R2024-30 Resolution Authorizing the City Manager to Sign Loan Documents for a Five-Year Lead Service Line Replacement Project, City Project 2023-20

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2/1/24,3:01 PM Item Coversheet The Illinois Environmental Protection Agency has been actively encouraging water utilities to seek funding from the State Revolving Fund(SRF)for lead service line replacement:, A draft rule for lead service line replacement funding priorities has been published in the Illinois Register,and this rule would heavily prioritize funding for low-income census tracts. As a result,the City may be able to obtain"principal forgiveness loans"(in effect,grant funding)for replacement projects in the most eligible census tracts. The attached five-year galvanized service line replacement project plan would replace the estimated 1,899 water service lines in census tracts which are expected to score highly for principal forgiveness loan funding under the draft rule. This would represent at least 25%of the inventory of suspected galvanized service lines requiring replacement. By accelerating the program to begin in 2025 or 2026,the City of Decatur may be in a better position to receive federal funds,if other states and agencies are not able to move forward with projects in the fiscal year established to obligate those funds. Lisa Bonnett,the City's adviser on water finances and government affairs,has highly recommended the approach to get in early and secure as much funding as possible. As was done in the Johns Hill neighborhood,water service line replacement will be coordinated with the City's ongoing neighborhood revitalization efforts. Neighborhood meetings will be held to make people aware of the program and how they will be affected including funding opportunities for the replacement of their services. The resolution The requested action by the City Council does not authorize any construction,nor does it approve the use of any grant funds.The resolution simply authorizes the City Manager to sign the preparatory loan documents for the project. If the project is selected for funding and terms are acceptable,the final loan documents will be presented to the City Council for approval. The City of Decatur has successfully completed many projects using funds from the IEPA SRF loan process. PRIOR COUNCIL ACTION: 1.January 17,2023—City Council also approved a cost-sharing program for replacement of water service lines affected by lead materials. The program is published on the City's web page at Lead Elimination&Water Service Line Replacement Program- City of Decatur,IL(decaturil.gov) 2.December 4,2023—City Council approved the proposed 2024 Capital Improvements Plan,which includes a budget of $643,500 from Fund 81,Water Capital Fund,for the Lead Service Line Replacement program. 3. January 16,2024—City Council awarded a contract to Hoerr Construction,Inc. in the amount of$307,825 to daylight lead service lines. POTENTIAL OBJECTIONS: There are no known objections to this resolution INPUT FROM OTHER SOURCES: None STAFF REFERENCE: Matt Newell,Public Works Director,Paul Caswell,City Engineer,and Robert Weil,Assistant City Engineer(Water Utility).Matt Newell will be in attendance at the City Council meeting to answer any questions of the Council on this item. BUDGET/TIME IMPLICATIONS: Budget Impact: There is not yet a complete picture of the true budget impact. This will become clearer as we refine the GRR inventory and determine available grant or loan funding opportunities. Staff Impact: A significant dedication of staff time would be required to successfully implement the project. As described in the attached project plan,this staff work represents the City cost share for the project. Current approved staffing levels should be sufficient to accomplish the project. ATTACHMENTS: Description Type Resolution Authorizing the City Manager to Sign Loan Documents for a Five-Year Lead ServkciLine Resolution Letter Replacement Project,City Project 2023-20 Location Map Backup Material https:/'decatur.novusagenda.com/AgendaWeb/CoverSheet.aspx?ItemID=4810 2/2