ORDINANCE 06-69

AN ORDINANCE OF THE CITY COUNCIL OF HOMER, ALASKA AUTHORIZING THE CITY TO ENTER INTO A LOAN AGREEMENT WITH THE ALASKA DEPARTMENT OF ENVIRONMENTAL CONSERVATION (ADEC) THROUGH THE DRINKING WATER (DW)/CLEAN WATER (CW) REVOLVING LOAN FUND PROGRAMS TO FINANCE THE OCEAN DRIVE LOOP SEWER AND KACHEMAK DRIVE PHASE I WATER AND SEWER PROJECTS AND DESIGN OF KACHEMAK DRIVE PHASE II WATER AND SEWER PROJECT IN THE AMOUNT OF $470,000.00 FROM DW AND $3,250,000.00 FROM CW AND AUTHORIZING THE CITY MANAGER TO EXECUTE THE APPROPRIATE DOCUMENTS.

WHEREAS, The City of Homer has helped property owners finance the extension of water and sewer mains into their neighborhoods through the Homer Accelerated Water and Sewer Program (HAWSP), and

WHEREAS, As part of the financing package for these projects, the City has routinely borrowed low interest funds from the DW/CW Revolving Loan Fund Programs; and

WHEREAS, Borrowing money from this fund provides low interest loan terms for both the City and the property owners and it enables the City to keep the HAWSP Fund solvent and with sufficient cash on hand to finance additional water and sewer projects, and

WHEREAS, The loans are repaid by the HAWSP Fund (the City share of improvement costs) and by the property owners as they make their LID assessment payments, and

WHEREAS, In 2006, the City intends to construct the Ocean Drive Loop Sewer and Kachemak Drive Water and Sewer projects and to design the Kachemak Drive Phase II Water and Sewer Project, and

WHEREAS, ADEC has accepted the City’s loan application and prepared loan documents that will finance these projects, and

WHEREAS, The maximum loan amount is $3,720,000 ($3,250,000 for sewer and $470,000 for water), the interest rate for sewer loans is 1.5%, the interest rate for water is 2.5%, and the term is 20 years; and

WHEREAS, This ordinance, in part, clarifies, Ordinance 06-41 adopted August 14, 2006.

Page Two

Ordinance 06-69

City of Homer

NOW, THEREFORE, THE CITY OF HOMER HEREBY ORDAINS:

Section 1. The Homer City Council finds that it is in the best interest of the City to enter into a loan agreement with the Alaska Department of Environmental Conservation through the DW/CW Revolving Loan Fund Programs to finance the construction of the Ocean Drive Loop Sewer and Kachemak Drive Phase I Water and Sewer Projects, and to engineer and design the Kachemak Drive Phase II Water and Sewer Project.

Section 2. The Council hereby approves a loan agreement in an amount up to $3,720,000 for a term of twenty years. The interest rate for sewer is 1.5% and the interest rate for water is 2.5%. The loan will be repaid by HAWSP Funds and LID Assessments. The City Manager is authorized to execute the appropriate documents.

Section 3. This is a non-code ordinance and shall not be incorporated into the Code of ordinances.

ENACTED BY THE CITY COUNCIL OF THE CITY OF HOMER THIS _____ day of ________, 2006.

CITY OF HOMER

JAMES C. HORNADAY, MAYOR

ATTEST:

MARY L. CALHOUN, CMC, CITY CLERK

Introduction:

Public Hearing:

Second Reading:

Effective Date:

Yeas:

Nays:

Abstain:

Absent:

Reviewed as to form and content:

Walt Wrede, City Manager Gordon Tans, City Attorney

Date: Date:

Fiscal Note: $3,720,000 Loan, 20 years, plus interest