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TO: Mayor Thomas J. Weisner
FROM: Jason Bauer, P.E., Engineering Coordinator
DATE: February 2, 2016
SUBJECT:
The City has previously applied for a low interest loan from the Illinois Environmental Protection Agency to fund the upcoming "East Galena Boulevard and East Downer Place Sewer Separation Project - Water Street to State Street" project. The attached debt ordinance must be adopted by the City for the IEPA to finalize the loan.
PURPOSE:
The attached ordinance outlines the amount of the loan and that the loan will be repaid from the City's Long Term Control Plan Fund over a period of 20 years. The current 2016 budget shows the loan amount for construction of this sewer separation project; without the loan there will be insufficient funds to start construction in 2016.
BACKGROUND:
The US and Illinois Environmental Protection Agencies have require the City of Aurora to develop and implement a Combined Sewer Overflow Long Term Control Plan (LTCP). Sewer separation is a component of the LTCP. Construction of this project will reduce the frequency of basement backup and combined sewer overflows to the Fox River. Completion of these improvements will also move the City closer to completing its Clean Water Act requirements.
DISCUSSION:
Passing this ordinance is required by the IEPA to loan the City the funds necessary to construct this project in 2016 and 2017. The current 2016 budget shows the full value of the loan in account 281-1856-512-73-09. The final value of the loan will be determined after construction; accordingly, the attached ordinance is higher than that expected amount of the actual loan and will cover the cost of construction and construction engineering.
IMPACT STATEMENT:
By adopting this ordinance the City will have the funds necessary to construct this project. Once completed, the project will reduce the frequency of combined sewer overflows into the Fox River and basement backups in the project area. During construction, there will be various roadway and lane closures, delays are to be expected.
RECOMMENDATIONS:
It is requested that the proposed ordinance be adopted to secure the loan funding.
cc: Alderman Garza, Chairman
Alderman Johnson
Alderman Mesiacos
Alderman Bohman, Alternate
CITY OF AURORA, ILLINOIS
ORDINANCE NO. _________
DATE OF PASSAGE ________________
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An Ordinance Authorizing A Loan Agreement (Water Pollution Control Loan Program - Home Rule Entity) For The East Galena Boulevard and East Downer Place Sewer Separation - Water Street to State Street Project.
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WHEREAS, the City of Aurora has a population of more than 25,000 persons and is, therefore, a home rule unit under subsection (a) of Section 6 of Article VII of the Illinois Constitution of 1970; and
WHEREAS, subject to said Section, a home rule unit may exercise any power and perform any function pertaining to its government and affairs for the protection of the public health, safety, morals, and welfare; and
WHEREAS, subject to said section, a home rule unit may exercise any power and perform any function pertaining to its government and affairs for the protection of the public health, safety, morals and welfare; and
WHEREAS, the City of Aurora, Kane, DuPage, Kendall and Will Counties, Illinois, operates its sewerage system (“the System”) in accordance with the provisions of the Illinois Constitution, Article VII, and the Local Government Debt Reform Act, 30 ILCS 350/1 et seq. (collectively “the Act”); and
WHEREAS, the MAYOR and CITY COUNCIL of the City of Aurora (“the Corporate Authorities”) have determined that it is advisable, necessary, and in the best interest of the public health, safety, and welfare to improve the System, including the following:
East Galena Boulevard and East Downer Place Sewer Separation - Water Street to State Street, including the installation of new storm sewers ranging in size from 12 to 60 inch as required to separate the sanitary and storm sewers. The project also includes the replacement/relocation of various sections of sanitary sewer and water main and all of the required restoration inclusive of new roadway pavement, together with any land or rights in land and all electrical, mechanical or other services necessary, useful or advisable to the construction and installation (“the Project”), all in accordance with the plans and specifications prepared by the consulting engineers of the City, which Project has a useful life of 50 years; and
WHEREAS, the estimated cost of construction and installation of the Project, including engineering, legal, financial and other related expenses is $8,000,000.00, and there are insufficient funds on hand and lawfully available to pay these costs; and
WHEREAS, the costs are expected to be paid for with a loan to the City from the Water Pollution Control Loan Program through the Illinois Environmental Protection Agency, the loan to be repaid from the City of Aurora Long Term Control Plan Sewer Separation Fund and the loan is authorized to be accepted at this time pursuant to the Act; and
WHEREAS, said loan shall bear an interest rate as defined by 35 Ill. Adm.
Code 365, which does not exceed the maximum rate authorized by the Bond Authorization Act, as amended, 30 ILCS 305/0.01 et seq., at the time of the issuance of the loan; and
WHEREAS, the principal and interest payment on said loan shall be payable semi-annually, and the loan shall mature in 20 years, which is within the period of useful life of the Project; and
WHEREAS, in accordance with the provisions of the Act, the City is authorized to borrow funds from the Water Pollution Control Loan Program in the aggregate principal amount of $10,000,000.00 to provide funds to pay the costs of the Project; and
WHEREAS, the loan to the City shall be made pursuant to a Loan Agreement, including certain terms and conditions between the City and the Illinois Environmental Protection Agency;
NOW, THEREFORE, BE IT ORDAINED by the City Council of the City of Aurora, Illinois, as follows:
SECTION 1. INCORPORATION OF PREAMBLES
The Corporate Authorities hereby find that the recitals contained in the preambles are true and correct, and incorporate them into this Ordinance by this reference.
SECTION 2. DETERMINATION TO BORROW FUNDS
It is necessary and in the best interests of the City to construct the Project for the public health, safety, and welfare, in accordance with the plans and specifications, as described so that the System continues to be operated in accordance with the provisions of the Illinois Environmental Protection Act, 415 ILCS 5/1 et seq.; and that for the purpose of constructing the Project, it is hereby authorized that funds be borrowed by the City in the aggregate principal amount (which can include construction period interest financed over the term of the loan) not to exceed $ 10,000,000.00 .
SECTION 3. ADDITIONAL ORDINANCES
The Corporate Authorities may adopt additional ordinances or proceedings supplementing or amending this Ordinance, authorizing entering into the Loan Agreement with the Illinois Environmental Protection Agency, prescribing all the details of the Loan Agreement, and providing for the collection, segregation and distribution of City of Aurora Long Term Control Plan Sewer Separation Fund so long as the maximum amount of the Loan Agreement as set forth in this Ordinance is not exceeded and there is no material change in the project or purposes described herein. Any additional ordinances or proceedings shall in all instances become effective in accordance with the Act or other applicable laws. This Ordinance, together with such additional ordinances or proceedings, shall constitute complete authority for entering into the Loan Agreement pursuant to applicable law.
However, notwithstanding the above, the City may not adopt additional ordinances or amendments which provide for any substantive or material change in the scope and intent of this Ordinance, including but not limited to interest rate, preference or priority of any other ordinance with this Ordinance, parity of any other ordinance with this Ordinance, or otherwise alter or impair the obligation of the City to pay the principal and interest due to the Water Pollution Control Loan Program without the written consent of the Illinois Environmental Protection Agency.
SECTION 4. LOAN NOT INDEBTEDNESS OF [ENTITY]
Repayment of the loan to the Illinois Environmental Protection Agency by the City pursuant to this Ordinance is to be solely from the revenue derived from the City of Aurora Long Term Control Plan Sewer Separation Fund and the loan does not constitute an indebtedness of the City within the meaning of any constitutional or statutory limitation.
SECTION 5. APPLICATION FOR LOAN
The MAYOR is hereby authorized to make application to the Illinois Environmental Protection Agency for a loan through the Water Pollution Control Loan Program, in accordance with the loan requirements set out in 35 Ill. Adm. Code 365.
SECTION 6. ACCEPTANCE OF LOAN AGREEMENT
The Corporate Authorities hereby authorize acceptance of the offer of a loan through the Water Pollution Control Loan Program, including all terms and conditions of the Loan Agreement as well as all special conditions contained therein and made a part thereof by reference. The Corporate Authorities further agree that the loan funds awarded shall be used solely for the purposes of the Project as approved by the Illinois Environmental Protection Agency in accordance with the terms and conditions of the Loan Agreement.
SECTION 7. RESERVE ACCOUNTS
As long as the City has outstanding revenue bonds payable from revenues of the system that are senior to the revenue bonds authorized by this ordinance, the City shall maintain an account, coverage and reserves equivalent to the accounts, coverages and reserves required by the outstanding ordinances.
SECTION 8. AUTHORIZATION OF MAYOR TO EXECUTE LOAN AGREEMENT
The MAYOR is hereby authorized and directed to execute the Loan Agreement with the Illinois Environmental Protection Agency. The Corporate Authorities may authorize by resolution a person other than the MAYOR for the sole purpose of authorizing or executing any documents associated with payment requests or reimbursements from the Illinois Environmental Protection Agency in connection with this loan.
SECTION 9. SEVERABILITY
If any section, paragraph, clause or provision of this Ordinance is held invalid, the invalidity of such section, paragraph, clause or provision shall not affect any of the other provisions of this Ordinance.
SECTION 10. REPEALER
All ordinances, resolutions, orders, or parts thereof, which conflict with the provisions of this Ordinance, to the extent of such conflict, are hereby repealed.
THE REST OF THIS PAGE IS LEFT INTENTIONALLY BLANK.
PASSED by the Corporate Authorities
of the City of Aurora on_________________________________, 2016.
APPROVED____________________________, 2016
______________________________________
Mayor
City of Aurora
Kane, DuPage, Kendall and Will Counties, Illinois
AYES: _____
NAYS: _____
ABSENT: ______
PUBLISHED in the______________________ on ____________________, 2016.
RECORDED in the City Records on ______________________, 2016.
ATTEST:
_____________________________
City Clerk
City of Aurora
Kane, DuPage, Kendall and Will Counties, Illinois
CERTIFICATION
I,__________________ do hereby certify that I am the duly elected, qualified and acting Clerk of the City of Aurora . I do further certify that the above and foregoing, identified as Ordinance Number ______________, is a true, completed and correct copy of an ordinance otherwise identified as ORDINANCE AUTHORIZING LOAN AGREEMENT (WATER POLLUTION CONTROL LOAN PROGRAM - HOME RULE ENTITY) FOR EAST GALENA BOULEVARD AND EAST DOWNER PLACE SEWER SEPARATION - WATER STREET TO STATE STREET passed by the City Council of the City of Aurora on the ___________ day of _________________, 2016, and approved by the MAYOR of the City of Aurora on same said date, the original of which is part of the books and records within my control as Clerk of the City of Aurora.
Dated this _________ day of _______________, 2016
_________________________________________
Clerk of the City of Aurora