Agenda 11/26/2002 - Laserfiche WebLink

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ATTACHMENT NOTES TO MEMORANDUMOF UNDERSTANDING DATED NOVEMBER 1, 2002 Wastewater Treatment and Capacities Current Flows and Projections Used City Current 3.0 MGD Koehler Plant 2.5 LSR Plant 0.6 Misc. PSA Projects 0._22 6.3 MGD Activeware 1 ._~0 7.3 MGD Reserve Capacity Cost The value of reserve capacity in the City's WWTP changes over time by adjusting for depreciation and the current construction cost index (CCI). This value has been determined to be $1,362,610 per MGD capacity as of November 1, 2002, and that value is used to calculate the concrete costs inse~ted into the November 1, 2002 MEMORANDUM OF UNDERSTANDING between the PSA and City. This value per MGD is to remain unchanged throughout all activities contemplated in this Memorandum. Calculations are fun.her detailed below. The PSA now owns 0.4 MGD capacity in the City Plant, and is using about 0.3 MGD. The City will forego $1,583,755 (45% of grant), which will purchase for the PSA 1.162 MGD additional ~capacity for a total of 1.562 MGD. According to the numbers above plus current usage (Koehler~2.5, Misc. Projects~0.2, Exist.~0.3), the PSA will need 3.0 MGD total capacity in the City Plant if the LSR Plant continues to operate. The additional 1.438 MGD capacity needed can be purchased on a deferred basis for $1,959,433'. Interest only at 2% ($39,188.66/yr) is to be paid for five years before starting a principal repayment schedule. If the LSR plant is to close, an additional 1.6 MGD capacity will be needed, for which the value is $2,180,176. Recognizing that tbeqEity does not desire to permanently relinquish this additional capacity, the requested capacity can be made available within the framework of Section IX. H. of the PSA/City Sewer Contract. That sect/on allows for use of the other party's unused capacity upon payment of interest at the current 20 year bend rate. The~ummt rate for general obligation bonds is 3.95%, meaning that the capacity use cost will be $86,116.95/yr LSR Plant Restart Section IX.H. of the Contract also stipulates that an eighteen month notice is required to reclaim "leased" capacity. The long notice was originally based on the need to construct a replacemem facility, which is not the case here, and would not be acceptable to the City or regulatory agencies. Therefor6, the agreement to restart the LSR plant in ninety days is an imentional, but mutually agreed upon, deviation from the Contract.