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REQUEST FOR <br />COUNCIL ACTION <br />CITY COUNCIL MEETING DATE: <br />JULY 18, 2011 <br />TITLE: <br />RESOLUTION TO PROVIDE WATER <br />SERVICE TO FORMER CUSTOMERS <br />OF DIAMOND PARK MUTUAL <br />WATER COMPANY <br />CITY MANAGER <br />RECOMMENDED ACTION <br />CLERK OF COUNCIL USE ONLY: <br />APPROVED <br />? As Recommended <br />? As Amended <br />? Ordinance on 15` Reading <br />? Ordinance on 2nd Reading <br />? Implementing Resolution <br />? Set Public Hearing For_ <br />CONTINUED TO <br />FILE NUMBER <br />Adopt a resolution to accept Proposition 84 grant funding, construct public water system <br />improvements and provide service to former customers of the Diamond Park Mutual Water <br />Company. <br />DISCUSSION <br />The Diamond Park Mutual Water Company (DPMWC) is a small private water system that serves <br />90 properties in the Valley Adams Neighborhood. The water company was founded in 1930. <br />In recent years, the DPMWC system has suffered from severe deficiencies, including water that <br />is high in nitrates and unsafe to drink. The company is non-functional in all areas, including <br />financial, technical, operational and managerial. Also, frequent water system leaks and <br />equipment failures cause the water service to be unreliable. <br />The State Department of Public Health (DPH) and the residents served by the DPMWC are <br />requesting that water service be provided by the City. To provide these services, water mains, fire <br />hydrants and meters must be constructed. The cost to construct these improvements is <br />approximately $1,000,000. <br />A resolution was adopted by the City on May 3, 2010 allowing the City to accept a State <br />Revolving Fund (SRF) grant to cover 80 percent of the construction costs for the public water <br />system improvements (Attachment 1). A survey was completed which showed the median <br />household income to be below $28,000 for this area. Given the results of this survey, the <br />probability of receiving a grant is high. <br />The DPH has recently learned that Proposition 84 grant funding is available. They have filed <br />another application on behalf of DPMWC for this funding, and thus another resolution is needed. <br />If successful, a Proposition 84 grant will pay for up to 100% of construction costs of the public <br />water system improvements. This funding will either be in lieu of, or in addition to, the funding <br />provided by the SRF grant. <br />55C-1