HomeMy WebLinkAbout06/24/1996 Regular
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MINUTES OF THE CONTINUED REGULAR
MEETING OF JUNE 17, 1996 OF
THE SPRINGFIELD CITY COUNCIL HELD
MONDAY, JUNE 24,1996
The City of Springfield Council met in a continued Regular Meeting of June 17, 1996, in the
Springfield City Council Chamber Room, 225 Fifth Street, Springfield, Oregon, on Monday,
June 24, 1996, at 5:35 p.m., with Mayor Morrisette presiding.
ATTENDANCE
Present were Mayor Morrisette, Councilors Ballew, Beyer, Dahlquist, and Shaver. Councilors
Burge and Maine were absent (excused). Also present were City Manager Michael Kelly, City
Attorn.ey Tim Harold, City Recorder Eileen Stein and members of the staff.
BUSINESS FROM THE CITY MANAGER
1. Resolution to Authorize $3.600.000 State Revolving Fund Loan.
RESOLUTION NO.96-27 - A RESOLUTION AUTHORIZING THE CITY MANAGER TO
EXECUTE A LOAN AGREEMENT WITH THE DEPARTMENT OF ENVIRONMENTAL
QUALITY AUTHORIZING A LOAN NOT TO EXCEED $3.600.000 TO COVER COSTS
OF CONSTRUCTION OF THE SOUTH SPRINGFIELD INTERCEPTOR, TO EXECUTE
SUCH OTHER AGREEMENTS AS MAYBE NECESSARY TO EFFECTUATE SUCH
LOAN AGREEMENT. AND ESTABLISHING A LOAN RESERVE ACCOUNT.
Finance Director Bob Duey presented the staff report on this issue. The Council is requested
to authorize the City Manager to complete negotiations with the Department of
Environmental Quality (DEQ) and execute a loan agreement to provide $3,600,000 from the
State Revolving Loan Fund for construction costs for Phase III of the South Springfield Sewer
Interceptor project.
Although the City had applied to DEQ for State Revolving Loan funding for the final phase of
the project, the project had not been ranked high enough priority to be given funding this year.
In the past few days, however, DEQ has notified the City that other, higher priority projects
have been delayed and that as a result, funding is available. Mr. Duey stated if the City can
execute a loan agreement before the end of this fiscal year, DEQ would be able to offer an
interest rate of 3 .93 percent. This is substantially below what the City would pay if it issued a
20 year revenue bond for construction costs, as originally anticipated. The loan will be repaid
from sewer user fees and can be covered by the existing rate structure. The loan will be
subordinate to city revenue bonds and thus not adversely affect the City's debt issuing
capacity. This will provide the City with increased debt capacity to respo.nd to unanticipated
capital needs, ongoing master planning efforts or emergency situations. By reducing the
repayment period from 20 to 10 years, the City will save substantial amounts of interest.
Councilor Ballew asked what sewer lines were maintained by the City and what sewer lines
were maintained by the Metropolitan Wastewater Management Commission (MWMC). Mr.
Duey replied that MWMC manages the regional sewer system and the City manages the local
sewer system. Mr. Kelly clarified that this roughly equates to MWMC maintaining sewer
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City of Springfield
Minutes of the Continued Regular Meeting of 6/17/96
Page 2
lines which are 24 inches and larger in diameter, and the City maintains sewer lines that are
smaller than 24 inches. He stated that there are some exceptions, but that this is a general rule
as provided for in the intergovernmental agreement that governs the regional sewer system.
Councilor Ballew commented she knew of a federal grant and asked whether this was part of
that. Mr. Duey replied that the City did try to obtain a federal grant for the South Springfield
Interceptor, but has never been successful in receiving federal funding for the project.
Mayor Morrisette noted that on Tuesday, June 25, at 10:00 a.m., he would be talking with
Senator Mark Hatfield. He explained he had sent a letter specifically requesting $3 million
and followed up with several telephone calls. He stated MWMC was also making a request
for a separate matter. Mayor Morrisette suggested scheduling a work session in the future to
discuss sewer user charges, reserves and rel~ted issues.
Mayor Morrisette explained that the engineering firm of CH2M Hill gave a presentation at the
last MWMC meeting. He said that during the meeting sewer capacity and funding issues were
discussed.
Mr. Duey discussed possible options if the loan amount does not cover all the construction
costs for the third phase of the Interceptor project.
Public Works Director Dan Brown explained how funding would be used if Senator Hatfield .
was successful in obtaining it for the project.
IT WAS MOVED BY COUNCILOR SHAVER, WITH A SECOND BY COUNCILOR
BEYER, TO ADOPT RESOLUTION NO. 96-27. THE MOTION PASSED WITH A VOTE
OF 4 FOR AND 0 AGAINST.
ADJOURNMENT
The meeting was adjourned at 6:00 p.m.
Minutes Recorder - Julie Wilson
(tL9!I~
Mayor
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Eileen Stein
City Recorder