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HomeMy WebLinkAbout1989-02-21 Min - Board REGULAR MEETING February 21, 1989 The regular meeting of the Board of Directors of the Truckee Donner Public Utility District was called to order by President Maass at 7 : 08 P.M. in the TDPUD Board Room. ROLL CALL: Directors Aguera, Corbett, Sutton, White and Maass were present. EMPLOYEES PRESENT: Tom Buckhouse, Paul Colburn, Andy Hyde, Peter Holzmeister and Susan Craig. CONSULTANTS PRESENT: Terry Lowell and Counsel John Phelps. OTHERS PRESENT: Burt Burgess and Tony Rivara. BILLS FOR APPROVAL After reviewing the bills presented for consideration, Director White moved that they be approved for payment; seconded by Director Aguera. All Directors, aye, by voice vote. SO MOVED. PUBLIC INPUT There was no public input. CORRESPONDENCE Letter from Director Maass to Channel Director Corbett said he was present when Director Maass dictated the letter to Channel 3 regarding their tips to prevent pipes from freezing. Directors Aguera, Corbett, Sutton and White indicated their approval of the content of the letter. COMMITTEE REPORTS Finance Committee Director White informed the Board that the Finance Committee discussed the purchase of Farmers Home Administration notes, an item appearing later on the agenda. CONSIDERATION OF RESOLUTION AUTHORIZING CALL FOR BIDS FOR ANNUAL SUPPLY OF WIRE AND CABLE After consideration, Director Corbett moved, and Director White seconded, that the Board adopt Resolution No. 8905 authorizing a call for bids for the District's annual supply of wire and cable. ROLL CALL: all Directors, aye. SO RESOLVED. CONSIDERATION AND POSSIBLE ACTION REGARDING PURCHASE OF FARMERS HOME ADMINISTRATION LOANS 1 Finance Supervisor Colburn noted that the Farmers Home Administration offered the District an opportunity in July of 1987 to purchase its two loans for approximately $390, 000. They are once again offering the opportunity to purchase the loans at a discount. The amount of the discount will depend upon the source of funds used for the purchase. The approximate discount they are using in the tax exempt option is 8.92%; and 11.2% for non-tax exempt. This is a vast improvement, Mr. Colburn said, over the 7 .75% discount rate that was used in July 1987 . Given the District's present earnings of 8. 5% at LAIF and the discount rate of 11. 2% on the loans, it would appear that the loan purchase would be a financially sound option at this time. Funds to purchase the loans could be obtained from either another borrowing institution or from existing cash invested by the District. Mr. Colburn said he investigated four possible sources and none appear to have an option that would be cost effective. He summarized the water investments that could possibly be used for the loan purchase. All but the reserve funds are self imposed by the Board, so the Board could use these funds. They are considered a non tax-exempt source by FmHA, and the loans could be purchased for approximately $283 ,419. Mr. Colburn made several suggestions for purchasing the loans: Remove the restriction on some of the funds completely; use the Building Fund which was set up to help offset the debt service on . the new building. By paying off the FmHA loans, their average annual debt service could be applied towards the building debt service. Treat the transfer out of the restricted fund as a loan. The repayment would be the current debt service schedule. Unrestrict the interest earnings on these funds. In 1988 there was $123 , 334 of interest income that was associated with these funds that was restricted. If the Board decides to purchase these loans, Mr. Colburn said the purchase must be complete by March 9 or a 5% good faith deposit must be submitted, in which case the completion date of the purchase will be extended to May 9. After some discussion, Director Corbett moved that the Board authorize the District to commit to the purchase of its FmHA loans at the discount rate (approximately $283 , 419) and to borrow the funds proportionately from facilities fees, the building fund, reserve for future meters, Dart funds, pre-paid connection fees and the telemetry reserve. Pay back will include interest and be on a quarterly basis. Staff is to advise Farmers Home Administration and to draw up the appropriate resolution for consideration by the Board at the next regular meeting. The motion was seconded by Director Aguera. ROLL CALL: all Directors, aye, with the exception of Director Sutton, who voted "no. " SO MOVED. Director Sutton asked staff to provide her with copies of the resolutions establishing all the various restricted funds and the other documentation having to do with use of the funds. She also asked for a copy of the year-end payroll record for all employees, 2 which she requested several months previously. • DISCUSSION REGARDING DESIGNATION OF VISITOR PARKING AREA AT TDPUD The Chairman noted that there are times when customer parking in the District parking lot is not available. He said the entire parking situation needs to be reviewed and the problems resolved. After some discussion, the Board directed that a plan for visitor parking in the District lot be drawn up. DISCUSSION AND POSSIBLE DIRECTION OF DRAFT AUDIT OF HIRSCHDALE WATER SYSTEM CONSTRUCTION Terry Lowell gave a brief overview of the audit. He said the scope of service was to verify that no duplication of payments occurred as a result of contract change orders; that prevailing wage rates were paid by the contractor; that the selection of equipment and the rate paid on extra work were proper; that the materials installed were as required by the contract; that the purchase of materials was conducted properly. Mr. Lowell noted the various documents he reviewed and interviews he conducted during the course of the audit. He said that each change order was reviewed in light of the following criteria. Was the work described in the contract change order a change in the contract scope of work? Was the method of compensation in accordance with the contract? Was the amount of compensation that which results from applying the method of compensation? The effect on contract time. He went over each contract change order with the Board. All items reviewed, Mr. Lowell reported, were found to be in substantial compliance with the contract. He noted, however, that there are problems with the basic way the original contract is written. After some discussion, the Chairman directed that Director Sutton and Manager Holzmeister work with Terry Lowell to evaluate the Hirschdale water system construction contract change orders, determine that there were no duplications of work and formulate an appropriate recommendation. CLOSED SESSION The Board adjourned to closed session at 9 : 33 P.M. pursuant to Government Code Section 54956 (b) . 1 to discuss possible litigation with Mr. Dragos having to do with water damage. RETURN TO PUBLIC SESSION The meeting was returned to public session at 9:47 P.M. No action was taken or direction given. ADJOURNMENT 3 There being no further business before the Board, Director Aguera moved that the meeting be adjourned at 9:48 P.M. The motion was seconded by Director Corbett and passed unanimously. TRUCKEE DONNER PUBLIC UTILITY DISTRICT Jame A. Maass, Presidentf Prepared by-�l Susan M. Craig, Deputy District C erk smc • 4