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1980-0512_SERRA_Agreement4/14/801 3rd draft AGREEMENT BETWEEN SOUTH EAST REGIONAL RECLAMATION AUTHORITY AND CALIFORNIA FIRST BANK FOR TEMPORARY BORROWING OF FUNDS TO REPAIR THE J.B. LATHAM REGIONAL WASTEWATER TREATMENT PLANT THIS AGREEMENT is made this 12th day of May , 1980, by and between the SOUTH EAST REGIONAL RECLAMATION AUTHORITY, a joint powers agency formed and created pursuant to Section 6500 and following of the Government Code of the State of California (hereinafter in some instances referred to as "SERRA") and California First- Bank, irstBank, a financial institution authorized to do business in the State of California, (hereinafter in some instances referred to as "Lender"); . WI T N E S S E T H WHEREAS, SERRA was formed for the purpose of pro- viding wastewater collection, treatment and disposal on behalf of its participating Member Agencies; and WHEREAS, SERRA previously formed Project Committee No. 2 for the purpose -of operating and maintaining that faci- lity known as the J.B. Latham Regional Wastewater Treatment Plant ("Treatment Plant"); and WHEREAS, SERRA is authorized by the terms of the joint powers agreement creating SERRA to incur indebtedness to accomplish its purposes; and WHEREAS, SERRA' s 'Treatment Plant was recently damaged by inundation and must be repaired if SERRA is to continue to accomplish its purposes; and WHEREAS, to finance, on an interim.basis, the cost of such necessary repairs SERRA desires to enter this Agreement and to issue notes as provided by Section 53820 and following of the Government Code of the State of California.; and WHEREAS, "Lender" is willing, in consideration of the covenants set forth below, to purchase such notes as are issued by SERRA; and WHEREAS, it is anticipated that the cost of repairs shall be reimbursed from state and/or federal emergency re— lief funds, from existing insurance coverage or from damages recovered from the County of Orange, the Orange County Flood Control District or others; and WHEREAS, in the event said costs are not iacovered, the Participating. Member Agencies of SERRA's Project Committee No. 2 are obligated as set forth below to pay the costs of repair of the Treatment Plant, and borrowing pursuant to this Agreement is a postponement of existing contractual indebtedness_ NOLO, THEREFORE, in consideration of the mutual promises and conditions hereinafter set forth the. parties do agree as follows: u -2- Section 1. SERRA agrees to cause to be issued pur- suant to Section 53850 and following of the Government Code of the State of California notes in the amount of $1,000,000.00 to be repayed no later than 15 months from the date of issuance with interest at the rate not to exceed ten percent (100) per annum. Section 2. Upon issuance of said notes, "Lender" agrees to purchase the notes upon the terms and conditions as set forth in Section 1 of this Agreement with the term of said notes to begin on the date of their purchase by "Lender." Section 3. SERRA and "Lender" agree that said notes shall be repaid from state and/or federal emergency relief funds, from reimbursement by SERRA's insurance carriers or from damages recovered from the County of Orange, the orange County Flood Control District or others, provided however, that if funds from these sources are not forthcoming within the time re- quired to repay said notes, repayment shall be made pursuant. to Section 4 of this Agreement. Section 4. The Member Agencies of Project Committee No. 2 of SERRA, signatories to this Agreement, hereby acknowledge that absent other funds the Member Agencies are contractually obligated to pay the costs of repairing the Treatment Plant and therefore agree to deposit with SERRA funds in the total amount of $1,176,471 to repay notes issued and sold pursuant to this Agreement, which amounts shall be deposited with SERRA on or -3- prior to thirty (30) days prior to the date repayment is required and which shall be made by each Member Agency in the same percentage as the capacity owned in the 9.0 MGD Treatment Plant which is as follows: Member Agency MGD Capacity Percentage Moulton -Niguel Water District 4.5 50.00 Santa Margarita Water District 1.0 11.11% San Juan Capistrano 2.5 27.78% Dana Point Sanitary District 1.0 11.119. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed hereinabove written. SOUTH the day and year first RECLAMATION AUTHORITY Byjr a -4ai rmBy ary/Assistant Secretary MOULTON-NIGUEL WATER DISTRICT By ` P/Y�/iVl2B�i President/vice President Secretary Assista�t Secretary 0 -4- CITY OF SAN JUAN CAPISTRANO um DANA POINT SANITARY DISTRICT By Presiden Vice President By cretary�/Assistaint Secretary SANTA MARGARITA WATER DISTRICT By President/Vice President / x r Sere y Assistant Secretary CALL FIRST BANK By c _\ Patrick J, yang/ Manager m -5- AGENDA ITEM April 2, 1980 TO: James S. Mocalis, City Manager FROM: W. D. Murphy, Director of Public Works J SUBJECT: Agreement For Administration of Funds For Emergency Rehabilitation (SERRA) / SITUATION Subsequent to the water inundation of the Treatment Plant on January 29th, recovery of the costs associated with this incident have been actively pursued. Insurance coverage, application for disaster relief funds and claims for damages against private parties/other agencies are being prepared. Expenses for the restablishing of plant operations, however, continue to be generated and are being accrued by the City. Until and unless funds are secured for financing these measures, an interim basis of payment must be made. The attached draft agreement has been developed to allow for the temporary borrowing of funds, approximately one million dollars by SERRA for plant repairs. This agreement would commit all funds recovered pursuant to claims or legal actions for repayment. FINANCIAL CONSIDERATIONS Temporary borrowing provisions permit such borrowing only against actual anticipated revenues. As no funds are presently committed, member agencies of SERRA's Project Committee No. 2 must obligate themselves to repayment in the event alternate funds are not forth coming. The proportionate share breakdown of the $1,000,000 plus $150,000 (10% interest rate for no longer than fifteen months) is based upon the percentage of capacity ownership in the Treatment Plant as per Project Committee No. 2. The City of San Juan Capistrano's share will be at 28%, or $322,000. This amount is to be deposited with SERRA 30 days prior to the date of repayment. ALTERNATE ACTIONS 1. Approve in concept the attached draft agreement between SERRA and California First Bank for temporary borrowing of funds to repair the J. B. Latham Regional Wastewater Treatment Plant and authorize the Mayor to execute the final agreement copy upon submittal to the City by the SERRA attorney. FOR CITY COUNCIL AGENDA .. Cf 3a� 0 Agreement For Administration of -2- Funds for Emergency Rehabilitation (SERRA) 2. Do not approve the draft agreement. 0 April 2, 1980 3. Refer the matter back to staff for additional information. RECOMMENDATION By motion, approve in concept the attached draft agreement between SERRA and California First Bank for temporary borrowing of funds to repair the J. B. Latham Regional Wastewater Treatment Plant and authorize the Mayor to execute the final agreement copy upon submittal to the City by the SERRA attorney. In addition, authorize the anticipated expenditure of $322,000 from the Sewer Enterprise Fund for this expense. (IRespectfully submitted, W.t�.a��'�� W. D. Murphy WDM:CSF/rem Encls.