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
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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
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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
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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
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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.