Title
Scheduling of Public Hearing for the GLWA FY 2026 Clean Water State Revolving Fund (CWSRF) Program Project Plan Submittals
Body
Agenda of: February 26, 2025
Item No.: 2025-047
Amount: N/A
TO: The Honorable
Board of Directors
Great Lakes Water Authority
FROM: Suzanne R. Coffey, P.E.
Chief Executive Officer
Great Lakes Water Authority
DATE: February 26, 2025
RE: Scheduling of Public Hearing for the GLWA FY 2026 Clean Water State Revolving Fund (CWSRF) Program Project Plan Submissions
MOTION
Upon recommendation of Nicolette N. Bateson, Chief Financial Officer/Treasurer, the Board of Directors (Board) of the Great Lakes Water Authority (GLWA), approves the Scheduling of a Public Hearing for the GLWA FY 2026 Clean Water State Revolving Fund (CWSRF) project plan submissions for the 1) Water Resource Recovery Facility (WRRF) Improvements to the Sludge Feed System for Solids Processing, 2) Hubbell Southfield Combined Sewer Overflow (CSO) Facility Improvements, and 3) CSO Facilities Improvements II for April 23, 2025 at 2:00 p.m. and authorizes the CEO to take such other action as may be necessary to accomplish the intent of this vote.
BACKGROUND
The Great Lakes Water Authority (the “GLWA”) identified three projects in the FY 2025 to FY 2029 Capital Improvement Plan (CIP) to be considered for low interest financing through the Michigan Department of Environment, Great Lakes and Energy (EGLE) FY 2026 CWSRF program:
1) WRRF Improvements to the Sludge Feed System for Solids Processing
2) Hubbell Southfield CSO Facility Improvements, and
3) CSO Facilities Improvements II.
GLWA must submit a Board adopted project plan for each proposed project to EGLE by the May 1, 2025 deadline. Applicants for a CWSRF loan, however, must also hold a formal public hearing prior to the adoption and submission of a final project plan. The public hearing should be scheduled for April 23, 2025, at 2:00 pm. This public meeting ensures transparency and will include a presentation summarizing each project plan, followed by an opportunity for public participation.
After the public hearing is closed, a resolution to adopt the final project plan will be scheduled for action by the GLWA Board at its regularly scheduled meeting also on April 23, 2025. The resolution must be approved and signed to ensure the finalized project plan and related forms are assembled and submitted to the EGLE by May 1, 2025.
The Public Hearing Notice and draft project plans for the proposed projects will be posted on the GLWA website <https://www.glwater.org/>.
The Projects:
WRRF Improvements to the Sludge Feed System for Solids Processing (CIP #213006) - The project consists of improvements to the sludge feed system at the WRRF which conveys sludge from six (6) sludge storage tanks to three (3) dewatering facilities. The improvements will replace aging pumping equipment and incorporate sludge feed conveyance loops to provide additional system flexibility, redundancy, and resiliency. The total cost of this project is estimated at $18,655,000.
Hubbell Southfield CSO Facility Improvements (CIP #273001) - This project includes upgrades to existing facility systems which includes flushing, dewatering, chemical disinfection, screening, instrumentation and controls, architectural, Heating, Ventilation, and Air Conditioning (HVAC), electrical, and site improvements, along with other miscellaneous enhancements. The project aims to bring the Hubbell-Southfield CSO Facility into compliance with current codes and standards, standardize equipment, enhance operational efficiency, improve reliability and resiliency, and strengthen safety measures. The total cost of this project is estimated at $67,500,000.
CSO Facilities Improvements II (CIP #270006) - The project consists of safety improvements and building rehabilitation at all nine (9) CSO facilities. The safety improvements include fall protection, upgraded eyewash stations, and miscellaneous improvements based on site-specific requirements. The St. Aubin Screening Disinfection Facility improvements also include disinfection, screening, electrical, HVAC systems, as well as various site improvements. The control upgrades at Baby Creek and Belle Isle CSO facilities consists of installing new flow monitoring, improvements to the gas monitoring and communications equipment. The proposed improvements will increase facility reliability, flexibility, operation, and safety, and decrease maintenance at the facilities. The total cost of this project is estimated at $23,500,000.
JUSTIFICATION
GLWA is seeking low interest loan assistance through the CWSRF program for the proposed projects. Savings are typically significant when comparing the interest rates under the CWSRF program with a similar open market revenue bond issue. Although the interest rate for FY 2026 will not be published by EGLE until October 2025, the current year’s interest rate of 2.50% for a 20-year loan and 2.75% for a 30-year loan is lower than present conventional revenue bond interest rates. GLWA may also qualify as an “overburdened applicant” and if eligible, the interest rates for a 20-year loan and 30-year loan will decrease to 2.00%. As long as interest rates for 30-year are comparable to 20-year loans, GLWA will consider the 30-year option.
It is prudent for GLWA to continue to pursue CWSRF loan funding as actual savings are anticipated to be higher due to general expectations of rising interest rates over the next year (and therefore increasing potential savings compared to use of open market revenue bonds). In addition, SRF funding is considered junior lien instead of bonds that are considered senior or second lien.
BUDGET IMPACT
Debt service interest payments on these projects would begin in the fall of FY 2026 and will be included as part of the FY 2026 financial plan.
COMMITTEE REVIEW
This matter was reviewed by the GLWA Audit Committee at its meeting on February 17, 2025. The Audit Committee unanimously recommends the Great Lakes Water Authority Board of Directors schedule a Public Hearing for the GLWA FY 2026 Clean Water State Revolving Fund (CWSRF) project plan submissions for the 1) WRRF Improvements to the Sludge Feed System for Solids Processing, 2) Hubbell Southfield CSO Facility Improvements, and 3) CSO Facilities Improvements II for April 23, 2025 at 2:00 p.m.