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HomeMy WebLinkAbout44 22 JEFFERSON COUNTY STATE OF WASHINGTON In the Matter of Authorizing ) Application to the ) RESOLUTION NO. 4 4 2 2 Department of Ecology ) Water Quality Program ) WHEREAS, the Jefferson County Comprehensive Plan calls for the construction of the Port Hadlock Wastewater project which will replace existing on-site septic systems, many of which are beyond their design life and some of which are failing, and will thereby help to improve water quality in surrounding water bodies which have been listed as impaired; and WHEREAS, construction of the Port Hadlock Wastewater project is required under the Growth Management Act (GMA) to fully realize the benefits of zoning within the Urban Growth Area (UGA) including the ability to expand businesses and develop multi-family housing; and WHEREAS, significant funding already provided by the State and County have allowed the completion of project studies, plans, approvals, permits, easements, land acquisitions, and other items that will allow project construction to begin in 2023; and WHEREAS, the County, through the efforts of the Commissioners, Public Works staff, and State and Federal legislators has already received significant construction funding for the project including: • $20 million from the State of Washington through a budget appropriation • $2.5 million through a federal Community Projects appropriation(plus $625,000 in local match) • $3.0 million (likely) through a second federal Community Projects appropriation (plus $750,000 local match); and WHEREAS, construction funding already acquired will allow the County to construct the wastewater treatment plant, reclaimed water re-use facility, and portions of the pressurized sewer collection and conveyance system in the"Phase I"service area; and conveyance system WHEREAS, additional funds are needed to complete the Phase I sewer collectionand y y and to help connect initial users to the system to generate sewer flow at startup; and WHEREAS, the Department of Ecology has issued a call for applications to its Water Quality Combined Funding Program(WQC) for State Fiscal Year 2024 which are due by October 12th; and WHEREAS, for the purposes of this application Jefferson County will be considered in"elevated hardship" status under which the County is eligible for 75% forgivable principal loan (essentially a grant) and 25% low interest loan at 0.4%for 20 years; and WHEREAS, Public Works staff and consultants have been preparing said application and recommend that the County pursue $5 million(75%) in forgivable loan principal (the maximum allowed) and $1.67 million (25%)in a low interest loan for a total of$6.67 million through the WQC program; and WHEREAS, successful application and acceptance of this funding will require debt payments estimated at $87,100 per year for 20 years; and WHEREAS, customer sewer rates are intended to cover operations and maintenance, administration, and equipment replacement. Adding debt service would escalate rates beyond that typical for sewer utilities, and therefore Public Works recommends that the County be prepared to service the debt associated with this loan; NOW, THEREFORE BE IT RESOLVED, that Public Works is authorized to make application to the Ecology Water Quality Combined Funding Program in the amount of$5 million(75%) forgivable principal loan and $1.67 million (25%) low interest loan, and the Public Works Director is authorized to sign said application on behalf of Jefferson County. APPROVED AND ADOPTED this Y( day of October , 2022. JEFFERSON COUNTY t 7. BOARD OF COMMISSIONERS SEAL; 4 ♦4 �% Heidi Eisenhour, Chair \() . 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Analysis/Strategic Goals/Pro's Et Con's: Over $23 million has been secured so far for construction of the Port Hadlock Wastewater project. Construction is planned to begin in early 2023, and existing funds are adequate to complete the wastewater treatment plant, the reclaimed water facility, and a portion of the sewer collection and conveyance system in the "Phase I" area. Additional funds are being sought to complete the Phase I area collection and conveyance system and to help connect initial users to the system to generate sewer flow at startup. A budget summary is attached for reference. The Ecology WQC program applications are due by October 12th. For the purposes of this application, Jefferson County will be considered in "elevated hardship" which allows award of up to 75% in forgivable principal loan ($5 million maximum) with the remaining 25% as a low interest loan. As such, Public Works is preparing an application for $5 million in forgivable principal loan (essentially a grant) and $1.67 million as a low interest loan. Fiscal Impact/Cost Benefit Analysis: The loan terms are expected to be 20 years at 0.4% and will require repayment at $87,100 per year. Given the need to keep sewer rates affordable, the County will need to be prepared to service this loan debt rather than add it to sewer customer bills. Recommendation: Public Works recommends that the Board sign the attached Resolution which authorizes Public Works to make application to the Ecology Water Quality Combined Funding Program for Fiscal Year 2024 in the amounts stated herein. Department Contact: Monte Reinders, Public Works Director x242. Reviewed By: ,/4 , . 9/2//7-2-- Mark McCau ey County Administrator Date