Staff Report - 5/18/09 Meetign

MEMORANDUM

TO:                  City Council

FROM:            David J. Deutsch, City Manager

SUBJECT:     Ordinance O-5-09, Authorizing the issuance and sale of a general obligation installment bond in a principal amount not to exceed $1,800,000 for public infrastructure improvements at the City’s Wastewater Treatment Plant and the installation of a new Enhanced Nutrient Removal system.

DATE:             May 14, 2009

            The Maryland Department of the Environment is requiring all major wastewater treatment plants with a design flow over .5 million gallons per day or greater to reduce the level of nutrient pollutants produced.  Enhanced nutrient removal (ENR) technologies allow sewage treatment plants to provide advanced levels of nutrient removal.

            The FY2010 Budget and the Capital Improvement Program provides for the design, engineering and construction of ENR improvements at the City’s Wastewater Treatment Plant in the amount of $10,414,100 for fiscal years 2009 through 2011.  The Maryland Department of the Environment has agreed to fund 82.84% of the total costs in the amount of $8.2 million for the engineering and construction of the ENR improvements via a Bay Restoration Fund ENR Grant program.  The remaining 17.16% share of the total costs in the amount of approximately $1,800,000 will be borrowed through the Maryland State Revolving Loan Program.

            Ordinance O-5-09 provides for the authority to borrow funds in a principal amount not to exceed $1,800,000.  The City’s bond counsel has prepared the attached ordinance authorizing the issuance of the general obligation bond.  The ordinance has also been reviewed by the Maryland Department of the Environment.  The loan will be for a term of 20 years and will bear interest at the rate of 1% per annum.

            Council’s approval of Ordinance O-5-09 authorizing the issuance of a general obligation installment bond through the Maryland State Revolving Loan Program to provide for ENR improvements at the City’s Wastewater Treatment Plant is recommended.

DJD/RSP/dgp

Attachment - Ordinance O-05-09 (14 pages)