#4 & #5 Authoritze sanitary sewer improvements and interfund borrowing & apply for clean water loan (File Res. #2010-713 & 2010-714)
DEPARTMENT OF PUBLIC WORKS MEMORANDUM
June 18, 2010
TO: City Council
FROM: Daniel L. Lynch, PE, Utility Director
SUBJECT: Action on Proposed Resolutions Authorizing the City Manager to Proceed
with Improvements to the Wastewater Utility-Sanitary Sewer System, to
Apply for a Wisconsin Clean Water Fund Loan and to Authorize Interfund
Borrowing to Provide Interim Funding (File Resolution Nos. 2010-713 and
2010-714)
Summary
The City of Janesville has over 300 miles of sanitary sewer mains. Annual preventative
maintenance on this system is necessary to help insure that the system remains
operational. Preventative maintenance activities fall into two major categories. The first
is the routine sewer cleaning activities performed by Utility employees to remove
material which may interfere with the flow of the sewage through the sewer mains. The
second maintenance activity is focused on the structural integrity of the sewer system.
In this part of the Utility’s annual maintenance program, sewers in need of major repair
or replacement are identified. Funding to inspect and repair these sewers has, in the
past, come from the operating budget of the Wastewater Utility and from General
Obligation (G.O.) Note borrowing. These resolutions will allow the City to pursue lower
interest loans from the Wisconsin Department of Natural Resources (WDNR) instead of
continuing to use the higher interest G.O. Notes.
Department Recommendation
The Utility staff strongly supports this project and encourages the City Council to adopt
the proposed resolutions. Adoption of these resolutions does not create any additional
financial obligation on the part of the City. Like the City’s other construction projects,
this project will come before the Council following bid openings when contract award
recommendations are made.
Suggested Motion
Move to adopt Resolution Numbers 2010-713 and 2010-714 authorizing the City’s
application for a low interest loan and providing for interim financing for the proposed
Wastewater Utility-Sanitary Sewer System improvements.
City Manager Recommendation
The City Manager concurs with the Utility’s recommendation.
Analysis
Following the structural failure and subsequent collapse of several major sanitary
sewers during the 1990’s, the sewer maintenance program was expanded so sewers
could be inspected and repaired or replaced before a collapse occurred. These
maintenance activities are mostly designed and managed by the City’s Engineering
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Department as part of its annual public works construction programs. Specifically, this
work involves the inspection of sanitary sewers through televising, the repair or
replacement of manholes and the repair, relining or replacement of mainline sanitary
sewers. Funding for these projects has come from the operating budget of the
Wastewater Utility ($290,000 in 2010) and from General Obligation Note borrowing
(estimated at $875,000 for 2010). These amounts reflect a continuation of past funding
levels. Adoption of these resolutions will simply allow the City to pursue low interest
loans from the Wisconsin Department of Natural Resources instead of continuing to use
G.O. Notes. Adoption of these resolutions does not commit the City to borrowing these
funds or proceeding with any part of these projects. Both the award of future
construction contracts and the application for a low interest WDNR loan will require
future Council action.
cc: Eric Levitt, City Manager
Jay Winzenz, Director of Administrative Services
Carl Weber, Director of Public Works
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RESOLUTION NO. 2010-713
A Resolution authorizing interfund borrowing to provide interim funding for the Clean
Water Loan Project and to comply with requirements of the Wisconsin Clean Water Loan
Program
WHEREAS, the City of Janesville, through its engineering department will provide engineering
services to prepare the construction plans and specifications and for construction of
improvements to the sanitary sewer system of the City of Janesville; and
WHEREAS, the City Council intends to fund this project by a combination of funding that
includes: funds in the 2010 operating budget and borrowing or receiving funds in 2010 in the
form of a Wisconsin Department of Natural Resources Clean Water Loan Program low interest
loan as outlined in the following table:
Project Funding Summary
Funding Amount
2010 Wastewater Utility Operating Budget $290,000
Clean Water Loan Program (DNR) $875,000
Total Project Cost $1,165,000
WHEREAS, the Wastewater Utility will make application for a Wisconsin Clean Water Loan
Program to assist design and construction of sanitary sewer improvements including the
televising of sanitary sewers, repair, reline or replace sanitary sewer structures and mains and
repair of sewer main wyes; and
WHEREAS, the City desires to comply in all respects with the requirements of the Wisconsin
Clean Water Loan Program and to refrain from any financial activity which may be considered
impermissible arbitrage; and
WHEREAS, these projects and the funding are all found to be in the best interest and of benefit
to the City, its residents, properties, and businesses.
NOW, THEREFORE, BE IT RESOLVED, by the Common Council of the City of Janesville that
they hereby approve and authorize the City Administration to take actions necessary to provide
funding for the design and construction of repairs and/or replacements of sewer mains and
structures of the sanitary sewer system not to exceed $1,165,000. No funds from sources other
than its water system revenue bond or the Available Funds identified above are, or are expected
to be, reserved, allocated on a long-term basis, or otherwise set aside by the City for the project,
except as permitted by the Internal Revenue Code of 1986. This declaration of official intent is
consistent with the budgetary and financial circumstances of the City. The purpose of this
Resolution is to satisfy the “official intent requirement” of Treasury Regulation Section 1.150-2;
and
BE IT FURTHER RESOLVED, that the City of Janesville hereby sets forth as its policy
compliance with all requirements of the Wisconsin Clean Water Loan Program so as to avoid
impermissible arbitrage in financing and refinancing of the site acquisition, design and
construction of thee utility facilities, and otherwise; and
BE IT FURTHER RESOLVED, that the City pay for services received prior to the approval of
any loan(s) from the Wisconsin Clean Water Loan Program and that such expenditures be paid
from the general funds of the Utility or funds previously borrowed in the City’s prior G.O. notes;
and
BE IT FURTHER RESOLVED, that the City has the intent to seek financing and refinancing with
the Wisconsin Clean Water Loan Program to pay $875,000 of the expenditures for the design
and construction of these sanitary sewer system improvements, all said financing and
refinancing to be in compliance with the Wisconsin Clean Water Loan Program so that the City
may be eligible for all monies available under said program; and
BE IT FURTHER RESOLVED, that the City may pay for services provided in conjunction with
the design and construction of these sanitary sewer system improvements performed by
independent contractors and seek reimbursement from the Wisconsin Clean Water Loan
Program from the general funds of the Utility; and
BE IT FURTHER RESOLVED, that the City has the intent that Clean Water Loan Program
repayments be repaid with the revenues of the City wastewater user charge system; and
BE IT FURTHER RESOLVED, that the City Manager and/or his designee(s), on behalf of the
City of Janesville, is/are hereby authorized to administratively negotiate, draft, execute, review,
enter in, modify, amend, record, file, and otherwise effectuate the above agreements and
promissory note, and/or to make and enter into any and all other agreements, contracts,
documents, papers, and forms, and/or to take whatever other actions that the City Manager
and/or his designee(s) may, from time to time and at any time, determine necessary and/or
desirable to effectuate the above transactions, agreements, and/or above all the intent and/or
purposes of this Resolution.
ADOPTED:
Motion by:
Second by:
APPROVED:
Councilmember Aye Nay Pass Absent
Brunner
McDonald
Eric Levitt, City Manager
Perrotto
Rashkin
ATTEST:
Steeber
Truman
Voskuil
Jean Ann Wulf, City Clerk-Treasurer
APPROVED AS TO FORM:
Wald Klimczyk, City Attorney
Proposed by: Utility Director
Prepared by: Utility Director
Shared/Resolution NO 2010-713 interfund borrowing.doc
RESOLUTION NO. 2010-714
A Resolution authorizing the City Manager to proceed with certain improvements to the
Wastewater Utility-Sanitary Sewer System and to apply for a Wisconsin Clean Water Fund
Loan
WHEREAS, Inspection, repair, and/or replacement of the City’s existing sanitary sewer system
including the sewer mains and structures is a necessary maintenance activity to insure the proper
operation of the sewer system; and
WHEREAS, The sanitary sewer mains and structures are necessary components of the overall
sewer system and convey the untreated sewage from its point of generation to the City’s
wastewater treatment plant; and
WHEREAS, the design of a sanitary sewer system improvements are underway; and
WHEREAS, the construction of this project is expected to begin in June 2010; and
WHEREAS, the City Council intends to fund this project by a combination of funding that includes:
funds in the 2010 operating budget and borrowing or receiving funds in 2010 in the form of a
Wisconsin Department of Natural Resources Clean Water Loan Program low interest loan as
outlined in the following table:
Project Funding Summary
Funding Amount
2010 Wastewater Utility Operating Budget $290,000
Clean Water Loan Program (DNR) $875,000
Total Project Cost $1,165,000
WHEREAS, the balance of said cost will be eligible for a Wisconsin Department of Natural
Resources (WDNR) Clean Water Loan Program low interest loan which will be repaid by user
fees; and
WHEREAS, the WDNR has required that an authorized representative be designated by adopted
resolution for a Clean Water Fund Loan Program low interest loan; and
WHEREAS, these projects and the funding are all found to be in the best interest and of benefit to
the City, its residents, properties, and businesses; and
WHEREAS, Daniel L. Lynch, P.E., 18, N. Jackson Street, Janesville, Wisconsin 53545, (608) 755-
3115, is the Utility Director of the City of Janesville;
NOW, THEREFORE, BE IT RESOLVED, by the Common Council of the City of Janesville that they
hereby approve and authorize the City Administration to take actions necessary to provide funding
for the design and construction of repairs and/or replacements of sewer mains and structures of
the sanitary sewer system not to exceed $1,165,000. No funds from sources other than its water
system revenue bonds or the Available Funds identified above are, or are expected to be,
reserved, allocated on a long-term basis, or otherwise set aside by the City for the project, except
as permitted by the Internal Revenue Code of 1986. This declaration of official intent is consistent
with the budgetary and financial circumstances of the City. The purpose of this Resolution is to
satisfy the “official intent requirement” of Treasury Regulation Section 1.150-2; and
BE IT FURTHER RESOLVED, by the Common Council of the City of Janesville that the City
Manager be authorized to apply to the Wisconsin Department of Natural Resources for a Clean
Water Loan Program low interest loan and that it endorses Daniel L. Lynch as the authorized
representative in any actions or for any requirements for a Clean Water Fund Program low interest
loan; and
BE IT FURTHER RESOLVED, that the City Manager and/or his designee(s), on behalf of the City
of Janesville, is/are hereby authorized to administratively negotiate, draft, execute, review, enter in,
modify, amend, record, file, and otherwise effectuate the above agreements and promissory note,
and/or to make and enter into any and all other agreements, contracts, documents, papers, and
forms, and/or to take whatever other actions that the City Manager and/or his designee(s) may,
from time to time and at any time, determine necessary and/or desirable to effectuate the above
transactions, agreements, and/or above all the intent and/or purposes of this Resolution.
ADOPTED:
Motion by:
Second by:
APPROVED:
Councilmember Aye Nay Pass Absent
Brunner
McDonald
Eric Levitt, City Manager
Perrotto
Rashkin
ATTEST:
Steeber
Truman
Voskuil
Jean Ann Wulf, City Clerk-Treasurer
APPROVED AS TO FORM:
Wald Klimczyk, City Attorney
Proposed by: Utility Director
Prepared by: Utility Director