Memorandum

City of Lawrence

Finance Department

TO:	David L. Corliss, City Manager
FROM:	Ed Mullins, Finance Director
CC:	Dave Wagner, Utilities Director
Date:	July 17, 2008
RE:	Resolution  6776 Water and Sewer Projects

Please include the following item on the City Commission consent agenda for consideration at the July 22, 2008 meeting:

Project Description   There are three projects included in the 2008 Water and Sewer capital improvement budget that will need to be financed with revenue bond proceeds.  The projects are the expansion of East Hills Pump Station 25, improvements to the anaerobic digester, and improvements to the Bowersock dam.  The estimated cost of the three projects is $5,070,000.  These projects are included in the most recent listing of wastewater/water capital projects reviewed by the Commission.

Project Details

East Hills Pump Station 25 – The project will increase the firm pumping capacity of Pump Station 25 from 0.97 MGD to 6.0 MGD.  Also included is the construction a new force main parallel to the existing 8" force main from PS-25 to the Kaw WWTP.  The estimated cost of the project is $3.4 million.

Anaerobic Digester – The project will convert the existing anaerobic storage tank at the wastewater treatment plant to a secondary digester with gas mixers and a floating cover including the expansion of the gas control building and upgrading the digester SCADA system to current Department standards.  This project has added importance for the City’s treatment capacity with the delay of the Wakarusa plant.  The estimated cost of the project is $5.0 million, but only $500,000 in engineering expenses will be bonded at the present time.

Bowersock Dam Improvements – The improvements will include maintenance of the dam structure including the short-term repairs identified in the 2007 Condition Assessment Report by Black & Veatch.  The estimated cost is $1,170,000.

Project Funding   The projects were included in the 2007 CIP.  The resolution will authorize that the projects be funded with revenue bond proceeds.  The next revenue bond issue is scheduled for the September of 2008.  In addition, the resolution includes issuance cost and the funding of a 10% bond reserve.  However, since the Wakarusa Treatment Plant is being delayed, a second resolution will be prepared to reallocate the proceeds from that project to these projects.  Before that can be done, the projects must first be authorized from funding from revenue bond proceeds.  As a result, funding the projects will not add to the amount of outstanding revenue bonds.

Action Requested   Adopt Resolution No. 6776 authorizing the issuance of water and sewer revenue bonds, temporary notes, or general obligation bonds in the amount of $5,620,000 for the projects.  The additional amount of the bond is intended to cover issuance costs and the debt service reserve requirement.