SRF Drinking Water Infrastructure AppTHE CITY OF
DUB E
~r-~~
MEMORANDUM
February 12, 2007
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: State Revolving Fund Loan for Drinking Water Infrastructure Application
Drinking water projects eligible for State Revolving Fund Loans (SRF) include
construction of treatment plants or improvement to existing facilities; water line
extensions to existing unserved properties; water storage facilities; and wells. The
Eagle Point Clear Well Reservoirs Rehabilitation project totaling $1,037,000 has been
identified as an eligible construction project for an SRF loan from the Iowa Finance
Authority and the Iowa Department of Natural Resources. If approved, the City would
be eligible for 3% interest plus a 0.25% annual servicing fee on construction loans for
drinking water projects costs and 0% interest for up to three years on planning and
design work for construction projects.
The current budget included the project to be funded with General Obligation (GO) bond
financing at estimated interest costs of 4.5% for 20 years.
Budget Director Jenny Larson recommends City Council approval to apply for State
Revolving Fund Loans to fund the Eagle Point Clear Well Reservoirs Rehabilitation
project in place of the GO Bond financing.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
,~
Vr~ .
Mic ael C. Van Milligen
MCVM/jh
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
Jenny Larson, Budget Director
THE CITY OF
DuB E MEMORANDUM
~-~-~
February 20, 2007
TO: Michael C. Van Milligen, City Manager
FROM: Jenny Larson, Budget Director
SUBJECT: State Revolving Fund Loan for Drinking Water Infrastructure Application
Introduction
Drinking Water Projects eligible for State Revolving Fund Loans (SRF) include
construction of treatment plants or improvement to existing facilities; water line
extensions to existing unserved properties; water storage facilities; and wells. The
Clear Well Reservoirs Rehabilitation Program has been determined as an eligible
project for submittal fora SRF loan. If the application is approved by City Council for
submittal to the Iowa Finance Authority and the Iowa Department of Natural Resources
(DNR), the City would be eligible for 3% interest plus a 0.25% annual servicing fee on
construction loans for drinking water project costs and 0% interest for up to three years
on planning and design work for construction projects.
The current budget included these projects to be funded with General Obligation (GO}
bond financing at estimated interest costs of 4.5% for 20 years.
Background
To be fiscally responsible, the City of Dubuque is constantly looking at ways to complete
projects with the least amount of debt service. The City contracted with East Central
Intergovernmental Association (ECIA) for the services of Community Development
Director Mark Schneider to assist in the application process. This was important since
Mark has existing relationships with the DNR and experience with the SRF program.
The program has a quarterly application process with the deadline for the next round of
SRF applications being March 1, 2007.
Discussion
City staff, with the assistance of Mark Schneider, identified the Eagle Point Clear Well
Reservoirs Rehabilitation project totaling $1,037,000 as an eligible construction project.
Staff desires to submit an SRF application to the Iowa DNR for review and approval at
the Environmental Protection Commission's June meeting. The June approval of the
application will allow for the proposed project to proceed with the construction timeline
identified in the application.
Action
I am respectfully requesting City Council approval to apply for the State Revolving Loan
funds and use the funds in place of GO Bond financing if the applications are approved
by the Iowa Finance Authority and the DNR. This provides opportunity to reduce debt
service costs on large capital projects in the future.
I will continue to evaluate other opportunities to use State Revolving Loan Funds in the
future.
Jml
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
Ken TeKippe, Finance Director
Bob Green, Water Plant Manager
Mark Schneider, ECIA Community Development Director
PWSID:
D Date Received:
SRF Tracking Number:
County:
Exhibit 3
Iowa Department of Natural Resources
Water Supply Engineering Section
APPLICATION FOR INCLUSION ON PROJECT PRIORITY LIST
DRINKING WATER STATE REVOLVING FUND INTENDED USE PLAN (IUP)
This form may be used to apply for inclusion on the project priority list of DWSRF IUP at the time the
Preliminary Engineering Report is submitted. IUPs are developed on an annual basis with quarterly
updates as needed. This form is not an application for a loan. DWSRF loan application materials may
be obtained from the Iowa Finance Authority (IFA) at 800-432-7230, a-mail lori.beary@iowa.gov or at
www.iowafinanceauthority.gov when the project is ready for a construction loan.
Instructions:
Complete the requested information in the following sections to the best of your ability. Please print or type the
information on the form. If a particular item does not apply to your system, enter n/a for "not applicable." Attach
supporting documentation as needed. Keep a copy of the completed application for your records, submit a copy
to your engineer, and submit the original signed form to the following address:
Jennifer Bunton, P.E.
Iowa Department of Natural Resources
401 SW Seventh Street, Suite M
Des Moines, IA 50309
Section 1: Applicant Information
Applicant Name: City of Dubuque
Applicant Address: 50 West 13t Street, Dubuque, IA 52001
Authorized Representative: Michael Van Milligen
Signature:
Title: City Manager
Telephone Number: 563-589-4116
E-mail: ctymgr@cityofdubuque.org
Consulting Engineer: Ted Payseur
Firm: Veenstra & Kimm, Inc.
Telephone Number: 515-238-5466
E-mail: tpayseur@v-k.net
Population Served: Community: 57,686 Service Area: 57,686
Number of Service
Connections: 21,741 total (19,813 residential; 1,855 commercial; 73 industrial)
Profit Status of the System Check one:
(for Nontransient ^ Not for profit system
Noncommuni s stems only): ^ Profit S stem
Percentage of Population 41
meetin LMI criteria:
Method of determining Check one:
percentage LMI ®2000 Census
^ Income survey (if checked, list party that conducted survey)
If the percentage of Are you interested in an extended loan term?
population served by the ^ Yes
project is greater than 51% ^ No
LMI, this project may be ®NA
eligible for an extended loan
term (up to 30 years.)
Proposed Project Schedule Final plan and specification date: June 15, 2007
Construction Initiation Date: September 1, 2007
Date You Intend to Sign a Loan Agreement: Yes
Section 2: Brief Project Summary (Attach additional pages if necessary.)
Describe the reasons for the proposed project: (i.e. specific water quality problem or system
improvement)
The proposed project will restore two deteriorating concrete clear well storage reservoirs. The reservoirs
store treated water in route to the City's distribution system. The concrete reservoirs are developing
cracks that must be repaired to eliminate the entry of contaminants into the City's drinking water supply.
Describe the proposed project: (i.e., specific solution to the water quality problem, or proposed system
improvement)
The proposed project will consist of repairs to the west reservoir including wall repair with epoxy
injection, repairs to spans in the roof, replacement of mastic are roof expansion joints cleaning and
paintingof roof openings, new EDPM roof membrane, and disinfection of the reservoir.
The repairs to the east reservoir include roof, beam, and stub wall removal repair of gunite lining and
columns, new concrete stub wall, new double tee roof and concrete tamping, new roof openin s and
epoxy coating on interior wall of reservoir.
Which other funding programs Check all that apply:
are you considering to assist in ^ Community Development Block Grant (CDBG)
completion of this project? ^ Rural Development Grant and/or Loan
^ Clean Water State Revolving Fund (for water system waste treatme
projects)
^ Reserve Funds
^ Other:
Does your project involve a Check one:
consolidation of two or more ^ Yes
water systems? ®No
If Yes, list systems and populations served:
Section 3: Proiect Cost
Cost Category Estimated Total Cost, $
Administration, legal
Land, structures, right-of--way, appraisals +
Relocation expenses +
Architectural and engineering fees + 62,000
Project inspection fees +
Soil investigation, Site work, demolition, debris removal +
Construction + 794,050
Equipment +
Miscellaneous +
PROJECT SUBTOTAL = 856,050
Contingencies + 171,100
Planning and design loan proceeds, if rolling into
construction loan +
Less "funds requested from other sources" - 0
LOAN SUBTOTAL = 1,027,150
Loan Initiation Fee (Loan Subtotal x .O1) + 10,271
TOTAL IUP REQUEST = 1,037,000
*Supporting materials may be requested to document funding requests and system needs.
Please include the following items with your application:
® Two official copies of the Preliminary Engineering Report, if not already submitted.
If already submitted, date submitted:
® Completed Viability Assessment Manual, available for download on our website at
httx~:-rw~~-w.iowadnr.com`water/yiabilitv,~manual.html
® Map of project area, if not included in Preliminary Engineering Report
Iowa Finance Authority
I N V E S T I N 6 I N HOME AND C O M M U N I T Y
State Revolving Fund Loan Application
Applicant: City of Dubuque
Tax ID Number: 42-6004596
NPDES Number (if applicable):
PWSID Number (if applicable): 3126052
Contact person/Title: Kenneth J. TeKippe, Finance Director
Address: 50 West 13th Street
City Dubuque County Dubuque State IA Zip Code: 52001
Telephone Number: 563-589-4133 Fax Number: 563-589-0890
E-mail address: ktekippe(~cityofdubuge.org
Amount of Loan Request: $ 1,037,000 Clean Water SRF or rinking Water S
(circle one)
Description of project:
- --
-
--
Clean Water S>fl~•(~anitAry Sewer) -
Clean Water'SRF (,Stp~r~~elver) --
^ Treatment
__
__ ^ Stora~e/Detention
__ - -_
^ Infiltration/inflow correction ^ Treatment
_._ _.
^ Sewer system rehabilitation
^ New collectors to existing communities
__ ^ Interceptor/Trunk Line
^ New interceptors '; ^ Collector
^ Correction of Combined Sewer Overflow ' ^ Other
^ Non Point Source Project
- - --
-
Drinkita _
<•
g•'4V~ter-SRS
^ Treatment ®Storage
^ Transmission & Distribution '; ^ purchase or consolidation of systems
^ Source (wells) ' ^ land acquisition
Have you obtained all permits and authorization s required for this project?
(DNR technical staff can inform you of the permits and authorizations needed for your project.)
Yes No N/A Date Obtained Date Expected
Operating Permit X
Construction Permit X 6-1-07
Others:
Is the system under any regulatory compliance order? ^ Yes ®No
Have construction bids been awarded? ^ Yes ®No
If no, what is the projected bid award date? June 15, 2007
What is the expected construction start date? September 1, 2007
What is the expected project completion date? November 1, 2008
PROFESSIONAL CONSULTANTS (provide if known)
Project Engineer:
Name of Contact Person:
Veenstra & Kimm
Ted Pa
Mailing Address: 3000 Westown Parkway
City, State, and Zip Code: West Des Moines IA 50266
Telephone Number: (515) 238-5466
E-mail address: tpayseur(a~v-k.net
Bond Counsel: Ahlers & Cooney, LLP
Bond Counsel: William Noth
Mailing Address: 100 Court Ave.
City, State, and Zip Code: Des Moines, IA 50309-2256
Telephone Number: 515-246-0332
E-mail address: wnothna,ahlerslaw.com
Financial Advisor (if any):
Name of Contact Person:
Mailing Address:
City, State, and Zip Code: _
Telephone Number:
E-mail address:
SOURCE OF FUNDS/COST BREAKDOWN FOR PROJECT
Source of Funds
Amount re uested from SRF (this ap lication) $ 1,037,000
Federal grant or loan- S ecify $
Applicant's share $
Other- Specify $
Total Source of Funds $ 1,037,000
Project Cost Breakdown
Administrative & Legal expenses $
Land and easements $
Relocation expenses $
Planning & Design expenses $ 62,000
Engineering construction fees $
Construction $ 794,050
Equi ment $
Interest during construction $
Miscellaneous $
Contingency $ 171,100
Other- Specify $
Total Pro"ect Cost $ 1,027,150
Minus Funds from other sources ($ 0 )
SRF Loan Request $ 1,027,150
1% origination fee (.O1 x SRF amount) $ 10,271
Total SRF Loan $ 1,037,000
2
Type of debt requested (check one): G.O. Revenue X Combination
If GO -Has bond counsel calculated GO debt capacity for this project? ^Yes ^ No
If Yes -enter debt capacity information
Constitutional Debt Limit $
Outstanding constitutional debt $
Constitutional Debt Capacity $
Remaining % of capacity left
If No -STOP -application cannot be completed without this analysis -contact bond counsel ASAP
to calculate debt capacity
If Revenue: Do you have any outstanding debt payable from the system revenues? ®Yes ^ No
If Yes, please list:
Existing System Debt:
Current Balance Interest Year Maturity Annual Payment
Rate Issued Date (Prin~'ra~ + rnterest)
Revenue Bonds
O
B
fr
a $1,900,000 3.00% 2002 6/1/17 $221,992
P y
abl
e
o
SystemRevenues)
Has bond counsel reviewed parity debt provisions for outstanding debt?
Have ordinances related to rates been adopted for financing this project?
If no - is the city planning on adopting ordinances? ^Yes ^ No
If yes -When will these ordinances be adopted?
^ Yes ^ No
® Yes ^ No
If no -Why are new ordinances not being adopted?
How much of the SRF loan being requested, if any, will be used to refinance existing debt?
Does your system or city have a current bond rating? ®Yes ^ No ^ I don't know
If yes, what is it? Aa2
Which rating agency rated your city? Moody's l
$ 0
3
Summary Statement of Revenue and Expenditures for System
REVENUES 2 years aQO Last Year Current Year Next Year 2 vrs from nnw
Residential 2,091,741 2,318,667 2,419,882 2,458,880 2,498,658
Commercial 1,646,689 1,825,333 1,905,014 1,935,714 1,967,028
Deferred Charges 712,082 789,333 837,066 837,066 850,607
Other- Explain
TOTAL REVENUES: $ 4,450,512 $ 4,933,333 $ 5,148,686 $ 5,231,660 $ 5,316,293
EXPENDITURES:
Operation and
Maintenance 3,332,279 3,715,769 3,829,255 3,944,133 4,062,457
Depreciation and
Amortization 948,888 854,087 1,038,237 796,669 957,943
Other- Explain
TOTAL
EXPENDITURES: $ 4,281,167 $ 4,569,856 $ 4,867,492 $ 4,740,802 $ 5,020,400
NET OPERATING
INCOME: $ 169,345 $ 363,477 $ 281,194 $ 490,858 $ 295,893
OTHER INCOME:
Interest 22,007 24,839 20,000 20,000 20,000
Other: Explain
TOTAL OPERATING
AND OTHER
INCOME: $ 191,352 $ 388,316 $ 301,194 $ 510,858 $ 315,893
INCOME DEDUCTIONS:
Interest on debt 103,321 97,097 90,612 136,227 128,978
Debt Retired 176,793 183,816 190,951 256,203 263,580
Other- Explain
NET INCOME: $ (88,7622 $ 107,403 $ 19,631 $ 118,428 $ 76 665
RETAINED EARNINGS:
Beginning of Year: $ 288,317 $ 199,555 $ 306,958 $ 326,589 $ 445,017
Ending of Year: $ 199,555 $ 306,958 $ 326,589 $ 445,017 $ 368,352
4
System Utilization for the most recent year:
Number of Connections Percentage of System Annual
Usage
Residential 19,813 47%
Commercial 1,855 37%
Industrial 73 16%
Unmetered 0 0%
List any significant users or potential users who utilize more than 5% of the system, with approximate
percentage of capacity attributed to each user.
Name of IndividuaUBusiness Annual User Charge Percentage of Ca acity
None ap licable
The applicant must enclose the following documentation with the completed application. Please
check any that are not applicable.
Enclosed Not Applicable
X One copy of user charge system and sewer use ordinance
X Copy of 5-year capital plan if available
The undersigned is duly authorized to request this loan on behalf of the Applicant. The Applicant
declares under penalty of law that all facts given and information attached are true and correct. The
Applicant authorizes IFA to verify all information.
Authorized Signature
Typed Name and Title,
Date
5