REPORT TO COUNCIL
SUBJECT
Title
Adopt a Pledge of Revenues Resolution and a Resolution Approving an Installment Sale Agreement in Support of the State Revolving Fund Financing for the Sunnyvale Clean Water Program
Report
BACKGROUND
The City is currently fully engaged in the most significant single public works program in its history, the rebuild of its aged Water Pollution Control Plant, which treats sewage from all of Sunnyvale and a small area inside the Cities of Cupertino and San Jose. Named the "Sunnyvale Clean Water Program", current cost estimates for this program are slightly over $450 million over approximately fifteen to twenty years.
In the planning phase for many years, the program is now under construction for the first phase of the project, which includes the facilities that handle the incoming sewage and the initial treatment process. Throughout the planning process, staff has included a placeholder in the City's Wastewater Management Fund long-term financial plan that estimates annual debt service associated with this program. This assumption has been based on a standard utility revenue bond financing.
Upon evaluating financing alternatives, staff identified that more favorable financing is available for a portion of the program through the State of California Clean Water Revolving Fund. In order to apply for this funding Council adopted three resolutions in December of 2015. This enabled the City to complete its application, and funding is now anticipated to occur in October. One of the adopted resolutions was a Pledge of Revenues Resolution. After Council adoption, the State Division of Financial Assistance (DFA) has asked the City Council to adopt a new resolution with revised language (See Attachment 1).
EXISTING POLICY
Council Fiscal Policy 7.11 Enterprise Fund Policies, 1.1b.1 Capital improvements associated with the existing infrastructure of a utility should be primarily funded from two sources: rate revenue and debt financing.
Coun...
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