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HomeMy WebLinkAbout09bii CB10 COUNCIL COMMUNICATION TO: Mayor and Council FROM: Pieter Van Ry, Sarah Stone DEPARTMENT: Utilities DATE: March 17, 2025 SUBJECT: CB 10 - Amendment to Englewood 2024 Colorado Water Resources and Power Development Authority Water Loan – Project Description DESCRIPTION: State Revolving Fund (SRF) water loan agreement amendment with the Colorado Water Resources and Power Development Authority (CWRPDA) to update the project description. RECOMMENDATION: Utilities staff is seeking City Council approval of an amendment to the SRF Leveraged Loan agreement with CWRPDA. This amendment updates the project description and revises the Authorized Officers listed in the agreement. The Water and Sewer Board recommended that Council approve the SRF loan amendment with CWRPDA during its February 11, 2025, meeting. PREVIOUS COUNCIL ACTION:  April 22, 2024 – City Council approved Drinking Water Revolving Fund Loan Agreements with CWRPDA to fund the Lead Reduction Program by emergency Ordinance.  April 15, 2024 – City Council approved Drinking Water Revolving Fund Loan Agreements with CWRPDA to fund the Lead Reduction Program by first reading.  March 25, 2024 – Utilities staff discussed the approval process for the Loan Agreements with Council at Study Session. SUMMARY: The Bipartisan Infrastructure Law (BIL), previously referred to as the Infrastructure Investment and Jobs Act, was signed into law on November 15, 2021. The BIL will invest more than $50 billion over the next five (5) years in U.S. Environmental Protection Agency (EPA) water infrastructure programs, including the SRF loan programs. In Colorado, the BIL funding is issued through the Drinking Water Revolving Fund (DWRF) in three (3) categories: 1) DWRF BIL General Supplemental Funding, 2) DWRF BIL Emerging Contaminants Funding, and 3) DWRF BIL Lead Service Line Funding. On May 23, 2024, Englewood Utilities closed on two (2) loans:  DWRF BIL Lead Service Line Direct Loan: $17,551,020 (including $10,000,000 in principal forgiveness). Page 52 of 2454  Leveraged SRF Loan: $23,000,080. These loans were intended to fully fund the Lead Reduction Program, originally estimated at $40 million. However, refinements to the lead service line inventory now indicate a total program cost closer to $30 million, leaving approximately $10 million in available funds from the leveraged SRF loan. To redirect these funds to other distribution system priorities, an amendment to the loan agreement is required. ANALYSIS: Utilities recommends approval of a first amendment to the Drinking Water SRF leveraged loan agreement with CWRPDA to update the project description and revises the Authorized Officers listed in the agreement. In March 2023, Utilities staff identified distribution system needs that could be funded through the leveraged SRF loan, including:  Installation of insertion valves at key locations to improve system control and mitigate risks during water main break emergencies.  Water line replacements along S Clarkson Ave and Union Ave.  A potential new project to directly connect the Allen Water Treatment Plant to Zone 2 of the distribution system. To ensure these projects are eligible for SRF funding, the project description in the loan agreement must be updated. The proposed amended project description is: "The project consists of identifying and replacing lead service lines (LSLs), including both public and private portions, in accordance with Bipartisan Infrastructure Law requirements. Additionally, the City will repair and/or replace pipelines, install or replace valves, and construct water main replacements." Along with this amendment, Utilities staff also requests to update the Authorized Officers listed in the loan agreement. The original agreement named two individuals from Public Works; however, Utilities staff recommends replacing them with:  Pieter Van Ry, Director of Utilities and South Platte Renew  Sarah Stone, Deputy Director – Business Solutions and Engineering These changes will ensure alignment with project and SRF loan oversight. COUNCIL ACTION REQUESTED: Motion to approve, by Ordinance, a State Revolving Fund water loan agreement amendment with the Colorado Water Resources and Power Development Authority to update the project description. FINANCIAL IMPLICATIONS: The SRF Water Fund loan will fund the Lead Reduction Program and additional improvements to the water distribution system for the next three (3) years in the amount of $40,000,000. This amendment does not change the financial implications of the loan agreement. CONNECTION TO STRATEGIC PLAN: Infrastructure: Page 53 of 2454  Establish a long-term Capital Improvement Program  Establish a 20-year plan for financing ATTACHMENTS: CB#10 - First Amendment to Englewood 2024 CWRPDA Water Loan - project scope Contract Approval Summary (CAS) Amendment to CWRPDA Leveraged SRF Loan Leveraged SRF Loan PowerPoint Presentation Page 54 of 2454 ORDINANCE NO. ____ COUNCIL BILL NO. 10 SERIES OF 2025 INTRODUCED BY COUNCIL MEMBER WRIGHT AN ORDINANCE APPROVING A FIRST AMENDMENT TO THE LOANS FROM THE COLORADO WATER RESOURCES AND POWER DEVELOPMENT AUTHORITY FOR THE PURPOSE OF FINANCING WATER CAPITAL IMPROVEMENTS AS PART OF THE CITY’S ONE WATER MODERNIZATION PROGRAM – WATER UTILITY SYSTEM PROJECT WHEREAS, the City of Englewood, Colorado, is a home rule municipal corporation duly organized and operating under Article XX of the Constitution of the State of Colorado and the Charter of the City of Englewood; and WHEREAS, pursuant to Article XIII of the Englewood Home Rule Charter, the City owns and operates a public water system, including water and water rights, which system has historically been operated as a self-supporting governmental enterprise and is known as the “Water Utility Enterprise” of the City; and WHEREAS, on April 22, 2024, the City Council of the City of Englewood adopted Ordinance No. 11, Series of 2024, authorizing the City to, among other things, enter into a loan agreement with the Colorado Water Resources and Power Development Authority (CWRPDA) under the federal Safe Water Drinking Act to finance capital improvements under the City’s One Water Modernization Program – Water Utility System Project; and WHEREAS, the CWRPDA loan supports critical infrastructure projects, including the modernization of drinking water treatment and conveyance systems, the replacement of outdated electrical and control systems, the replacement of lead service lines, improvements to metering processes, and the initiation of a water reuse program; and WHEREAS, since closing on the CWRPDA loan, Utilities staff has worked with the CWRPDA to expand the project scope, requiring an amendment to the CWRPDA loan agreement to reflect these changes; and WHEREAS, the Englewood Water and Sewer Board reviewed and recommended approval of the proposed amendment to the CWRPDA loan agreement; and WHEREAS, staff seeks Council approval to execute the First Amendment to the CWRPDA loan agreement to incorporate the revised project scope. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ENGLEWOOD, COLORADO, AS FOLLOWS: Section 1. Approval of First Amendment to CWRPDA Loan Agreement. Pursuant to and in accordance with the State Constitution, the Enabling Laws and this Ordinance, City Council hereby approves and authorizes the execution of an Amendment No. 1 to the Page 55 of 2454 2 4890-6227-3454.1 ("Drinking Water (“DW”) State Revolving Fund (“SRF”) Revenue Bond 2024 Series B Leveraged Loan Agreement dated as May 1, 2024, which shall be in substantially the same form as that attached hereto. Section 2. General Provisions Applicable to this Ordinance. The following general provisions and findings are applicable to the interpretation and application of this Ordinance: A. Severability. If any clause, sentence, paragraph, or part of this Ordinance or the application thereof to any person or circumstances shall for any reason be adjudged by a court of competent jurisdiction invalid, such judgment shall not affect, impair or invalidate the remainder of this Ordinance or its application to other persons or circumstances. B. Inconsistent Ordinances. All other Ordinances or portions thereof inconsistent or conflicting with this Ordinance or any portion hereof are hereby repealed to the extent of such inconsistency or conflict. C. Effect of repeal or modification. The repeal or modification of any provision of the Code of the City of Englewood by this Ordinance shall not release, extinguish, alter, modify, or change in whole or in part any penalty, forfeiture, or liability, either civil or criminal, which shall have been incurred under such provision, and each provision shall be treated and held as still remaining in force for the purposes of sustaining any and all proper actions, suits, proceedings, and prosecutions for the enforcement of the penalty, forfeiture, or liability, as well as for the purpose of sustaining any judgment, decree, or order which can or may be rendered, entered, or made in such actions, suits, proceedings, or prosecutions. D. Safety Clauses. The City Council hereby finds, determines, and declares that this Ordinance is promulgated under the general police power of the City of Englewood, that it is promulgated for the health, safety, and welfare of the public, and that this Ordinance is necessary for the preservation of health and safety and for the protection of public convenience and welfare. The City Council further determines that the Ordinance bears a rational relation to the proper legislative object sought to be obtained. This Safety Clause is not intended to affect a Citizen right to challenge this Ordinance through referendum pursuant to City of Englewood Charter 47. E. Publication. Publication of this Ordinance may be in the City’s official newspaper, the City’s official website, or both. Publication shall be effective upon the first publication by either authorized method. F. Actions Authorized to Effectuate this Ordinance. The Mayor is hereby authorized and directed to execute all documents necessary to effectuate the approval authorized by this Ordinance, and the City Clerk is hereby authorized and directed to attest to such execution by the Mayor where necessary. In the absence of the Mayor, the Mayor Pro Tem is hereby authorized to execute the above-referenced documents. The execution of any documents by said officials shall be conclusive evidence of the approval by the City of such documents in accordance with the terms thereof and this Ordinance. City staff is further authorized to take Page 56 of 2454 3 4890-6227-3454.1 additional actions as may be necessary to implement the provisions of this Ordinance, and has authority to correct formatting and/or typographical errors discovered during codification. G. Enforcement. To the extent this ordinance establishes a required or prohibited action punishable by law, unless otherwise specifically provided in Englewood Municipal Code or applicable law, violations shall be subject to the General Penalty provisions contained within EMC § 1-4-1. Introduced and passed on first reading on the 18th day of February, 2025; and on second reading, in identical form to the first reading, on the __ day of ____, 2025. Othoniel Sierra, Mayor ATTEST: _________________________________ Stephanie Carlile, City Clerk I, Stephanie Carlile, City Clerk of the City of Englewood, Colorado, hereby certify that the above and foregoing is a true copy of an Ordinance, introduced and passed in identical form on first and second reading on the dates indicated above; and published two days after each passage on the City’s official website for at least thirty (30) days thereafter. The Ordinance shall become effective thirty (30) days after first publication on the City’s official website. Stephanie Carlile Page 57 of 2454 Contract Number City Contact Information: Staff Contact Person Phone Title Email Summary of Terms: Original Contract Amount Start Date 5/23/2024 Amendment Amount End Date Amended Contract Amount Total Term in Years Vendor Contact Information: Name Contact Address Phone Email City State Zip Code Contract Type: Please select from the drop down list Descripiton of Contract Work/Services Colorado Water Resources and Power Development Authority Amendment to Loan The SRF Water Fund loan will fund the Lead Reduction Program and additional improvements to the water distribution system for the next three (3) years in the amount of $40,000,000. This amendment does not change the financial implications of the loan agreement. First Amendment to the Leveraged SRF Loan $ 23,000,080 $ - $ 23,000,080 303.349.3766Sarah Stone SStone@englewoodco.govUtilities Deputy Director – Business Solutions and Engineering City of Englewood, Colorado CONTRACT APPROVAL SUMMARY The Bipartisan Infrastructure Law (BIL), previously referred to as the Infrastructure Investment and Jobs Act, was signed into law on November 15, 2021. The BIL will invest more than $50 billion over the next five (5) years in U.S. Environmental Protection Agency (EPA) water infrastructure programs, including the State Revolving Fund (SRF) loan programs. In Colorado, the BIL funding is issued through the Drinking Water Revolving Fund (DWRF) in three (3) categories: 1) DWRF BIL General Supplemental Funding, 2) DWRF BIL Emerging Contaminants Funding, and 3) DWRF BIL Lead Service Line Funding. On May 23, 2024, Englewood Utilities closed on two (2) loans: • DWRF BIL Lead Service Line Direct Loan: $17,551,020 (including $10,000,000 in principal forgiveness). • Leveraged SRF Loan: $23,000,080. These loans were intended to fully fund the Lead Reduction Program, originally estimated at $40 million. However, refinements to the lead service line inventory now indicate a total program cost closer to $30 million, leaving approximately $10 million in available funds from the leveraged SRF loan. To redirect these funds to other distribution system priorities, an amendment to the loan agreement is required. Renewal options available no change Payment terms (please describe terms or attached schedule if based on deliverables) Page 58 of 2454 City of Englewood, Colorado CONTRACT APPROVAL SUMMARY Procurement Justification of Contract Work/Services Budget Authorization of Contract Work/Services Source of Funds: Revenue CAPITAL ONLY Item A B C D 1=A-B-C-D Capital Tyler New World Budgeted?Spent To Encumbrance Contract Budget Operating Year Project # / Task #Fund Division Account Line Item Description YES / NO Budget Date (Outstanding PO)Amount Remaining C -$ -$ -$ -$ -$ O -$ -$ -$ -$ -$ Total Current Year -$ -$ -$ -$ -$ C -$ -$ -$ -$ -$ O -$ -$ -$ -$ -$ Total - Year Two -$ -$ -$ -$ -$ GRAND TOTAL -$ -$ -$ -$ -$ Process for Choosing Contractor: Attachment (For Capital Items Only / Expense Line Item Detail is Located in OpenGov): All Other Attachments: PLEASE NOTE: City Council Approval Required for the following: - Budgeted Contracts or Agreements greater than $250,000 - Non-Budgeted Contracts or Agreements greater than $125,000 General Ledger Account String n/aSolicitation Name and Number: NOTES/COMMENTS (if needed): This amendment does not change the financial implications of the loan agreement. Utilities staff is seeking Water and Sewer Board recommendation for City Council to approve an amendment to the Drinking Water State Revolving Fund (SRF) loan agreement with the Colorado Water Resources and Power Development Authority (CWRPDA). This amendment updates the project description and revises the Authorized Officers listed in the agreement. The SRF Water Fund loan will fund the Lead Reduction Program and additional improvements to the water distribution system for the next three (3) years in the amount of $40,000,000. This amendment does not change the financial implications of the loan agreement. Solicitation Evaluation Summary/Bid Tabulation Attached Prior Month-End Project Status and Fund Balance Report Evaluation Summary/Bid Tabulation AttachedEvaluation Summary/Bid Tabulation AttachedEvaluation Summary/Bid Tabulation AttachedContract Copy of Original Contract if this is an Amendment Copies of Related Contracts/Conveyances/Documents Addendum(s) Exhibit(s) Certificate of Insurance Page 59 of 2454 This FIRST AMENDMENT TO LOAN AGREEMENT ("Amendment”) is made and entered into as of this ______ day of ________________2025, by and between the Colorado Water Resources and Power Development Authority (the “Authority”) and CITY OF ENGLEWOOD, COLORADO, ACTING BY AND THROUGH ITS WATER UTILITY ENTERPRISE (the “Governmental Agency”); WITNESSETH THAT: WHEREAS, pursuant to the federal Safe Drinking Water Act of 1996 and Section 37-95-107.8, the Authority administers the Drinking Water Revolving Fund and provides financial assistance to governmental agencies in financing the costs of certain water projects; and WHEREAS, the Governmental Agency and the Authority entered into a Loan Agreement dated as of May 1, 2024 (the "Drinking Water (“DW”) State Revolving Fund (“SRF”) Revenue Bonds 2024 Series B Leveraged Loan Agreement") for a loan through the Drinking Water Revolving Fund to finance a portion of the cost of a water project of the Governmental Agency (the "DW SRF Revenue Bonds 2024 Series B Leveraged Loan"); and WHEREAS, the Governmental Agency has requested that the Project Description of the Project to be financed under the 2024 Leveraged Loan Agreement be amended to expand the proposed project; and WHEREAS, the Project as expanded is authorized by the Project Eligibility List for the Drinking Water Revolving Fund that has been approved by the Colorado Legislature; NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Authority and the Governmental Agency hereby agree as follows: 1. Amendment of Project Description. The Project Description set forth in Exhibit A (1) of the 2024 Leveraged Loan Agreement is amended to read as follows: "The project consists of identifying and replacing lead service lines (LSL), to include both the public and private portions of the identified lead service lines, in accordance with the Bipartisan Infrastructure Law requirements. Additionally, the City will repair and/or replace pipeline, install or replace valves, and construct water main replacement." 2. No Other Amendment. Except as hereby amended, the DW SRF Revenue Bonds 2024 Series B Leveraged Loan Agreement remains in full force and effect. A-1 Page 60 of 2454 IN WITNESS WHEREOF, the Authority and the Governmental Agency have caused this Amendment to Leveraged Loan Agreement to be executed, sealed and delivered, as of the date set forth above. (SEAL) COLORADO WATER RESOURCES AND POWER DEVELOPMENT AUTHORITY ATTEST: By: Assistant Secretary Executive Director (SEAL) CITY OF ENGLEWOOD, COLORADO, ACTING BY AND THROUGH ITS WATER UTILITY ENTERPRISE ATTEST: By: City Clerk Mayor A-2 Page 61 of 2454 Page 62 of 2454 Page 63 of 2454 Page 64 of 2454 Page 65 of 2454 Page 66 of 2454 Page 67 of 2454 Page 68 of 2454 Page 69 of 2454 Page 70 of 2454 Page 71 of 2454 Page 72 of 2454 Page 73 of 2454 Page 74 of 2454 Page 75 of 2454 Page 76 of 2454 Page 77 of 2454 Page 78 of 2454 Page 79 of 2454 Page 80 of 2454 Page 81 of 2454 Page 82 of 2454 Page 83 of 2454 Page 84 of 2454 Page 85 of 2454 its discretion, deem necessary to enforce the obligations of the Governmental Agency to the Authority pursuant to Section 3.03, Section 3.06 and Section 5.04 hereof. SECTION 5.08 Default by the Authority. In the event of any default by the Authority under any duty, covenant, agreement or obligation of this Loan Agreement, the Governmental Agency's remedy for such default shall be limited to injunction, special action, action for specific performance or any other available equitable remedy designed to enforce the perfonnance or observance of any duty, covenant, obiigation or agreement of the Authority hereunder as may be necessary or appropriate. The Authority shall on demand pay to the Governmental Agency the reasonable fees and expenses of attorneys and other reasonable expenses in the enforcement of such performance or observation. ARTICLE VI. MISCELLANEOUS SECTION 6.01 Notices. Any notice, demand, or request required or authorized by this Agreement to be given to another notice recipient listed below, or in Exhibit B in the case of the Governmental Agency (including overnight delivery service) to each of the notice recipients and addresses below or in Exhibit B for the receiving notice recipient. Any such notice, demand, or request shall be deemed to be given (i) when sent by email transmission, or (ii) when actually received if delivered by courier or personal delivery (including overnight delivery service). Each addressee listed below ad the Governmental Agency shall have the right, upon IO days' prior written notice to the other notice recipient, to change its list of notice recipients and addresses listed below or in Exhibit A in the case of the Governmental Agency. The notice recipients below and the Governmental Agency may mutually agree in writing at any time to deliver notices, demands or requests through alternate or additional methods, such as electronic: (a)Authority: (b)Trustee: (c)Loan Servicer: 139095716.3 Colorado Water Resources and Power Development Authority 1580 Logan Street, Suite 820 Denver, Colorado 80203 Attention: Executive Director Email Address: krnclaughlin@cwrpda.com U.S. Bank Tmst Company, National Association Denver Tower 950 17th Street Denver, Colorado 80202 Attention: Corporate Trust Services Email Address: jennifer.petruno@usbank.com U.S. Bank Trust Company, National Association. Denver Tower 950 17th Street 24 Page 86 of 2454 Page 87 of 2454 Page 88 of 2454 Page 89 of 2454 Page 90 of 2454 Page 91 of 2454 Page 92 of 2454 Page 93 of 2454 DESCRIPTION OF THE LOAN 1. EXHIBIT B 2. Address of Governmental Agency: City of Englewood, Colorado, Acting By and Through Its Water Utility Enterprise 1000 Englewood Parkway Englewood, CO 80110 Attention: Sarah Stone Ernai l Address: Sstone@englewoodco.gov Cost of Project: Approximately $40,000,000 3.Principal Amount of Loan Commitment: $22,448,980 4.Loan Term: The date commencing on the Loan Closing and ending on the final Loan Repayment date set forth in Exhibit C. 5.Description of the Project: See Exhibit A, 1. 6.Authorized Officer(s): Tim Hoos -Deputy Director -Engineering and Asset Management Brittany Payton -Business Support Specialist Kevin Engels -Director of Finance Christine Hart -Accounting Supervisor 7.Project Completion Date: May 2027 B-1 Page 94 of 2454 Page 95 of 2454 Page 96 of 2454 Page 97 of 2454 Page 98 of 2454 Page 99 of 2454 Page 100 of 2454 Page 101 of 2454 Page 102 of 2454 Page 103 of 2454 Page 104 of 2454 Page 105 of 2454 Page 106 of 2454 Page 107 of 2454 Page 108 of 2454 SRF Water Loan Agreement Amendment Presented By Utilities Deputy Director –Business Solutions and Engineering, Sarah Stone Pa g e 1 0 9 o f 2 4 5 4 Background •Bipartisan Infrastructure Law (BIL) •Signed November 15, 2021 •Invests more than $50 billion over the next 5 years in USEPA water infrastructure programs •Drinking Water Revolving Fund (DWRF) •Colorado Water Resources and Power Development Authority (CWRPDA) •Englewood’s DWRF Loans •BIL Direct Loan -$17.55 million •BIL Principal Forgiveness -$10 million •Leveraged Loan -$23.0 million Pa g e 1 1 0 o f 2 4 5 4 Proposed Loan Amendment •Update Project Description •Insertion valves at key locations •Water line replacement •S Clarkson St. •Union Ave. •Connect Allen WTP to Zone 2 of distribution system •Add Authorized Officers •Pieter Van Ry, Director of Utilities and South Platte Renew •Sarah Stone, Deputy Director – Business Solutions and Engineering •Water and Sewer Board recommended City Council approval during its February 11, 2025, meeting.Pa g e 1 1 1 o f 2 4 5 4 Questions? Pa g e 1 1 2 o f 2 4 5 4 Thank you Pa g e 1 1 3 o f 2 4 5 4