HomeMy WebLinkAbout01/21/2003, C5 - WATER REUSE PROJECT - CAPITAL RESERVE ACCOUNT FOR OPERATION AND MAINTENANCE council 2103
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CITY OF SAN L U IS O B I S P O
FROM: John Moss,Utilities Directors~
Prepared By: David Pierce,Water Projects Manager 0
SUBJECT: WATER REUSE PROJECT — CAPITAL RESERVE ACCOUNT FOR
OPERATION AND MAINTENANCE
CAO RECOMMENDATION
Adopt a resolution establishing a Recycled Water Capital Reserve Account for operation and
maintenance of the recycled water treatment and distribution facilities funded by State Revolving
Fund(SRF)Loans.
DISCUSSION
The State Water Resources Control Board (SWRCB) requires that recipients of SRF Loans
provide assurances that the systems will be maintained for the life of the loan and that the
recipient will be able to repay the loan. The SWRCB approved the 2001 Water Fund Analysis as
a satisfactory revenue plan. On November 6, 2001 the City Council adopted Resolution 9246
dedicating water fund revenues for repayment of the State Revolving Fund Loans for the Water
Reuse Project.
This resolution establishes a Capital Reserve Account that provides the State Water Resources
Control Board with assurance that the City Council will have the fiscal resources to maintain the
facilities being constructed with the SRF loan.
FISCAL IMPACT
There are no expenditures associated with this action. Assuming that the SRF loan is issued for
$12,000,000, the City will have to build dedicated reserve of $600,000 at a rate of t/z % of the
loan amount per year over a 10 year period (about $60,000 per year),; This will not have a
significant affect on the water fund. as it does not have to be in addition to the 20%
(approximately$1,000,000)working capital balance required by existing City Policies.
ATTACHMENT
Resolution
\\879_MORRO\S WROUPS\UTIL\Council Agenda Reports\2003 Council Agenda Reports\WRP_Capital Reserve
Account CAR.doc
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ATTACHMENT 1
RESOLUTION NO. (2003 Series)
A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO
ESTABLISHING A CAPITAL RESERVE ACCOUNT FOR OPERATION AND
MAINTENANCE OF THE WATER REUSE PROJECT.
WHEREAS, Water Reclamation Facility produces recycled water suitable for irrigation and
other uses; and
WHEREAS,the City has designed a Water Reuse Project to distribute recycled water; and
WHEREAS, the State of California Water Resources Control Board has issued project
approval letters for grants and loans to finance the Water Reuse Project; and
WHEREAS, on November 6, 2001 the City Council adopted Resolution No. 9246 (2001
series) dedicating water fund revenues for repayment of the state revolving fund loans; and
WHEREAS, the State Water Resources Control Board requires that the City establish a
Capital Reserve Account to insure that there will be sufficient funding for operation and
maintenance of the project during the life of the loan.
NOW,THEREFORE, BE IT RESOLVED that the Council of the City of San Luis Obispo
hereby establishes a Recycled Water Capital Reserve Account (RWCRF) for operation and
maintenance of the facilities constructed through the Water Reuse Project with funding from
SRF Loan No. C-06-4307-110. The Capital Reserve Account shall be established to meet the
following criteria:
1. The Capital Reserve Account shall be dedicated for expansion, major repair, or replacement
of the recycled water treatment and distribution facilities.
2. The City shall deposit sufficient funds to build up the RWCRF at a minimum rate of one-half
of one (0.5)percent of the SRF loan amount each year for a period of ten (10)years.
3. All interest earned on deposits to the RWCRF shall remain in the RWCRF for the uses
specified below. The City shall replace any amounts expended from the RWCRF by
depositing at a minimum annual rate of ten (10)percent of the expended amount.
4. The City's unused bonding capability for the Water Enterprise Fund may be used to offset,
dollar for dollar, the required cash deposits to the RWCRF. Unused bonding capability
means, with respect to each SRF loan contract issued after January 21, 1993, an amount equal
to unissued bonds or other indebtedness authorized either by vote of the local electorate or by
provisions of local or other law under which the borrower would be legally permitted to issue
such bonds or other indebtedness without approval by the local electorate or by any other
public entity.
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Resolution No. (2003 Series)
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5. The amounts required to be deposited in the RWCRF may be reduced by any amounts held
and not previously allocated for the purposes of this calculation. The amounts may be held in
any fund or account established pursuant to a.resolution or indenture of a borrower pursuant
to which any bonds or other indebtedness have been issued and are outstanding, which
amounts may be used for the purposes for which the RWCRF is established.
6. Money deposited in the RWCRF shall be available for the costs for planning, design, and
construction of capital improvements to the recycled water treatment and distribution
facilities.
7. The City shall prepare and submit a report on RWCRF activities and fund status beginning
five (5) years after the Division's approval of the final Revenue Program. A report shall be
due every five (5) years for the life of the loan contract.
8. The requirement to create and maintain a RWCRF shall remain in force for the life of the
loan contract. At the end of the loan contract, disposition of the RWCRF will be a local
responsibility.
9. Failure to meet these provisions could result in the immediate recall and repayment of all
SRF loan funds disbursed to the City.
On motion of , seconded by , and on the
following roll call vote:
AYES:
NOES:
ABSENT:
The foregoing Resolution was passed and adopted on this day of January , 2003.
Mayor David F. Romero
ATTEST:
APPROVED AS TO FORM:
Lee Price,City Clerk
oCiAttomey
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