CITY OF SIGNAL HILL
STAFF REPORT
2175 Cherry Avenue • Signal
Hill, California 90755-3799
2/14/2023
AGENDA ITEM
TO:
HONORABLE MAYOR
AND MEMBERS OF THE CITY COUNCIL
FROM:
THOMAS BEKELE
PUBLIC WORKS DIRECTOR
SUBJECT:
LOAN AGREEMENT FOR CONSTRUCTION OF GUNDRY RESERVOIR ROOF
REPLACEMENT PROJECT
Summary:
City Council will consider approval of an Inter-Fund Loan Agreement between the City’s General Fund and Water Enterprise Fund for the construction of Gundry Reservoir Roof Replacement Project.
The Inter-Fund Loan Agreement will be for a not-to-exceed amount of $1.9 million at zero interest and payment term of 20 years with the first payment beginning on January 1, 2025, in the amount of $95,000.
Recommendation:
Authorize the Mayor to execute an Inter-Fund Loan Agreement between the City’s General Fund and Water Enterprise Fund for $1.9 million at zero interest and payment term of 20 years.
Fiscal Impact:
The estimated cost for project management, design, engineering, permitting and construction of the Gundry Reservoir Roof Replacement Project is $3,200,000. In addition, during construction, the City will be consuming approximately 80% of its water demand from Metropolitan Water District (MWD).
The purchase of additional water from MWD will add approximately $600,000 in costs to the City. The Public Works Department would work to complete the project within the shortest amount of time feasible to avoid incurring significant water costs through MWD. As shown below, including expected water purchase costs from MWD, the total project cost is approximately $3,800,000.
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The engineering costs will be accounted for within the FY 2022-23 Water Department operating budget. The construction project will be added to the Water Enterprise Capital Improvement Plan (CIP) as part of the FY 2023-24 adopted budget.
Strategic Plan Objectives:
Goal No. 4: Maintain and improve the public infrastructure.
Goal No. 5: Ensure an enhanced quality of life for the residents.
Background and Analysis:
The City of Signal Hill water supply is composed of groundwater from local wells drawn from the Central Basin aquifer and water supply connection from MWD. The Central Basin is an adjudicated basin managed by the Water Replenishment District of Southern California. The City draws its allocated water demand utilizing three Wells: Well Number 7, Well Number 9 and Well Number 8 which is currently being abandoned and replaced by Well Number10. Well Numbers 7 and 10 are located outside the City service area and pump water from the Central Basin aquifer into a transmission pipeline for conveyance to Gundry Reservoir. Gundry Reservoir serves as the general forebay receiving water from existing wells for centralized treatment and disinfection before water enters the distribution system.
Gundry Reservoir is located south of Reservoir Park and north of 33rd Street. The reservoir was originally constructed in 1929 and consists of a 5-million gallon partially buried 202’ diameter by 20’ cylindrical concrete tank. Gundry Reservoir’s original roof cover from 1929 was a wood framing system that was replaced in the 1990s with a steel truss and plate system. A partial replacement of the roof cover took place in 2006 resulting in two different types of roof structures. The steel roof plate and some of the structural members sustained corrosion over time with notable deterioration at structural steel framing members and exhaust fan penetrations. As part of the 2006 partial roof replacement, watertight coating was also applied to the interior of Gundry Reservoir.
As part of routine maintenance and ongoing water quality requirements, the City prepared a Diver Report (Attachment A) and structural investigation report (Attachment B) where a thorough analysis of both the interior and exterior of the reservoir was performed. The conclusion from both reports identified that roof replacement and removal/reapplication of the existing watertight coating is critical for safety and water quality reasons.
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The scope of work for the improvement includes but is not limited to:
· Replacement of the existing roof steel structure and light-gauge cold-formed covering; · Modification to the existing concrete wall to accommodate a new structural framing system; · Installation of proper ventilation system;
· Installation of proper maintenance access ladders and tracks; and · Removal and reapplication of interior watertight coating.
On January 24, 2023, City Council received and filed the FY 2021-22 Annual Comprehensive Financial Report (ACFR) which identified a surplus of $8.6 million. Staff proposed an allocation of $1.9 million of the surplus funds to the Water Enterprise Fund in the form of debt service. The City Council reviewed and adopted the allocation as shown in Resolution No. 2023-01-6726. The proposed Inter-Fund Loan Agreement would formalize the Inter-Fund loan and set the terms of the loan (Attachment C). The Agreement stipulates a loan term of 20 years with zero interest, in addition, the agreement provides City Council the option to forgive the loan if the Water Enterprise Fund does not generate sufficient revenues to support its debt service. Any form of partial or full loan forgiveness would be brought back to City Council for further review and decision.
Reviewed:
_________________________
Sharon Del Rosario
Approved:
_________________________
Carlo Tomaino
Attachments:
A. Diver Report
B. Gundry Avenue Reservoir Preliminary Roof Evaluation
C. Inter-Fund Loan Agreement
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