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HomeMy WebLinkAboutResolutions - 2024.04.11 - 41129 AGENDA ITEM: Notice of Intent to Issue Bonds to Construct Improvements to the City of Pontiac Water Supply System DEPARTMENT: Water Resources Commissioner MEETING: Board of Commissioners DATE: Thursday, April 11, 2024 6:31 PM - Click to View Agenda ITEM SUMMARY SHEET COMMITTEE REPORT TO BOARD Resolution #2024-3994 _ 24-22 Motion to adopt the attached suggested resolution. ITEM CATEGORY SPONSORED BY Bonds Yolanda Smith Charles INTRODUCTION AND BACKGROUND The City of Pontiac is in urgent need of improvements to the water distribution system to avoid continual water main breaks and other disruptions to the water supply system. The best way to finance a water main replacement and improvement project is by issuing bonds in an amount not to exceed $13.2 million. POLICY ANALYSIS The City of Pontiac is in urgent need of improvements to the water distribution system. The system is owned by Oakland County. The water main replacement project will upgrade the system in the area between Elizabeth Lake Road and Orchard Lake Road, and between Telegraph Road and Johnson Avenue. This area is served by piping that is undersized and beyond its recommend useful life. Upgrades to known lead service lines will also take place, in accordance with the Lead and Copper Rule section of the Michigan Safe Drinking Water Act. The Water Resources Commissioner intends to issue bonds in one or more series in the aggregate principal amount of not to exceed $13,210,000 for the purpose of defraying all or part of the cost of acquiring, constructing and installing water supply system improvements and facilities to improve the County’s City of Pontiac Water Supply System (the "System") to serve the users of the System and the residents of the County of Oakland, which improvements shall include without limitation the replacement and upgrade of watermain and the replacement of water service lines and improvements to related facilities as well as all work necessary and incidental to these improvements, including without limitation the restoration of property, streets, rights-of-way, and easements affected by the improvements. Additionally, financial assistance in the form of grants, principal forgiveness, and a low-interest loan of up to $25,365,000 have been awarded to the project by the Michigan Department of Environment, Great Lakes, and Energy for this project under the Drinking Water State Revolving Fund. This item will return to the Board at a future meeting with a bond resolution that authorizes issuance of the County’s bonds and sets the parameters within which the bonds may be sold. BUDGET AMENDMENT REQUIRED: No Committee members can contact Michael Andrews, Policy and Fiscal Analysis Supervisor at 248.425.5572 or andrewsmb@oakgov.com or the department contact persons listed for additional information. CONTACT Jen Cook Eric McGlothlin ITEM REVIEW TRACKING Aaron Snover, Board of Commissioners Created/Initiated - 4/11/2024 David Woodward, Board of Commissioners Approved - 4/11/2024 Hilarie Chambers, Executive's Office Approved - 4/12/2024 Lisa Brown, Clerk/Register of Deeds Final Approval - 4/16/2024 AGENDA DEADLINE: 04/21/2024 6:31 PM ATTACHMENTS 1. 2024-04-03 Notice of Intent to Issue Bonds 2. 2024-04-03 EDI Memo for Pontiac Water Distribution System 3. Pontiac IV OH area maps COMMITTEE TRACKING 2024-04-03 Economic Development & Infrastructure - Recommend to Board 2024-04-11 Full Board - Adopt Motioned by: Commissioner Michael Gingell Seconded by: Commissioner Penny Luebs Yes: David Woodward, Michael Spisz, Michael Gingell, Penny Luebs, Kristen Nelson, Christine Long, Robert Hoffman, Philip Weipert, Gwen Markham, Angela Powell, Marcia Gershenson, Yolanda Smith Charles, Charles Cavell, Brendan Johnson, Ajay Raman, Ann Erickson Gault, Linnie Taylor (17) No: None (0) Abstain: None (0) Absent: Karen Joliat, William Miller III (2) Passed April 11, 2024 RESOLUTION #2024-3994 _ 24-22 Sponsored By: Yolanda Smith Charles Water Resources Commissioner - Notice of Intent to Issue Bonds to Construct Improvements to the City of Pontiac Water Supply System Chair and Members of the Board: WHEREAS the County of Oakland (the "County") is in urgent need of water supply system facilities constituting a part of the County’s City of Pontiac Water Supply System (the "System") as described in the notice attached hereto (sometimes referred to herein as the "Project"), in order to promote the health and welfare of the residents served by the System, which Water Supply system facilities also would benefit the County and its residents, and such facilities can be financed most economically and efficiently by the County through the exercise of the powers conferred by Act 34, Public Acts of Michigan, 2001, as amended ("Act 34"); and WHEREAS the County is authorized pursuant to the terms of Act 34 to issue its bonds to finance the cost of the acquisition and construction of the Project, which bonds will be secured by revenues of the System and the County's full faith and credit pledge; and WHEREAS it is anticipated that the County will advance all or a portion of the costs of the Project prior to the issuance of the bonds, such advance to be repaid from proceeds of the bonds upon the issuance thereof; and WHEREAS Section 1.150-2 of the Treasury Regulations on Income Tax (the "Reimbursement Regulations") specifies conditions under which a reimbursement allocation may be treated as an expenditure of bond proceeds, and the County intends by this resolution to qualify amounts advanced by the County to the Project for reimbursement from proceeds of the bonds in accordance with the requirements of the Reimbursement Regulations. NOW THEREFORE BE IT RESOLVED 1. DECLARATION OF INTENT TO REIMBURSE PROJECT EXPENDITURES. The County hereby declares its official intent to issue its limited tax general obligation bonds in one or more series in the aggregate principal amount of not to exceed $13,210,000 to finance all or part of the cost of the Project. The County hereby declares that it reasonably expects to seek reimbursement for its advances to the Project as anticipated by this resolution. The bonds shall be authorized by proper proceedings subsequent to this resolution. 2. NOTICE OF INTENT TO ISSUE BONDS. The County Clerk is hereby instructed to publish the notice attached hereto once in a newspaper of general circulation in the County of Oakland, which notice shall not be less than ¼ page in size in such newspaper. 3. CONFLICTING RESOLUTIONS. All resolutions and parts of resolutions insofar as they may be in conflict herewith are rescinded. Chair, the following Commissioners are sponsoring the foregoing Resolution: Yolanda Smith Charles. Date: April 11, 2024 David Woodward, Commissioner Date: April 12, 2024 Hilarie Chambers, Deputy County Executive II Date: April 16, 2024 Lisa Brown, County Clerk / Register of Deeds COMMITTEE TRACKING 2024-04-03 Economic Development & Infrastructure - Recommend to Board 2024-04-11 Full Board - Adopt Motioned by Commissioner Michael Gingell seconded by Commissioner Penny Luebs to adopt the attached Bonds: Notice of Intent to Issue Bonds to Construct Improvements to the City of Pontiac Water Supply System. Yes: David Woodward, Michael Spisz, Michael Gingell, Penny Luebs, Kristen Nelson, Christine Long, Robert Hoffman, Philip Weipert, Gwen Markham, Angela Powell, Marcia Gershenson, Yolanda Smith Charles, Charles Cavell, Brendan Johnson, Ajay Raman, Ann Erickson Gault, Linnie Taylor (17) No: None (0) Abstain: None (0) Absent: Karen Joliat, William Miller III (2) Passed ATTACHMENTS 1. 2024-04-03 Notice of Intent to Issue Bonds 2. 2024-04-03 EDI Memo for Pontiac Water Distribution System 3. Pontiac IV OH area maps STATE OF MICHIGAN) COUNTY OF OAKLAND) I, Lisa Brown, Clerk of the County of Oakland, do hereby certify that the foregoing resolution is a true and accurate copy of a resolution adopted by the Oakland County Board of Commissioners on April 11, 2024, with the original record thereof now remaining in my office. In Testimony Whereof, I have hereunto set my hand and affixed the seal of the Circuit Court at Pontiac, Michigan on Thursday, April 11, 2024. Lisa Brown, Oakland County Clerk / Register of Deeds Note: This notice must be not less than ¼ page in size in the newspaper. NOTICE OF INTENT TO ISSUE BONDS BY THE COUNTY OF OAKLAND, MICHIGAN NOTICE IS HEREBY GIVEN, that the County of Oakland, Michigan, intends to issue bonds in one or more series in the aggregate principal amount of not to exceed $13,210,000 for the purpose of defraying all or part of the cost of acquiring, constructing and installing water supply system improvements and facilities to improve the County’s City of Pontiac Water Supply System (the "System") to serve the users of the System and the residents of the County of Oakland, which improvements shall include without limitation the replacement and upgrade of watermain and the replacement of water service lines and improvements to related facilities as well as all work necessary and incidental to these improvements, including without limitation the restoration of property, streets, rights-of-way, and easements affected by the improvements. The bonds will bear interest from their date at a rate or rates to be determined at competitive and/or negotiated sales but in no event to exceed such rates as may be permitted by law. The bonds will be issued under and pursuant to the provisions of Act No. 34, Public Acts of Michigan, 2001, as amended, and the principal of and interest on the bonds are expected to be paid from revenues of the System. In addition, the full faith and credit of the County will be pledged to pay the principal of and interest on the bonds as the same shall become due. The County will be obligated, as a first budget obligation, to advance moneys from its general funds or to levy ad valorem taxes on all taxable property within its corporate boundaries to pay the principal of and interest on the bonds as the same shall become due to the extent that the revenues of the System are not sufficient for such purpose; provided, however, that the ability of the County to raise such moneys is subject to applicable constitutional and statutory limitations on the taxing power of the County. Sources of repayment of the principal of and interest on the bonds may also include any other monies lawfully available for the repayment thereof. RIGHT TO PETITION FOR REFERENDUM This notice is given, by order of the Board of Commissioners of the County of Oakland, to and for the benefit of the electors of the County of Oakland in order to inform them of their right to petition for a referendum upon the question of the issuance of the aforesaid bonds. The bonds will be issued, without submitting such a question to a vote of the electors, unless within 45 days after the date of publication of this notice a petition requesting a referendum upon such question, signed by not less than 10% or 15,000 of the registered electors residing within the County of Oakland, whichever is the lesser, shall have been filed with the undersigned County Clerk. In the event that such a petition is filed, the bonds will not be issued unless and until the issuance thereof shall have been approved by the vote of a majority of the electors of the County of Oakland qualified to vote and voting thereon at a general or special election. FURTHER INFORMATION Further information relative to the issuance of said bonds and the subject matter of this notice may be secured at the office of the Clerk of the County of Oakland, 1200 North Telegraph Road, Pontiac, Michigan 48341. This notice is given pursuant to the provisions of Act 34, Public Acts of Michigan, 2001, as amended. LISA BROWN, Clerk County of Oakland Form DC–001 OAKLAND COUNTY WATER RESOURCES COMMISSIONER Page 1 of 2 Rev.: 02/12/2018 4891-0679-7485 v2 [9007-452] OAKLAND COUNTY WATER RESOURCES COMMISSIONER MEMORANDUM TO: Commissioner Yolanda Charles Smith, Chairperson of the Economic Development and Infrastructure Committee FROM: Jen Cook, P.E., Civil Engineer III, Project Manager SUBJECT: Intent to Reimburse Project Costs from Bond Proceeds and Publish Notice of Intent to Issue Bonds for improvements to the City of Pontiac Water Distribution System DATE: April 3, 2024 The City of Pontiac is in urgent need of improvements to the water distribution system. The system is owned by Oakland County with Water Resources Commissioner Jim Nash acting as the county’s agent. The Fiscal Year 2024 State Revolving Fund project plan recommended the rehabilitation and/or replacement of undersized, aging, and break-prone mains within the city and identified strategic projects to make system improvements needed to both water distribution mains and water service lines. The water main replacement project will upgrade the system in the area between Elizabeth Lake Road and Orchard Lake Road, and between Telegraph Road and Johnson Avenue. This area is served by piping that is undersized and beyond its recommend useful life. In accordance with the Lead and Copper Rule section of the Michigan Safe Drinking Water Act, lead water service lines must be inventoried and replaced at a rate averaging 5% per year. Replacement of known lead service lines in the project area will ensure the system is complying with that requirement while minimizing neighborhood disruption. The Water Resources Commissioner is seeking to publish a notice of intent to issue bonds in an amount not to exceed $13,210,000. Financial assistance in the form of grants, principal forgiveness, and a low-interest loan of up to $25,365,000 have been awarded to the project by the Michigan Department of Environment, Great Lakes, and Energy for this project under the Drinking Water State Revolving Fund. Such improvements can be financed most economically and efficiently by Oakland County through the exercise of the powers conferred by Act 34, of the Public Acts of Michigan, 2001, as amended to issue bonds to finance the cost of the acquisition and construction of this project. Bonds will be issued in one or more series and secured by the County’s full faith and credit pledge and repaid with revenues of the system. It is anticipated that the County will advance all or a portion of the costs of the project prior to the issuance of the bonds from system funds and that system fund advances would be repaid from proceeds of the bonds. The County can reasonably expect to seek reimbursement for its advances to the project as anticipated by the accompanying resolution. Form DC–001 OAKLAND COUNTY WATER RESOURCES COMMISSIONER Page 2 of 2 Rev.: 02/12/2018 4891-0679-7485 v2 [9007-452] Requested Action: Adopt the resolution as presented approving the publication of a Notice of Intent to Issue Bonds in an amount not to exceed $13,210,000, to finance a portion of the cost of improvements to the City of Pontiac Water Distribution System and declaring its intent to reimburse project costs from bond proceeds.