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Public Works Agency <br />www.santa-ana.org/public-works <br />Item # 23 <br />City of Santa Ana <br />20 Civic Center Plaza, Santa Ana, CA 92701 <br />Staff Report <br />April 4, 2023 <br />TOPIC: Installment Sale Agreement for the Septic to Sewer Island Project <br />AGENDA TITLE <br />Adopt a Resolution Approving the Construction Installment Sale Agreement with the <br />California State Water Resources Control Board for Financing of the Septic to Sewer <br />Island Project (Non -General Fund) <br />RECOMMENDED ACTION <br />Adopt a resolution approving the Construction Installment Sale Agreement (D2201000) <br />with the California State Water Resources Control Board for financing of the Septic to <br />Sewer Island Project, in an amount up to $1,529,220. <br />DISCUSSION <br />On June 5, 2018, the City Council directed staff to initiate the process to annex the 17tn <br />Street and Tustin Avenue County of Orange Unincorporated Island (Island). <br />The Public Works Agency's Water Resources Division currently provides sanitary sewer <br />service to some of the parcels within the Island, but many of the parcels are on septic <br />systems. In an effort to find cost-effective solutions to expand the sewer system to serve <br />the parcels with septic systems in the Island, the Water Resources Division has sought <br />funding mechanisms such as the California State Water Resources Control Board's <br />(Water Board) Clean Water State Revolving Fund (SRF) (Exhibit 1). The SRF provides <br />low-cost, flexible financing to water utilities to implement projects that protect <br />California's water resources. Approval of the agreement (Exhibit 2) will allow the City to <br />complete the Project in a timely and cost-effective manner. <br />Total project costs are estimated at $1,529,220. Staff has requested a principal loan <br />amount for the full project cost, which according the Payment Schedule (Exhibit E in <br />Exhibit 2), will be paid back over at a 2.6 percent annual interest rate over 30 years and <br />at a cost of $671,079.54. <br />FISCAL IMPACT <br />Principal and interest payments are due annually beginning July 20, 2025. Funds for <br />debt servicing in fiscal years FY25-26 through FY54-55 will be included in the proposed <br />budgets for City Council consideration. Debt servicing will be recorded in the Sanitary <br />