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IP #929roo Ado Request for Action Originating Department Approved for Agenda Agenda Section City Manager January 21, 2014 Work Session Item No. By: Kirk McDonald, City Manager 1 By: Kirk McDonald 11 ..8 Discussion regarding JWC emergency backup water supply project Requested Action The City Council requested this topic be added to this work session agenda in follow up to the three -city joint council meeting that was recently held regarding the emergency backup supply project. Staff requests to discuss the upcoming council resolutions for the project and, per several council members' informal discussion at the joint meeting, possibly adding an additional charge to water bills to fund the new backup system. Policy/Past Practice The construction of an emergency backup water supply system has been discussed over the past several years and is a goal of the JWC. Background The Joint Water Commission (JWC) is a joint powers entity consisting of the cities of Crystal, Golden Valley, and New Hope, initiated in 1963. Based on this agreement, the three cities built their water distribution systems to be interconnected without reference to city boundaries. The JWC has an ongoing long-term water purchase agreement with the City of Minneapolis water utility and intends to continue that relationship, however the JWC continues to have concerns regarding the reliability of the Mississippi River as the sole water supply source for the city of Minneapolis and its customers. In 2009 the JWC and each of the three member cities adopted a Water Supply, Emergency and Conservation Plan to comply with Minnesota Statute which requires the JWC and the three member cities to identify and develop an emergency source of water supply. The JWC identified groundwater from the Prairie du Chien/Jordan aquifer to be a viable alternative water supply on an emergency basis and legislation was passed during the 2004 legislative session authorizing the JWC to drill wells to meet the needs of the three member cities. At the direction of the three city councils at the May 7, 2012 tri -Council meeting each city adopted by resolution the Emergency Water Supply Preliminary Design and Feasibility Study was prepared. At the direction of the three City Councils at the May 23, 2013 tri -Council meeting and adopted by resolution by each city, staff was directed to develop a capital improvement program to implement the emergency water supply plan; and to retain professional and contractor services to implement the emergency water supply. At the tri -Council meeting on January 9, 2014, a detailed report, cost estimate and financing plan were presented to elected officials and staff. Motion by Second by To: 1:/RFA/CityManager/2014/Q-Discuss JWCEmergency Backup 012114 Request for Action, Page 2 January 21, 2014 Staff is recommending the attached resolution ordering the construction of the emergency water supply system which is outlined above, be placed on the January 27th council agenda. Golden Valley and Crystal will be voting on the resolution before the end of this month. My understanding is the financing resolution is anticipated to be prepared by Golden Valley's bond counsel and forwarded to New Hope and Crystal in March. The resolution will obligate the two cities who are not financing the project to pay their appropriate costs for the bond through the JWC capital improvement program. The estimated bond is roughly $4.6 million, and the annual 20 -year payments are approximately $330,000 per the attached bond schedule. The payments have been incorporated into the JWC CIP program. The City Council informally discussed adding a charge to the monthly utility bill for water rates to help fund the emergency backup system. The estimated cost for the annual principal and interest payments is 17t per 1,000 gallons. The additional charge could be added to utility bills and labeled "emergency backup supply". We have attached an example of a current utility bill to denote where the charge could be added. On the sample bill, 2,000 gallons of water was used, so the charge would be 17t x 2, or 34t. The average New Hope household uses roughly 5,000 gallons of water per month, so the average charge would be 17t x 5, or 85�. The council should discuss this information and provide appropriate direction to staff regarding the amount to be charged, and implementation date, if staff is to proceed with this idea. Attachments January resolution ordering project Preliminary Bond schedule CIP excerpts January 9, 2014 presentation excerpts Sample utility bill Resolution 14- January 2014 Council Member introduced the following resolution and moved its adoption: RESOLUTION ORDERING CONSTRUCTION OF EMERGENCY WATER SUPPLY WHEREAS, the Joint Water Commission (JWC) is a joint powers entity authorized by Minnesota Statute 471.59 consisting of the cities of Crystal, Golden Valley, and New Hope, initiated in 1963; and, WHEREAS, based on this agreement, the three cities built their water distribution systems to be interconnected without reference to city boundaries; and, WHEREAS, the JWC has an ongoing long-term water purchase agreement with the City of Minneapolis water utility and intends to continue that relationship; and, WHEREAS, the JWC continues to have concerns regarding the reliability of the Mississippi River as the sole water supply source for the City of Minneapolis and its customers; and, WHEREAS, in 2009 the JWC and separately each of the three member cities, adopted a Water Supply, Emergency and Conservation Plan to comply with Minnesota Statute 473.859, and said statute requires the JWC and the three member cities to identify and develop an emergency source of water supply; and, WHEREAS, the JWC has identified groundwater from the Prairie du Chien/Jordan aquifer to be a viable alternative water supply on an emergency basis; and, WHEREAS, legislation was passed during the 2004 legislative session authorizing the JWC to drill wells to meet the needs of the three member cities on a case-by-case basis; and WHEREAS, at the direction of the three City Councils at the May 7, 2012 tri -Council meeting and adopted by resolution in session separately, the Emergency Water Supply Preliminary Design and Feasibility Study was prepared; and, WHEREAS, at the direction of the three City Councils at the May 23, 2013 tri -Council meeting and adopted by resolution in session separately, staff was directed to develop a capital improvement program to implement the emergency water supply plan; and to retain professional and contractor services to implement the emergency water supply; and, WHEREAS, at a tri -Council meeting on January 9, 2014, a detailed report, cost estimate and financing plan were presented to elected officials and staff. GAMMesolutions\Ordering Construction of Wells.doc NEW HOPE RESOLUTION FORMAT City of New Hope Resolution 2014 - Resolution ordering construction of emergency water supply WHEREAS, the Joint Water Commission (JWC) is a joint powers entity authorized by Minnesota Statute 471.59 consisting of the cities of Crystal, Golden Valley, and New Hope, initiated in 1963; and, WHEREAS, based on this agreement, the three cities built their water distribution systems to be interconnected without reference to city boundaries; and, WHEREAS, the JWC has an ongoing long-term water purchase agreement with the City of Minneapolis water utility and intends to continue that relationship; and, WHEREAS, the JWC continues to have concerns regarding the reliability of the Mississippi River as the sole water supply source for the City of Minneapolis and its customers; and, WHEREAS, in 2009 the JWC and separately each of the three member cities, adopted a Water Supply, Emergency and Conservation Plan to comply with Minnesota Statute 473.$59, and said statute requires the JWC and the three member cities to identify and develop an emergency source of water supply; and, WHEREAS, the JWC has identified groundwater from the Prairie du Chien/Jordan aquifer to be a viable alternative water supply on an emergency basis; and, WHEREAS, legislation was passed during the 2004 legislative session authorizing the JWC to drill wells to meet the needs of the three member cities on a case by case basis; and WHEREAS, at the direction of the three City Councils at the May 7, 2012 tri -Council meeting and adopted by resolution in session separately, the Emergency Water Supply Preliminary Design and Feasibility Study was prepared; and, WHEREAS, at the direction of the three City Councils at the May 23, 2013 tri -Council meeting and adopted by resolution in session separately, staff was directed to develop a capital improvement program to implement the emergency water supply plan; and to retain professional and contractor services to implement the emergency water supply; and, WHEREAS, at a tri -Council meeting on January 9, 2014, a detailed report, cost estimate and financing plan were presented to elected officials and staff. NOW, THEREFORE, BE IT RESOLVED, by the City Council of the city of New Hope, Minnesota: that the construction of an emergency backup water supply to include three new wells, reestablishment of the existing New Hope well, all motors, pumps, meters, meter vaults, valves, associated pipe work, control and support equipment is hereby ordered. Adopted by the City Council of the city of New Hope, Hennepin County, Minnesota, this 27th day of January, 2014. Attest: City Clerk t 10"Doi,aid Kirk From: Virnig, Sue [SVirnig@goidenvalleymn.gov] Sent: Thursday, January 09, 2014 8:50 AM To: Burt, Tom; 'Anne Norris (Anne. Norris@crystalmn.gov)'; McDonald Kirk; 'Charles Hansen (Charles. Hansen@ci.crystal.mn.us)' Subject: RE: Structure of Bond for JWC Originally rovements in for $450,000 per year or around .21/1000 gallons. It is now at $350,000 per year at arou .17/1000. Sue Virnig J Finance Director J City of Golden Valley 7800 Golden Valley Road I Golden Valley, MN 55427 1763-593-8010 1763-593-3969 (Fax) 763-593- city �+'� od, iP'111 �- vase 3968 (TTY) I svirnirt@eoldenvalleymn.aov orol ]�Pf Note new email address From: Vimig, Sue Sent: Thursday, January 09, 2014 7:57 AM To: Burt, Tom; 'Anne Norris (Anne.Norris@c-rystalmn.gov); Hansen (Charles.Hansen@ci.erystal.mn.usa' Subject: Structure of Bond for JWC 'Kirk McDonald (kmcdonald ci.new-ho e.mn.us); 'Charles The structure would be GO Water Revenue Bonds, secured by revenues of the City of GV's water utility. The JWC would construct well facilities across all participants including the City of GV. The JWC would.receive participant debt service payments and transmit them to the City of GV's water utility, from which the City would then make bond payments. As the bonds are secured by GV's water utility and ultimately GO pledge, any payment delinquencies would first be borne by the City which would then seek remedies under the JWC contract. Sue Virnig J Finance Director I City of Golden Valley 7800 Golden Valley Road I Golden Valley, MN 55427 763-593-8010 1763-593-3969 (Fax) 1 763-593- 3968 (TTY) I svirniR0eoldenga1levmn.Aovva den, 011, al. ey Note new email address $4,605,000 City of Golden Valley, Minnesota General Obligation Bonds Series 2014 - Joint Water Commission DEBT SERVICE SCHEDULE Date Principal Coupon Interest Total P+I 105% Levy 02/0112015 205,000.00 0.800% 123,235.42 328,235.42 344,647.19 02/0112016 185,000.00 0.850% 146,242.50 331,242.50 347,804.63 02101/2017 185,000.00 1.150% 144,670.00 329,670.00 346,153.50 02!0112018 185,000.00 1.450% 142,542.50 327,542.50 343,919.63 02/01/2019 190,000.00 1.850% 139,860.00 329,860.00 346,353.00 02/0112020 195,000.00 2.200% 136,345.00 331,345.00 347,912.25 0210112021 200,000.00 2.500% 132,055.00 332,055.00 348,657.75 02!0112022 205,000.00 2.800% 127,055.00 332,055.00 348,657.75 02101/2023 210,000.00 3.000% 121,315.00 331,315.00 347,880.75 02101/2024 21,5,000.00 3.250% 115,015.00 330,015.00 346,515.75 02/01/2025 220,000.00 3.450% 108,027.50 328,027.50 344,428.88 02101@026 230,000.00 3.650% 100,437.50 330,437.50 346,959.38 02/01/2027 235,000.00 3.800% 92,042.50 327,042.50 343,394.63 02/01/2028 245,000.00 3.950% 83,112.50 328,112.50 344,518.13 02!0112029 255,000.00 4.050% 73,435.00 328,435.00 344,856.75 02101/2030 265,000.00 4.150% 63,107.50 328,107.50 344,512.88 02101/2031 275,000.00 4.300% 52,110.00 327,110.00 343,465.50 02/01/2032 290,000.00 4.400% 40,285.00 330,285.00 346,799.25 02/01/2033 300,000.00 4.450% 27,525.00 327,525.00 343,901.25 02101/2034 315,000.00 4.500% 14,175.00 329,175.00 345,633.75 Total $4,605,000.00 - $1,982,592.92 $6,587,592.92 $6,916,972.57 SIGNIFICANT DATES Dated............................................................................................................................................................................... 4/01/2014 DeliveryDate................................................................................................................................................................... 4101/2014 FirstCoupon Date........................................................................................................................................................... 210112015 Yield Statistics BondYear Dollars............................................................................................................................................................ $51,927.50 AverageLife.................................................................................................................................................................... 11.276 Years AverageCoupon.............................................................................................................................................................. 3.8180019% NetInterest Cost (NIC).................................................................................................................................................... 3.9244195% TrueInterest Cost (TIC).................................................................................................................................................. 3.8884567% Bond Yield for Arbitrage Purposes.................................................................................................................................. 3.7517252% AllInclusive Cost (AIC).................................................................................................................................................... 4.0016028% IRS Form 8038 NetInterest Cost.............................................................................................................................................................. 3.8180019% WeightedAverage Maturity............................................................................................................................................. 11.276 Years Interest rates are estimates. Changes In rates may cause significant alterations to this schedule. The actual underwriter's discount bid may also vary. &rks2019 -Jam WA&P / SIN=X ft Vff / 1212/2015 / 9.99AM Springsted VI I T yr MCY1f "%JrC UTILITY BILL AUTOMATIC PAYMENT -DO NOT PAY Pro -authorized payment of 38.24 vAll be drawn from your bank on 01/1812014 I I I I I 1111111 I II I I I It I I II I 1111 I I I 11111 f I I I I I I I I I I I I II NEW HOPE MN 65427-1538 REMIT TO: CITY OF NEW HOPE 8500 INTERNATIONAL PKWY NEW HOPE, MN SS428-3606 This Portion For Your Records SERVICE ADDRESS: Motor # Read Date Prev. Read Pres. Read Usage 19960877 1 013 2775 2795 20 Total Wader Consumption, 20 Total Sewer Consumption: 20 Consumption Measured in HUNDREDS OF GALLONS WATER: (Fixed Change) Based on usage - per 1,000 Gallons Sane Fee (Residential & Can newial): $6.43 Black I: 1 - 10,000 Gallons: $4.73 Block 2:10,001 - 20,000 Gallons: $5.15 Mock3:Greater than 20,001Gall= &Lrigadow $5.79 Commercial: 54.85 EWER: (Fixed Charge) Based on Winter Average Consumption far Residential or Ac Water used for Commercial or Institutional - per 1,000 Gallons Minimum Fee includes 1st 1,000 Gallops: $6.01 Foch additional 1,000 Gallons: $3.99 Treatment SumherV11,000 Gallons: 50.46 STREET LIGHTS, (Pro -rated) Used to pay ft Strr;et Eights throughout city Non -Decorative (Overhead Power): $I.05 DeeoniUve (Underground Power): $1.50 RECYCLING: (Pro4ved) Not based on how often or how much used: $3,55 STORM DRAINAGE* (Fro -rated) Pays for cleaning, mamf enanee and improvements throughout the City Residential: $6.30 Non Residential: $9.45 STATE TESTING FEE: (Fixed Charge) Annual fee of $6.36 collected bythe City and paid to the MN Depc oflicalth: x0.53 REMIT TO: CITY OF NEW HOPE BILLING 33.66 PAYMENT - THANK YOU 33.66CR BALANCE FORWARD: b.00CR STATE TESTING FEE 0.53 WATER BASE FEE 6.43 I-CWATER CONSUMPTION - BLOCK 1 9.46 EWER MONTHLY CHARGES 10.00 SEWER TREATMENT SURCHARGE 0,92 STORM DRAINAGE - RES 6,30 RECYCLING CHARGES 3,55 STREET LIGHTS 1,05 TOTAL. CURRENT CHARGES: 38.44 TOTAL AMOUNT DUE: 38.Z4 A 5% PEMALrY K7LL BE cIYARGED IF R4YMEdr is Nor w ouR OFRCE BY 4 Pill ON THE DUE DA TE PRINTED ADOVF— Pre-authorized payment of 38.24 will be drawn from your bank on 01/16/2014 5500 INTERNATIONAL PKWY NEW HOPE, MN 55428.3606 Please Include your CUSTOMER NUMBER located at the top of your bill when authorizing electronic payments or submitting your CLOSING BILL to ensure pap*nts are applied correctly. For Further information or Assistance. Contact: 763-592-6760 Min" I Water �Commii�ian ,2014-2018 Capital improvement Pr- Ic, r CVstal, GoidenV-ll1cy;&xew,,l1o17, IN December 4, 2014 To Commissioners, Council of the Crystal, Golden Valley, and New Hope and the residents of the three cities, The Adopted Capital Improvement Program (CIP) for 2014-2018 is presented in this transmittal. The Capital Improvement Program is a five-year fiscal planning instrument that is used to identify needed capital projects and to delineate the financing and timing of the associated projects. Generally these projects exceed $10,000 in cost and require financing by the three cities of the Joint Water Commission_ An annual capital improvement budget, encompassing the projects outlined for the first year of the CIP, is presented to the Commissioners with the City budget. Each project is brought forth in the upcoming year for final approval by the Commissioners. The adoption of a CiP is a requirement for each city in the metropolitan area. As part of the Metropolitan Land Planning Act passed by the State legislature in 1976, each city is required to adopt a Comprehensive Plan. Each city included the water supply plan in their comprehensive plan. Background of the Joint Water Commission The Cities of Crystal, Golden Valley, and New Hope addressed the issue collaboratively in 1963, when they formed the Joint Water Commission (JWC) to purchase water from the City of Minneapolis and develop the infrastructure to deliver that water to their communities. Since then, the JWC has efficiently managed the three Cities' unique water supply and storage system in a fair and equitable manner. Each City maintains its own distribution system and utility billing, meter reading, and water sampling functions. As required by the US Environmental Protection Agency (EPA), the JWC frequently performs many stringent water quality tests on water samples taken from locations throughout each of the three communities to ensure consumers receive safe, quality water. For 50 years, the City of Minneapolis has been a reliable source of reasonably priced, good quality water. In return, the JWC has been a good customer, purchasing about 15 percent of the water treated by Minneapolis. The JWC remains committed to providing its customers with the highest quality water at the least cost. As the cost of water continues to increase, the JWC must evaluate its altematives to ensure it will continue to honor that pledge. The JWC currently purchases water from the City of Minneapolis. The Minneapolis Water Works (NWN) draws its water supply from the Mississippi River in Fridley. After treatment and purification, the water is pumped to customers in Minneapolis, Columbia Heights, Hilltop, Bloomington, Edina, and the JWC communities of Crystal, Golden Valley, and New Hope. The system that brings water to your house involves miles of piping. Treated water is pumped from the MWW plant through large pipes (the largest of which is 48 inches in diameter) to two JWC water reservoirs in Crystal and Golden Valley. The storage capacity of the two reservoirs is 27 million gallons. The water is pumped from the reservoirs into the water distribution systems separately owned and maintained by each of the three JWC cities. Each city is responsible for installing and operating its own water mains, pumping stations, water towers, and utility billing. The three JWC Cities use about seven million gallons each day. Water demands of JWC customers have been relatively constant over the past 10 years. During the day, the amount of water used by residences and businesses fluctuate hour by hour. The JWC water storage reservoirs are big enough to meet each day's needs, keeping the water flowing through the pipelines at an adequate pressure to meet customer needs. Water demands in the summer increase dramatically (often up to 17 million gallons each day) when residences and businesses sprinkle their lawns. The most customers have used in a single day was 20 million gallons. Future Plans The JWC needs an emergency supply backup. Currently their water supply system would have to rely on the Minneapolis for their needs and currently they do not have a plan to meet the needs of all their customers. As the three cities prepare for the future, the emergency supply backup is a top priority. This document will help plan the upcoming needs for all three cities. As rates continue to increase, the planning of the financial future is most important. JOINT WATER COMMISSION 2014-2018 CIP CAPITAL IMPROVEMENT FUND EXHIBIT I Total Available 6,269,565 2,238,574 3,580,614 1,231,683 1,375,783 Expenditures: Capital Improvement Plan Expenditures 5,735,000 1 700,000 3 038 000 685,000 825,000 Total Expenditures 5,735,000 1,78D,000 3,038.000 685,000 825,000 Estimated Net Assets Q 12131 $W,05 $538,574 $542,614 $548,683 $550783 Page II 2014 2015 2018 2017 2018 Cash Selance @ 111 $229,092 $534,565 $538,574 $542,614 $60,683 Rei+enue: City of Golden Valley 589,765 731,000 1,308,340 294,550 354,750 City of Crystal 358,225 459,000 820,260 184,950 222,750 City of New Hope 377,015 510,000 911,400 205,500 247,500 Hennepin County 233,750 Bond Prxxmeds 4,500,000 Other Interest Earnings 1,718 4,009 4,039 4,070 4,100 Total Available 6,269,565 2,238,574 3,580,614 1,231,683 1,375,783 Expenditures: Capital Improvement Plan Expenditures 5,735,000 1 700,000 3 038 000 685,000 825,000 Total Expenditures 5,735,000 1,78D,000 3,038.000 685,000 825,000 Estimated Net Assets Q 12131 $W,05 $538,574 $542,614 $548,683 $550783 Page II s 9 Capital Improvement Plan 2014 ffim 2018 PROJECTS & FUNDING SOURCES BY DEPARTMENT Department Project# Priority 2014 2015 2016 2017 2018 Total Joint Water Commission Ccu* Road 9 ProJact 12-023 rrla 5WAID 5(10,000 11,983„000 Joint watdr ComN&SIo>f Total 5,7Am 1,000000 Secwity Fence at Reservoir -Golden Valley 13-030 A 35.000 35,000 Securtgr Fence at ReWv&ZWfal 13-031 n1a 70,000 70,000 figb f Valve at 8" Taww-New Hope 134W Fila 20,000 20,ODO Service Payments 14-001 ala 350,000 35D,DOD 350,000 360,000 1,400,000 Emergency Watrn Supply 14-011 nfa 4.000,ODD 4,001),000 Two Pumila Valvas -Golden Valley 144127 n!a 70,000 70,000 SCADA LIpdatu 14-029 ala 55,000 55.000 110,000 Replace water Tower AlMde Val"DI len valley 14-035 Na 50,ODD 5000 Elevated wakwTawera -New, Hope 14-036 nla 45,01)1) 45,000 Secu* forA0 Towea and Pump Stallms 14-037 We 60,000 60,000 Replace York Pit Veale and Vault Crystal 14-038 Na 200,000 200,000 Intal Gener tZrystal 14-039 rile 500,01)0 500,000 WaWMain Leek DeledimSurvey 14-040 We 130,1100 13D,ODD Replace Trunk Vahm - Golden Valley 15-001 Na 70,000 70,000 14001 Elevated Tower Impaction - Golden Valley 15-002 A 10,000 10,000 North Tower steel and Repald-New Hope 15-W3 Wa 6DQ,OD0 600,0(3} Replace Geta Vehra-New Hope 15.004 We 7000 70,001) Instal Additional Reeerv& Acmaa-Crystal 15-005 Na 100,000 1000(10 Install4W Gala Valve -Golden Valley 154M Wa IDDAD0 100,00(I Replsowrr* at Pump swan -Golden Valley 16 -ODI we 26001)1) 280,000 560,000 Ladders at ReservoirGolden Valley 1802 We 14,001) 14,000 RbdVatvae(2)-GoldenVallay 16-01)3 Wa 24,001) 24,000 South Tourer blest and RepainMew Hope 16-0D4 A 750,000 750.000 Gale Vahre Rsplaaernenbs-Cryslal 16 005 nla 70,000 70,000 140,001) Inspect and Clean Reservoir -Crystal 16-006 WA 30,000 30,000 Replace 16' and 18' Wafer Alain -Golden Valley 16-0D7 we ODD,000 80OAM 50 Avenue Weller Main -Naw Hope 18-008 720,000 720,000 Replace Trunk Vahre-New Hope 17 -ODI n/a 70,01)(1 70,001) Raroof Pump Slaeon-ryotai 17-002 A 90,000 90,000 Rapla onm* at Pump Stadon-Cryslel 17.003 ala 175,000 175,000 Joint Water Commission Total $73.UN 1,MD W 3,1)31,1)00 6Mi W . 825,000 11,083,090 Joint WeAer cmWn tRsion 5,735.000 1,700AW 3,036,000 666,000 825,000 11,983„000 Joint watdr ComN&SIo>f Total 5,7Am 1,71)1),0111) .,. 8,686,001) .6K,00D 868,000 i1,980,ODD Page I RL 000 .. :; i4 d ■ M � t JWC EMERGENCY WELL SUPPLY UPDATE Joint City Council Work Session January 9,, 2014 Presented by Bolton & Menk, Inc. 3 Critical Success Factors for the JWC Emergency Water Supply 1. Reliable Ensure ability for quick MDH approval and start-up 2. Maintainable Minimal vulnerability and need for maintenance 3. Operator Friendly Simple to operate to achieve maximum flow Potential Water Quality Issues • Switchin from Softened/Filtered Water To Unsoftened/Unfiltered Water: Aesthetics Related Impacts: — 1 Colored Water / 1 Difficulty getting laundry white — 1 Spotted Dishes / t Difficulty getting soap to lather — T Oily sheen on coffee • Longer Residence Time (SRT): Aesthetics Related Impacts: — j T&O Health Related Impacts: — j C12 — t Orthophosphate/Polyphosphate — 1 Microbial Activity (and 1D0) I Sequestering Effectiveness pH, IPb & Cu Chlorine Feed Block construction and 4 cylinders per well may be warranted (6-9 day supply) as opposed to 2 cylinders (3-4 day supply). • Cylinder delivery occurs when Y2supply is used. PRELIMINARY OPINIONS OF COSH JWC EMERGENCY WELL SUPPLY I TEM O. DESCRIPTION Casts 1 CIVIL ENGINEERING $167,000 2 NEW ELLS AND APPURTENANCES $1 A721000- ELE TRIC, L AND �O1 TROLE COSTS $626¢000 �I-IL 1 I IE CLOSETS!BRICK N TR TION $96,000 he -E IL EES E%T -bc 437tOOO 6 NEW HOPE WELLI` OUSE PUMP/PIPING $1171000 LOTHER IMPROVEMENTS �J5g00V.� �( �L CONTINGENCIES $611.000 TOTAL E TIMTED CCNSTRUCTION COSTS1 $3,979,000 Milestone Schedule • 80% Cost Estimate • Tri -City Council Meeting • Council Resolutions Approved • Begin Advertise for Bids • Complete Construction January 2014 January 2014 March 2014 April 2014 December 31, 2015 Springsted, Inc. * Authorize Construction of Three Emergency Wells within the JWC Communities * If yes then; * Adopt Resolution to order construction of the Emergency Water supply * Adopt resolution agreeing to financing of the project Request for Action Originating Department Approved for Agenda Agenda Section Ordinances & City Manager January 27, 2014 Resolutions Item No. By: Kirk McDonald, City Manager 1 By: Kirk McDonald 10.2 Resolution ordering construction of emergency water supply "1 Requested Action Staff requests the City Council approve the attached resolution ordering construction of emergency water supply. The City Council discussed this matter at the January 21 work session and directed staff to place the resolution on this agenda. Policy/Past Practice The construction of an emergency backup water supply system has been discussed over the past several years and is a goal of the JWC, Background The Joint Water Commission (JWC) is a joint powers entity consisting of the cities of Crystal, Golden Valley, and New Hope, initiated in 1963. Based on this agreement, the three cities built their water distribution systems to be interconnected without reference to city boundaries. The JWC has an ongoing long-term water purchase agreement with the City of Minneapolis water utility and intends to continue that relationship, however the JWC continues to have concerns regarding the reliability of the Mississippi River as the sole water supply source for the city of Minneapolis and its customers. In 2009 the JWC and each of the three member cities adopted a Water Supply, Emergency and Conservation Plan to comply with Minnesota Statute which requires the JWC and the three member cities to identify and develop an emergency source of water supply. The JWC identified groundwater from the Prairie du Chien/Jordan aquifer to be a viable alternative water supply on an emergency basis and legislation was passed during the 2004 legislative session authorizing the JWC to drill wells to meet the needs of the three member cities. At the direction of the three city councils at the May 7, 2012 tri-Council meeting each city adopted by resolution the Emergency Water Supply Preliminary Design and Feasibility Study was prepared. At the direction of the three City Councils at the May 23, 2013 tri-Council meeting and adopted by resolution by each city, staff was directed to develop a capital improvement program to implement the emergency water supply plan; and to retain professional and contractor services to implement the emergency water supply. At the tri-Council meeting on January 9, 2014, a detailed report, cost estimate and financing Elan were presented to elected officials and staff. Motion by Second by To: i I:/RFA/CityManager/2014/Q-ConstructEmergWater 012714 G Request for Action, Page 2 January 27, 2014 The three city councils were supportive of moving forward with the project and agreed each individual city would approve this resolution. The JWC and member cities will finalize financing costs and options in the near future. Staff recommends approval of the resolution. Attachments Resolution ordering project CIP excerpts January 9, 2014 presentation excerpts City of New Hope Resolution 2014-23 Resolution ordering construction of emergency water supply WHEREAS, the Joint Water Commission (TWC) is a joint powers entity authorized by Minnesota Statute 471.59 consisting of the cities of Crystal, Golden Valley, and New Hope, initiated in 1963; and, WHEREAS, based on this agreement, the three cities built their water distribution systems to be interconnected without reference to city boundaries; and, WHEREAS, the JWC has an ongoing long-term water purchase agreement with the City of Minneapolis water utility and intends to continue that relationship; and, WHEREAS, the JWC continues to have concerns regarding the reliability of the Mississippi River as the sole water supply source for the City of Minneapolis and its customers; and, WHEREAS, in 2009 the JWC and separately each of the three member cities, adopted a Water Supply, Emergency and Conservation Plan to comply with Minnesota Statute 473.859, and said statute requires the JWC and the three member cities to identify and develop an emergency source of water supply; and, WHEREAS, the JWC has identified groundwater from the Prairie du Chien/Jordan aquifer to be a viable alternative water supply on an emergency basis; and, WHEREAS, legislation was passed during the 2004 legislative session authorizing the JWC to drill wells to meet the needs of the three member cities on a case by case basis; and WHEREAS, at the direction of the three City Councils at the May 7, 2012 tri -Council meeting and adopted by resolution in session separately, the Emergency Water Supply Preliminary Design and Feasibility Study was prepared; and, WHEREAS, at the direction of the three City Councils at the May 23, 2013 tri -Council meeting and adopted by resolution in session separately, staff was directed to develop a capital improvement program to implement the emergency water supply plan; and to retain professional and contractor services to implement the emergency water supply; and, WHEREAS, at a tri -Council meeting on January 9, 2014, a detailed report, cost estimate and financing plan were presented to elected officials and staff. NOW, THEREFORE, BE IT RESOLVED, by the City Council of the city of New Hope, Minnesota: that the construction of an emergency backup water supply to include three new wells, reestablishment of the existing New Hope well, all motors, pumps, meters, meter vaults, valves, associated pipe work, control and support equipment is hereby ordered. Adopted by the City Council of the city of New Hope, Hennepin County, Mi esota, this 27th day of January, 2014. Mayor J� Attest: City Clerk December 4, 2014 To Commissioners, Council of the Crystal, Golden Valley, and New Hope and the residents of the three cities, The Adopted Capital Improvement Program (CiP) for 2014-2018 is presented in this transmittal. The Capital improvement Program is a five-year fiscal planning instrument that is used to identify needed capital projects and to delineate the financing and timing of the associated projects. Generally these projects exceed $10,000 in cost and require financing by the three cities of the Joint Water Commission_ An annual capital improvement budget, encompassing the projects outlined for the first year of the CIP, is presented to the Commissioners with the City budget. Each project is brought forth in the upcoming year for final approval by the Commissioners. The adoption of a CIP is a requirement for each city in the metropolitan area. As part of the Metropolitan Land Planning Act passed by the State legislature in 1976, each city is required to adopt a Comprehensive Plan. Each city included the water supply plan in their comprehensive plan. Background of the Joint Water Commission The Cities of Crystal, Golden Valley, and New Hope addressed the issue collaboratively in 1963, when they formed the Joint Water Commission (JWC) to purchase water from the City of Minneapolis and develop the infrastructure to deliver that water to their communities. Since then, the JWC has efficiently managed the three Cities' unique water supply and storage system in a fair and equitable manner. Each City maintains its own distribution system and utility billing, meter reading, and water sampling functions. As required by the US Environmental Protection Agency (EPA), the JWC frequently performs many stringent water quality tests on water samples taken from locations throughout each of the three communities to ensure consumers receive safe, quality water. For 50 years, the City of Minneapolis has been a reliable source of reasonably priced, good quality water. In return, the JWC has been a good customer, purchasing about 15 percent of the water treated by Minneapolis. The JWC remains committed to providing its customers with the highest quality water at the least cost. As the cost of water continues to increase, the JWC must evaluate its alternatives to ensure it will continue to honor that pledge. The JWC currently purchases water from the City of Minneapolis. The Minneapolis Water Works (MWW) draws its water supply from the Mississippi River in Fridley. After treatment and purification, the water is pumped to customers in Minneapolis, Columbia Heights, Hilltop, Bloomington, Edina, and the JWC communities of Crystal, Golden Valley, and New Hope. The system that brings water to your house involves miles of piping. Treated water is pumped from the MWW plant through large pipes (the largest of which is 48 inches in diameter) to two JWC water reservoirs in Crystal and Golden Valley. The storage capacity of the two reservoirs is 2? million gallons. The water is pumped from the reservoirs into the water distribution systems separately owned and maintained by each of the three JWC cities. Each city is responsible for installing and oper'eting its own water mains, pumping stations, water towers, and utility billing. The three JWC Cities use about seven million gallons each day. Water demands of JWC customers have been relatively constant over the past 10 years. During the day, the amount of water used by residences and businesses fluctuate hour by hour. The JWC water storage reservoirs are big enough to meet each day's needs, keeping the water flowing through the pipelines at an adequate pressure to meet customer needs. Water demands in the summer increase dramatically (often up to 17 million gallons each day) when residences and businesses sprinkle their lawns. The most customers have used in a single day was 20 million gallons. Future Pians The JWC needs an emergency supply backup. Currently their water supply system would have to rely on the Minneapolis for their needs and currently they do not have plan to most the needs of all their customers. As the these cities prepare for the future, the emergency supply backup is a top priority. This document will help plan the upcoming needs for all three cities. As rates continue to increase, the planning of the financial future is most important. AL My of CRTSTAL f �f JWC EMERGENCY WELL SUPPLY UPDATE Joint City Council Work Session January 9,, 2014 Presented by Bolton dank, inc.. 3 Critical Success Factors for the JWC Emergency Water Supply 1. Reliable Ensure ability for quick MDH approval and start-up 2. Maintainable Minimal vulnerability and need for maintenance 3. Operator Friendly Simple to operate to achieve maximum flow Potential Water Quality Issues • Switchin from Softened/Filtered Water To Unsoftened/Unfiltered Water: Aesthetics Related Impacts: ® 1 Colored Water /t Difficulty getting laundry white t Spotted Dishes% t Difficulty getting soap to lather -� t Oily sheen on coffee • Longer Residence Time ORT),-- Aesthetics Related Impacts: -- t T&O Health Related Impacts: - 1 C12 — t Orthophosphate/Polyphosphate — 1 Microbial Activity (and !DO) j Sequestering Effectiveness pH, IPb & Cu Chlorine Feed * a If% le + r-, %, I ut,L U" d"u 14 cylinaers per wail may be warranted (6-9 day supply) as opposed to 2 cylinders (3-4 day supply). Cylinder delivery occurs when Y2supply is used. PRELIMINARY OPINIONS OF COST JWC EMERGENCY WELL SUPPLY ITEtr'T NO. _ _ DESCRIPTION 1 CIVIL ENGINEERINGNEW i'ELL AND APPURTENANCES ELECTRICAL AND CONTROLS COSTS 4 CHLORINE CLOSES BRICK CONSTRUCTION CHEMICAL PEED E UIPMEN l- 6 NEW HOPE WELLHOU E PUMP' PIPIN 77HER 11PR 'E TENT CON77INGEN IE 115%) TOTAL ESTIMATED N TR.UCTION COSTS Costs $187,000 $1,472,000 $626.000 $98,000 $437,000 $117000 $525.000 $51 .000 $31979,000 Milestone Schedule • 80% Cost Estimate • Tri -City Council Meeting Council Resolutions Approved • Begin Advertise for Bids • Complete Construction January 2014 January 2014 March 2014 April 2014 December 31, 2015 Authorize Construction of Three Emergency Wells within the JWC Communities If yes then: * Adopt Resolution to order construction of the Emergency Water supply * Adopt resolution agreeing to financing of the project _ Request for Action Originating Department Approved for Agenda Agenda Section City Manager March 17, 2014 Work Session Item No. By: Kirk McDonald, City Mana er 1 By: Kirk McDonald 11.10 Discussion regarding internal financing for emergency water supply system (improvement project 929) Requested Action Staff requests to discuss the option of internal financing for New Hope's share of the JWC emergency water supply system. AEM will be in attendance for the discussion. If council is supportive of the recommendation, a resolution establishing an interfund loan will be presented at a regular council meeting in the near future. Policy/Past Practice The council has approved interfund loans in the past when the funds are available to save on interest costs and accomplish city projects. A recent example includes paying off the golf course clubhouse outside debt via an interfund loan from the temporary financing fund and EDA. Background At the tri -city JWC council meeting held on January 9, 2014 the three councils unanimously agreed to move forward with the construction of an emergency water supply system. Each city would be responsible for financing their share of the project, and the estimated cost to New Hope is $1.1 million. The council further discussed this matter at the January 21 work session and supported approving a resolution to construct the project along with the other cities. The council also discussed adding a 20� charge per 1,000 gallons of water to pay for New Hope's share of the project and discussed internal financing. At the January 27 council meeting the council approved a resolution ordering construction of an emergency water supply, and at the February 10 council meeting an ordinance was approved establishing a fee for the emergency water supply system. The 20c per 1,000 gallon fee will be effective on the April 2014 utility bills. AEM has prepared the attached memo regarding the option of internal financing. As of December 31, 2013 the temporary financing fund had a balance of $3,128,321, and AEM recommends that there are adequate funds to internally finance New Hope's share of the emergency water supply system. Based on the number of gallons of water sold in 2013, it is estimated the new 20a charge will generate approximately $122,681 in revenue per year that would be utilized to pay off the internal loan. With the addition of a small 1.51% interest rate for an internal loan, the loan would be repaid in a ten year period (please see attached amortization schedule). Motion by Second by To:'7 I:/RFA/CityManager/2014/Q-Discuss n'#929 031714 Request for Action, Page 2 March 17, 2014 If the council is supportive of financing the project internally from the temporary financing fund, a resolution establishing the interfund loan would be presented in the future. Attachments AEM memo 2013 water consumption 2013 41h quarter report - ZL1JO �'EICK & NMU1 S TLP AEM Financial Solutions' MEMORANDUM Date: March 12, 2014 To: Kirk McDonald From: Jean McGann Subject: Emergency Water Supply System Financing On February 10, 2014 the City Council approved an ordinance establishing a fee to fund construction and maintenance of the emergency water supply system. Each City in the Joint Water Commission UWC) will participate in the funding of the system. The City of New Hope's share of the project is $1.1M. AEM has been asked to review funding alternatives in order to finance this project internally. In reviewing information provided by City staff, it is anticipated to generate $122,680 per year from the $.20 per 1.000 gallons fee. If this is financed internally, the Temporary Financing Fund has adequate reserves to manage this internal loan. The City currently has a weighted average interest rate of 1.51%. If the Temporary Financing Fund loans the Water Fund $1.1M at 1.5I %, the loan could be repaid in 10 years at $119,341 per year with final maturity is 2024. Amortization schedule is as follows: Date Total Payment Interest 06/30/2014 06/30/2015 06/30/2016 06/30/2017 06/30/2018 06/30/2019 06/30/2020 06/30/2021 06/30/2022 06/30/2023 06/30/2024 119,340.80 119,340.80 119,340.80 119,340.80 119,340.80 119,340.80 119,340.80 119,340.80 119,340.80 119,340.84 $ 1,193,408.04 5201 Eden Avenue,, Suite 250 Edina, MN 55436 962.715,3070 1 Fax 952,835.3261 $ 16,610.10 15,058.76 13,484.11 11,885.67 10,263.10 8,616.02 6,944.08 5,246.89 3,524.07 1,775.24 $ 93,408-04 Principal $ 102,730.70 104,282.04 105,856.69 107,455.13 109,077.70 110,724.78 112, 396.72 114,093.91 115,816.73 117,565.60 $ 1,100,000.00 Outstanding Principal $ 11100,000.00 $ 997,269.30 892,987.26 787,130.57 679,675.44 570,597.74 459,872.96 347,476.24 233,382.33 117,565.60 0.00 CBH City of New Hope Land Use Report Water Consumption 2013 Per 100 gallons MONTH RESIDENTIAL COMMERCIAL INSTITUTIONAL Hundreds of Gallons Hundreds of JWC Eme en Fee we bill in January 347,102.00 71,356.00 7,048.00 1 Gallons 425,506.00 Total In Gallons 42,550,600 r$0.20 $8,510.12 $0.19 $0.18 $0.17 $0.16 $0.15 February 359,435.00 83,078.00 8,094.00 450,607.00 45,060,700 $9,012.14 $8,084.61 $8,567.53 $7,659.10 $7,233.60 $6,808.09 $6,382.59 March 317,610.00 76,808.00 6,648.00 401,066.00 40,106,600 $8,021.32 $7,620.25 $8,110.92 $7,660.31 $7,209..71 $6,,,759..10 April ,. ,.4,841.00 423,816.00 42,381,600 $8,4763 $8,052.50 $7,219.18 $7,6286 $6,818.12 $7,204.87 $6,417.05 $6,015.99 347,060.00 416,517.00 79,210.00 7,374.00 433,64.00 43,364,400 $8,672.88 $8,239.23 $7,805.59 $7,371.94 $6,781.05 $938.34 $6,357.24'Ma $6,504.66June 363,726.00 99,857.00 12,996.00 529,370.00 52,937,000 $10,587.40 $10,058.03 $9,528.66Jul $8,999.29 $8,469.92 $7,940.55 535,931.00 ,.,. 131,701.00 71,514.00 47,151,400 $9,430.28 $8,958.76 $8,487.25 $8,015.73 $7,528.22 $7,072.71August September610,877.00 24,075.00 134,577.00 691,707.00 69,170700 $13,834.14 $13,142.43 $12,450.72 $11,759.01 $11,x67.31 $10,375.60 October 447,074.00 ,8.00 775,602.00 77,560,200 $15,512.04 $14,736.43 $13,960.83 $13,185.23 $12,409.63 $11,634.03 November 385,951.00 ,.29,312.00 100,715.00 14,054.00 611,581.00 61,158,100 $12,231.62 $11,620.03 $11,008.45 $10,396.87 $9,785. $9,173.71 December 339,213.00 74,328.00 5,379.00 ,. 418,920.00 ,72,000 $10,014.40$8,512.24 $7,510.80 41,892,000 $8,378.40 $7,959.48 $7,121.64 711-52 $6,02.72 283.80 TOTAL 4,812,246 1,159,905.00 161,902.00 6,134,053.00613,405,300.00 $122,681.06 16,546.96 $$0.56 110,412.90 $104,278.85 $98,12885 $9201078 CBH (1) See statement of revenue and expenditures general fund for further explanation of this increase (2) 4/29/13 Council authorization to close fund to Golf Course (3) Decrease due to acquistitions and payments on current projects (4) Decrease due to scheduled bond payments (5) Increase of $100,000 Council authorized transfer (6) Increase due to receipt of municipal state aid (7) Increase due to property tax receipts being accumulated and minimal project payments (7) Increase due to payments on current projects (8) Increase due to receipt of payment for Golf Course interfund loan and reduction in improvement costs (9) Decrease due to payments on current projects and/or scheduled debt payments (10) Decrease due to payments on current projects and/or scheduled debt payments and offset by a SIM transfer from Storm Water fund. (11) Increase due to energy improvement grant revenue (12) Variance due to Council authorized transfer of $1,000,000 from storm water fund to Water utility fund (13) Decrease due to payments on current projects and/or scheduled debt payments -5- ° r• 1 • I I r r � Y'Y06 A ,l.F <. 341 ..--1�. �'RS„- ,. ':?<rL._ .:, .Y >' s r. _3�#,_t: :rzt 14�*.a :,. i�'•°�S y .,., r�i rv_ y i?' ,°.l t� {'. '� + "i- =5, #�±�Ti V�.19'T r. ,�., ,:� SW /"� +R��.i � ,.7F:.- . M.�1:"'r "'III""" �,�„ z_P� •ma !' �''- �""�,S,.A` ,15+.3„A � , ? G'� w�'.i7'� .�� yyDID1 P— 1 I Ell ry,Ny {I 1 j� 1 ' ,I l 1'-!�!ri`;• �.?.1��1�-."��11��'�S2 e�el7�`y�.�tirrs • 1 tV 1� S�ru4�.-.1.41.. 11 -K" I 11 1 _1 1 i.... �.r.+..., �•.Y..'Ywh��.°�,?,v �"'1 a� i •'111 ° �i,..t 9 1 ,_fit �. y� 5{ _qi �R' :: y,Yt � t { •� p' 1n 6 I•.1�`'�y. 8.. 1 ,1.,_ T� �,.�i� �5�` ;•H�2n F•.Y-e,�1 u1�W�S�,� �iJ�i ��d"I�"�;;. y. A��. �'.� '�+ �� •'S � +�l , ��t� r' M' 1 1 1 9 1 1 • ' ice, 11 11 1• 1. y�y�• "f ; x� 'yy�' S ��/' r,, it{t.�' ,�I Alf fall � �s y� V�" r�T_ -�J 'd'"""�F:�SkN� }yam->irr �F �: :yY.�. �� '�,.-I!... .ik�H.�� I[I+�,. �.'IW-•S'�� k � �!'[� �'[;. ��L;!k�S`VL�l�i'. MAAds,� ewer •,"� 3lYR�, 291,571 `' ,,/ �E y � .5 {{i�1}y1y�� .fir} r � §;_ :'.'�,�Fi �!F: L�"_'Xi:RJ�'i5 )°"'? 1F'iw" S�"�,..�`.: .m ,T-+�' ,, °��%�" i� ��+�n .. 1 1 Ptx 1 i 1 ./ 31d 1 , - r -.': b_. f �$e'_:+i 37,257 , Yf;'':li,". h�v. _.-:.. =!'.xufF�+p:-+hA, . u R - 1 7 f. -.j:' }"' 1' Storm 014,675 , 9402 Central garage _ 5,329,235 �C!t .4,746,975 1, 1if „d`I�' :'le;-.p',r-' 3 .__+i-��s LI ' _ k° rr+ "iJ:+6 I!,'U-';°P�;�'?i 8 �,�,i D Vacation leave fllre �T:�e�Ai��.r'E 911 i 1I @ 7�3'�' 620,433 :�.=' y .'p' ins '�Irr �P ��'111d� �^# ��ys E" -�- � Agency - pass thru 46,081 16,374 (29,707) Total9503 2365=01,200 Item Jr anadon. ofohaniMs-: : 1 1 1 f i Y (1) See statement of revenue and expenditures general fund for further explanation of this increase (2) 4/29/13 Council authorization to close fund to Golf Course (3) Decrease due to acquistitions and payments on current projects (4) Decrease due to scheduled bond payments (5) Increase of $100,000 Council authorized transfer (6) Increase due to receipt of municipal state aid (7) Increase due to property tax receipts being accumulated and minimal project payments (7) Increase due to payments on current projects (8) Increase due to receipt of payment for Golf Course interfund loan and reduction in improvement costs (9) Decrease due to payments on current projects and/or scheduled debt payments (10) Decrease due to payments on current projects and/or scheduled debt payments and offset by a SIM transfer from Storm Water fund. (11) Increase due to energy improvement grant revenue (12) Variance due to Council authorized transfer of $1,000,000 from storm water fund to Water utility fund (13) Decrease due to payments on current projects and/or scheduled debt payments -5- Request for Action Originating Department Approved for Agenda Agenda Section Ordinances & City Manager April 14, 2014 Resolutions Item No. By: Kirk McDonald, City Manager 1 BY: -Kirk McDonald 10.2 Resolution approving interfund loan and transfer from temporary financing fund to water fund for emergency water supply system (improvement project #929) Requested Action Staff recommends the City Council approve the attached resolution approving interfund loan and transfer from temporary financing fund to water fund for emergency water supply system. At the March 17, 2014, work session the Council discussed funding New Hope's share of this project internally, and was supportive of the option presented by the city's financial consultant (AEM) and staff. Policy/Past Practice The council has approved interfund loans in the past when the funds are available to save on interest costs and accomplish city projects. A recent example includes paying off the golf course clubhouse outside debt via an interfund loan from the temporary financing fund and EDA. Background At the tri -city JWC council meeting held on January 9, 2014 the three councils unanimously agreed to move forward with the construction of an emergency water supply system. Each city would be responsible for financing their share of the project, and the estimated cost to New Hope is $1.1 million. The council further discussed this matter at the January 21 work session and supported approving a resolution to construct the project along with the other cities. The council also discussed adding a 20t charge per 1,000 gallons of water to pay for New Hope's share of the project and discussed internal financing. At the January 27 council meeting the council approved a resolution ordering construction of an emergency water supply, and at the February 10 council meeting an ordinance was approved establishing a fee for the emergency water supply system. The 20is per 1,000 gallon fee will be effective on the April 2014 utility bills. AEM prepared the attached memo regarding the option of internal financing which was reviewed at the March 17 council work session. As of December 31, 2013 the temporary financing fund had a balance of $3,128,321, and AEM recommends that there are adequate funds to internally finance New Hope's share of the emergency water supply system. Based on the number of gallons of water sold in 2013, it is estimated the new 2N charge will generate approximately $122,681 in revenue per year that would be utilized to pay off the internal loan. With the addition of a small 1.51% interest rate for an internal loan, the loan would be repaid in a ten year period (please see attached amortization schedule). Motion by Second by J/�Zto, L6V To: j I:/RFA/CityManager/2014/Q&R-Approve Interfund-YU929 041414 Request for Action, Page 2 April 14, 2014 The attached resolution authorizes an interfund loan and transfer from temporary financing fund to water fund in the amount of $1.1 million as project expenses are incurred for New Hope's share of the JWC emergency water supply system. Staff recommends approval of the resolution. Attachments Resolution March 17, 2014 work session minutes March 17, 2014 RFA including amortization schedule City of New Hope Resolution 2014- 57 Resolution approving interfund loan and transfer from temporary financing fund to water fund for emergency water supply system (improvement project #929) WHEREAS, the three city councils of the Joint Water Commission (New Hope, Golden Valley, and Crystal) have unanimously agreed to construct an emergency water supply system; and WHEREAS, at the January 27, 2014, council meeting the council approved a resolution ordering construction of an emergency water supply, similar to the other two cities; and WHEREAS, each city is responsible for financing their share of the project and the estimated cost for New Hope is $1.1 million; and WHEREAS, at the February 10, 2014, council meeting the city council approved an ordinance establishing a fee for the emergency water supply system in the amount of 20c per 1,000 gallons of water; and WHEREAS, the city's financial consultant (AEM) has recommended the city council finance the emergency water supply project internally with an interfund loan from the temporary financing fund to the water fund to pay for project expenses as they are incurred; and WHEREAS, the interfund loan would be paid back with the 2N per 1,000 gallon fee over a ten year period with a small 1.51% interest rate for an internal loan per the attached amortization schedule; and WHEREAS, the city council supports the internal financing option for the emergency water supply project and the recommendation from AEM. NOW, THEREFORE, BE IT RESOLVED, by the city council of the city of New Hope, Minnesota that an interfund loan and transfer from the temporary financing fund to the water fund in the amount of $1.1 million as project expenses are incurred for the emergency water supply system is hereby approved. Adopted by the City Council of the city of New Hope, Hennepin County, Minnesota, this 14th day of April, 2014. Mayor Attest: �e u_ City Clerk T Purchase skates for rental, set up rental area Golf course grills Fairway unit e Rotary rough mower Golf carts lease program Directors Paschke and Rader also reviewed proposed CIP projects for years 2016- 2018. Ms. Jean McGann of AEM reported on the financial aspects related to CIP for parks, street, and central garage. She stated the street infrastructure maintains a positive cash balance and appears to have sufficient resources for the projects planned in the next five years. She stated the park infrastructure fund cash balance is projected to be negative at the end of 2015 due to the large number of projects scheduled for year 2015. She pointed out if major expenditures are not delayed, the city should consider increasing funding to the park infrastructure by approximately $150,000 per year over the next four years. Ms. McGann stated the central garage cash flow assumes replacement is funded at 25% and operations funded at 100%. She stated funding replacement at 25% will continue to have a negative effect on the overall cash position of the central garage. She noted Council may want to consider increasing the replacement funding level in 2015 to 50%. She also pointed out the 2018 CIP assume a public works addition for $2,650,000 paid out of current funds. Ms. McGann stated by increasing both the park tax levy and the street tax levy by 3% would result in approximately $45,000 for each fund which equates to a tax increase of $7 for a home valued at $200,000. Council thanked the directors and AEM representatives for the update. IMP. PROJECT 929Mayor Hemken introduced ntroduced for discussion item 11.10, Discussion regarding internal Item 11.10 financing for emergency water supply system (improvement project no. 929). Mr. Kirk McDonald, city manager, reported the recent $.20 charge per 1,000 gallons of water will generate approximately $122,681 of revenue per year. He stated the city's share of the emergency water supply system is $1.1 million. He recommended financing the cost internally with repayment over ten years. Ms. Jean McGann, AEM, stated the city's temporary financing fund has adequate reserves to manage the internal loan. She recommended using a 1.51% interest rate which is the average interest earned on investments. She indicated the $1.1 million loan could be repaid in 10 years at $119,341 per year with final maturity in 2024. Council expressed support for an internal loan. Tracking Project Costs Mayor Hemken introduced for discussion item 11.11, Discussion regarding tracking Item 11.11 project costs. Mr. Kirk McDonald, city manager, explained how projects are tracked by Council action and expenses are coded to the corresponding project number by the Finance Department. He stated a report can be generated for expenses/revenues related to an improvement project number. City Council Work Session March 17, 2014 Page 10 ABDO EICK & • _ VMRSLLP AEM Financial Solutions'" MEMORANDUM Date: March 12, 2014 To: Kirk McDonald From; Jean McGann Subject: Emergency Water Supply System Financing On February 10, 2014 the City Council approved an ordinance establishing a fee to fund construction and maintenance of the emergency water supply system. Each City in the Joint Water Commission (JWQ will participate in the funding of the system. The City of New Hope's share ofthe project is $1 JAL AEM has been asked to review fimding alternatives in order to finance this Projectinternally. In reviewing information provided by City staff it is anticipated to generate $122,680 per year from the $.20 per 1.000 this is financed internally, the Temporary Financing Fund has ad P gallons fee. If weighted average interest rate of 1.51 %. If the Temporary Fiaencing Fuytd loans the Water Fund $1, IinterrM at 1.3 %, the loan coauld as a repaid in 10 years at $119,341 per year with final maturity is 2024. Amortization schedule is as fellows: Date Total Payment Interest 06/30/2014 Prin! F al Outstanding Principal 06/30/2015 119,340.80 $ 16,610.10 $ $ 102,730.70 $ 111001000.00 06/30/2016 119,340.80 15,058.76 104,282.04 997,269.30 06/30/2017 119,340.80 13,484.11 105,856.69 892,987.26 06/30/2018 119,340.80 11,885.67 107,455.13 787,130.57 06/30/2019 119,340.80 10,263.10 109,077:70 679, 675.44 06/30/2020 119,340.80 8,616.02 110,724.78 570,597.74 06/30/2021 119,340.80 6,944.08 112,396.72 459,872.96 06/30/2022 119,340.80 5,246.89 114,093.91 347,476.24 06/30/2023 119,340.80 3,524.07 115,816.73 233,382.33 06/30/2024 119,340.84 1,775.24 117,565.60. 117,565.60 0.00 $ 1,193,408.04 $ 93,408.04 $ 11100,000.00 stat Eden Avenue, Sub 230 Edha, MN 65498 852116. M I FaK982.836.3M, City of New Hope CBH Hundreds of Gallons Emergency Fee (we bill In $0.20 $8,510.92 Land Use Report Water Consumption 2013 $0.18 $0.17 Per 100 gallons $0.15 $9,012.14 MOMM RESIDII IL COMMERCIAL INSTITUTIONAL $7,233.60 $6,808.09 $6,38z.5( 58,021.32 $7,620.25 $8,110.92 $7,219.18 Hundreds of .1W7c Janua 347,102.00 71,656.00 7,048.o0 Gallons 425.508.00 Total in Gallom Februa 359,435.00 83,078.00 8,094.00 4,607.00 42,550,600 March 317,610.00 76,808.00 6,6411 o0 401,066.00 45,080,700 TIS �Ma 34f,750.00 77,225.00 4,841.00 423,81 — 40,106,600 42,381.600 June 347,060.00 79,210.00 7,374.00 433,644.00 43.364.400 �l1 418.517,00 99,857.00 12,996.00 529370-00 52.937,000 AU USt 363,728.00 951855.00 11,933.00 471,514.00 47,151,400 Se tember 535,931.00 131,701.00 24,075.00691,707.00 $8,512.24 $7,121.64 69.170,700 8men.00 October 134,577,00 30148.00 0.200 November 47, 4074.00 135,1 95.00 29,91200 611,561.00 61.15 $,100 December 385 951.00 100,715.00 14,054.00 500,720.00 50.072,000 399,213,00 1 74,328.00 5,379.00 418,920,00 41,892,000 TOTAL 4,812,246.00 1.159,905.00 161,9oz.00 6,134.053.00 s1 -'A enn %M nn CBH Hundreds of Gallons Emergency Fee (we bill In $0.20 $8,510.92 $0.19 $0.18 $0.17 $0.16 $0.15 $9,012.14 $8,084.61 $8,561.53 $7,659.10 $7,233.60 $6,808.09 $6,38z.5( 58,021.32 $7,620.25 $8,110.92 $7,219.18 57,680.31 $7,209.71 $6,759.1( 58,478.32 $8,052.50 $7,828.68 $8,818.12 $6,417.05 $6,015.9f $8.672.88 $8,239.23 $7,805.59 $7,204.87 87,371.94 $6,781.05 $6,357.2( $10,587.40 $10,058.03 $9,528.66 $8,999.29 $6.938.34 $6.504.6( $9,430.28 $8,958.76 $8,487.25 $8,015.73 $8,469.92 $7,528,22 $7,940.5. $13,834.14 $13,142.43 $12,450.72 $11,759.01 $11,067.31 $7,072.7' 110,375.6 $15,512.04 $12,231.62 $14,736.43 $f 1,620.03 $13,)80.83 $13,185.23 $12,409.63 $11,834.0 $10,014.40 $9,513.68 $11,008.45 $9,x12.96 $10,396,87 $9,785.29 $9,173.7• $8,378.40 $7,959.48 $7 540.56 $8,512.24 $7,121.64 $8,011.52 56,702.72 $6.283.8( $122,681.06 116,546.86 ;110,412.80 $104,278.85 ;98,728.85 $92.010.7 )tvI fr.:neral 9€I10 Fire capita ppm 901! &wix>irrr►i'<div,4oprrt•:otawh,jrhy 4016 Solid %ask ma t 9€11 ". Ift aw,a �10,i mmxut 9021 polii:t Jbr*-K ')117 F.D.% sinki. P 1 i1, (1 l,A' 9118 • ED.X sinking W 11, C-1-1 4114 * EDA si.,1mg it 2, N-2 9140 Fin; pmion bund 1196 51145 20109 QQ Fquipr: ejj 92-02 Cies Halt ClP 9203 -two:[ 'rn6z' trJGhirr, 9;13 1: DA consu tiott.45. V-1 9214 EDA v-n:;trurv, ,n t7. X -i-1 .x.3,15. )"M;xt:ratrtrction 0 3, 85-2 4:}f: EDA r.mmFuetion 1.19, 0-;,v1 9217 * EDA a irt5 'ta Gt t)Y) 4 t0.03-01 9318 • k, DA ion al 1, 04-1 9213 EDA cm -a mina u.12: 0.1-3 0220 ED.% owi- tmciiim ;11= 11,1 92°13 Pak Wr iamzium 93(,2 Golfcwjr.!%: 4jf13 lwe arena c,3(4 Stt).nn %;avr 433 5`rm iilt`:Z'.�t nul 9402 Centra. ware a: a(r7 i:7S1:f.it3S2 94Q3 Vaca:_o i, L -a—, 941•) Irfu rr-aliun weno!(Agt 95: )3 IA;,:m,) - F, w thro Total t~1'i Y O!' Nl;A% 1.1111'F IMP; ` E NOT_k AT"?" ACHN.BN T B lNittilIfl)CASH 13:11.zV..('F,SBN ftND Y)ECEN113E1i :t 1, 21112 :V ,D I)ECE�ISER ? 1, 2`113 B36"Re slaacx Chauge from 1213162([12 12431/2013 I MI12012 4.043,41 T 348.301 2.74-7.114 140.808 131v11 l(1lsn 234,464 (2A.1021i (517.51 t 1 3$.902 100.74- 573 I05,4t; t 114.5$ot 14,a,T1f t: l 1 8,}143 (1fr,Ss•1i I YS.47fl 2.1.�i.r975 5,319.n3 `(:7,917 620,433 46 091 S ft,13L771 3,73. t 1 152.694 13,(x:3 117,459 136.468 (17,144) (i«0:1551 201.f'r7 (1.4281 1,34ta,? a3 ;ti9 '1u8 t 1f.1:f' 19 429) 01,70', 5.1.,35, .[53.'58 576.777 '_49.1 xt} 4." 4€,11''5 415,$[40 OU59 153.1;9 1637t S 25,308,4.02 23 �ta1.?tI€I 1—rrt xpl.-:atimo nl+a�te�rs r.elxPtl.pn. ]trtrs},',(1 t 1) Sed s 1St 11:61[ of r,% CriLsE sn:l exna'. rtti3 8,�;.::ral ti ".•�1 ti3P i� ri` _r cti�1-.atio.- r;ft:ti ini r� ass (") 4 2913 Coum:il at hwi7,Jon w clo.: fund to Golf1wour.::u (3) 1 _ s.w Jue to 9a4ui;-taair.s and (,a)rrwnts on currem prvje,w� (4) dth- to--cbMu4ed band payme:,ts (5s I numaz": of SIO0,000 Council act( orized tr ci.:rr (.61 Inmm du:: to rowipt of rrrwicipal .tM ,tint f'1 ]rtcaet j w w rrors' tax rezzir:3 h.-ingaceumululwd m -.J minimal pro ,:Ll pa) rm„- u (7) 1nmax d x to p)metta on i;arnent je-4s t8) ln�xe" du;. to mcei, t of xsg went for Giff C'mcr ,: irtertund lo -Ir- and tett: tett in it VLm ,;[[twat Oog3 (.348,301) t2) 13) 11.$86 ft$R) 15.581 f1#:'moit (4) 10.958 (3:.tt 4 (35 902) (13-kU59) }4) 100.85ii (5) i.423.Ggla €8) (i,Ell l) 13-,' MR 1571 (2 698) t 1.• 4�5 I I'D 188 (7) [ 17.175) (1.85[4) t?. Vv1 98 893 165,02.1 id) S1�-�35► €lb, 37,'157 3JS,;95 (11' t 1,517.1(9$; 112' 4'541'_.26(4) (13, (92.3571 111,775) 1.656 S (1,847,212) (9) D=4a,:: due to ra}tmertts oat cimot projects in -i or whe,14ed &bt papnent-1 x 1 vi Dai re. a dw to pad=w; on ct nr tt :gin jests and or .� f,_ luted a bt p.1Y~1tnts and afiie't b3° a S t M tr n:;fcr fro[, Storm W!ter ftmd. 1117 1r1�r:.a.�: dei: tv �o::rb} irsap:titvean�nt 1tr„mt re�;•rrcu (12) ttar:anw Jut to O-u:tcil a"., --r: trw7!, .ar cif sl; } i3(:r7 firm :'._ rm x%-tLr t`;an,l t) Wgr ati(ity fund(131 �::; r,'�>S EI!::,'. t,t j.`M,;.T.�rii� (3n e"lar�+eatt 11ts jwY.i'� a.:t.: ti,r �.i;+:nt::.,A( !:Litt t'.c•) trit:r6t? Y -5- September 11, 2015 Municipal Builders, Inc. 17125 Roanoke Street NW Andover, MN 55304 Subject: Joint Water Commission Emergency Supply Wells City Project #14-07 Change Order Dear Mr. Wegner: Enclosed please find a fully executed Emergency Supply Pumps/Piping Electrical/Chemical Change Order Agreement between Municipal Builders, Inc. and the City of Golden Valley. We look forward to a successful recycling agreement with you. If you have any questions, please contact me at 763-593-8008. W L— Jeff Oliver, PE City Engineer Enclosures CC: Bolton & Menk, Inc. City of Golden Valley, Finance Department City of Crystal, City Manager City of New Hope, City Manager Joint Water Commission 763-593-8000 763-593-8109 763-593-3968 1 Municipal Builders, Ing September 8, 2015 Mr. Steve Nelson Bolton & Menk, Inc 7533 5unwood Drive NW, Suite 206 Ramsey, MN 55303 Re: Joint Water Commission Emergency Supply Wells City Project #14-07 Change Order Dear Sir, We would have preferred that additional days be added to the project duration on the attached change order #1 due to the additional work that was requested. The attached change order #1 is being signed with the understanding that no liquidated damages will be assessed on this project per the recent e-mails exchanged between the JWC, the project engineer and Municipal Builders, Inc. 1.`• 725 Roanoke Street NW 0 Andover' MN 55304 0 Phone: (763) 421-8740 FAX: (763) 421-1077£3 SECTION 00491— CHANGE ORDER No. 1 PROJECT: Emergency supply Pumpsipiping/Eleci icavaemical DATE OF ISSUANCE: August 3, 201 S EFFECTIVE DATE: 813/15 OWNER: Joint Water Commission ENGINEER'S Project No.: R22.107452 CONTRACTOR Municipal Builders ENGINEER: Steve Nelson, P.E. You am dhccW to snake the following changes in the Contract Documents. Descripdow- All the scope changes and costs change dewn"bcd, referenced and tabulaW in Memoranda of Understanding MOUI and MOU2. Reason for Change Order: Reasons for gilts approved are outlined in MOU l and MOU2, Attachments: (Ust documents supporting rhaage) Sm MOU 1 and MOU2. C NAME IN CONTRA[ 17 PRICE: CHANGE IN CO'No"TRACT TIES: ft1vv Original C=hWt Tunes 0,514.400.OQ Subsurd'aq CaqActikm 15 Rmdy W NW payment 711!11, Net CbWges tram Fe"Ous Cama mdea 30.0 � d mvm d rkbwn Psion to sh Chane Order ContcwtT&ms oar to this � � CtwwgeChrkx s]3i4�t1.DI1 �� Ready Cor G1A ltiiet Dac�e+�'this C6a4ge +Order No Changs idrtliis �e+Deder Caaplseci Price wig alt apgrrovad t mange tinders Contrast Times 51.188.1133.05 Subda"Cwn� ReadyffhWMrW 711/12 RECIOMNI vMr-0• APPROV tea: qtr ^_ By BY - r. rghtrtAu/*.tu"bWSWmtw) tnriaedS dva) t EJCDC No. 1910CS-B (1990 motion) ftVmwd by the awhieen Joint Comm iincoments C=F xmttoe end endorsed by The Associated Geral Cmenctors N22.107452 — New Hope, Golden Valley, and Crystal, MN CHANGE ORDER Emergency SuPply Pumps/Piping/Electrical/Cheluical PAGE 00991-1