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TO: Honorable Mayor and Members of the Common Council FROM: Steven M. Gohde, Assistant Director of Public Works/Utilities General Manager DATE: August 14, 2024 SUBJECT: Res 24-446 Approve Safe Drinking Water Loan Program Financial Assistance Agreement with the Wisconsin Department of Natural Resources for Project No. 4874-15

BACKGROUND

The Wisconsin Department of Natural Resources (WDNR) provides financial assistance for communities undertaking water system improvements through the Safe Drinking Water Loan Program (SDWLP).  In 2017, the City of Oshkosh (City) received a Principal Forgiveness Loan (PFL) through the SDWLP in the amount of $500,000 to assist residents in replacing private-side lead water service laterals.  In 2018, the City also received an additional PFL through the SDWLP in the amount of $300,000.  In 2021, the City also received a third PFL through the SDWLP for $280,000.  In 2022, the City also received a fourth PFL through the SDWLP for $382,500.  These first four (4) grants have allowed the City to assist 698 property owners in replacing their private-side lead water service.   The City has applied for and is in the process of receiving additional money to assist residents in replacing private-side lead water service laterals in the amount of $1,099,500.  This year, the Federal money being provided to the WDNR to fund the portion of the SDWLP that includes assistance for private-side lead water service lateral (LSL) replacements is coming from the Bipartisan Infrastructure Legislation.  This means that only a portion of the funding is in the form of a PFL ($548,000).  The remaining portion is in the form of an interest-charging loan ($551,500).  The interest rate on this loan is 0.25%. This loan will require the issuance of Taxable Private LSL Replacement Loan Program Revenue Bonds, Series 2024, in the amount of $551,500.   At the March 28, 2017 meeting, the Common Council (Council) adopted changes to Chapter 20 of the Municipal Code, which requires the complete replacement of a lead water service lateral if a repair or partial replacement occurs.  A program for private-side lead water service lateral replacements was also created, which provides funding to property owners for replacing their private-side lead water service laterals in coordination with construction projects or in an emergency situation where a repair or partial replacement would have previously occurred.  The funding provided through this program comes from the SDWLP. Due to changes in the funding source and program requirements, this program will be revised.  The City will be paying the LSL replacement contractors directly, instead of reimbursing property owners for their payments to these contractors.  The City will be requiring participants in the program to take out loans with the City to reimburse the City for fifty percent (50%) of these costs.

ANALYSIS

Approval of these agreements will allow the City to recover costs associated with assisting the residents with the replacement of their private-side lead water service laterals.  Without this program, the City could not assist residents in replacing their private-side lead water service laterals.

FISCAL IMPACT

There is no fiscal impact to the City related to this agreement.  A portion of this SDWLP agreement is for a Principal Forgiveness Loan, which means there is no repayment of this portion.  The remaining portion of this loan will be covered by the repayments of the property owners’ loans with the City.  This loan, like last year’s, requires the City must complete the public-side relay prior to applying for financial assistance.

RECOMMENDATION

I recommend approval of the resolutions authorizing the issuance and sale of up to $551,500 Taxable Private LSL Replacement Loan Program Revenue Bonds, Series 2024 and Safe Drinking Water Loan Program Financial Assistance Agreement with the WDNR for Project No. 4874-15.

Attachments RES 24-446 WDNR FAA #4874-15

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