5.2 Amendment No. 1 KDHE Loan Markley-MagnoliaCITY OF SALINA
REQUEST FOR CITY COMMISSION ACTION DATE TIME
09/26/22 4:00 P.M.
AGENDA SECTION ORIGINATING DEPARTMENT: FISCAL APPROVAL:
NO: 5
BY:
ITEM UTILITIES DEPARTMENT FINAL APP OVAL:
NO: 2
Page I BY: Martha Tasker M 4f BY:
ITEM:
Authorize Amendment No. 1 to the Loan Agreement (Loan) between the Kansas Department of
Health and Environment, acting on behalf of the State of Kansas, and the City of Salina, Kansas for
the purpose of financing the Markley/Magnolia Sewer System Improvements.
BACKGROUND:
The Markley/Magnolia Sewer Improvements provided sanitary sewer service to the following areas:
• Highland Meadows Hamlet Woodlands Addition
• GreatLIFE Golf & Fitness - Former Elks Country Club
• Valley View Addition — (Septic Tanks)
• Magnolia Hills Estates
• Undeveloped Area
The project included:
• Construct a new Wastewater Pump Station No. 57 and force main
• Abandoning existing Wastewater Pump Station No. 57
• Install 7,725 Linear Feet of 8 -inch gravity sewer
• Install 485 Linear Feet of 10 -inch gravity sewer
• Electrical improvements
On February 4, 2019, the City Commission authorized the loan for an amount not to exceed
$2,250,000. The breakdown for the loan is as follows:
Sanitary Sewer Collection System
Contingency
Engineering
Loan Amount:
Budget Final Cost
$1,950,000 $1,310,978.00
$ 190,000 $ 0
$ 110,0000) $ 88,033.70
$2,250,000 $1,399,011.70
Amendment No. 1 decreases the amount of the loan from $2,250,000.00 to $1,399,011.70.
FISCAL NOTE:
The semi-annual (March and September) payments will be reduced from $90,662.15 to $49,395.91.
COMMISSION ACTION:
Staff has identified the following options for the City Commission's consideration:
1.) Authorize the Mayor to execute Addendum No. 1 to the Loan Agreement between the Kansas
Department of Health and Environment, acting on behalf of the State of Kansas, and the City
of Salina, Kansas for the purpose of financing of the Markley/Magnolia Sewer System
Improvements.
CITY OF SALINA
REQUEST FOR CITY COMMISSION ACTION DATE TIME
09/26/22 4:00 P.M.
AGENDA SECTION ORIGINATING DEPARTMENT: FISCAL APPROVAL:
NO:
BY:
ITEM UTILITIES DEPARTMENT FINAL APPROVAL:
NO:
Page 2 BY: Martha Tasker BY:
2.) Authorize execution of the Addendum No. 1 to the Loan Agreement with amendments as the
City Commission deems appropriate.
3.) Postpone execution of the Addendum No. 1 to the Loan Agreement to a specified date and
time and provide staff direction regarding additional information or amendments the City
Commission would like to request for their further consideration.
4.) Vote to deny execution of the Addendum No. 1 to the Loan Agreement which would result in
no decrease in the semi-annual payments.
Staff recommends Option 1.
FIRST AMENDMENT TO THE
LOAN AGREEMENT
By and Between
THE KANSAS DEPARTMENT OF HEALTH AND ENVIRONMENT
ACTING ON BEHALF OF
THE STATE OF KANSAS
AND
CITY OF SALINA, KANSAS
KWPCRF PROJECT NO,: C20 2050 01
ORIGINAL LOAN AGREEMENT
EFFECTIVE AS OF DECEMBER 11, 2018
AMENDMENT NO.: 1
EFFECTIVE AS OF JUNE 27. 2022
First Amendment to
the Loan Agreement by and between the
Kansas Department of Health and Environment
Acting on Behalf of the State of Kansas
and the City of Salina, Kansas
Effective As of June 27, 2022
WHEREAS, the City of Salina, Kansas (the Municipality) has entered into a Loan Agreement
with the Kansas Department of Health and Environment, acting on behalf of the State of Kansas,
effective as of December 11, 2018 (the "Loan Agreement'); and
WHEREAS, said Loan Agreement was entered into for the benefit of the Municipality, KWPCRF
Project No, C20 2050 01; and
WHEREAS, the Municipality and KDHE hereby determines that it is necessary to amend certain
exhibits to the Loan Agreement, and
WHEREAS, this First Amendment to the Loan Agreement is entered into and effective as of
June 27, 2022;
THEREFORE, the Loan Agreement is amended as follows:
SECTION 1. Article If, Loan Terms, Section 2.01, Amount of Loan and Exhibit B of the LOAN
AGREEMENT BY AND BETWEEN THE KANSAS DEPARTMENT OF HEALTH AND ENVIRONMENT
AND THE CITY OF SALINA, KANSAS are/is hereby amended to read as set forth on the pages
attached hereto.
SECTION 2. Except as herein specifically set out, the Loan Agreement is confirmed and ratified.
First Amendment
Effective as of June 27, 2022 2
IN WITNESS WHEREOF, KDHE and the Municipality have caused this First Amendment to the
Loan Agreement for the Municipality to be executed, sealed and delivered, effective as of June 27,
2022.
PER
�•'++t r��*�*
Kan
sas
Department of Health
and Environment
The KANSAS DEPARTMENT OF HEALTH AND ENVIRONMENT, acting
on behalf of THE STATE OF KANSAS
gy�/S��ki
Jan t Stanek
Secretary
Kansas Department of Health and Environment
Date:I�-202.2—� 022
SALINA, KANSAS
By
Title: Mayor
(Seal)
ATTEST
z
Date:
First Amendment
Effective as of June 27. 2022
The "Municipality"
ARTICLE II
LOAN TERMS
Section 2.01. Amount of the Loan. Subject to all of the terms, provisions and conditions of this
Loan Agreement, and subject to the availability of State and Federal funds, KDHE will loan an amount
not to exceed {$2,250,000j One Million Three Hundred
Ninety Nine Thousand Eleven Dollars and Seventy Cents ($1,399.011.701 to the Municipality to pay the
costs of the Project described in Exhibit A hereto. The final actual amount of the Loan may be reduced
without revision of any other terms, provisions or conditions of this Loan Agreement, other than the
Loan Repayment Schedule Exhibit B hereto), to reflect reductions in the estimated or actual total
Project Costs as impacted by opening of bids for construction, change orders, final actual costs, and
prepayments. The Municipality shall be responsible for any costs incurred by the Municipality in
connection with the Project in addition to the amount of the Loan. An amendment to Exhibit B must be
accomplished by an Amendment to the Loan Agreement executed by all parties.
First Amendment
Effective as of June 27, 2022 4
EXHIBIT B
LOAN REPAYMENT SCHEDULE
(See Page 6)
DEDICATED SOURCE OF REVENUES AND LOAN REPAYMENT SCHEDULE
Dedicated Source of Revenue.
The Municipality shall impose and collect such rates, fees and charges for the use and services
furnished by or through the System, including all improvements and additions thereto hereafter
constructed or acquired by the Municipality as will provide System Revenues or levy ad valorem taxes
without limitation as to rate or amount upon all the taxable tangible property, real or personal, within
the territorial limits of the Municipality to produce amounts which are sufficient to (a) pay the cost of the
operation and maintenance of the System, (b) pay the principal of and interest on the Loan as and
when the same become due, and (c) pay all other amounts due at any time under the Loan Agreement;
provided, however, no lien or other security interest is granted by the Municipality to KDHE on the
System Revenues under this Agreement. In the event that the System Revenues are insufficient to
meet the obligations under the Loan and the Loan Agreement, the Municipality shall levy ad valorem
taxes without limitation as to rate or amount upon all the taxable tangible property, real or personal,
within the territorial limits of the Municipality to produce the amounts necessary for the prompt payment
of the obligations under the Loan and Loan Agreement.
The Loan Repayment Schedule
The Municipality and KDHE have agreed that interest becoming due semiannually on the Loan
during the construction period for the Project may be capitalized and repaid as a part of the Loan. In
this regard, KDHE shall give the Municipality written notice of each semiannual installment of interest
becoming due during the construction period. At its option, the Municipality may elect to pay such
amounts, and if so elected, must pay such amounts within 30 days of receipt of the notice of their
becoming due. If the Municipality does not elect to pay such amounts within 30 days of receipt of such
notice, the amount then due and owing as semiannual interest on the Loan shall be capitalized and
added to the principal amount of the Loan and shall bear interest at the rate of interest set forth in
Section 2.02 hereof.
First Amendment
Effective as of June 27, 2022
KANSAS WATER POLLUTION CONTROL REVOLVINGFUND
Actual Draws - Actual Interest Rate
Amortization of Loan Costs as of 6/27/2022
Prepared for.
City of Salina - Matldey/Magnolia, Project No. C20 2050 01
Gross Interest Rate Allocation thru 3/1/2024 after 3/1/2024
Service Fee Rate: 2.29% 0.25%
Net Loan Interest Rate: 0.25% 2.290/a
Project Principal: 1,399,011.70
Interest During Const.: 0.00
Service Fee During Const.: 0.00
Gross Loan Costs: 1,399,011.70
Gross Interest Rate: 2.54%
First Payment Date: 9/1/2020
Number of Payments: 30
Payment Payment Beginning Interest Principal Service Total Ending
Number Date Balance Payment Payment Fee Payment Balance
1
9/1/2020
1,399,011.70
850.31
82,073.02
7,788.82
90,662.15
1,316,988.68
2
3/1/2021
1,316,988.68
1,315.55
77,296.20
12,050.40
90,662.15
1,239,692.48
3
9/1/2021
1,239,692.48
1,460.19
75,826.62
13,375.34
90,662.15
1,163,865.86
4
3/1/2022
1,163,865.86
1,45333
75,896.30
13,312.52
90,662.15
1,087,969.56
5
9/1/2022
1,087,969.56
1,360.03
35,578.02
12,457.86
49,395.91
1,052,391.54
6
3/1/2023
1,052,391.54
1,315.49
36,030.54
12,049.88
49,395.91
1,016,361.00
7
9/1/2023
1,016,361.00
1,270.45
36,488.13
11,63733
49,395.91
979,872.87
8
3/1/2024
979,872.87
1,224.84
36,951.53
11,219.54
49,395.91
942,92134
9
9/1/2024
942,921.34
10,796.45
37,420.81
1,178.65
49,395.91
905,500.53
10
3/1/2025
905,500.53
10,367.98
37,896.05
1,131.88
49,395.91
867,604.48
11
9/1/2025
867,604.48
9,934.07
3877.33
1,084.51
49,395.91
829,227.15
12
3/1/2026
829,227.15
9,494.65
38,864.73
1,036.53
49,395.91
790,362.42
13
9/1/2026
790,362.42
9,049.65
39,35831
987.95
49,395.91
751,004.11
14
3/1/2027
751,004.11
8,599.00
39,858.15
938.76
49,395.91
711,145.96
15
9/1/2027
711,145.96
8,142.62
40,364.36
888.93
49,395.91
670,781.60
16
3/1/2028
670,781.60
7,680.45
40,876.98
838.48
49,395.91
629,904.62
17
9/1/2028
629,904.62
7,212.41
41,396.12
78738
49,395.91
588,508.50
18
3/1/2029
588,508.50
6,738.42
41,921.85
735.64
49,395.91
546,586.65
19
9/1/2029
546,586.65
6,258.42
42,454.26
683.23
49,395.91
504,132.39
20
3/1/2030
504,132.39
5,77232
42,993.42
630.17
49,395.91
461,138.97
21
9/1/2030
461,138.97
5,280.04
43,539.45
576.42
49,395.91
417,599.52
22
3/l/2D31
417,599.52
4,781.51
44,092.40
52200
49,395.91
373,507.12
23
9/1/2031
373,507.12
4,276.66
44,65237
466.88
49,395.91
328,854.75
24
3/1/2032
328,854.75
3,765.39
45,219.45
411.07
49,395.91
283,635.30
25
9/1/2032
283,635.30
3,247.62
45,793.75
354.54
49,395.91
237,841.55
26
3/1/2033
237,841.55
2,723.29
46,375.32
297.30
49,395.91
191,46623
27
9/1/2033
191,466.23
2,192.29
46,964.29
239.33
49,395.91
144,501.94
28
3/1/2034
144,501.94
1,654.55
47,56D.73
180.63
49,395.91
96,941.21
29
9/1/2034
96,941.21
1,109.98
48,164.75
121.18
49,395.91
48,776.46
30
3/1/2035
48,776.46
558.49
48,776.46
60.96
49,395.91
0.00
Totals
139,886.45
1,399,011.70
108,044.11
1,646,942.26
Prepared by the Department of Administration
First Amendment
Effective as of June 27, 2022 6