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Project Funding
<br /> The passage of an ordinance authorizing a loan agreement to borrow funds from the Illinois Public
<br /> Water Supply Program is one of the final steps in securing an I-EPA low interest loan. The
<br /> ordinance addresses the funding for the project and assures that the City is able to meet the
<br /> repayment of the loans. Staff anticipates that a portion of the loan will be offset with ARRA funds
<br /> with the balance being paid by both 0%interest and low-interest loans as outlined below. The
<br /> amount of ARRA funds and 0%interest loans available for this project has not been determined by
<br /> the I-EPA.
<br /> Project Budget Water Water Both Projects
<br /> Main Tank/Pump
<br /> Station
<br /> Engineering Desi $355,000 $169,000 $524,000
<br /> Construction Estimate $8,034,440 $2,900,000 $10,934,440
<br /> Construction Contingencies $803,444 $290,000 $1,093,444
<br /> Construction Engineering $550,000 $150,000 $700,000
<br /> Total Project Cost $9,742,884 $3,509,000 $13,251,884
<br /> Loan Forgiveness * -$1,816,050 -$683,950 -$2,500,000
<br /> Total $7,926,834 $2,825,050 $10,751,884
<br /> * The I-EPA has not provided written confirmation of this amount.
<br /> The Public Water Supply Loan Program administered by the I-EPA currently utilizes ARRA funds
<br /> to provide forgiveness of a portion of the loans for approved projects along with 0% loans up to a
<br /> certain maximum amount and low-interest loans for the remainder. In a July 6, 2009 memo to the
<br /> City Council, it was noted that staff had been informed of up to $5,000,000 in loan forgiveness
<br /> through ARRA funding. This level of loan forgiveness has never been confirmed in writing to the
<br /> City. The City has been verbally informed of loan forgiveness amounts ranging from$2,500,000 to
<br /> $5,000,000. In the cost scenario above, the lower loan forgiveness value has been used. As is
<br /> common with the Public Water Supply Loan Program,the actual terms of the loan will not be fully
<br /> written until a project has been awarded by the City Council and a bid amount approved by the I-
<br /> EPA. At that point, the agreement authorized by the attached ordinance will be signed and the loan
<br /> activated. The contractor will then be given a notice to proceed.
<br /> Bids were opened by the City on September 29, 2009 and are still under review to determine the
<br /> lowest qualified bidder. The bids ranged from $2.59 million - $3.15 million for the water tank/
<br /> booster pump station and from $5.76 million to $8.59 million for the water main extension. The
<br /> $14 million requested in the Agreement covers the range of bids received plus engineering and
<br /> contingencies. It is expected that the actual loan will be less than $11 million. The bid award is
<br /> planned to be presented to Council at the October 19, 2009,meeting.
<br /> The City will typically begin repaying the loan amount within 6 months of the project completion.
<br /> Loan repayment will likely begin in late 2011.
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