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HomeMy WebLinkAbout2007-06-18 Ordinance 4957ORDINANCE 1\10. 4957 ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO ArvlENDING THE BUDGET FOR THE FISCAL YEAR 2006-07 TO PROVIDE AN ADDITIONAL APPROPRIATION OF $4,137,300 TO CAPITAL IrvIPROVEMEI\lT PROGRAM (CIP)PROJECT NUMBER WQ- 04010, REPLACE EXISTING RECLAIIVlED WATER PIPE The Council of the City of Palo Alto does ordain as follows: SECTION.1. The Council of the City of Palo Alto finds and determines as follows: A. Pursuant to the provisions of Section 12 of Article III of the Charter of the City of Palo Alto, the Council on June 12, 2006 did adopt a budget for fiscal year 2006-07; and B. From fiscal year 2003-04 through fiscal year 2006-07, the Council did adopt a budget for CIP Project Number WQ-04010, Replace Existing Reclaimed Water Pipe (Project), with a cumulative appropriation of $16,800,000. The original funding sources of this appropriation are shown in Paragraph I below; and C. In fiscal year 2004-05 through fiscal year 2005-06, the Utilities Water Fund transferred $1,000,000 to the Wastewater Treatment Fund to pay for its share of the project costs; and D. In fiscal year 2006-07, the California State Water Resources Control Board (SWRCB) State Revolving Fund (SRF) loan was made available to the Project. This loan consists of $7,500,000 in principal for the project and $1,500,000 in fees/interest totaling $9,000,000 that will be repaid over 20 years; and E. As a consequence of receiving the SRF, the Utilities Water Fund requests the Wastewater Treatment Fund to return the $1,000,000 that it originally transferred. The return of this amount will improve the Water Rate Stabilization Reserve and allow interest earnings to the Fund. The Water Fund will contribute to the project, however, by repaying it's share of the SRF loan (see Paragraph J below); and F. From fiscal year 2003-04 to date, substantial expenses related to design elements of the Project were incurred leaving a balance of $15,100,153 for the construction cost of the Project; and G. In summer 2006, this project was put out to bid. The bids received were significantly higher than the appropriation balance available from the Project. The City rejected all bids and redesigned the Project to reduce construction costs; and H. The Project was issued for re-bid in March 2007. The low bid received is higher than the appropriation balance available from the Project and additional funding of $4,137,300 is required to construct the Project; and I. The increase in funding of $4,137,300 for CIP Project I\lumber WQ- 04010 will bring the total appropriation to $20,937,300. As a consequence of increased expenditures, the SRF Loan, and increased State Grant Funds, the following changes in Project funding sources will be made; and J. The SRF loan will be paid over a period of twenty years. The share of each entity in the annual amortization of the loan (principal and fees/interest) is summarized in the following table; and City of Palo Alto-RWQCP $ 90,000 City of Mountain View $300,000 City of Palo Alto-Water $ 60,000 Fund Total $450,000 K. Funding requirements from the SRF loan and State grants require that the City of Palo Alto and the City of Mountain View must first pay for the expenditures of the Project before requesting loan monies. The expenditures can later be reimbursed from the approved grants and loan. Due to the timing of the receipt of reimbursements, there is a likelihood that the City of Palo Alto Wastewater Treatment Fund Rate Stabilization Reserve (RSR), jf necessary, will temporarily provide funding for CIP Project Number WQ-04010 and replenishments will be made to the RSR as reimbursements are received; and L. The additional appropriation of funds is for one-time expenditures and if future year ongoing costs are needed they will be included in the operating budget and appropriately shared with Mountain View; and M. City Council authorization is needed to amend the 2006-07 budget to make available the funds required for construction of CIP Project Number WQ- CJ4010, Replace Existing Reclaimed Water Pipe. SECTION 2. The sum of Four Million One Hundred Thirty Seven Thousand Three Hundred Dollars ($4,137,300) is hereby appropriated to CIP Project Number WQ-04010, Replace Existing Reclaimed Water Pipe. SECTION 3. The SRF loan of Seven Million Five Hundred Thousand Dollars ($7,500,000) in principal shall be designated to provide funding to CIP Project Number WQ-040, Replace Existing Reclaimed Water Pipe. SECTION 4. The sum of One Million Six Hundred Ninety Six Thousand Eight Hundred Four Dollars ($1,696,804) shall be returned to the Wastewater Treatment Fund Stabilization Reserve. SECTION 5. The sum of One Million ($1,000,000) shall be transferred from the Wastewater Treatment Fund to the Water Fund. SECTION 6. The share of the City of Mountain View in the cost of the CIP Project Number WQ-04010, Replace Existing Reclaimed Water Pipe shall be reduced by the sum of Nine Hundred Thirty EightThousand Six Hundred Ninety Six Dollars ($938,696). SECTION 7. The State Grant shall be increased by the sum of Two Hundred Seventy Two Thousand Eight Hundred Dollars ($272,BOO). SECTION B. The Wastewater Treatment Fund Rate Stabilization Reserve shall be available to temporarily fund CIP Project Number WQ-04010, Replace Existing Reclaimed Water Pipe and shall be replenished as reimbursements are collected from State grants and SRF loan. SECTION 9. As specified in Section 2.2B.OBO(a) of the Palo Alto Municipal Code, a two-thirds vote of the City Council is required to adopt this ordinance. SECTION 10. As provided in Section 2.04.330 of the Palo Alto Municipal Code, this ordinance shall become effective upon adoption. SECTION 11. The Council of the City of Palo Alto adopted a mitigated negative declaration for the Project in January 2004. INTRODOCED AND PASSED: AYES: NOES: ABSTENTIONS: ABSENT: ATTEST: APPROVED AS TO FORM: June 18, 2007 BEECHAM, CORDELL, DREKMEIER, KISHIMOTO, KLEIN, KLEINBERG, MORTON, MOSSAR BARTON APPROVED: Director Services City of Palo Alto MEMORANDUM DATE: June 28, 2007 SUBJECT: Budget Amendment Ordinance Number 4957 Staff is infonning a correction on Section J of the Budget Amendment Ordinance Number 4957 "ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO AMENDING THE BUDGET FOR THE FISCAL YEAR 2006-07 TO PROVIDE AN ADDITIONAL APPROPRIATION OF $4,137,300 TO CAPITAL IMPROVEMENT PROGRAM (CIP) PROJECT NUMBER WQ-04OlO, REPLACE EXISTING RECLAIMED WATER PIPE" The original table, in Section J of the Budget Amendment Ordinance, reflected a RWQCP and Water Fund annual amortization of $60,000 and $90,000, respectively. The revised table will reflect the correct amount, shown in redline strike-out fonn below: This change is informational and does not require City Council action. '\,. \ DEPARTMENT HEAD: