SRF Sponsorship Project Application for Catfish CreekTHE CITY OF
Dui
Masterpiece on the Mississippi
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
Dubuque
band
AI -America City
r
2007 • 2012 • 2013
SUBJECT: Catfish Creek Watershed Enhancement Project, Clean Water State
Revolving Fund Sponsorship Project Funding
DATE: August 13, 2014
City Engineer Gus Psihoyos and Assistant City Manager Teri Goodmann recommend
City Council authorization to submit a $2,400,000 Clean Water State Revolving Fund
Sponsorship Project application to the Iowa Department of Natural Resources in order
to secure funding for the Catfish Creek Watershed Enhancement Project. If the
application is approved by the Iowa Department of Natural Resources, it would have no
impact on the City budget. The City of Dubuque would receive an interest rate
reduction on the Upper Bee Branch Project loan that would offset the cost of funding the
Catfish Creek Watershed Enhancement Project.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
Mic ael C. Van Milligen
MCVM:jh
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
Teri Goodmann, Assistant City Manager
Gus Psihoyos, City Engineer
THE CITY OF
Dui
Masterpiece on the Mississippi
TO: Michael C. Van Milligen, City Manager
FROM: Gus Psihoyos, City Engineer
Teri Goodmann, Assistant City Manager
Dubuque
bitetri
All -America City
1 r
2007 • 2012 • 2013
SUBJECT: Catfish Creek Watershed Enhancement Project, Clean Water State
Revolving Fund Sponsorship Project Funding
DATE: August 12, 2014
INTRODUCTION
The purpose of this memo is to seek authorization to submit a Clean Water State
Revolving Fund Sponsorship Project application to the Iowa Department of Natural
Resources in order to secure funding for the Catfish Creek Watershed Enhancement
Project.
BACKGROUND
In 2009, legislation was passed in Iowa that allows water utilities that issue debt through
the CWSRF Program to sponsor and help finance other water quality improvement
projects within or outside its service limits. This new funding mechanism, called Water
Resource Restoration Sponsored Projects, will provide cities, counties, local watershed
organizations, watershed management authorities, county conservation boards, and soil
and water conservation districts a funding source to construct improvements throughout
a watershed that keep sediment, nutrients, chemicals and other pollutants out of
streams and lakes. The City of Dubuque had the first successful application for the
state when $9.4 million of the interest paid on the Water and Resource Recovery Center
was to be used to reconstruct over 70 Green Alleys in the Bee Branch Watershed.
Repayment of a standard Clean Water SRF (CWSRF) loan includes the repayment of
the original loan amount, the principal, and the cost to finance the loan, interest and
fees. On a CWSRF loan with a sponsored project, the financing costs are reduced by
the amount of the cost of the sponsored project improvements. Figure 1 shows a
comparison between a standard CWSRF loan and a CWSRF loan with a sponsorship
project. As shown, the total cost to the utility (the total of loan repayments) remains
unchanged as the cost of funding for the sponsorship project is offset by a reduction in
loan financing costs. In essence, two water quality projects are completed for the price
of one.
In December 2013, the City of Dubuque's Upper Bee Branch Creek Restoration Project
(Upper Bee Branch Project) qualified for a Green Project Loan from the CWSRF
Program in the amount of $28,823,000. And the project has been included in the
CWSRF Intended Use Plan since that time. The next step is to submit an actual loan
application for the Upper Bee Branch Project. In order to take advantage of the CWSRF
Sponsorship Program, the Upper Bee Branch loan application must incorporate the
CWSRF Sponsorship Project. To do this, an application must be submitted outlining the
specifics of the Clean Water SRF Sponsorship Project.
$ Total of Loan Repayments
o Funding for Sponsorship Project
▪ Loan Financing Costs
(Interest & Fees)
CWSRF Project Loan Principal
Figure 1. Loan repayment comparison between a standard CWSRF loan and a CWSRF loan
with a sponsorship project.
DISCUSSION
The City of Dubuque has been working with the Dubuque Soil and Water Conservation
District (SWCD), Dubuque County, and the Catfish Creek Watershed Authority Board
(CCWMA) over the past several years on improving water quality and quantity
challenges in the Catfish Creek Watershed. The Catfish Creek Watershed is a 57 -
square mile watershed that includes the southwestern part of Dubuque as well as parts
of the cities of Asbury, Peosta and Centralia. Much of the watershed remains rural. The
Catfish Creek Watershed Management Authority is an organization assembled to tackle
concerns with water quality and flooding on a watershed level. This means crossing
jurisdictional boundaries and working together to solve problems within the entire
watershed.
With the development of a watershed plan, $2.4 million in improvements have been
identified throughout the Catfish Creek Watershed that will improve water quality within
2
the creek and mitigate flooding. Collectively referred to as the Catfish Creek Watershed
Enhancement Project, the various improvements include:
• Floodplain/Streambank Restoration
• Wetland Creation
• Land Acquisition for the Preservation of Trees and Buffers
• Permeable Pavement Parking Lots
• Develop a Soil Quality Restoration Cost -Share Program for Watershed
Residents
• Develop a Streambank and Riparian Buffer Program to Partner with
Agricultural Landowners
The City of Dubuque would pursue funding for this project through the Clean Water SRF
Sponsorship Project program which typically allows funding for approximately $100,000
for every $1,000,000 on the original loan. Therefore, the Upper Bee Branch Project
could sponsor the $2,400,000 needed to construct the improvements associated with
the Catfish Creek Watershed Enhancement Project. In order to pursue this possibility,
an application for the Catfish Creek Watershed Enhancement Project must be
completed and submitted to the Iowa Department of Natural Resources. And in order for
the application to be considered, it must include a resolution approving the submission
of an application. The IDNR and the Iowa Finance Authority have not yet awarded any
funds for a project with the interest from stormwater SRF loan, which might pose a
challenge for this application.
RECOMMENDATION
I recommend that the City submit an application through to the Clean Water SRF
Sponsorship Project program in order to provide $2,400,000 in funding for the Catfish
Creek Watershed Enhancement Project.
BUDGET IMPACT
If the application is approved by the Iowa Department of Natural Resources, it would
have no impact on the City budget. The City of Dubuque would receive an interest rate
reduction on the Upper Bee Branch Project loan that would offset the cost of funding the
Catfish Creek Watershed Enhancement Project.
ACTION TO BE TAKEN
I respectfully request the City Council authorize the City Manager or his designee to
submit a Clean Water SRF Sponsorship application to sponsor and fund the Catfish
Creek Watershed Enhancement Project.
Prepared by Deron Muehring
Cc: Jenny Larson, Budget Director
Ken TeKippe, Finance Director
Deron Muehring, Civil Engineer
3
RESOLUTION NO. 243-14
AUTHORIZATION TO SUBMIT A CLEAN WATER SRF SPONSORSHIP PROGRAM
APPLICATION TO PROVIDE FUNDING FOR THE CATFISH CREEK WATERSHED
ENHANCEMENT PROJECT
Whereas, legislation was passed during the 2009 Iowa General Assembly session to
create the Clean Water State Revolving Fund Sponsorship Project program, which is designed
to provide communities with the ability to fund two water projects for the cost of one; and
Whereas, the City of Dubuque submitted an Intended Use Plan to the Clean Water State
Revolving Fund in the amount of $28,823,000 for the Upper Bee Branch Creek Restoration
Project that was approved by the Department of Natural Resources and the Iowa Finance
Authority in December 2013, which qualifies the City to apply for the Clean Water SRF
Sponsorship Project program; and
Whereas, the Catfish Creek Watershed Enhancement Project will include the
construction of $2.4 million in improvements to help improve water quality and reduce flooding
events in the watershed; and
Whereas, the City of Dubuque has prepared an application seeking $2.4 million for the
Catfish Creek Watershed Enhancement Project through the Clean Water State Revolving Fund
Sponsorship Project program; and
Whereas, if approved, the City would receive an interest rate reduction of $2.4 million so
that the citizens of Dubuque would not pay any more than they would for the approved loan for
the Upper Bee Branch Creek Restoration Project.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
DUBUQUE, IOWA:
That the City Manager or his designee is hereby authorized to submit a Clean Water
SRF Sponsorship application to sponsor and fund the Catfish Creek Watershed Enhancement
Project.
Passed, approved and adopted this 18th day of August, 2014.
Attest:
Kevi S. Firnstah(, Cit
t'erk
oy D. Buol, Mayor