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08 In March, the City sold a$2.2 million bond (funded by water rate increase) to support four water and sewer improvement projects: 1) Water Main Replacement/Kenzie Terrace $ 630,000 2) 27`h Avenue Sewer Replacement $ 440,000 3) Water Filtration/Chemical Room Upgrade $ 960,000 4) Up-Grade Electrical System/Wells 3,4 & 5 $ 170,000 $2,200,000 Because of a favorable bidding climate, WSB &Associates combined the Kenzie Terrace Water Main Project and the 27`"Avenue Sewer Project. By doing so, the actual cost was $850,000 compared to the projected cost of$1,070,000. Because the remaining funds $220,000 are associated with Public Works activities such as maintaining the water and sewer system, Council could authorize the unused hinds to fund another public works project. I contacted Todd Hubmer, WSB &Associates, to inquire if he had any concerns regarding use of the funds for another project. Mr. Hubmer's only concern was that, if these funds were transferred to another project, we establish a contingency plan for the possibility that costs for the Chemical Room Upgrades could come in higher than the adjusted budget. If the actual costs of the projects did come in higher than expected, my recommendation would be to transfer reserves or interest earnings from the water filtration funds to offset a deficit in funding. An additional, $170,000 could be made available by deferring the budget of the Electrical System Improvements for Wells 3, 4 & 5. Future funding options would include: 1) If the Chemical Room Upgrades came in under budget, the funds could be used to complete the electrical improvements to the wells. 2) As part of the 2003 water rates, Council approved an increase of 5 cents per 100ccf to fund non-recurring maintenance costs. These funds could be designated to fund some or all of the electrical improvements. Consideration: Council authorizes a transfer of$390,000 from the Water& Sewer Projects Fund to the Public Facilities Project.