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02. Business from Manager - Urban Renewalt jf,^,'j 1 1 t V Incorporated 1892 Telephone (406) 758-7700 Douglas Rauthe FAX (406) 758-7758 Mayor Post Office Box 1997 Kalispell. Montana Al Thelen Zip 59903-1997 Interim City Manager City Council Members: MEMO Gary W. Nystul Ward I Cliff Collins To: Mayor & City Council Ward Norbert F. Donahue From: Al Thelen, Interim City Manager Wardll Dale Haarr Date: July 29, 1996 Wardll Jim Atkinson Re.: Urban Renewal Bond Issue/Referendum Petition Dilemma Ward III The staff and I have been working with bond counsel, Dorsey Lauren Granmo Ward III & Whitney, and our fiscal advisor, D.A. Davidson on the proposed Pamela B. Kennedy Ward IV bond issue for the modified urban renewal project in view of the M. Duane Larson Ward IV proposed referendum. The ordinance approving the issuance of bonds becomes effective on August 14, 1996. As you are aware, we must issue the bonds no later than September 9, 1996 when the City's authority to issue bonds on this project sunsets. The timetable to acquire signatures on the petition for a referendum on this project extends for 90 days starting on about August 1, 1996. The dilemma facing the staff is, how do we assure that the petitioners will have their 90 days to acquire signatures and at the same time preserve the position taken by the majority of the council to effect the bond issue? I Mayor and City Council Page 2 July 29, 1996 We cannot wait 90 days for the petition, so we will begin this week to make arrangements to issue the bonds. We will have a resolution authorizing the bond sale before you on August 19th and we will be prepared to close the issue on September 5, 1996. The bond proceeds will be held in escrow until either early November when the timetable for the petition expires, or April if the petition is successful. If the voters approve the bond sale, we will re -market the issue at that time. The bonds will carry an interest rate of 4�- % initially and will be re -market based on the market rates at that time. If the referendum results in a repeal of the ordinance and the bond financing, we will collapse the bond issue and pay the bonds off from the escrow account. Finance Implications The issuance costs of the bonds were estimated at $225,000 before the advent of the referendum and escrow account. This number has risen to $450,000. In addition, it will cost about $150,000 to re -market the bonds in November or April if the voters approve the ordinance. If the voters defeat the ordinance, the City will still have to absorb these costs from current cash rather than proceeds from the bond issue. The City staff will need. to spend considerable time during August to support the efforts of D. A. Davidson in preparing data for the bond sale. It is my estimate that this will cost $5,000 to $10,000 in time. 0 (Il 0i �Jll� �11 Incorporated 1892 Telephone (406) 758-7700 FAX (406) 758-7758 Post Office Sox 1997 Kalispell, Montana Zip 59903-1997 To: Mayor & City Council From: Al Thelen, Interim City Manager Date: July 29, 1996 Re.: Sanitary Sewer Carryover Budget I had planned to ask the Council for their authorization to include in our carryover budget the $260,000 that you approved for sewer projects in April. (See March 29th memo attached.) These projects have not been encumbered since they are currently under design. Items in this program are: Elk River Lift Station $180,000 Green Acres Lift Station 50,000 Auxiliary Power on Trailer 30,000 $260,000 The budget session came to a close before I thought of this item. I have taken the liberty to include it in the budget document and Resolution # 4276. This will authorize the City to carry these funds over into FY 1997 and spend them once the design is complete and you approve the contracts for construction. Douglas Rauthe Mayor Al Thelen Interim City Manager City Council Members: Gary W. Nystul Ward I Cliff Collins Ward I Norbert F. Donahue Ward II Dale Haarr Ward II Jim Atkinson Ward III Lauren Granmo Ward III Pamela B. Kennedy Ward IV M. Duane Larson Ward IV Amhk The Elk' lift station has become the most critical improvement need for our sewer system. Although it is the oldest lift station, this facility must pump as much as 1.3 million gallons of sewage per week, compared with 450,000 gallons for the peak week of any other lift station. The pump control system is a virtual museum piece and replacement parts are very hard to find. The steel dry well, which houses the pump and control systems 18 feet below ground level, is rusting through, leaking groundwater continuously. The concrete wet well is also undersized for current demands and is structurally impaired from 30 years of acid corrosion. Our construction estimate for this project is $175,000, assuming that the existing auxiliary power generator is adequate for the new pumps. Believing that the facility could be designed for under $5000, staff recommends that the engineering for the Elk's lift station be contracted to Carver Engineering. They have previously designed four similar lift stations in our system and they could determine whether the existing generator would be sufficient for the new pump system. The Greenacres lift station must also be upgraded as soon as possible to meet pumping demands. Although the system has not deteriorated to the same extent as the Elk's lift station, it has reached it's useful capacity. During one recent event, both pumps ran together for several hours and were still barely able to meet demand. Although each sewage lift station has two pumps. the second one is intended to act as a backup. When one pump is down for repairs, the system must be able to meet demands with a single pump. On top of the current demand, the Greenacres area is developing quickly, with at least 110 new homes to be added to the service area in the very near future. This includes 24 homes in the Woodland Court subdivision, 23 homes in Meadow Park II, 24 homes in Southgate Villas and 40 homes with prepaid connection fees in the Mar Lee Villa mobile home park. The Woodland Court subdivision has brought sewer service up to several vacant properties and another mobile home park, so even more new customers can be predicted. In short, the pump system must be upgraded now to stay ahead of demand. We can upgrade this system without having to build a new wet well. The project, which is much less complex than the Elk's lift station, can be designed by the Public Works engineering staff to keep the total cost under $50,000. Auxiliary power is not currently available at the Greenacres lift station. When the facility was built in 1981, it's entire service area received water from the Greenacres community water system. At that time any power outage was expected to shut down the supply of water as it shut down the sewage pumps. Today, with our reservoirs serving at least half of the area, sewage continues to flow even when power is off at the pumps. A power failure during a high flow period would cause sewage to back up into basements, leaving us no choice but to relieve the system into the neighboring slough. Stair has considered a FY 97 budget proposal to purchase a trailer mounted electrical generator. This portable generator could serve the Greenacres lift station, as well as five others which lack auxiliary power. A trailer mounted unit is particularly well suited to Greenacres because the pump station is right in someone's front yard and there is no place for a permanent generator. If the Council so desires, the trailer mounted generator could be purchased this year, for approximately $30,000, from capital funds in the current sewer budget.