Title
Resolution to Adopt the 14 Mile Road Transmission Main Loop - FY 2020 Drinking Water Revolving Fund Project Plan
Body
Agenda of: April 24, 2019
Item No.: 2019-165
Amount:
TO: The Honorable
Board of Directors
Great Lakes Water Authority
FROM: Sue F. McCormick
Chief Executive Officer
Great Lakes Water Authority
DATE: April 24, 2019
RE: Resolution to Adopt the 14 Mile Road Transmission Main Loop - FY 2020 Drinking Water Revolving Fund (DWRF) Project Plan
MOTION
Upon recommendation of Nicolette Bateson, Chief Financial Officer/Treasurer, Financial Services and Cheryl Porter, Chief Operating Officer - Water & Field Services, the Board of Directors (Board) of the Great Lakes Water Authority (GLWA), approves the attached Resolution to adopt the 14 Mile Road Transmission Main Loop - FY 2020 Drinking Water Revolving Fund (DWRF) Project Plan; and authorizes the CEO to take such other action as may be necessary to accomplish the intent of this vote.
BACKGROUND
The “14 Mile Water Transmission Main Loop Project - (CIP# 122013)” includes the 14 Mile Transmission Main that currently serves West Bloomfield Township, Farmington Hills, Commerce Township, Novi, Walled Lake, and Wixom. It is a single feed transmission system. If a disruption to service were to occur on this transmission main, many of those serviced along this main would experience a complete loss of pressure and flow. This project would provide a transmission main loop to the 14 Mile system to increase redundancy on this branch of the system.
The project is comprised of design and construction of 6-7 Miles of transmission main from 8 Mile Road to 14 Mile Road along the Halsted/Haggerty Road corridor in order to back-feed the 14 Mile Transmission system during a break in the transmission system along 14 Mile. The work will also include connections to the yard piping and reservoir fill line at the Haggerty Booster Station as well as a control valve to regulate flows along the transmission main. These improvements and modifications are detailed in the Project Plan. The estimated cost of the project is $54,426,000.
The complete project plan <https://www.glwater.org/wp-content/uploads/2019/03/DWRF-14-Mile-TM-Loop-Project-Plan-Report-FINAL-DRAFT-03202019.pdf> is available on GLWA’s website at <https://www.glwater.org/wp-content/uploads/2019/03/DWRF-14-Mile-TM-Loop-Project-Plan-Report-FINAL-DRAFT-03202019.pdf>
JUSTIFICATION
The 14 Mile Road Transmission Main Loop will significantly improve the redundancy and resiliency of the system. GLWA is seeking low interest loan assistance through the DWRF program for this project. Although the Michigan Department of Environmental Quality (MDEQ) interest rate for FY 2020 will not be determined until October 2019, the current year’s interest rate of 2.00% is less than the present conventional revenue bond interest rates. Based on the estimated project amount of $54.4 million, GLWA could save an estimated $33 million in interest costs and avoided issuance costs, based on a similar open market revenue bond with a 30-year term and 4.50% interest rate, over the life of the 30-year bond issue. This will afford savings to both GLWA and its member partners.
BUDGET IMPACT
Debt service is anticipated to begin in FY2021 for this project and will be included as part of the FY2021 financial plan.
COMMITTEE REVIEW
This matter was presented to the GLWA Audit Committee at its March 15, 2019 meeting. The Audit Committee unanimously recommended that the Great Lakes Water Authority Board hold the public hearing on April 24, 2019 for the 14 Mile Road Water Transmission Main Loop Project and approve the resolution to accept and submit the Drinking Water Revolving Fund project plan as presented, at its regular meeting on April 24, 2019.
SHARED SERVICES IMPACT
This item does not impact the shared services agreement between GLWA and DWSD.