MEMORANDUM 09-10

 

TO:             Mayor Hornaday / Homer City Council

 

FROM:       Walt Wrede and Carey Meyer

 

DATE:        January 19, 2009

 

SUBJECT:  Economic Stimulus Package / Project List

 

At the last meeting, the Council adopted Resolution 09-10 which approved a list of projects that will be submitted for possible inclusion in the proposed Federal Economic Stimulus Package. During discussion, the Council recognized that the list of projects was compiled in a hurry and under a deadline and expressed a desire to have some additional discussion and possibly amend and/or supplement the list. In addition to that, new details have emerged about the package since Resolution 09-10 was adopted that may influence how the Council may want to amend the list. Those new details include:

 

  • It now looks as though projects will need to be “shovel ready” within 180 days (6 months) instead of 90 to 120 days.
  • It appears that water and sewer projects will be emphasized but that money for them will be appropriated through the existing revolving loan fund, which Homer has already used extensively. There is some talk about loan forgiveness under some circumstances.
  • It is now very clear that education and “green” energy and infrastructure projects will be a high priority.

 

Following are some comments on various projects that could be added to the list. Some of them are City projects and others are not. A few we strongly recommend adding. Others require more discussion with Council.

 

Recommended City Projects

 

  1. Deep Water Dock: Since it now looks like we might have up to six months to complete design and permitting, we are more confident that we can get this done. We recommend that this project be added. We would caution Council that the money will probably have to be returned if construction is not complete within two years. Also, the draft resolution promises a 10% local match. This is a $ 20 Million Project (Federal Request $18, Million) so 10% is $2 Million. Recall that the Council assured Senator Stevens that it would issue $ 2 Million in Revenue Bonds as a local match.
  2. Turbine Electric Project:  Recall that the City received a grant to design this project. Design is currently underway. Since alternative energy is a high priority in the stimulus package and we now have additional time to complete design, this project seems ideal. We recommend that this project be added. The Federal Request is $400,000 for construction and installation, and connection to the electric grid.

 

City Projects Under Consideration

 

  1. Other Water and Sewer Projects: Public Works is considering a number of projects that would help with maintenance and upkeep of the current system. These projects would save the City and the ratepayers money in the future. Examples include repairs to the PRV Stations and replacement of the water line from the Spit (Council has already approved design). We will have more detail for you by meeting time. Since these types of projects are only likely to be funded through the revolving loan fund, we would not recommend doing them unless the loans have a provision for loan forgiveness that the City is eligible for. The HAWSP Fund has enough debt already and depleting the water and sewer depreciation fund and/or raising rates is not desirable at this time. We have also discussed adding the new sewer treatment plant project that was inserted into the CIP List this year. However, Carey does not think it is possible to have that project ready for bid within 6 months.

 

Other Projects

 

  1. The Kachemak Ferry: At the time this was written, I had not yet spoken to Michael Beal, the consultant who is working on the Kachemak Ferry Project. I hope to have more information about this, including where they are on the design process, by meeting time. One thing to think about is that this is not a project that has been vetted by the Council or by the Community. It is not on the CIP list like all of the other projects are. I don’t believe Council has even reviewed the feasibility study. No agreements have been reached about where the ferry would land in the Homer Harbor. So, this might be a great project but it would be kind of a leap of faith to include it given our current lack of information and public input.
  2. College Expansion: I spoke with Carol Swartz last week about the College’s plans. As you may know, the College has decided to move forward to Plan B and seek funding for approximately $8 Million to build a new building on their existing property next to City Hall. If funding can be secured, I understand that the College would no longer be interested in acquiring City Hall, at least for the foreseeable future. Carol expressed an interest in having this project included on the Council list. I told her that she should submit a project description and that the Council would consider it. Again, this project is a little different in that it is not currently included on the CIP List.
  3. Voc-Ed Center: This idea was mentioned by Council member Zak at the last meeting. It is a very good idea and I suspect there is a real need for that here. However, it is really hard for me to see how we could possibly get the need and feasibility studies and design and permitting done within 6 months. If this was new construction, we would have to identify a piece of land. If the idea is to refurbish the old school, we would have to have a better idea of what was happening with the University. Perhaps it would be a good idea to just seek money to upgrade the old school.

 

 

 

Recommended Water/Sewer Projects

 

  1. Homer Water Storage/Distribution improvements Project: This project consists of construction a 1.0 MG water storage tank, extending water main from East Hill Road to Anderson Street, and the abandonment of the existing “A” Frame tank. We recommend that an application be made for economic stimulation loan funds.  This project is on the CIP list and would allow the transmission mains and the water treatment plant to operate at an average daily flow, improve fire flows, and improve distribution system efficiencies. The HAWSP fund has limited ability to fund new infrastructure projects. If the loan does not have significant “forgiveness” provisions, we would recommend that the offered funding be rejected.  Total Cost = $3,900,000 ($390,000 design; $3,510,000 construction).  Schedule: Design – Mar 2009 to Dec 2009; Construction – Apr 2010 to Oct 2010.

 

  1. Homer Sewer Plant Bio-Solids Treatment Improvement Project: This project consists of constructing an addition to the sewer plant and installing mechanical sludge dewatering equipment, installation of a digester and energy recovery system, abandoning the existing sludge lagoon, and converting the lagoon to a flow equalization pond.  We recommend that an application be made for economic stimulation loan funds.  This project is on the CIP list and would allow for more effective sludge treatment, provide energy recovery, storage of peak wet weather flows until they can be treated without violating the plant’s NPDES permit, and create space for a future new Public Works Complex. The HAWSP fund has limited ability to fund new infrastructure projects. If the loan does not have significant “forgiveness” provisions, we would recommend that the offered funding be rejected.  Total Cost = $5,245,000 ($525,000 design; $4,720,000 construction). Schedule: Design – Mar 2009 to Dec 2009; Construction – Apr 2010 to Oct 2010.

 

  1. Homer Sanitary Sewer Rehabilitation Project:  This project consists of identifying sewer mains with potential infiltration and structural integrity problems and slip-lining them to correct deficiencies and eliminate infiltration. The main focus will be the Ocean Drive sewer main (highly corrosive wastewater) and the West Trunk; especially areas with brittle asbestos cement (AC) pipe. The Bay Avenue sewer lift station wet well will be replaced.  We recommend that an application be made for economic stimulation loan funds.  This project will return structural integrity to the badly corroded Ocean Drive main (receiving aggressive wastewater from the Spit), reduce infiltration, and improve lift station capabilities. The Water/Sewer Reserve Account has limited ability to fund infrastructure improvement projects. If the loan does not have significant “forgiveness” provisions, we would recommend that the offered funding be rejected.  Total Cost = $1,200,000 ($120,000 design; $980,000 construction). Schedule: Design – Mar 2009 to Apr 2009; Construction – Jun 2009 to Nov 2009.

 

  1. Homer Pressure Reducing Vault Replacement Project:  This project consists of replacing four existing PRV vaults (Ben Walters, Lucky Shot, Lake, and A-Frame) that are in need of replacement.  The City has recently replaced two of the most needed replacements; this project would replace the other PRV stations that are in poor condition. We recommend that an application be made for economic stimulation loan funds.  The Water/Sewer Reserve Account has limited ability to fund infrastructure improvement projects. If the loan does not have significant “forgiveness” provisions, we would recommend that the offered funding be rejected.  Total Cost = $600,000 ($60,000 design; $540,000 construction). Schedule: Design – Mar 2009 to Apr 2009; Construction – Jun 2009 to Nov 2009.