Title
Approval of a Resolution Regarding the Water Project Promissory Note
Recommended Action
Committee Recommendation:
Finance Committee directed staff to prepare a promissory note to be presented to the Council on the consent agenda.
City Manager Recommendation:
Move to approve the resolution regarding the Water Project promissory note.
Report
Issue:
Whether a Water Project promissory note should be used to fund Drinking Water projects impacted by the suspension of the Drinking Water State Revolving Fund (DWSRF) loans.
Staff Contact:
Dean Walz, Acting Director of Administrative Services, 360.753.8465
Stacie Tellers, Acting Accounting Supervisor, 360.753.8599
Presenter(s):
None - Consent Calendar Item.
Background and Analysis:
The Waterworks Utility of the City of Olympia provides drinking water, wastewater, and reclaimed water services for the citizens of Olympia. The utility, for debt purposes, is reported as a combined utility; however the City operates the services separately.
Recently the City was notified that the State did not pass a capital budget and suspended DWSRF loan payments. The City currently has State loans to finance three projects totaling more than $13 million in amounts not yet received. Those projects are:
* Log Cabin Road Reservoir
* McAllister Wellfield Corrosion Control Facility
* Fones Road Booster Pump Station
The loans are drawn down as the City expends funds on the projects. The City expects to again receive loan payments once a capital budget is adopted by the State.
The Drinking Water Capital Fund has less than $5,500,000 of resources. For June and July this fund had expenses of $1.1 and $1.5 million.
Staff recommends the Council adopt a resolution authorizing a promissory note by the Waterworks Utility for the Drinking Water Capital Fund. The note would be purchased by the City internal investment pool.
The promissory note is for $10 million, maximum maturity of three years and an interest rate of 1.5 percent wh...
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