Approval Sheet

CITY OF GILLETTE
201 E. 5th Street
Phone (307)686-5200
CITY OF GILLETTE

www.gillettewy.gov

 
DATE: 4/7/2015 7:00:00 PM
SUBJECT:
Council Consideration of Amendment No. 5 to the 2009 Project Funding Agreement for Grant Funding for the Gillette Madison Pipeline Project with the State of Wyoming Water Development Commission in the Amount of $13,385,995.00, as Authorized by the 2014 Wyoming State Legislature.
BACKGROUND:
During the 2011 General Session the Sixty-First Legislature of the State of Wyoming enacted and Governor Mead approved Senate Act No. 36 which provides grant and loan funding for the Gillette Madison Pipeline Project.

The following table summarizes Grant/Loan Appropriations we have received to date from the State of Wyoming for this project:

~ 2009 Appropriation: $11,222,500.00 (67% grant) + $5,527,500.00 (33% loan) = $16,750,000.00 (total)
~ 2010 Appropriation: $16,415,000.00 (67% grant) + $8,085,000.00 (33% loan) = $24,500,000.00 (total)
~ 2011 Appropriation: $32,362,500.00 (67% grant) + $15,939,739.00 (33% loan) = $48,302,239.00 (total)
~ 2012 Appropriation: $30,000,000.00 (67% grant) + $14,776,119.00 (33% loan) = $44,776,119.00 (total)
~ 2013 Appropriation: $30,000,000.00 (67% grant) + $0 (33% loan) = $30,000,000.00 (total)

Total Grant/Loan Appropriation(s) Received To Date (before this amendment) = $120,000,000.00 (67% grant) + $44,328,358.00 (33% loan) = $164,328,358.00 (total) 

The current Grant Appropriation approved by the 2014 Wyoming State Legislature is summarized as follows:

~ 2014 Appropriation: $13,385,995.00 (67% grant) +$0 (33% loan) = $13,385,995.00 (total)

Total Grant/Loan Appropriation(s) Received To Date (after this amendment) = $133,385,995.00 (67% grant) + $44,328,358.00 (33% loan) = $177,714,353.00 (total) 

2015 Appropriation is summarized as follows:

~ 2015 Proposed Appropriation: $12,406,005.00 (67% grant) + $0 (33% loan) = $12,406,005.00 (total)

Total Anticipated State Appropriations: $145,792,000.00 (67% grant) + $44,328,358.00 (33% loan) = $190,120,358.00 (total)

The 33% loan portion has a term of five (5) years from the date the WWDC determines project benefits accrued to the City, at an annual rate of four percent (4%) interest. A portion of the revenue, up to $75 million - to be collected from Capital Facilities Tax revenue, is intended to re-pay the loan at the time the project is complete.

The City of Gillette approved a Project (Funding) Agreement with the WWDC in 2009 for the original 2009 Grant/Loan Appropriation(s).  Subsequent approvals have taken place by the City of Gillette for Amendment No. 1 (2010 Grant/Loan Appropriation), Amendment No. 2 (2011 Grant/Loan Appropriation), Amendment No. 3 (2012 Grant/Loan Appropriation), and Amendment No. 4 (2013 Grant Appropriation).

In harmony with the 2011 Enrolled Senate Act No. 36, the Wyoming Water Development Commission staff, working in conjunction with the Wyoming Attorney General's Office, drafted the enclosed "Amendment No. Five to the Project Agreement for the Gillette Madison Pipeline Project" for approval by the Governing Body of the City of Gillette.
ACTUAL COST VS. BUDGET:
The current total estimated cost of the Gillette Madison Pipeline Project is $217,600,000 as recognized by W.S. 99-3-1405(e)(i)(A) when considering the immediate development of five (5) new Madison wells.

Upon approval of Amendment No. 5, the City of Gillette will have approved total appropriations in the amount of $177,714,353.00 available for project-eligible expenses, for which $44,328,358.00, or 33% of the actual development costs, is in the form of a project loan, and $133,385,995.00, or 67% of the actual development costs, is in the form of a project grant.

The remaining $12,406,005.00 grant funding has been budgeted by the Governor and appropriated by the Legislature during the 2015 Wyoming State Legislative Session.  A separate amendment will be prepared to incorporate these funds into the project agreement.

A portion of the revenue, up to $75 million - to be collected from Capital Facilities Tax revenue, is intended to re-pay the loan at the time the project is complete.  The Cap Tax is also intended to match the 67% grant after the current 33% loan appropriation(s) have been completely withdrawn and expended.
SUGGESTED MOTION:
I move to approve Amendment No. 5 to the 2009 Project Funding Agreement with the State of Wyoming Water Development Commission for Grant Funding for the Gillette Madison Pipeline Project in the Amount of $13,385,995.00 as Authorized by the 2014 Wyoming State Legislature.
STAFF REFERENCE:
Kendall Glover, Utilities Director
ATTACHMENTS:
Click to download
Amendment 5 to Project Agreement