\T Y OF
PISMO BEACH CITY COUNCIL STAFF REPORT
O�syo B�P�� Agenda Item #9.F
Meeting Date: March 18, 2025
TITLE:
State Water Resources Control Board State Revolving Fund Financing RECOMMENDATION:
1. Adopt a Resolution authorizing the City Manager of the City of Pismo Beach to file a financial assistance application for a financing agreement with the State Water Resources Control Board for the planning, design, and construction of the Central Coast Blue Recycled Water Project.
2. Adopt a Resolution authorizing the advance of funds for planning, design, and construction of the Central Coast Blue Recycled Water Project subject to later reimbursement by the State Water Resources Control Board.
DISCUSSION:
The City of Pismo Beach is pursuing funding of the Central Coast Blue Recycled Water Project (Project) through various grants and low-interest rate financing options. One of the low interest financing options is through the State Water Resources Control Board State Revolving Fund (SRF). As part of the application for financing through the SRF, the City is required to submit an Authorizing Resolution (Attachment 1) and a Reimbursement Resolution (Attachment 2) for the Project. Due to the desire for a low- interest cost to finance the portion of the Project that is not supported by grants, staff recommends that the Council adopt the resolutions.
Resolutions
This staff report includes two resolutions for the Council's consideration and approval:
• Authorizing Resolution for CWSRF — Authorizes and directs the City Manager of the City of Pismo Beach or designee to sign and file for, on behalf of the City, a Financial Assistance Application for a financing agreement from the State Water Resources Control Board and provide assurances, certifications, and commitments as required for the financial assistance application. • Reimbursement Resolution — All loan applicants that are publicly-owned entities are required to submit an adopted Reimbursement Resolution for review by the Clean Water State Revolving Fund (CWSRF) tax attorney. The language may not vary from the language provided in the template. The Reimbursement Resolution is required to be a stand-alone resolution. This resolution states the City's intention to reimburse expenditures paid prior to the issuance of the obligations or the approval by the State Water Board of the project funds in the principal amount of $50.0 million. The total amount of the project that is currently estimated to be financed, after assuming grant funding, could be $42.9 million for the Project. The amount in the reimbursement resolution includes a 17% contingency to cover the Council Agenda 3-18-2025 9.F-1
difference between the estimate and the actual bid amount of the project, as the amount of the Project cannot exceed the reimbursement amount in this resolution.
Conclusion and Recommendation
Staff recommends that the Council:
1. Adopt a Resolution (Attachment 1) authorizing the City Manager of the City of Pismo Beach to file a financial assistance application for a financing agreement with the State Water Resources Control Board for the planning, design, and construction of the Central Coast Blue Recycled Water Project.
2. Adopt a Resolution (Attachment 2) authorizing the advance of funds for planning, design, and construction of the Central Coast Blue Recycled Water Project subject to later reimbursement by the State Water Resources Control Board.
FISCAL IMPACT:
The financial impact of adopting the attached resolutions is a potentially low-interest rate (currently 1.8%) borrowing cost of approximately $1.9 million per year based on the anticipated $42.9 million borrowing amount.
The amount in the reimbursement resolution is a larger amount, $50.0 million, to cover any costs that may come up during the implementation of the project. In the likely event that the project costs are closer to the projected cost, the financing cost will be lower. In addition, dependent on the timing of the project approval, the interest rate may change.
Finally, the City continues to seek additional grant funding that would also lower the borrowing amount.
ATTACHMENTS:
1. SRF Authorizing Resolution
2. SRF Reimbursement Resolution
Submitted by: Nadia Feeser, Administrative Services Director City Manager Approval:
,l
Council Agenda 3-18-2025 9.F-2
Attachment 1
RESOLUTION NO. R-2025-XXX
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PISMO BEACH,
CALIFORNIA AUTHORIZING THE CITY MANAGER OF THE CITY OF PISMO
BEACH TO FILE A FINANCIAL ASSISTANCE APPLICATION FOR A FINANCING
AGREEMENT WITH THE STATE WATER RESOURCES CONTROL BOARD FOR
THE PLANNING, DESIGN, AND CONSTRUCTION OF THE CENTRAL COAST BLUE
RECYCLED WATER PROJECT
WHEREAS, the City of Pismo Beach desires to finance the costs of constructing and/or reconstructing certain public facilities and improvements relating to its water and wastewater systems, including certain treatment facilities, pipelines and other infrastructure, specifically the Central Coast Blue Recycled Water Project; and WHEREAS, the City intends to finance the construction and/or reconstruction of the Central Coast Blue Recycled Water Project or portions of the Central Coast Blue Recycled Water Project with moneys ("Project Funds") provided by the State of California, acting by and through the State Water Resources Control Board (State Water Board); and
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Pismo Beach (the "Entity") as follows:
The City Manager of the City of Pismo Beach (the "Authorized Representative") or designee is hereby authorized and directed to sign and file, for and on behalf of the Entity, a Financial Assistance Application for a financing agreement from the State Water Resources Control Board for the planning, design, and construction of the Central Coast Blue Recycled Water Project (the "Project").
This Authorized Representative, or his/her designee, is designated to provide the assurances, certifications, and commitments required for the financial assistance application, including executing a financial assistance agreement from the State Water Resources Control Board and any amendments or changes thereto.
The Authorized Representative, or his/her designee, is designated to represent the Entity in carrying out the Entity's responsibilities under the financing agreement, including certifying disbursement requests on behalf of the Entity and compliance with applicable state and federal laws.
UPON MOTION OF Council Member seconded by Council Member the foregoing resolution was adopted by the City Council of the City of Pismo Beach this 18t" day of March 2025, by the following vote:
AYES:
NOES:
Council Agenda 3-18-2025 9.F-3
Attachment 1
ABSENT:
ABSTAIN:
RECUSED:
Approved: Attest:
Ed Waage, Mayor Erica Inderlied, City Clerk
IN WITNESS WHEREOF, I have hereunto set my hand on
Erica Inderlied, City Clerk
Council Agenda 3-18-2025 9.F-4
Attachment 2
RESOLUTION NO. R-2025-XXX
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PISMO BEACH,
CALIFORNIA AUTHORIZING THE ADVANCE OF FUNDS FOR PLANNING, DESIGN,
AND CONSTRUCTION OF THE CENTRAL COAST BLUE RECYCLED WATER
PROJECT SUBJECT TO LATER REIMBURSEMENT BY THE STATE WATER
RESOURCES CONTROL BOARD
WHEREAS, the City of Pismo Beach ("Agency") desires to finance the costs of constructing and/or reconstructing certain public facilities and improvements relating to its water and wastewater systems, including certain treatment facilities, pipelines and other infrastructure (the "Project"); and
WHEREAS, the Agency intends to finance the construction and/or reconstruction of the Project or portions of the Project with moneys ("Project Funds") provided by the State of California, acting by and through the State Water Resources Control Board ("State Water Board"); and
WHEREAS, the State Water Board may fund the Project Funds with proceeds from the sale of obligations the interest upon which is excluded from gross income for federal income tax purposes (the "Obligations"), and
WHEREAS, prior to either the issuance of the Obligations or the approval by the State Water Board of the Project Funds the Agency desires to incur certain capital expenditures (the "Expenditures") with respect to the Project from available moneys of the Agency; and WHEREAS, the Agency has determined that those moneys to be advanced on and after the date hereof to pay the Expenditures are available only for a temporary period and it is necessary to reimburse the Agency for the Expenditures from the proceeds of the Obligations.
NOW, THEREFORE, THE AGENCY DOES HEREBY RESOLVE, ORDER AND DETERMINE AS FOLLOWS:
SECTION 1. The Agency hereby states its intention and reasonably expects to reimburse Expenditures paid prior to the issuance of the Obligations or the approval by the State Water Board of the Project Funds.
SECTION 2. The reasonably expected maximum principal amount of the Project Funds is $50,000,000.
SECTION 3. This resolution is being adopted no later than 60 days after the date on which the Agency will expend moneys for the construction portion of the Project costs to be reimbursed with Project Funds.
Council Agenda 3-18-2025 9.F-5
Attachment 2
SECTION 4. Each Agency expenditure will be of a type properly chargeable to a capital account under general federal income tax principles.
SECTION 5. To the best of our knowledge, this Agency is not aware of the previous adoption of official intents by the Agency that have been made as a matter of course for the purpose of reimbursing expenditures and for which tax-exempt obligations have not been issued.
SECTION 6. This resolution is adopted as official intent of the Agency in order to comply with Treasury Regulation §1.150-2 and any other regulations of the Internal Revenue Service relating to the qualification for reimbursement of Project costs.
SECTION 7. All the recitals in this Resolution are true and correct and this Agency so finds, determines and represents.
UPON MOTION OF Council Member , seconded by Council Member , the foregoing resolution was adopted by the City Council of the City of Pismo Beach this 18tn day of March 2025, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
RECUSED:
Approved: Attest:
Ed Waage, Mayor Erica Inderlied, City Clerk
IN WITNESS WHEREOF, I have hereunto set my hand on
Erica Inderlied, City Clerk
Council Agenda 3-18-2025 9.F-6