2017-01 Authorizing to Borrow from Water Pollution Control Revolving Loan Fund

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targeting the Nelson Park Neighborhood's ongoing storm drainage problems which were identified as the#2 storm water mitigation priority in the City's stormwater master plan. This project will also separate sanitary sewage from storm water drainage. Separating the two types of sewer flow will reduce basement backups and combined sewer overflows into the Sangamon River. BACKGROUND: In 1966, a drainage study was completed for the City in an effort to plan for the drainage of future developments and to identify drainage projects for the City to undertake in the near term. During the late 1970's and early 1980's the City invested nearly$20 million in drainage improvements throughout the City. The Nelson Park Neighborhood was identified as a needed future project with residents on nearly every street reporting street and basement flooding; however, this work was never completed. More recently, the City's 2009 Stormwater Master Plan once again identified the Nelson Park Neighborhood as a high priority for drainage, listing it as 2nd out of 46 identified priority areas to address. Based on preliminary designs, the cost estimate is about $4.8 million with engineering costs included. The project was then put on hold until sufficient funding could be identified. Knowing that the project costs would exceed the City's ability to fund out of current revenue, the City approached the Illinois Environmental Protection Agency(IEPA) and inquired about a low interest loan similar to those the City has recently taken advantage of for high cost sanitary sewer repairs. The IEPA indicated that this project was loan eligible. The City then prepared and submitted a Facilities Plan for the Nelson Park Neighborhood that identified the storm drainage problems, outlined the proposed project to resolve them, and estimated the possible project costs. Project Funding Through the Water Pollution Control Loan Program The passage of an ordinance authorizing a loan agreement to borrow funds from the Illinois Water Pollution Control Loan Program is one of the final steps in securing an IEPA low interest loan. The loan rate is expected to be 1.75%. The ordinance addresses the funding for the project and assures that the City is able to repay the loan over a 20 year period beginning at the substantial completion of the project. The funds included in the loan request are summarized in the following table: Work Item Project Estimate Design Engineering $244,000 Construction $4,156,325 Construction Contingency 3% 124,690 Construction Engineering $318,985 Total Estimated Project Cost $4,844,000 Total Loan Requested $4,844,000 As is common with the Water Pollution Control Loan Program, the actual loan document will not be fully written until a contract has been awarded by the City Council and a bid amount is approved by the IEPA. At that point, the agreement authorized by the attached ordinance will be signed by the City Manager and the loan activated. The contractor will then be given a notice to proceed. — 2 —