HomeMy WebLinkAboutResolution No. 2025-54ffr • �ffilrgmmmm=
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WHEREAS, the Water Treatment Plant Pumphouse Project will construct a new pumphouse including
new water distribution system pumps and appurtenances at the 420 Shotgun Dr. location to replace
outdated equipment and improve overall system resiliency; and,
WHEREAS, the City of Kenai was previously awarded a $1,200,000 State Revolving Fund Loan for this
project; and,
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WHEREAS, the project currently is included on an Alaska Drinking Water Fund project priority list for the
current fiscal year; and,
WHEREAS, an additional project loan of up to $1,500,000 has been offered and is eligible for 100% loan
forgiveness according to the notification received on June 12, 2025 from the Alaska Department of
Environmental Conservation; and,
WHEREAS, the City's debt covenant established in Article 6 of Kenai Municipal Charter is not applicable
to this agreement as the funding requested will be forgiven upon release; and,
Section 1. That the City Manager is authorized to apply for and execute a loan agreement with the
Alaska Department of Environmental Conservation in the amount of $1,500,000 in support of the Water
Treatment Plant Pumphouse Project, and that the City Manager is authorized to represent the City of
Kenai in carrying out the City of Kenai's responsibilities under the loan agreement, and that the City
Manager is authorized to delegate responsibility to appropriate City of Kenai staff to carry out technical,
financial, and administrative activities associated with the loan agreement.
PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, THIS 20TH DAY OF AUGUST, 2025.
Brian Gabriel Sr., Mayor
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TO: Mayor Gabriel and Council Members
THROUGH: Terry Eubank, City Manager
FROM: Lee Frey, Public Works Director
DATE: August 12, 2025
SUBJECT: Resolution 2025-54 - Authorizing the Application to the State of Alaska,
Department of Environmental Conservation for a State Revolving Fund Load
from the Alaska Drinking Water Fund and Execution of a Loan Agreement
for the Water Treatment Plant Pumphouse Project
funding through the State's Revolving Fund (SRF) Loan in support of the Water Treatment Pla
Pumphouse project, The project includes design and construction of a new pumphouse buildin
distribution pumps, controls, piping, a backup generator and pressure tanks to increase syste
pressures, increase fire flows, reduce flow restrictions and improve system resilience.
This project was previously funded through an SRF Loan in the amount of $1,200,000.
construction cost estimate for the project produced at the 65% completion of the design phas
estimated the project cost at approximately $3,400,000 with contingencies. After reviewing t
costs. the Public Works Department put in an additional request throui—
the SRF Loan program for a total project cost of $4,400,000. On June 2, 2025 and received wo
of the programs offer of $1,500,000 on June 12, 2025. We need to complete the applicati
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process through the SRF program prior to appropriation of the funds to construct the proje
Design work is expected to be completed no later than October.
The City previously appropriated $1,200,000 of local Utility Capital Funds to this project throu,
Ordinance 3384-2023. At the time, these funds were to be used to pay project costs un
reimbursement from the SRF and simultaneous loan forgiveness was provided to avoid the Ci
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incurring debt. The City's debt covenant established in Article 6 of Kenai Municipal Charter is no
applicable to this agreement. The City Administration has had several meetings with staff fro
the SRF program and due to the loan forgiveness upon application for payment, the City is no
incurring debt through accepting the 100% forgivable loan amount. The City's debt covena
established in Article 6 of Kenai Municipal Charter is not applicable to this agreement. This allo
the original appropriation of $1,200,000 to now be used for project costs.
Utility Funds (Ordinance 3384-2023) $1,200,000
SRF Loan Proceeds (Including 100% Loan Forgiveness) 2,700,000
Additional Utility Capital Funds _500,000
The final project budget will be determined after successful bidding. Appropriation of the S
funds and the additional $500,000 of utility capital funds will occur after receipt of approved S
loan application. Council's support is respectfully requested. I
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