Memorandum 15-191 Alaska Drinking Water Fund Loan

Memorandum 15-191

TO:                       Katie Koester - City Manager

FROM:                 Carey Meyer - Public Works Director

DATE:                  November 17, 2015

SUBJECT:         Alaska Drinking Water Fund Low Interest Loan

                              ADEC Municipal Grant Program Match

The Council accepted a legislative grant for the construction of two water mains (Homer Water Distribution/Storage Improvements - Phase I):

Shellfish Avenue/South Slope Drive – from East Hill Road to Mountain View Drive, and
Kachemak Drive (Phase II).

The grant will pay for 70% of the cost of construction, with the remaining 30% match being paid by benefitted property owners through either a special assessment district or a deferred assessment.

Public Works proposes to apply for a 1 ½ percent loan (through ADEC/EPA) to finance the matching requirement. The City Council passed Resolution 15-010 authorizing the City Manager to apply for a loan in the amount of $594,076, but the actual required amount is $839,100.

The loan application cannot be completed until a resolution is passed authorizing the correct amount and authorizing the City Manager to apply for and accept the loan.

Recommendation

City Council pass a resolution authorizing the City Manager to apply for and accept an Alaska Drinking Water Fund low interest loan to finance the City’s ADEC Municipal Grant Program match for the Homer Water Distribution/Storage Improvement (Phase I) project in the amount of $839,100 and authorizes the City Manager to execute a loan agreement for the loan and all other appropriate documents.