Memorandum

City of Lawrence

Utilities Department

 

TO:

David L. Corliss – City Manager

Cynthia Wagner - Assistant City Manager

Diane Stoddard - Assistant City Manager

FROM:

Mike Lawless – Asst. Director of Utilities

CC:

Dave Wagner – Director of Utilities

Philip Ciesielski - Asst. Director of Utilities

Ed Mullins, Finance Director

Date:

August 4, 2010

RE:

Water & Sewer Revenue Bond Reallocation

 

Please include the following item on the City Commission Agenda for consideration at the August 10, 2010 meeting:

Adopt Resolution 6902 Reallocating the 2007 Revenue Bond Proceeds and Resolution 6903 Reallocating the 2008 Revenue Bond Proceeds.

Project History

The Utilities Department has identified five projects funded with revenue bonds that have unspent proceeds. These projects include the Clinton Plant expansion, the Four Seasons Storage Basin, the ground storage tanks on campus, the West Baldwin Creek sanitary sewer, and the Stoneridge Water Tower.  In addition, the interest earned on the bond proceeds is also being reallocated.  The Department is recommending reallocation of the unspent proceeds to fund projects identified in the 2009 and 2010 Capital Improvement Program (CIP) that will be ready for construction later this year. The projects identified with unspent proceeds are listed in the table below.

Project No.

Description

Estimated

Bond Balance

2007 Bond Series

2CP205

Clinton Plant Expansion

       115,000.00

CS0704

West Baldwin Creek Interceptor Sewer

       405,000.00

UT0705

Four Seasons Wet Weather Basin

    1,690,000.00

CS0707

Pump Station 25 and Force Main Upgrade

       300,000.00

Sub-total 2007 Series

    2,510,000.00

2008 Bond Series

6CP906

Stoneridge Tank

       335,000.00

Sub-total 2008 Series

       335,000.00

Estimated Bond Funding Available

    2,845,000.00

 

The Utilities Department has identified one previously approved project in the 2009 CIP that requires additional funding and three new projects in the 2010 CIP that could be funded by reallocating the bond proceeds. Reallocation of the bond proceeds will provide the necessary funding for all bonded projects in the 2010 CIP with no new revenue bonds needed.

 

The new projects identified for funding were authorized for financing by resolution 6898. Following approval of resolution 6898, two additional resolutions (6902 and 6903) authorizing the reallocation of the bond proceeds are being presented for Commission consideration.

 

The projects to receive the reallocated bond funds are described below. Projects 2, 3 and 4 are the bond projects identified in the 2010 CIP.

 

1.   Project WW0601: Anaerobic Digester at the WWTP - $410,000

This 2009 CIP project, authorized by the City Commission for design, involves converting an existing storage tank into a third anaerobic digester vessel and modifying the gas control building/equipment to allow processing additional digester gas.

2.   Project UT0810DS: 2010 Water Line Rehabilitation and Replacement Program - $1,135,000

This project includes replacement of the existing watermains along 9th Street from Vermont Street to Tennessee Street and along Tennessee Street across the 9th Street right-of-way. It also includes replacement of the existing watermains along Kentucky Street from 12th Street to 19th Street and the watermain on Engle Road south of 15th Street. This project has not been authorized for design.

3.   Sanitary Sewer Reconstruction - $650,000

a.    Project UT0905CS: 15th & New Hampshire and 11th & Delaware - $525,000

The existing sewer lines servicing both the 1100 block of Delaware Street and the 1500 block of New Hampshire consist of 6 inch diameter vitrified clay pipe and have been in service for over 70 years. The project will include the installation of approximately 890 linear feet of sanitary sewer line servicing the 1100 block of Delaware Street and approximately 670 linear feet of sanitary sewer line servicing the 1500 block of New Hampshire Street. This project has been authorized for design by the City Commission.

b.   Project UT0702CS: 8th & Michigan - $125,000

The project will construct approximately 180 feet of 12 inch relief sewer, 35 feet of 8 inch relief sewer and about 2,200 feet of Cured-In-Place-Pipe lining on Michigan Street and Arkansas between 6th & 8th Street to help reduce sanitary sewer overflows. The project was designed by Utilities staff and is ready for City Commission authorization for construction upon approval of the bond reallocation.

4.   Motor Control Center (MCC) Replacement - $650,000

a.    Clinton Water Treatment Plant MCC Replacement - $500,000

The Motor Control Centers, (MCC) located at the Clinton Water Treatment Plant, are over thirty years old and replacement parts for the MCC’s are no longer available.  The Motor Control Center is essential, as it receives the incoming electrical feed and distributes 480 Volt AC power to the major components in the plant including Pumping and Chemical Feeds. This project has not been authorized for design.

b.   Pump Station PS 5 – MCC Replacement - $150,000

The Motor Control Center (MCC) in Pump Station 5 A was installed in 1966 and replacement parts are no longer available.  The Motor Control Center is essential, as it takes the incoming electrical feed and distributes 480 Volt AC power to the pumps in this structure. This project has not been authorized for design.

 

Resolutions 6902 and 6903 have been prepared by Bond Counsel to provide the legal authority to reallocate the 2007 and 2008 revenue bond proceeds to fund the projects identified above. The reallocations are possible because the department spent less on the 2007 and 2008 capital projects than anticipated. By adopting these resolutions, no new revenue bonds will be needed to fund the 2010 CIP.

 

Action Request:  Staff recommends adopting Resolution 6902 reallocating the 2007 Revenue Bond Proceeds and Resolution 6903 reallocating the 2008 Revenue Bond Proceeds.

 

Thank you for your assistance. Please advise if you have any questions.