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Grants
<br /> The City's state and federal legislative advocate, Townsend Public Affairs (Townsend),
<br /> has identified a few grant possibilities to help fund the Project. Specifically, the federal
<br /> Bureau of Reclamation Smart Water program offers up to $1.5 million in funding for
<br /> PFAS remediation projects, the proposed federal infrastructure legislation includes
<br /> funding for PFAS remediation, the details of which are still pending, and the state's FY
<br /> 2021/22 budget includes $731 million for water related projects although it is currently
<br /> unclear whether PFAS remediation or groundwater well rehabilitation projects are
<br /> eligible. To ensure the City pursues all available grant funds, staff proposes to contract
<br /> with Townsend to research and write applications on behalf of the City for the Project.
<br /> Like the approach to the settlement proceeds, if the City receives grant funds before
<br /> incurring debt for the project, the debt principal will be reduced. If the City receives grant
<br /> funds after incurring debt, bond proceeds will be used to make debt service payments.
<br /> Alternative Option to Address PFAS - Buying More Water from Zone 7
<br /> The alternative to implementing the Project is to purchase more water from Zone 7
<br /> rather than the City pump groundwater. Based on current Zone 7 water rates, the City's
<br /> water rates would increase by approximately 42 percent to purchase an equivalent
<br /> amount of water from Zone 7 that the City currently pumps from the groundwater. That
<br /> compares an up to 22 percent rate increase to issue debt. And, while Zone 7 rates will
<br /> increase per Zone 7 rate increases, the rate increase associated with debt service will
<br /> remain steady and will result in a rate reduction once the bonds are fully defeased in 30-
<br /> years. Thus, staff is recommending the PFAS Treatment and Well Rehabilitation Project
<br /> and not recommending purchasing additional water from Zone 7. Please note that staff
<br /> has not fully discussed this option with Zone 7 except whether Zone 7 could
<br /> accommodate providing additional surface water on an interim basis if the City's well is
<br /> shut down. Thus, it is possible that Zone 7 could not permanently accommodate the
<br /> increased supply of water should the City decide to choose that option.
<br /> Summary Staff Recommendations
<br /> In summary, staff is recommending the following funding plan:
<br /> PFAS Treatment and Well Renovation
<br /> Funding Plan
<br /> Financing,
<br /> Settlement
<br /> Water Op Connection proceeds &
<br /> Fiscal Year Total Est. Cost Fund Fees Grants
<br /> 2020/21* $540,000 $540,000
<br /> 2021/22* 1,707,500 1,707,500
<br /> 2022/23* 8,026,200 1,067,500 $1,271,804 $5,686,896
<br /> 2023/24 30,988,300 4,000,000 3,000,000 23,988,300
<br /> 2024/25 4,713,000 2,000,000 1,000,000 1,713,000
<br /> Totals $45,975,000 $9,315,000 $5,271,804 $31,388,196
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