Title
Resolution Adopt the Ypsilanti Pumping Station Improvements Project FY 2022 Drinking Water Revolving Fund (DWSRF) Project Plan
Body
Agenda of: June 23, 2021
Item No.: 2021-242
Amount: N/A
TO: The Honorable
Board of Directors
Great Lakes Water Authority
FROM: Sue F. McCormick
Chief Executive Officer
DATE: June 23, 2021
RE: Resolution to Adopt the Ypsilanti Pumping Station Improvements Project FY 2022 Drinking Water Revolving Fund (DWSRF) Project Plan
MOTION
Upon recommendation of Nicolette Bateson, Chief Financial Officer/Treasurer, and Cheryl Porter, Chief Operating Officer-Water & Field Services, the Board of Directors of the Great Lakes Water Authority, approves the attached Resolution to Adopt the Ypsilanti Pumping Station Improvements Project FY 2022 Drinking Water Revolving Fund (DWSRF) Project Plan; and authorizes the CEO to take such action as may be necessary to accomplish the intent of this vote.
BACKGROUND
The project is comprised of the evaluation, design, and construction of the full replacement of the Ypsilanti Pumping Station. The existing YPS is an in-line booster pumping station located in Van Buren Township adjacent to the Willow Run Airport. It was constructed in the mid 1980’s to replace an older temporary pumping station to boost the pressure of water supplied from the Wick Road Pumping Station. In the mid-1990’s the City of Ypsilanti decommissioned their aging water treatment plant and switched to what is now the GLWA water system. During this time, a connection to a transmission main supplied by the Joy Road Pump Station was added to the YPS to provide a continuous supply of water to the YPS service area. The total cost of this project is currently estimated at $35,500,000.
GLWA wishes to utilize loans available under the State of Michigan Drinking Water Revolving Fund (DWSRF) for this project. A public hearing on the project plan was held on June 23, 2021, at 2:00 pm. The attached Resolution approves the project plan, directs GLWA staff to address all public comments, prepare a responsiveness summary, and publish the final Project Plan; authorizes GLWA’s CEO to transmit the final FY 2022 DWSRF Project Plan to the Michigan Department of Environment, Great Lakes, and Energy (EGLE); and to secure a DWSRF loan for the project.
JUSTIFICATION
This project is necessary to ensure the GLWA can maintain supplying drinking water with high reliability and efficiency to the City of Ypsilanti, Ypsilanti Township, Augusta Township, Pittsfield Township, and Superior Township. The proposed project will construct a new pump station. The existing pump station will be decommissioned and demolished. GLWA is seeking low interest loan assistance through the DWSRF program for these projects. Although the EGLE interest rate for FY 2022 will not be determined until October 2021, the current year’s interest rate of 1.875% is less than the present conventional revenue bond interest rates. Based on the estimated project amount of $35.5 million, GLWA could save an estimated $15.7 million in interest costs and avoided issuance costs, based on a similar open market revenue bond with a 30-year term and 3.50% interest rate, over the life of the 30-year bond issue. This will offer savings to both GLWA and its members.
BUDGET IMPACT
Debt service is anticipated to begin in FY 2023 for this project and will be included as part of the FY 2023 financial plan.
COMMITTEE REVIEW
This matter was presented to the GLWA Audit Committee at its June 21, 2021 meeting. The Audit Committee unanimously recommends that the Great Lakes Water Authority Board of Director approve the attached Resolution to Adopt the Ypsilanti Pumping Station Improvements Project - FY 2022 Drinking Water State Revolving Fund Project Plan at its regularly scheduled meeting on June 23, 2021.
SHARED SERVICES IMPACT
This item does not impact the shared services agreement between GLWA and DWSD.