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Home My WebLink About55-Mayor's Office ~';~...fOF SAN BERNARDIN~ - REQ~ST FOR COUNCIL AtTION I From: Mayor W.R. lIoloanb REC'D.-ADi;;!1.0FSllbject: PAYMENl' OF CXlS'l'S FOR WATER SYBT1!K IN m:nmNN HEIGHTS Dept: Office of the Mayor April 20, 1990 ;~-?J tifB 2~; f~, .:. ~ r . ,;; '~. L ,_, Date: 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 REOUIREMENTS: Amount: $399,168 Source: (Acct. No.! N/A IAcct. Descriotionl N/A Finance: Council Notes: ..c ""II:" Agenda Item No 5S . . - _.- --~,.._, . cl~f OF SAN BERNARDIN~ - REQ~ST FOR COUNCIL AtTION STAFF REPORT In 1984, the Ccnm::ln COIlnCil requested the MJni.cipal Water Board to acquire the private water system which was servin;J the DelInann Heights area. 'Ihe reason for the COIlnCil's request was poor quality of water service and the seriously deteriorated COIXlition of the water mains and related system infrastructure. At the tiJne the request was made, the City informally agreed with the Water Department to pay the acquisition cost cut of :future Camamity Devel~ent Bl=k Grant (<::l)a;) films. '1he water system was acquired through eminent ck"."in in which the East Valley Water District also participated by corxiemnin;J the Southern Califomia Water System in the Highland area. '1he C01'KienU1ation suit has been caupleted and the acquisition cost for the entire system is $5,465,000. '1he City's share of this cost is $399,268. 'lhi.s aIIDmlt can be retired aver a period of five (5) years at an interest rate of 7.5%. I have recently been advised that the City cannot ~'"'l-'Liate 0:111- numity Developnent films not yet authorized and for which no grant ~L""""el1t exists. It is appropriate, however, to allocate films annually for this pll'pOSE! if the project is, in fact, eligible for <::l)a; financial assistance. As such, it woold be awrcPI'iate for the City Administrator to consult with the Redevel'-P'""'Jt Aqercj Execu- tive Director and the Directors of Finarxle and Cnrmnni.ty Developnent in order to identify ,.appropriate fun:iin;J source. WRH/lab/3873 April 20, 1990 75.0264 "., 'r "" WATO DEPJO.TMENT CITY HAU 3llO N. "D" mm_ . PO. BOX 710 924l1Z SAN BERNARDINO, CALIFORNIA (714) 384-5141 "' ) . lOUt[) OF ~l COMMISSIONERS .......'" MAlGAlfT H. CHANDlfR COMMISSI()lot!IS IOIUT liVENS fMlUAGMCIA JAMES H. UIAP. HAIOt.D W. WlUIS ~a. ."':"'''':'. ... "'- ~ E' ~ . . . ~. 1tu ot." ttflRlT I. WESSEL QNlIAl~. JOSE," F. 5ItJ5KAL 0tIK'IDL ENQNfUIHC.- ~"""","HN<E IRNAIDC. mm D1uOot. ADMINlSTM1'l()H '~HANCI DIWlt L """"'" DwtrCJOl. W.QU IllcLAMAil'ION January 9, 1990 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 California Water Company's Highland and De1mann Water Systems. The negotiated purchase price of the water systems are as follows: ACQuisition of Water Systems Reimburse.So. Ca1. 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 80~ East Valley and 20~ 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 87~ East Valley and 13~ Water Department. This allocation is based upon the proportionate value .' . . 'r" '-' 1'"'\ -....I r""'l -" . . Skip Wl1son January 9, 1990 Palle 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 District) for Highland - Delmann Heillhts Quality Water Authority", dated February, 1986. The basis of the appraisal is Depreciated Reproduction Cost Value. The Water Department is desirous of borrowing from East Valley Water District, a portion of our allocated costs, as we have previously discussed. East Valley issued Certificates of Participation for the aCQuisition of this water system, and has expressed that funds would be available to the Water Department. Based upon information presented above, below is a summary of the cost allocation and proposed terms and conditions of a loan. Cost Allocation (Exhi bi t "A") Total Purchase Price . . 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 its share of the total cost of $732,680.98 leaving a balance to finance of $379,867.79. Financing: 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 r" V /'1 .....1 ._'\ Skip Wilson January 9, 1990 Page 3 San Bernardino Water Department portion of total issue. . $399,168 Net Proceeds Cost of Issuance $379,868 19.300 $399,168 Proposed terms of the loan: Interest Rate Period Start Date Payments 7. 2l\ 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 - . . .c C I T Y 0)-.- SAN B OR N A R D MUNICIPAL WATER DEPARTMENT INTEROFFICE MEMORANDUM I N 0 ~ ...,i TO: Neil Thomsen, Accounting Supervisor FROM: Bernard C. Kersey, Director, Administration & Finance SUBJECT: ACQUISITION OF SOUTHERN CALIFORNIA WATER COMPANY'S DELMANN 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 sixty (6~) equal monthly installments 0: $7,497.56. Flease issue a check on the accounts payable reglster of March 27. 1990. In the amount of $32,497.56 to East Valley Water Distrlct. Thereafter, a check ln the amount of $7,4?7.56 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. ~(!L~~ ~ernard C. Kersey / Director, Administration & Finance BCK:mka Attachment ~ tfP',<-:. . '- /--."., , "-" "-# J . ( East v~r;y Water District I'ROM1ssoa! BOTI . 374.168.00 March 15, 1990 San BeruardiDo lfun1c1pa1 Vater Deparment dtar date and for value received pr~.e. to pay to the laat Vallay Vater Di.trict, the sua of Theel! HUDdrad SevaDry-Four Thousand OIle Ihmdred SistY-E1&bt aDd 00/100 U 374,168.00 ). in lllWful aODeY of the United Statee. with intereet theceou froa date until paid at the rata of~ percent (I) per anaua, payable aa fo11_.: Sixty _nrhly pa~ot. of H ,497 .56 each. C_Dc:l11& OIl the 1st day of April 1990 aDd due on or before the 1st day of eac:b auhaeqUeDt aontb UDtll paid. Sbould clefault ha ucla 1D pay.eot of uzy lDatallaellt when clue. the whole _ of pr1nclpal IlIId butut cban becaaa :r-ediate1y due .... pa:rabla at tloa option of the holder of tbia note. Shoulcl 8uit be c_oced or _ attorDllJ' emp1o;reol to eDforce payment of this I1Ote. Die SaD Jeruardil10 1IuD1cipal Vater Depar~llt qreea to pa:r IJUda addltlODllI sua aa tbe court.." adJudJa n_ able as attorney'. faaa 10 said eult. Marcaret B. Chandler. PraaUallt Baalarel c. r;araey. Sec:retary ,