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Form#: B-52 7/18/91 DEPARTMENT OF FINANCE REQUEST FOR COUNCIL ACTION DEPARTMENT: Dept of Environmental Management DATE: 7/10/12 STAFF CONTACT: Lyle Hirota PHONE: 961-8333 A. REQUEST: An Ordinance amending Ordinance 11-81 authorizing the Mayor to enter into an intergovernmental agreement for a State Water Pollution Control Revolving Fund Loan for Wastewater improvement projects and authorizing the issuance of$9,822,000 General Obligation Bonds of the County of Hawaii for the purpose of financing the following projects: Kalaniana'ole Interceptor Sewer Rehabilitation Phase II $8,622,000 Kulaimano and Papa'ikou Dewatering $1,200,000 B. BACKGROUND AND JUSTIFICATION (USE ADDITIONAL SHEETS AS NEEDED): The State Department of Health has indicated that funding through the State Water Pollution Control Revolving Fund Loan Program is available for the Kalaniana'ole Interceptor Sewer Rehabilitation (KISR) Phase II project and the Kulaimano and Papaikou Dewatering project. An Interim SRF Loan has been executed with the DOH for the KISR project in the amount of$8,000,000 as authorized by Ordinance 11-81. A construction contract has been awarded for this project in the amount of$7,491,861 with a Notice to Proceed date of June 25, 2012. Based on the awarded bid price, the County is eligible for a maximum loan amount of$8,621,409 which includes up to 10% for contingencies and a design allowance of$380,362. This request is to increase the authorized amount for SRF funding for the KISR project by $622,000 to the maximum available loan amount in order to take advantage of the lower interest rates should contingency items arise. This request includes no changes to the Kulaimano and Papaikou Dewatering project. The KISR project involves the rehabilitation of the existing Kalaniana'ole Avenue Interceptor from Kea'a St. to Baker Avenue due to severe deterioration from sewer gases. The Kalaniana'ole Avenue Interceptor between Kea'a St. and the Pua Sewage Pump Station (SPS) receives sewage from all areas of Hilo located North of Kea'a St. Failure of the interceptor would result in a sewage spill of approximately 2.8 million gallons per day, the majority of which would be discharged to the Wailoa River resulting in contamination of both the Wailoa River and Hilo Bay. The interceptor between the Pua SPS and Baker Avenue services all areas east of the Pua SPS and failure would result in a sewage spill to State Water on the order of approximately 500,000 gallons per day to shoreline and anchialine ponds. SIGNED: (. i /1 i r ' DATE: Department Head C:\Documents and Settings\rbauman.COUNTYOFHAWAII\Local Settings\Temporary Internet Files\OLK2E\B-52 Bond Ordinance Kal Ave 071012.doc