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CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION
From:
Subject: Resolution of the Mayor and
Common Council of the City o,f San
Bernardino approving Amendment NO.2 to
that certain Loan Agreement by and among
the City of San Bernardino, the San
Bernardino Valley Municipal Water District,
and the San Bernardino Regional Water
Resources Authority
Fred Wilson,
City Administrator
Dept:
City Administrator's Office
Date:
April 18, 2005
Council Date: April 25, 2005
Synopsis of Previous Council Action:
08/26/98
Approval of the Joint Exercise of Powers Agreement to form the San Bernardino
Regional Water Resources Authority.
Approval of Loan Agreement by and among the City of San Bernardino the San
Bernardino Valley Municipal Water District and the San Bernardino Regional Water
Resources Authority.
Approval of Amendment to Loan Agreement by and among the City of San Bernardino,
the San Bernardino Regional Water Resources Authority and the San Bernardino Valley
Municipal Water District.
Approval of Sub-Recipient Agreement by and between the City and the JPA
Water Resources Authority approves Amendment No. 2 to that certain Loan Agreement
by and among the City of San Bernardino, the San Bernardino Valley Municipal Water
District, and the San Bernardino Regional Water Resources Authority.
10/01/01
10/21/02
12/20/04
4/11/05
Recommended Motion:
Adopt Resolution
Contact person:
Lori S;:!!;soon
Phone:
51??
Supporting data attached: Staff Reoort. Resolution
And Amendment
Ward:
1.2 and 3
FUNDING REQUIREMENTS:
Amount: No current requirement. Adoption may delay
certain repayments.
Source: (Acct. No.) -0-
(Ar.ct np.!;r.ription) -0-
Finance: f~~
Agenda Item No. ..g
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CITY OF SAN BERNARDINO - REOUEST FOR COUNCIL ACTION
Staff Report
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Resolution of the Mayor and Common Council of the City of San Bernardino approving
Amendment No.2 to that certain Loan Agreement by and between the City of San Bernardino,
the San Bernardino Valley Municipal Water District, and the San Bernardino Regional Water
Resources Authority.
Backe:round
On October 1,2001, the City entered into a loan agreement with the JPA (the San Bernardino
Regional Water Resources Authority) and with Valley (the San Bernardino Valley Municipal
Water District). The City and Valley each agreed to loan an amount not to exceed $600,000 to
the JP A for the purposes of paying fees and for the expense of consulting work by EEK.
On October 21, 2002, Amendment No.1 was approved which provided for an additional loan of
$250,000 each. It also added the costs of preparing an Environment Impact Report to the scope
of work. This produced a total loan of$850,000 from the City.
As of this writing, the JPA's loan is approaching its limit of $850,000 from both the City and
Valley. In order to continue to fund its operations, this Amendment has been proposed.
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Proposed Amendment
The proposed resolution would adopt an Amendment No.2. The Amendment would commit the
City and Valley, upon the JPA's written request, to re-loan funds received back from federal
grants and other sources pursuant to the Sub-Recipient Agreement and Grant Allocation
Agreement approved in late 2004. The total principal loan amount would remain limited to
$850,000 at any point in time.
This Amendment also provides that loan proceeds may only be used for the purposes of paying
fees and authorized expenses of a project manager, legal counsel, the remainder of the EIR
consultant charges, etc. There is also limitation to clarify that specific Project-related tasks with
regard to the North Lake Project only will be funded directly by Valley and those for the South
Lake only directly by the City. If the North Lake Project moves forward, Valley will be
responsible for the cost of acquisition, demolition, relocation, and construction, with the IPA's
costs limited to routine administrative expenses.
In effect, this Amendment will allow the City to re-loan funds to the JPA as the IPA's loan
balance is paid down through the receipt of grant funds.
Financial Impact
Federal grants earmarked to date for this project are summarized as follows:
Grant
FY 2003 earmark
FY 2004 earmark
FY 2005 earmark
Totals
Federal Grant
$ 447,100
482, I 00
450.000
$1,379,200
Matching Funds
30,000*
394,446**
368.181**
$ 792,627
Total Grant & Match
$ 477,100
876,546
818.181
$ 2,171,827
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, *In-kind match
"Cash match to be provided by Valley, pursuant to the Sub-Recipient Agreement
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A Sub-Recipient Agreement between the City and the lPA provides that federal grant funds wiII
be used to repay a portion of the lP A's loans from the City and Valley. To date, the FY 2003
earmark has been received, and the $447,100 in grant proceeds was used to repay the City and
Valley each $223,550.
On a go-forward basis, the Grant Allocation Agreement between the City and Valley provides
that the City (as the EPA grantee for the FY 04 and FY 05 grants) will process all of the
associated reimbursements for Valley, with Valley being responsible for compliance with grant
assurances and to provide all local matching funds. In return, Valley will pay the City's General
Fund an amount equal to one half of these reimbursements. Both the City and Valley will
execute Instruments of Forbearance to further reduce the remaining amounts due under their
loans to the lPA.
Assuming that all grant funds allocated are eventually received, the amount repaid to the City
would total $689,600, which equals 50% of the grant allocations. If none of these repayment
amounts were re-loaned to the lPA, the lPA's remaining debt to the City would be $160,400. If
all repayments are eventually re-Ioaned to the lPA, the lPA's debt to the City would be
$850,000. At this time, the eventual cost to the City remains unknown, but the City's exposure
would be capped at $850,000.
Staff will also continue to pursue reimbursement of the City's costs through future federal grant
funds.
Recommendation
Adopt resolution.
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RESOLUTION NO.
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE
CITY OF SAN BERNARDINO APPROVING AMENDMENT NO. 2 TO
THAT CERTAIN LOAN AGREEMENT BY AND AMONG THE CITY OF
SAN BERNARDINO, THE SAN BERNARDINO VALLEY MUNICIPAL
WATER DISTRICT, AND THE SAN BERNARDINO REGIONAL WATER
RESOURCES AUTHORITY
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WHEREAS, the City of San Bernardino, California (the "City"), is a charter city, duly
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organized and existing pursuant to the provisions of the Constitution of the State of California;
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and
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WHEREAS, the City, the San Bernardino Valley Municipal Water District (the
"District") and the San Bernardino Regional Water Resources Authority (the "Authority")
heretofore entered into that certain 2001 Loan Agreement dated as of October 1, 2001 (the
"Loan Agreement"), pursuant to which each of the City and the District agreed to loan to the
Authority an amount not to exceed Six Hundred Thousand Dollars ($600,000.00) for the
purposes of paying the fees and authorized expenses of the Initial Consultant; and
WHEREAS, the City, the District and the Authority heretofore entered into that certain
Amendment No. I to 200 I Loan Agreement dated as of October 21, 2002, pursuant to which
each of the City and the District agreed to loan to the Authority an amount not to exceed an
additional Two Hundred Fifty Thousand Dollars ($250,000.00) for the purposes of paying the
fees and authorized expenses of the Initial Consultant and the next phase in the development
and implementation of the Project as redefined by the Authority, to wit: the preparation of an
Environmental Impact Report ("EIR") in accordance with the California Environmental Quality
Act, as amended and the Guidelines established thereunder; and
WHEREAS, the Authority retained the services of a firm to assist the Authority in the
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preparation of an EIR (the "EIR Consultant"); and
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WHEREAS, upon repayment, in whole or in part, and from time-to-time of the amounts
owed by the Authority to the City and the District, the City and District hereby commit to re-
loan additional funds attributable to repayments received from such appropriate federal grant
funds only, on an equal basis, to the Authority, so long as the total principal amount as so
loaned and outstanding at anyone time, plus any remaining balance so owed to City and
District by the Authority never exceeds Eight Hundred Fifty Thousand Dollars ($850,000) in
principal at any point in time for either the City or District.
NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COMMON
COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS:
Section I. The Mayor and Common Council hereby approves Amendment No. 2
attached hereto as Exhibit "A". The Mayor of the City of San Bernardino is hereby authorized
and directed to execute Amendment No.2, together with such technical and conforming
13 changes as may be approved by the City Attorney.
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4831-1871-7440.1 -2-
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Council Members:
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ESTRADA
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C) LONGVILLE
14 MCGINNIS
15 DERRY
16 KELLEY
17 JOHNSON
18 MC CAMMACK
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RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN
BERNARDINO APPROVING AMENDMENT NO.2 TO THAT CERTAIN LOAN
AGREEMENT BY AND AMONG THE CITY OF SAN BERNARDINO, THE SAN
BERNARDINO VALLEY MUNICIPAL WATER DISTRICT, AND THE SAN
BERNARDINO REGIONAL WATER RESOURCES AUTHORITY
Section 2.
This Resolution shall take effect upon its adoption and execution in the
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I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and
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Common Council of the City of San Bernardino at a
meeting thereof, held on the
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day of
, 2005, by the following vote to wit:
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Ayes
Nays
Abstain
Absent
Rachel G. Clark, City Clerk
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The foregoing resolution is hereby approved this
day of
,2005.
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Judith Valles, Mayor
City of San Bernardino
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Approved as to form and Legal Content:
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By:
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City Attorney
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AUTHORITY
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San BemardiIlo Regional Water Resource Authority
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By: /~ ' ~...t/
/ dith Valles
( resident
(SEAL)
ATTEST:
By:
Secretary
APPROVED AS TO FORM:
By:
Authority Counsel
4837-09 J 9-6800, I
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ORIGINAL
AMENDMENT NO.2 TO
2001 LOAN AGREEMENT
(City of San Bernardino and the San Bernardino Valley Municipal Water District)
THIS AMENDMENT NO.2 is entered into this _ day of , 2005,
by and among the City of San Bernardino, a California charter city (the "City"), the San
Bernardino Valley Municipal Water District, a public water district organized under the laws of
the State of California (the "District"), and the San Bernardino Regional Water Resources
Authority, a joint powers authority organized pursuant to California Government Code Section
6500, et seQ. (the "Authority").
WHEREAS, the Authority was organized for the purpose of detennining the most
beneficial method of alleviating high ground water problems existing in the City; and
WHEREAS, to accomplish its goals and objectives, the Authority is conducting a
water resource and storage project fonnerly known as the San Bernardino Vision 20/20 Project
which is now defined as the project described in the current EIR (as defined below) as the North
Lake Project and the South Lake Project (collectively, the "Project"); and
WHEREAS, the Authority initially retained Ehrenkrantz, Eckstut & Kuhn
Architects PC (the "Initial Consultant") to assist in the development and implementation of the
Project as initially described; and
WHEREAS, the City, the District and the Authority heretofore entered into that
certain 2001 Loan Agreement dated as of October 1, 2001 (the "Loan Agreement"), pursuant to
which each of the City and the District agreed to loan to the Authority separate amounts not to
exceed Six Hundred Thousand Dollars ($600,000.00) for each of the City and the District for the
purposes of paying the fees and authorized expenses of the Initial Consultant; and
WHEREAS, the City, the District and the Authority heretofore entered into that
certain Amendment No. 1 to 2001 Loan Agreement dated as of October 21, 2002, pursuant to
which each of the City and the District agreed to loan to the Authority separate additional
amounts not to exceed an additional Two Hundred Fifty Thousand Dollars ($250,000.00) for
--- each of the City and the District for the purposes of paying the fees and authorized expenses of
the Initial Consultant and RBF Consultants (the "Consultants") for the next phase in the
development and implementation of the Project as redefined by the Authority, to wit: the
preparation of an Environmental Impact Report ("EIR") in accordance with the California
Environmental Quality Act, as amended and the Guidelines established thereunder; and
WHEREAS, upon repayment, in whole or in part, and from time-to-time of the
amounts owed by the Authority to the City and the District, the City and District hereby commit
to re-loan, additional funds attributable to repayments received from such appropriate federal
grant funds only, on an equal basis, to the Authority, so long as the total principal amount as so
\ loaned and outstanding at anyone time, plus any remaining balance so owed to City and District
4837-0919-6800, I
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by the Authority, never exceeds Eight Hundred Fifty Thousand Dollars ($850,000) in principal at
any point in time for either the City or District.
NOW, THEREFORE, in consideration of the premises and such other good and
valuable consideration, receipt of which is acknowledged by the parties, the parties hereto agree
as follows:
Section 1. Except as hereby amended, the Loan Agreement, as amended by
Amendment No.1, is in all respects ratified and confirmed and all of the terms, provisions and
conditions thereof shall be and remain in full force and effect.
Section 2. Except as otherwise provided herein, all terms not otherwise
defined in this Amendment No. 2 shall have the same meanings in this Amendment No. 2 as
those terms are given in the Loan Agreement, as previously amended.
Section 3. Paragraph numbered 1 of the Loan Agreement is amended by
adding the following at the end of said Paragraph:
"Upon repayment, in whole or in part, and from time-to-time of the
outstanding Eight Hundred Fifty Thousand Dollars ($850,000)
owed by the Authority to each the City and District, the City and
District commit to re-loan additional funds which are received as
loan repayments from the Authority attributable to appropriate
federal grant funds only on an equal basis to the Authority upon
receipt of the Authority's written request for such subsequent loan,
provided that the total principal amount as so loaned by each of the
City and the District, plus any remaining principal balance so owed
to the City and District by the Authority, never exceeds Eight
Hundred Fifty Thousand Dollars ($850,000) at any point in time,
for either the City or District. The President of the Authority shall
be hereby authorized to act for and on behalf of the Authority to
request in writing such additional loan of funds from the City and
the District in such amounts and subject to the requirements as set
forth above."
Section 4. Paragraph numbered 2 of the Loan Agreement is hereby amended
in its entirety to read as follows:
"2. Use of City/District Loan. The Authority shall use the
City/District Loan proceeds solely for the purposes of paying fees
and other routine expenses associated with the normal operations
and administrative activities of the Authority, such as costs of the
project manager, legal counsel, the remaining invoices of the
Consultant related to the ElR and for suc4 other fees and other
necessary and normal expenses reasonably incurred by the
C) Authority related to the Project. It is understood that future
4837-0919-6800.1 2
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specific Project-related tasks with respect to (i) the North Lake
Project only will be funded directly by the District, and (ii) the
South Lake Project only will be funded directly by the City,
including, but not limited to, relocation, planning, NEP A analysis,
property acquisition, and other activities associated with the
planning, design and construction of the North Lake Project and
the South Lake Project, respectively."
Section 5. This Amendment No.2 may be executed in counterparts, each of
which shall be an original, and all of which shall constitute but one and the same instrument.
4837-0919-6800.1
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IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment
No.2 as of the date first above written.
CITY
City of San.Bernardino
ATTEST:
By: ""fit {{t:-;Z/
J~~h Valles
(M(
By:
City Clerk
APPROVED AS TO FORM
AND LEGAL CONTENT:
By:
City Attorney
DISTRICT
San Bernardino Valley Municipal Water District
By:
C. Patrick Milligan
President
ATTEST:
By:
Secretary
4837-0919-6800 I
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