55B - DIAMOND APKR MUTAL WATER CO

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REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: MAY 3, 2010 TITLE: RESOLUTION TO PROVIDE WATER SERVICE TO FORMER CUSTOMERS OF THE DIAMOND PARK MUTUAL WATER COMPANY .; CITY MANAGER RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 1s` Reading ❑ Ordinance on 2ntl Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER Adopt a resolution to accept State grant funding, construct public water system improvements and provide service to former customers of the Diamond Park Mutual Water Company. DISCUSSION Diamond Park Mutual Water Company ( DPMWC) is a small private water system that serves approximately 90 properties in the Valley Adams Neighborhood. The water company was founded in 1930. In recent years, the DPMWC system has suffered from many severe deficiencies, including the following: • The water is high in nitrates and is unsafe to drink. • The private water company is nonfunctional in all areas, including financial, technical, operational, and managerial. • Frequent water system leaks and equipment failures cause the water service to be unreliable. The State Department of Public Health (DPH) and the residents served by DPMWC are now requesting that water service be provided by the City. For this to occur, public water system improvements (water mains, fire hydrants, and meters) must be constructed. The cost to construct these improvements is approximately $1,000,000. The DPH has filed an application on behalf of DPMWC for a State Revolving Fund grant that will cover 80 percent of the cost to construct the public water system improvements. A survey was completed which showed the median household income to be below $28,000 for this area. Given the results of this survey, the probability of receiving a grant is high. 55B -1