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HomeMy WebLinkAboutG49-23 Tabled Ordinance No. G49-23 TABLED 12-20-2023 AN ORDINANCE AUTHORIZING THE CITY OF ELGIN, KANE AND COOK COUNTIES, ILLINOIS TO BORROW FUNDS FROM THE ILLINOIS ENVIRONMENTAL PROTECTION AGENCY'S PUBLIC WATER SUPPLY LOAN PROGRAM FOR THE CITY OF ELGIN LEAD SERVICE LINE REPLACEMENT PROJECT WHEREAS, the City of Elgin, Kane and Cook Counties, Illinois (the"City"), operates its public water supply system("the System")and in accordance with the provisions of Article VII of the Illinois Constitution and the Local Government Debt Reform Act, 30 ILCS 350/1 et seq. (collectively the"Act"); and WHEREAS, the Mayor and the City Council of the City of Elgin (the "Corporate Authorities") have determined that it is advisable, necessary, and in the best interest of the public health, safety, and welfare to improve the System, including the following: Replacement by the City of the publicly-owned and privately-owned portions of the lead water service from the water meter to the water main for approximately 220 properties; together with any land or rights in land and all electrical, mechanical, or other services necessary, useful or advisable to the construction and installation (the "Project"), all in accordance with the plans and specifications prepared by the consulting engineers of the City of Elgin which Project has a useful life of 100 years; and WHEREAS, the estimated cost of construction and installation of the Project, including engineering, legal, financial, and other related expenses is Two Million Twenty-Seven Thousand Dollars ($2,027,000), and there are insufficient funds on hand and lawfully available to pay these costs; and WHEREAS,the loan shall bear an interest rate as defined by 35 Ill. Adm. Code 662,which does not exceed the maximum rate authorized by the Bond Authorization Act, as amended, 30 ILCS 305/0.01 et seq., at the time of the issuance of the loan; and WHEREAS,to principal and interest payment shall be payable semi-annually,and the loan shall mature in twenty (20) years, which is within the period of useful life of the Project; and WHEREAS, the costs are expected to be paid for with a loan to the City from the Public Water Supply Loan Program through the Illinois Environmental Protection Agency,the loan to be repaid from revenues of the System and the loan is authorized to be accepted at this time pursuant to the Act; and WHEREAS, in accordance with the provisions of the Act,the City is authorized to borrow funds from the Public Water Supply Loan Program in the aggregate principal amount of $2,072,000 to provide funds to pay the costs of the Project; and WHEREAS, the loan to the City shall be made pursuant to a Loan Agreement, including certain terms and conditions between the City and the Illinois Environmental Protection Agency; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ELGIN, KANE AND COOK COUNTIES, ILLINOIS, AS FOLLOWS: SECTION 1. INCORPORATION OF PREAMBLES The Corporate Authorities hereby find that the recitals contained in the preambles are true and correct, and incorporate them into this Ordinance by this reference. SECTION 2. DETERMINATION TO BORROW FUNDS It is necessary and in the best interests of the City to construct the Project for the public health, safety, and welfare, in accordance with the plans and specifications, as described; that the System continues to be operated in accordance with the provisions of the Illinois Environmental Protection Act, 415 ILCS 5/1 et seq.; and that for the purpose of constructing the Project, it is hereby authorized that funds be borrowed by the City in the aggregate principal amount (which can include construction period interest financed over the term of the loan) not to exceed $2,027,000. SECTION 3. ADDITIONAL ORDINANCES The Corporate Authorities may adopt additional ordinances or proceedings supplementing or amending this Ordinance, providing for entering into the Loan Agreement with the Illinois Environmental Protection Agency, prescribing all the details of the Loan Agreement, and providing for the collection, segregation and distribution of the revenues of the System, so long as the maximum amount of the Loan Agreement as set forth in this Ordinance is not exceeded and there is no material change in the project or purposes described herein. Any additional ordinances or proceedings shall in all instances become effective in accordance with the Act or other applicable laws. This Ordinance, together with such additional ordinances or proceedings, shall constitute complete authority for entering into the Loan Agreement under applicable law. However, notwithstanding the above, the City may not adopt additional ordinances or amendments which provide for any substantive or material change in the scope and intent of this Ordinance, including but not limited to interest rate, preference or priority of any other ordinance with this Ordinance,parity of any other ordinance with this Ordinance,or otherwise alter or impair the obligation of the City to pay the principal and interest due to the Public Water Supply Loan Program without the written consent of the Illinois Environmental Protection Agency. SECTION 4. LOAN NOT INDEBTEDNESS OF THE CITY Repayment of the loan to the Illinois Environmental Protection Agency by the City pursuant to this Ordinance is to be solely from the revenue derived from the revenues of the System, and the loan does not constitute an indebtedness of the City within the meaning of any 2 constitutional or statutory limitation. SECTION 5. APPLICATION FOR LOAN The City Manager is hereby authorized to make application to the Illinois Environmental Protection Agency for a loan through the Public Water Supply Loan Program, in accordance with the loan requirements set out in 35 Ill. Adm. Code 662. SECTION 6. ACCEPTANCE OF LOAN AGREEMENT The Corporate Authorities hereby authorize acceptance of the offer of a loan through the Public Water Supply Loan Program, including all terms and conditions of the Loan Agreement as well as all special conditions contained therein and made a part thereof by reference.The Corporate Authorities further agree that the loan funds awarded shall be used solely for the purposes of the project as approved by the Illinois Environmental Protection Agency in accordance with the terms and conditions of the Loan Agreement. SECTION 7. OUTSTANDING BONDS The City has outstanding bonds, payable from revenues of the system, that are senior to the loan authorized by this Ordinance, and the City establishes an account, coverage, and reserves equivalent to the account(s), coverage(s) and reserve(s) as the senior lien holders in accordance with 35 Ill. Adm. Code 662.350(a)(9)(C)(PWS). SECTION 8. AUTHORIZATION OF MAYOR TO EXECUTE LOAN AGREEMENT The Mayor is hereby authorized and directed to execute the Loan Agreement with the Illinois Environmental Protection Agency. The Corporate Authorities may authorize by resolution a person other than the Mayor for the sole purpose of authorizing or executing any documents associated with payment requests or reimbursements from the Illinois Environmental Protection Agency in connection with this loan. SECTION 9. SEVERABILITY If any section, paragraph, clause or provision of this Ordinance is held invalid, the invalidity of such section,paragraph,clause or provision shall not affect any of the other provisions of this Ordinance. SECTION 10. REPEALER All ordinances, resolutions, orders, or parts thereof, which conflict with the provisions of this Ordinance, to the extent of such conflict, are hereby repealed. 3 SECTION 11. EFFECTIVE DATE That this ordinance shall be in full force and effect upon its passage and publication in the manner provided by law. s/David J. Kaptain David J. Kaptain, Mayor Presented: December 20, 2023 Tabled: December 20, 2023 Omnibus Vote: Yeas: 9 Nays: 0 Attest: s/Kimberly Dewis Kimberly Dewis, City Clerk 4 Kim Dewis From: William Cogley Sent: Tuesday, December 19, 2023 11:13 AM To: Rick Kozal Cc: Karina Nava; Christopher Beck; Kim Dewis Subject: FW: Elgin Year 3 LSLR Debt Authorization Ordinance Follow Up Flag: Follow up Flag Status: Flagged Rick This is a follow up to our discussion. The item on tomorrow night's city council agenda that should be tabled is item 13 on the consent agenda which is an ordinance authorizing the city to borrow funds from the IEPA for the lead service line replacement program. Bill William A. Cogley Corporation Counsel City of Elgin 150 Dexter Court Elgin, II 60120 (847) 931-5659 (847) 931-5665 (facsimile) cogley w@cityofelgin.org From: Christopher Beck<Beck_C@cityofelgin.org> Sent: Monday, December 18, 2023 7:18 PM To: William Cogley<Cogley_W@cityofelgin.org> Cc: Katlin Bailey<bailey_k@cityofelgin.org> Subject: Fwd: Elgin Year 3 LSLR Debt Authorization Ordinance Bill, Follow up from Nora, fyi. I think this would be fine, but we can discuss tomorrow. Chris Sent from my iPhone Begin forwarded message: From: Nora Bertram <bertram n@cityofelgin.org> Date: December 18, 2023 at 5:49:11 PM CST To: Katlin Bailey<bailey k@cityofelgin.org>, Christopher Beck<Beck C@cityofelgin.org> Subject: Re: Elgin Year 3 LSLR Debt Authorization Ordinance 1 Katlin and Chris, I would like to table the debt authorization ordinance at this time with the intention to modify it. See below from IEPA. Is it possible to table only that and leave the resolution allowing Rick to sign the loan documents? It would be beneficial to be able to send in the signed loan application as soon as we can, and the two items were approved under the same item on 12/6. From IEPA: If the city writes the ordinance for a loan term of up to 30 years, with a high enough debt limit to cover all the work they want to fund through our program—for this phase, and subsequent ones, if they'd like—that would cover them in any eventuality. If doing so is feasible for them. If not, then we can do separate ordinances for phases going forward. (For applicants who might qualify for an extended loan term, they could say "up to 40 years" or"40 years maximum".) Definitely get the debt authorizing ordinance(s) in ASAP, at least for this phase and next year's. We've been delayed in finalizing the new lead rules, but the debt authorizing ordinance is one of the items we need to receive in order to award Readiness to Proceed priority scoring points in April. That will benefit phase 4 of Elgin's LSLR project. Our program has no problem with applicants borrowing less money for a shorter loan term than what they're authorized for/can afford. I'm always happy to start reviewing a PDF copy ahead of the mail. Feel free to submit that. I'm working Friday, so it sounds like the timing will be perfect. Also, please be aware that the first page of the loan application has some outdated information. We only need one hard copy, not three. Ellen Watters Project Manager Infrastructure Financial Assistance Section Illinois EPA 1021 North Grand Avenue East P.O. Box 19276 Springfield, IL 62794-9276 Phone (217) 782-2027 From: Katlin Bailey<bailey k@cityofelgin.org> Sent: Monday, December 18, 2023 3:23 PM To: Nora Bertram <bertram n@cityofelgin.org> Subject: RE: Elgin Year 3 LSLR Debt Authorization Ordinance The item can be tabled at the meeting if we need to address these issues since the agenda has already been published. I will talk with Bill/Chris and get back to you. Katlin From: Nora Bertram <bertram n@cityofelgin.org> Sent: Monday, December 18, 2023 3:21 PM To: Katlin Bailey<bailey k@cityofelgin.org> 2