10-2126 State Revolving Fund Loan

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8. E CITY MANAGER MEMORANDUM To: The Honorable Mayor and City Commissioners From: Barbara Lipscomb, City Manager Date: February 22, 2010 Subject: Resolution 10-2126 - Amendment to Resolutions 09-2076 and 10-2110 Regarding the Florida Department of Environmental Protection State Revolving Fund Grant/Loan Agreement for Water Quality Improvements Project Introduction: Resolution 10-2126 provides for an amendment to Resolutions 09-2076 and 10-2110 to include specific language required by the Florida Department of Environmental Protection (FDEP) regarding the State Revolving Fund Grant/Loan Agreement for the City's water quality improvements project. Background: In September 2009 via Resolution 09-2076, the City Commission approved an agreement for federal grant/loan funding of the City's water quality improvements project through the American Recovery and Re -investment Act. This funding allows the City to repair failing water distribution systems with only a small fraction of out-of-pocket expenses used for construction. In accordance with the agreement, FDEP will provide $3M ($2.55M in grants and $450,000 in loans) of funding for said water quality improvements. Subsequently, FDEP issued a first amendment to the agreement to include construction administration/inspection services (referred to as "technical services" by FDEP) and also included capitalized interest ($10,300) of the loan. The first amendment was approved by the City Commission, via Resolution 10-2110, at its January 25, 2010 meeting. However, after all documents were submitted to FDEP and reviewed by their financial staff, City staff was notified that specific language in the resolution was necessary in order to release federal funding for this project. Discussion: Resolution 10-2126 incorporates the specific language as required by FDEP which enables the City to receive the federal funding. The verbiage contained therein identifies the Mayor as the person authorized to execute documents relating to the State Revolving Fund agreements and all other agreements pertaining to the water quality improvements project as funded by FDEP and specifically states that the City pledges to repay the loan (including the mechanism in place to repay such loan). Repayment of said loan is to begin in December 2010 and semi-annually thereafter (July and December of each year). The City has dedicated $310K in FY 2010 (Public Works Renewal and Replacement Water Line Replacement Account) and $150,300 in FY 2011 (same account) to repay the loan. Budget Impact: Resolution 10-2126 does not create an additional impact to the City's Budget.