Explanation
1. BACKGROUND: The Department of Public Utilities (DPU) receives low-interest loans to fund capital improvement projects through The Ohio Environmental Protection Agency’s (OEPA) Water Pollution Loan Fund (WPCLF) program. The WPCLF program which is administered by the Ohio Water Development Authority (OWDA), provides below market-rate loans as well as other support mechanisms for funding various environmentally impactful projects. The Water Resource Restoration Sponsorship Program (WRRSP) is a program through which interest generated from an identified Sponsor Project’s WPCLF loan is used to fund an OEPA approved waterway protection or restoration project. By agreeing to participate as a sponsor for a WRRSP project, the Sponsor Project’s WPCLF loan receives an additional interest rate discount of up to 0.1% while assisting in water resource improvements within the central Ohio watershed area.
Ordinance 2106-2007 authorized the Director of the Department of Public Utilities to enter into a Sponsorship Agreement for the Clover Groff Phase 2 WRRSP Project. By agreeing to sponsor the WRRSP, DPU received a 0.1% discount on the sponsoring project’s WPCLF loans, and the interest generated by the loans was then to be paid as a reimbursement to OEPA through the Ohio Water Development Authority (OWDA) for the WRRSP project.
Based on the loan amounts for the Sponsor Projects, OEPA estimated the interest generated would fully fund the WRRSP and therefore agreed to the sponsorship arrangement and paid for the WRRSP project’s construction in full. The Sponsor Projects, however, were completed under budget (under bid amount) and therefore will not generate the amount of interest anticipated to cover the costs of the WRRSP.
The letter addressed to the Director of Public Utilities from OEPA dated January 25, 2013, and attached to this Ordinance, reflects this interest shortfall. For this reason it is necessary for DPU to reimburse OEPA, through payment to O...
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