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Home My WebLink About47-Mayor's Office - - . . ;ITV OF SAN BERCARDINO - REQUESTOOR COUNCIL ACTION From: Mayor W.R. Holcanb ? E STJ. - ':.C;; H. OF Sllbject: PAYMENl' OF <DSTS :roR 1iM'ER SYSTEM IN DEIM1lNN HEIGIrrs Date: Office of the Mayor April 20, 1990 ._<:.'-:. t :".-, .1: u !': ",,.. ") ti:i\ {...: :. .:'."-' Dept: Synopsis of Previous Council action: None. Recommended motion: That the City Administrator be directed to identify appropriate funding sources for payment of the City's share of incorporating the Delmann Heights Water service facilities into the City's water system. - , Phone: 5133 Ward: 6 . Supporting data attached: FUNDING REQUIREMENTS: Amount: $399,168 Source: (Acct. No.! NjA (Acct. DescriPtion) NIA Finance: Council Notes: Zl7 . CIT-t OF SAN BERLCARDINO - REQUEST ~R COUNCIL ACTION STAFF REPORT In 1984, the u....,L>l. Council requested the MUnicipal Water Board to acquire the private water system which was servinJ the Delmarm Heights area. '!he reason for the Council's request was poor quality of water service am the seriously deteriorated condition of the water mains am related system infrastructure. At the tine the request was made, the City infoDl1ally agreed with the Water Department to pay the acquisition cost out of future Camlmity Devel~""Jt Block Grant (CDOO) fums. '!he water system was acquired through eminent rl""", i n in which the East Valley Water District also participated by COI'Xiemnin:J the Southern Califomia Water System in the Highlam area. '!he con:lenU1ation suit has been canp1eted am the acquisition cost for the entire system is $5,465,000. '!he city's share of this cost is $399,268. 'Ibis anv::JUIrt; can be retired CNer a period of five (5) years at an interest rate of 7.5%. I have recently been advised that the city cannot aJ::PrOPriate Can- m.mi.ty Develc:pnent fums not yet authorized am for which no grant agreement exists. It is appropriate, however, to allocate fums annually for this p.u:pose if the project is, in fact, eligible for COB:; financial assistance. As such, it 1oIOUld be aw.<~iate for the City Administrator to consult with the Redevel~""Jt ~ Execu- tive Director am the Directors of Finance am l"nmnnity Develc:pnent in order to identify /appropriate ~ sooroe. WRH/lab/3873 April 20, 1990 ,.ILn.,,,,,, . ,. " C WATER DEPART~~NT CITY HALL 300 N. "0" STRUT 92401 . PO. BOX 110 924112 SAN BERNARDINO, CALIFORNIA (714)384-5141 IIQ,UD Of Wt.T(1 COMMISSIONERS I'ItISlDfN'l MAlGAIlET H. CHANDUR . ~SSI()ool(15 IOIlIT~VENS (M1UA GAlICIA JAMES H. UlJJA HAIOLD W. W1LLlS a..''"".:.. ;:' ,- ~ "'. ... .... 'So :' ~ ,. , . ,. .fl'tJl: 'O~" HlUlIT" WESSEL ClNRAlMAHAClI JOSl....f.51'tJ5IW. tMIC1OI.INCfNIIIIN(;. ~....."""""" ........, C. ICEISEY Dluax.ADMINISTIAIlON .~OWOCI January 9, 1990 llUI\NI . NOO1ON D1IEClOl. wml ltaAMATlON Skip Wilson, Treasurer East Valley Water District P.O. Box 3427 San Bernardino, California 92413 RE: FINANCING & ACQUISITION OF SOUTHERN CALIFORNIA WATER COMPANY HIGHLAND-DELMANN HEIGHTS WATER QUALITY SUPPLY AUTHORITY Dear Skip; The City of San Bernardino, the Board of Water Commissioners of the City of San Bernardino, and East Valley Water District entered into a Joint Powers Agreement for the purpose of aCQuiring Southern Cal ifornia Water Company's Highland and Delmann Water Systems. The negotiated purchase price of the water systems are as follows: ACQuisition of Water Systems Reimburse So. Cal. Water for property taxes Total Cost $5,400,000 65.000 $5,465,000 Additionally, East Valley and the Water Department have paid all expenses for attorneys, engineers, appraisers, and expert witnesses since the inception of the transaction based upon a split of 80S East Valley and 20S Water Department. As of December 31, 1989, $171,007.52 has been expended for these services. The final allocation of costs was to be determined when the condemnation was finally settled. We have been meeting during the month of December to finalize the allocation of costs and the basis of allocation, and have determined the final allocation to be 87S East Valley and 13S Water Department. This allocation is based upon the proportionate value - - . , c ~ '-' Skip W; lson January 9, 1990 Page 2 of the Highland and Delmann Systems set forth on pages IV-26-28 of Krieger & Stewart's report entitled "Valuation of Southern California Water Company Highland and Delmann Water Systems (San Bernardino Valley D;strict) for H;ghland - Delmann Heights Quality Water Authority", dated February, 1986. The basis of the appraisal is Depreciated Reproduct;on Cost Value. The Water Department is des i rous of borrowi n9 f rom East Valley Water D;str;ct, a portion of our allocated costs, as we have prev;ously discussed. East Valley issued Certif;cates of Partic;pation for the acquis;t;on of this water system, and has expressed that funds would be ava;lable to the Water Department. Based upon information presented above, below is a summary of the cost allocation and proposed terms and cond;tions of a loan. Cost A11ocat;on (Exhibit "A") Total Purchase Pr;ce . . Expenses Total Cost as of 12-31-89 East Valley Allocation 87~ San Bernardino Water Dept. 13~ $5,465,000.00 171.007.52 $5,636,007.52 $4,903,326.54 $ 732,680.98 The San Bernardino Municipal Water Department has paid $352,813.19 through December 31, 1989 towards ;ts share of the total cost of $732,680.98 leav;ng a balance to finance of $379,867.79. F;nancing: East Valley issued $5,940,000 Certificates of Participation for the acquisition of the water system (ExhibitMBM). The determination of cost allocation is as follows: Total Issue Less: Cost of Insurance Net Proceeds $5,940,000 286.465 $5,653,535 San Bernardino Water Department portion of net proceeds. . . 6.72~ $5,653,535 divided by $379,868 ~ " - - . c .-." '-" . Skip Wilson January 9, 1990 Page 3 San Bernardino Water Department portion of total issue. . $399,168 Net Proceeds Cost of Issuance $319,868 19.300 $399, 168 Proposed terms of the loan: Interest Rate Period Start Date Payments 1.2" 5 years November 20, 1989 1st of Each Month Please advise if you agree with the information presented herein. Sincerely, r, tion & Finance BCK:tae pc: Herbert B. Wessel Neil Thomsen ~ '. . Ct: Y 0 F S A H B E R H ~ D MUNICIPAL WATER DEPAR~ INTEROFFICE MEMORANDUM I H 0 TO: Neil Thomsen, Accounting Supervisor FROM: Bernard C. Kersey, Director, Administration & Finance SUBJECT: ACQUISITION OF SOUTHERN CALIFORNIA WATER COMPANY'S DELHAHN SYSTEM DATE: March 22, 1990 COPIES: Joe Stejskal ---------------------------------------------------------------- ---------------------------------------------------------------- The Water Department entered into a promissory note with East Valley Water District for the remaining costs associated with the acquisition of the Delmann Heights System of Southern California Water Company's San Bernardino service area. A full accounting of the total acquisition costs and allocation of these costs are attached. Under the terms of the promissory note, we are to make a down payment of $25,000.00 towards the unfunded balance of $399,168.00, leaving a balance of $374,168.00. The balance will be paid in s~xty (60) equal monthly installments 0: $7,497.56. Please issue a check on the accounts payable reglster of March 27. 1930. ~n the amount of $32,497.56 to East Valley Water Distrlct. Thereafter, a check ln the amount of $7,497.56 is to be issued to East Valley Water District by the first of each subsequent month until palO. If there are any questions, please advise. d.~c~<'! Director, Administration & Finance BCK:mka Attachment - - - ~ c ,,;..""'- - . ( East v;J~y Water District I'IlOM1SSOIJ Jon . 374.168.00 March is. 1990 Sail BerDardiDO Municipal Vater Departaent after date alld for value recdved pr~.e. to pay to the EQt Valle,. Water Diltrlct. the _ of Three ltulIdred Seventy-Pour Thousand OIle Ihmdred $bty-E1abt lUId 00./100 (t 374.168.00 ). in bvful aOlley of the United States. vith interest ther_ h_ date unril paid at the rate of 7 oS percent (1) per allDUll. payable aa follav. : Suty BIOllthly paYld!uta of U .497 .56 each. co..ellcina 011 the lat day of Aprll 1990 and due on or before the 1st day of each aubaeQuent aoath uutil paid. Should default b. ucle ill pay.ent of UZf iIIatallagt well clue. the whole _ of prUle!pal aD4 iDeerut IhaU bacOM ~e41ae.l,. clue .... payable at tile opti_ of the holder of tbis note. Should suit be c_oc:ecl or all attorDeJ' employ- to enforce payment of this !lOte. Tbe SaD IerDar41llO JIIm1cfJal Vater Departeellt sare.. to pay .udl additioual __ a. tbe court aay adJudJe reu_ able.. attoruy'. fe.. ill .aU 811it. Haraarat B. Cbandler. rreaUellt lenaI'd C. Iter..,.. 8ecretatf ,