Title
A Resolution Of The City Commission Of The City Of Hollywood, Florida, Relating To The Drinking Water State Revolving Fund Program, Authorizing Declarations Of Official Intent Under U.S. Treasury Regulations With Respect To Reimbursements From State Revolving Loan Proceeds For Temporary Advances Made For Payments Prior To Issuance, And Related Matters.
Strategic Plan Focus
Infrastructure & Facilities
Body
Staff Recommends: Approval of the attached Resolution.
Explanation:
On July 1, 2008, the Florida Legislature approved, and the Governor signed into law House Bill No. 7139 and Senate Bill No. 1302, referred to as the 2008 Ocean Outfall Legislation (OOL), which was later amended in 2013. The OOL requires elimination of disposal of effluent through the ocean outfall that serves the Southern Regional Wastewater Treatment plan (“SRWWTP”) by the year 2025. To meet the mandate of this legislation, the City chose the option of disposing the effluent generated from the SRWWTP to a new deep injection well (“IW”) system that requires construction of two injection wells (No. 3 and 4) and a pump station.
To meet the schedule and funding constraints, the City chose to meet the mandate of OOL by constructing the project in two phases. Phase I is the constructing of IWs 3 and 4 and Phase II is the construction of the pump station. The Department of Public Utilities sought funding from the Florida Department of Environmental Protection (“FDEP”) through the State Revolving Fund loan (“SRF”) program.
On May 12, 2021, FDEP, through the Clean Water State Revolving Fund Programs placed the City’s Ocean Outfall Regulatory Compliance Deep Injection Wells No. 3 and No. 4 Pump Station Project on the Priority List designated as DEP Project DW0604D for construction funds.
In anticipation of the funding and loan agreement by FDEP through the SRF Loan Programs, FDEP requires the attached resolution and Declaration of Official Intent forms to be executed. These forms are necessary to comply with United States Treasury Regulations for funding infrastructure projects with respect to reimbursement from note and bond proceeds of temporary advances made for payment prior to issuance, and related matters.
Certain provisions of the Reimbursement Regulations (United States Treasury Regulations §1.150-2) require that there be a Declaration of Official Intent no later than 60 days following payment of the Original Expenditure expected to be reimbursed from proceeds for SRF Loans, and that the reimbursement occur within certain prescribed time periods after an expenditure is paid or after the property resulting from that Original Expenditure is placed into service.
The City of Hollywood, Florida wishes to take necessary steps to comply with the Reimbursement Regulations.
The Director of Public Utilities recommends that the City Commission authorize the appropriate City Officials to execute the Declaration of Official Intent under U.S. Treasury Regulations with respect to reimbursement from note and bond proceeds of temporary advances made from payment prior to issuance, and related matters for the SRF Loan Program to finance the Ocean Outfall Regulatory Compliance Phase II - Deep Injection Wells No. 3 and No. 4 Pump Station Project.
Fiscal Impact:
Annually, the City adopts a Capital Improvement Plan (CIP) which includes loans issued through the SRF program. The City may begin to incur expenditures related to the approved capital projects prior to securing the financing for the projects. To be eligible for reimbursement for those expenditures from the future proceeds, the City must comply with IRS regulations and declare its official intent to seek reimbursement for those expenditures from future proceeds of SRF loans. Included in this declaration is a portion of the funding for the Deep Injection Wells No. 3 and No. 4 Pump Station Project totaling $59,943,579.00.
The Department of Public Utilities has hired a Consultant to manage this Project. The determination of need for any additional staff will be ascertained at a future date once the full project is completed.
Recommended for inclusion on the agenda by:
Keith Moran, Deputy Director, Finance, Department of Public Utilities
Vivek Galav, Director, Department of Public Utilities
Gus Zambrano, Assistant City Manager/Sustainable Development
Attachments
• Resolution
• Declaration of Official Intent