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On June 15, 2021, the City Council received a presentation on the Basis of Design
<br /> Report (BODR) prepared by Carollo Engineers and approved finalizing the project
<br /> design. The Project is estimated to cost approximately $46 million of which $3.3 million
<br /> has already been allocated from the Water Operating Fund to cover design costs,
<br /> leaving $42.7 million to be funded. At the June 15, 2021, City Council meeting, City
<br /> Council directed staff to prepare a funding plan for the unfunded portion of the
<br /> estimated project cost and bring that plan to City Council for review and approval.
<br /> Staff presented the following funding plan at the September 7, 2021, City Council
<br /> meeting which Council adopted:
<br /> PFAS Treatment and Well Renovation
<br /> Total Cost by Fiscal Year 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
<br /> *$3.3M in Water Operating Funds already allocated.
<br /> Of the remaining $6 million in the Water Operating Fund, $1 million was allocated to a
<br /> PFAS reserve from the FY 2020/21 year-end water Operating Fund surplus which will
<br /> be allocated to the project during the FY 2021/22 mid-year budget update.
<br /> As described in the table above, $31.4 million of the Funding Plan will be a combination
<br /> of financing and settlement proceeds and grant funds, if available. The Funding Plan
<br /> assumes $31.4 million will need to be funded through financing for which staff is
<br /> pursuing a SRF loan due to the lower interest rates. Securing grant funding for the
<br /> PFAS project reduces the amount of financing required which reduces the impact to the
<br /> City's rate payers.
<br /> DISCUSSION
<br /> Recently, the Urban Community and Multibenefit Drought Relief (UCMDR) Program
<br /> from DWR has become available. The UCMDR provides grant funding for drought
<br /> and drinking water quality improvement projects. Staff has initiated an application for
<br /> DWR grant funds to support the PFAS project in the amount of$14,000,000. The
<br /> general application requires a City Council resolution authorizing the grant application
<br /> and designating an authorized representative to sign and file for and on behalf of the
<br /> City. Since OSD is the lead department for the Project, the proposed resolution
<br /> designates the Director of Operations and Water Utilities as the City's authorized
<br /> representative.
<br /> Page 3 of 4
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