Resolution Number CVWD 02-09-03-01RESOLUTION NO. CVWD 02-09-03-01
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE CAPISTRANO
VALLEY WATER DISTRICT, CALIFORNIA, AUTHORIZING AWARD AND
EXECUTION OF A SERVICE CONTRACT WITH ECO RESOURCES, INC.
FOR THE DESIGN, CONSTRUCTION, FINANCING AND OPERATION OF
THE SAN JUAN BASIN DESALTER PROJECT AND THE FORM AND
EXECUTION OF A GUARANTY AGREEMENT WITH SOUTHWEST
WATER COMPANY AS GUARANTOR OF THE PERFORMANCE OF THE
OBLIGATIONS OF ECO RESOURCES, INC. UNDER THE SERVICE
CONTRACT
WHEREAS, the Capistrano Valley Water District (the "District') is a county
waterworks district organized and existing under the laws of the State of California
authorized to establish, maintain, equip, own and operate water treatment projects within
the District and to contract for water project services; and
WHEREAS, the District plans to implement a new water treatment project consisting
of a water treatment plant, wells, a raw water pumping station and related transmission
line, a brine disposal line and a finished water pumping station and related transmission
line to serve its potable water supply needs (the 'Project'); and
WHEREAS, the District is authorized under the laws of the State of California,
including Title 1, Division 6, Chapter 14 of the California Government Code (Section 5956
et seq.), as amended, to utilize a competitive procurement proposal process in contracting
for water treatment services and to contract with a single firm on a full service, long-term
basis for the design, permitting, financing, construction, start-up, acceptance testing,
operation, maintenance, repair, replacement or management of the Project (the 'Project
Services"); and
WHEREAS, the District issued a pre -request for proposals dated September 22,
2000 to companies interested in providing the Project Services; and
WHEREAS, the District, on November 20, 2000, based on the technical and
financial qualifications set forth in the pre -request for proposals, determined all of the three
firms that responded to the pre -request for proposals to be qualified; and
WHEREAS, the District issued a request for proposals on February 1, 2001, as
amended (the 'RFP"), to the pre -qualified firms to provide the Project Services, and set
forth in the RFP the criteria for selection of the preferred proposer; and
WHEREAS, proposals submitted in response to the RFP were received in July,
2001 from Eco Resources, Inc. and Earth Tech, Inc. A proposal clarification process was
. conducted commencing in July 2001 and post -proposal clarification submittals were
received from each of the proposers in July 2001; and
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WHEREAS, based on further evaluation by its selection committee utilizing the
evaluation factors and selection criteria and following the review and selection process
identified in the RFP, the District on September 18, 2001 selected the proposal by or on
behalf of ECO Resources, Inc., a corporation organized and existing under the laws of the
State of Texas and authorized to do business in the State of California (the "Company"), as
the most advantageous proposal received in response to the RFP; and
WHEREAS, based on the evaluation report of the proposals prepared in September
2001 by the selection committee, the District designated the Company as the Selected
Proposer Team, as defined in the RFP, and authorized the selection committee by
resolution of the Board of Directors of the District dated September 18, 2001 to proceed
with negotiations with the Company for a proposed service contract for the Project Services
(the "Service Contract"); and
WHEREAS, negotiations with the Company have proven to be successful in the
development of a Service Contract which has a 20 year initial operating term following the
development and construction periods; and
WHEREAS, Southwest Water Company, an affiliate of the Company, has agreed to
act as the guarantor of the Service Contract on behalf of the Company and to provide the
District with an unconditional and unlimited guaranty of the Company's performance of its
obligations under the Service Contract, for the term of the Service Contract, in the form of a
guaranty agreement with the District (the "Guaranty Agreement"); and
WHEREAS, the Project is expected to be financed by revenue bonds of the San
Juan Basin Authority pursuant to a lease arrangement between the San Juan Basin
Authority and the District under which the District will lease the Project from the San Juan
Basin Authority and pay the debt service on the bonds for the term of the Service Contract.
The District will have no obligation to pay debt service on the bonds in the event the
Service Contract is terminated due to an event of default by the Company and the failure of
the trustee or insurer of the bonds to cure such event of default in accordance with the
terms of the Service Contract; and
WHEREAS, the Company is expected to provide additional financial support to the
trustee or insurer of the bonds in order to cover payment of the debt service on the bonds
in the event of a default or breach by the Company under the Service Contract; and
WHEREAS, the negotiated Service Contract and Guaranty Agreement will provide a
comprehensive framework which will result in a public-private partnership that is
advantageous to the interests of the residents of the District; and
WHEREAS, the proposed Service Contract and Guaranty Agreement incorporate all
provisions which are required to be included as provided for in the RFP.
NOW, THEREFORE, BE ITRESOLVED, by the Board of Directors of the District
that the [General Manager] is hereby authorized to execute and deliver the Service
Contract with the Company for the provision of the Project Services. The Service Contract
09-03-02 2 CVWD Resolution
shall be substantially in the form presented at this meeting with such amendments,
' modifications, changes and omissions thereto as the District Manager may approve as in
the best interests of the District and not inconsistent with the terms of this resolution. The
execution of the Service Contract shall constitute conclusive evidence of valid authorization
hereunder of any such amendment, modification, change or omission.
BE IT FURTHER RESOLVED, that the [District Manager] is hereby authorized to
execute and deliver the Guaranty Agreement executed and delivered to the District by
Southwest Water Company. The Guaranty Agreement shall be substantially in the form
presented at this meeting with such amendments, modifications, changes and omissions
thereto as the District Manager may approve as in the best interests of the District and not
inconsistent with the terms of this resolution. The execution by the District Manager of the
Guaranty Agreement shall constitute conclusive evidence of the authorization hereunder of
any such amendments, modifications, changes or omissions to such Guaranty Agreement.
BE IT FURTHER RESOLVED, that the District Manager is hereby authorized to
execute and deliver any and all other papers, instruments, opinions, certificates, affidavits
and other documents, and to do and cause to be done any and all acts necessary or
proper in connection with or for carrying out this resolution and the execution, delivery and
performance of the Service Contract and the Guaranty Agreement, including the execution
of contract administration memoranda, as appropriate under the Service Contract, taking
appropriate action with respect to the various termination rights of the parties under the
' Service Contract during the development period, and taking appropriate action with respect
to the financing of the Project as contemplated by the Service Contract.
BE IT FURTHER RESOLVED, that the District Clerk shall cause copies of this
resolution to be forwarded to the members of the District's selection committee, the
appropriate representatives of the Company, and the appropriate representatives of
Southwest Water Company.
PASSED, APPROVED, AND ADOPTED this 3rd day of September 2002.
ATTEST:
`�91m,
DIANE BATHGATE, C an
R. MONAHAN, Clerk of the Board
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STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss.
CITY OF SAN JUAN CAPISTRANO )
I, MARGARET R. MONAHAN, appointed Clerk of the Board of the Capistrano Valley
Water District, do hereby certify that the foregoing Resolution No. CVWD 02-09-03-01
was duly adopted by the Board of Directors of the Capistrano Valley Water District at a
regular meeting thereof, held the 3rd day of September 2002, by the following vote:
AYES: DIRECTORS
NOES DIRECTORS
ABSENT: DI
Hart, Gelff and Chairman Bathgate
Swerdlin
Campbell
R. MONAHAN, Clerk of the Board