUQUE, IOWA Not to Exceed $18,000,000 Stonnwater Management Utility Revenue Capital Loan Notes (State of Iowa Revolving Fund Loan) • Public hearing on the authorization of a Loan and Disbursement Agreement and the issuance of Notes to evidence the obligation of the City thereunder. • Resolution instituting proceedings to take additional action. NOTICE MUST BE GIVEN PURSUANT TO IOWA CODE CHAPTER 21 AND THE LOCAL RULES OF THE CITY. 1 February 18, 2019 The City Council of the City of Dubuque, State of Iowa, met in regular session, in the Historic Federal Building, 350 West 6th Street, Dubuque, Iowa, at 6:00 o'clock P.M., on the above date. There were present Mayor.Roy D. Buol in the chair, and the following named Council Members: Luis Del Toro, Ric Jones, Kate Larson, David Resnick, Jake Rios, Brett Shaw Absent: 1 The Mayor announced that this was the time and place for the public hearing and meeting on the matter of the authorization of a Loan and Disbursement Agreement by and between the City and the Iowa Finance Authority, and the issuance to the Iowa Finance Authority of not to exceed $18,000,000 Stormwater Management Utility Revenue Capital Loan Notes, of the City of Dubuque, State of Iowa, to evidence the obligations of the City under the Loan and Disbursement Agreement, in order to provide funds to pay costs of acquisition, construction, reconstruction, extending, remodeling, improving, repairing and equipping all or part of the Stormwater Management Utility, including land acquisition, engineering and construction of the Upper Bee Branch Creek Railroad Culverts Project, part of Phase 7 of the Bee Branch Watershed Flood Mitigation Project, also known as the Upper Bee Branch Creek Restoration Project and water restoration project costs related to the Midtown Transfer and Catfish Creek Watershed Pervious Alley Construction Project, and that notice of the proposed action by the City Council to institute proceedings for the authorization of the Loan and Disbursement Agreement and the issuance of the Notes had been published pursuant to the provisions of Section 384.84A of the Code of Iowa, as amended, and no petition was filed calling for a referendum thereon. The Mayor then asked the Clerk whether any written objections had been filed by any City resident or property owner of the City to the proposal of the Notes. The City Clerk advised the Mayor and the City Council that -0- written objections had been filed. The Mayor then called for oral objections to the proposal and -0- were made. Whereupon, the Mayor declared the time for receiving oral and written objections to be closed. (Attach here a summary of objections received or made, if any) 2- thereto. The City Council then considered the proposed action and the extent of objections Whereupon, Council Member Resnick introduced and delivered to the Clerk the Resolution hereinafter set out entitled "RESOLUTION INSTITUTING PROCEEDINGS TO TAKE ADDITIONAL ACTION FOR THE AUTHORIZATION OF A LOAN AND DISBURSEMENT AGREEMENT AND THE ISSUANCE OF NOT TO EXCEED $18,000,000 STORMWATER MANAGEMENT UTILITY REVENUE CAPITAL LOAN NOTES", and moved: ® that the Resolution be adopted. ❑ to ADJOURN and defer action on the Resolution and the proposal to institute proceedings to the meeting to be held at o'clock .M. on the day of 2019, at this place. Council Member Jones seconded the motion. The roll was called and the vote was, AYES: Del Toro, Larson, Jones, Resnick, Buol, Rios, Shaw NAYS: Whereupon, the Mayor declared the measure duly adopted. RESOLUTION NO. 67-19 RESOLUTION INSTITUTING PROCEEDINGS TO TAKE ADDITIONAL ACTION FOR THE AUTHORIZATION OF A LOAN AND DISBURSEMENT AGREEMENT AND THE ISSUANCE OF NOT TO EXCEED $18,000,000 STORMWATER MANAGEMENT UTILITY REVENUE CAPITAL LOAN NOTES WHEREAS, pursuant to notice published as required by law, the City Council has held a public meeting and hearing upon the proposal to institute proceedings for the authorization of a Loan and Disbursement Agreement by and between the City and the Iowa Finance Authority, and the issuance to the Iowa Finance Authority of not to exceed $18,000,000 Stoiiuwater Management Utility Revenue Capital Loan Notes to evidence the obligations of the City under said Loan and Disbursement Agreement, for the purpose of paying costs of acquisition, construction, reconstruction, extending, remodeling, improving, repairing and equipping all or - 3 - part of the Stormwater Management Utility, including land acquisition, engineering and construction of the Upper Bee Branch Creek Railroad Culverts Project, part of Phase 7 of the Bee Branch Watershed Flood Mitigation Project, also known as the Upper Bee Branch Creek Restoration Project and water restoration project costs related to the Midtown Transfer and Catfish Creek Watershed Pervious Alley Construction Project, and has considered the extent of objections received from residents or property owners as to said proposal, and no petition was filed calling for a referendum thereon, and accordingly the following action is now considered to be in the best interests of the City and residents thereof: NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, STATE OF IOWA: Section 1. That this Council does hereby institute proceedings and takes additional action for the authorization of a Loan and Disbursement Agreement by and between the City and the Iowa Finance Authority, and the issuance to the Iowa Finance Authority in the manner required by law of not to exceed $18,000,000 Stormwater Management Utility Revenue Capital Loan Notes for the foregoing purposes. Section 2. That this Council does hereby consent to the terms and conditions of the SRF Loan Program, which terms and conditions and the disclosures provided with respect thereto are hereby acknowledged, accepted and approved. Section 3. That the Clerk, with the assistance of the City Attorney and bond counsel, is hereby authorized and directed to proceed with the preparation of such documents and proceedings as shall be necessary to authorize the City's participation in the SRF Loan Program, to select a suitable date for final Council authorization of the required Loan and Disbursement Agreement and issuance of the Note to evidence the City's obligations thereunder, and to take such other actions as the Clerk shall deem necessary to permit the completion of a loan on a basis favorable to the City and acceptable to this Council. Section 4. This Resolution shall serve as a declaration of official intent under Treasury Regulation 1.150-2 and shall be maintained on file as a public record of such intent. It is reasonably expected that stormwater management utility fund moneys may be advanced from time to time for capital expenditures which are to be paid from the proceeds of the above loan agreement. The amounts so advanced shall be reimbursed from the proceeds of the Loan Agreement not later than eighteen months after the initial payment of the capital expenditures or eighteen months after the property is placed in service. Such advancements shall not exceed the loan amount authorized in this Resolution unless the same are for preliminary expenditures or unless another declaration of intention is adopted. PASSED AND APPROVED this 18th day of February, 2019. ATTEST: 5 CERTIFICATE STATE OF IOWA ) SS COUNTY OF DUBUQUE I, the undersigned City Clerk of the City of Dubuque, State of Iowa, do hereby certify that attached is a true and complete copy of the portion of the corporate records of the City showing proceedings of the City Council, and the same is a true and complete copy of the action taken by the Council with respect to the matter at the meeting held on the date indicated in the attachment, which proceedings remain in full force and effect, and have not been amended or rescinded in any way; that meeting and all action thereat was duly and publicly held in accordance with a notice of public hearing and tentative agenda, a copy of which was timely served on each member of the Council and posted on a bulletin board or other prominent place easily accessible to the public and clearly designated for that purpose at the principal office of the Council (a copy of the face sheet of the agenda being attached hereto) pursuant to the local rules of the Council and the provisions of Chapter 21, Code of Iowa, upon reasonable advance notice to the public and media at least twenty-four hours prior to the commencement of the meeting as required by law and with members of the public present in attendance; I further certify that the individuals named therein were on the date thereof duly and lawfully possessed of their respective City offices as indicated therein, that no Council vacancy existed except as may be stated in the proceedings, and that no controversy or litigation is pending, prayed or threatened involving the incorporation, organization, existence or boundaries of the City or the right of the individuals named therein as officers to their respective positions. WITNESS my hand and the seal of the City hereto affixed this 19th day of February 2019. 01551476-1\10422-198 City Clerk, t of Dubuque, State of Iowa ROLL CALL ORDER FOR MEETING OF February 18, 2019 Del Toro, Larson, Jones, Resnick, Buol, Rios, Shaw CITY OF DUBUQUE, IOWA CITY COUNCIL MEETING Historic Federal Building Second -Floor Council Chambers 350 W. 6th Street February 18, 2019 Council meetings are video streamed live and archived at www.cityofdubuque.org/media and on Dubuque's CityChannel on the Mediacom cable system at cable channel 8 and digital 117.2 REGULAR SESSION 6:00 PM PLEDGE OF ALLEGIANCE PRESENTATION(S) 1. Fire Unit Commendations Fire Chief Rick Steines will present commendations to several Fire Unit Personnel and Emergency Responders for a December 3, 2018 rescue situation. 2. Iowa Tourism Outstanding Community Award Presentation Travel Dubuque CEO/President Keith Rahe will present the Iowa Tourism "Outstanding Community" award in the metro category from the Travel Iowa Industry Partners. PROCLAMATION(S) 1. Read Across America Day Proclamation (March 4, 2019) 2. American Legion Centennial Month (March 2019) 3. Irish -American Heritage Month Proclamation (March 2019) CONSENT ITEMS The consent agenda items are considered to be routine and non -controversial and all consent items will be normally voted upon in a single motion without any separate discussion on a particular item. If you would like to discuss one of the Consent Items, please go to the microphone and be recognized by the Mayor and state the item you would like removed from the Consent Agenda for separate discussion and consideration. 1. Minutes and Reports Submitted Arts and Cultural Affairs Advisory Commission of 2/6; City Council Proceedings of 2/4, 2/7, 2/11, 2/13; Airport Commission of 1/28; Catfish Creek Watershed Management Authority of 2/7; Five Flags Civic Center Commission of 2/4; Investment Oversight Advisory Commission of 1/23; Library Board of Trustees City Council Update #179 of 1/24; Zoning Advisory Commission of 2/6; Zoning Board of Adjustment of 1/24; Proof of Publication for City Council Proceedings of 1/22, 1/28. Suggested Disposition: Receive and File Pg. 1