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Home My WebLink About7 Bank Of New York Agenda Item # Memorandum To: Board of Directors From: Mary Chapman, Administrative Services Manager Date: February 20, 2004 SUBJECT: Consideration of appointing the Bank of New York Western Trust Company as the Fiscal Agent for purposes of administering the repayment of the State Revolving Fund loan for the Donner Lake water system improvements from the State of California, Department of Water Resources and establishing and maintaining a reserve fund. 1. WHY THIS ITEM IS BEFORE THE BOARD One of the steps that must be completed in order for the loan contract with the State of California Department of Water Resources to be completed is that the District must appoint a fiscal agent to perform certain duties relating to the repayment of the loan. The fiscal agent must also establish and maintain a reserve fund which is funded by the District. 2. HISTORY When the District entered into the safe drinking water loan with the State (Prop 55 loan), we were also required to appoint a fiscal agent, establish a separate checking account and establish a reserve fund account. The requirements for this new loan are the same, however, we must appoint an outside financial institution to serve as fiscal agent who will act as trustee for the funds. 3. NEW INFORMATION Attached is a copy of the FISCAL SERVICES AGREEMENT which must be executed by an authorized representative of the District, the appointed fiscal agent and a representative of the State. The fiscal agent acts as trustee for the loan repayments and performs other duties as outlined in the attached agreement. Basically, the fiscal agent receives principal and interest payments from the District and makes the principal and interest payments to the Department of Water Resources and receives and deposits periodic reserve fund payments. 4. RECOMMENDATION 1 recommend that the Board appoint the Bank of New York Western Trust Company to act as Fiscal Agent in accordance with the requirements of the Department of Water Resources SDW State Revolving Fund loan relating to the Donner Lake water system improvements. I further recommend that the Board authorize the board president to execute the FISCAL SERVICES AGREEMENT with the Department of Water Resources which is attached. State of California DEPARTMENT OF WATER RESOURCES The Resources Agency SOW State Revolving Fund FISCAL SERVICES AGREEMENT 1, This Agreement is entered into this date between the Truckee Donner Public Utility_Distriof hereafter referred to as Depositor, and Bank of New York Western Trust Company hereafter referred to as Fiscal Agent.The purpose of this Agreement is to assist Depositor in meeting the repayment provision of the Safe Drinking Water State Revolving Fund Loan Contract number _between Depositor and the State of California, Department of Water Resources,hereafter referred to as Department. Said Loan Contract requires the Depositor to engage the services of a Fiscal Agent to assist in accumulating funds sufficient to repay principal and interest to the Department. IMPORTANT_NOTICE TO FISCAL AGENT This constitutes written notice pursuant to Commercial Code Section 9302(1)(g)(if that the Department has a security interest in the deposit account which is the subject of this Agreement. Depositor has granted the security interest to the Department to secure performance of the obligations imposed by the Loan Contract between Depositor and the Department. 2. FIS_CAL AGENT agrees to act as Trustee for_loan repaymentfunds deposited and_perform___serv_ices and is authorized by Depositor to act,as follows: A. Upon opening the account, promptly send a copy of the signature card to the Department and thereafter send a year-end statement of the account balance until the loan is repaid in full to: Department of Water Resources Safe Drinking Water Office, Room 804 Post Office Box 942836 Sacramento, California 94236-0001 This signature card is to show Fiscal Agent authorization only for withdrawal. B. Receive semi-annual _,___(specify monthly, quarterly, etc.)remittances from Depositor as specified in paragraph 3B. below into an account established for purposes of this Agreement only. C. Assist and advise Depositor to take into consideration rates of return on funds deposited into the account in determining reserve deposits required by the Loan Contract and paragraph 3A, below. D. Debit this account and transmit loan principal and/or interest payments to the Department in accordance with the Terms of the Loan Contract summarized below(provided sufficient funds are in the account): Principal(estimate) $ 13 209 357 Interest Rate 2.34 Loan Repayment Term 20 First Semi-annual P&I Due Date July 1 2006 Interest Payments During Construction Variable -- Semi-annual P&I Payments(estimate) $415.408 Reserve Fund(estimate) $830 816 These terms and conditions may be subject to amendment as provided in the Loan Contract. E. Promptly notify the Department of any 30-day delinquency of remittances from Depositor. Notice shall be directed to the address stated above in number 2. F. Promptly notify the Department if Reserve Fund provided for in paragraph 3A, falls below or is not accumulating sufficiently to meet the required minimum at the time indicated. G. Release no funds from Depositor's account except as provided in subparagraph 2D. above without written consent of the Department. Signature authority for withdrawal of funds shall remain with the Fiscal Agent, not the Depositor. H. Upon request of the Department or Depositor, provide the Department with a full statement of Depositor's account and a copy of the signature card. 3. DEPOSITOR agrees to perform as follows: A. RESERVE FUND 1. Accumulate a Reserve Fund of two semiannual payments in the amount specified above in subparagraph 2D.to meet the conditions of Article B-4 _ _of the Loan Contract. Said Article requires accumulation of a Reserve Fund of two _ semi-annual loan payments during the first ten years of the repayment period.At least half of the required Reserve Fund must be on deposit by the time the first 10 semi-annual payments are made.Once accumulated,the Reserve Fund must be maintained at that level until the loan is repaid in full. During the last year of the contract, all Reserve Funds must be applied to the loan payment. DWR 4280(Rev.4100)Page One 2. Deposit an average of$ ,per _ (frequency)beginning _..(date)into an account established with the Fiscal Agent for purposes of this Agreement, in amounts necessary to meet the Reserve Fund requirement. Depositor may maintain the Reserve Fund in a separate, higher yield account(s)subject to the same withdrawal conditions as other funds on deposit under this Agreement. 3. The Reserve Fund may be established in lump sum at the Depositor's option. If electing this option, Depositor will make a deposit of$__,with the Fiscal Agent by (date). Terms of such deposit account are as follow: _... ... B. PRINCIPAL AND INTEREST 1. Deposit an average of$ _„....._ per (frequency)beginning _ (date)in order to meet the semi-annual principal and/or interest payments due to the Department under the Loan Contract. This amount may be adjusted to reflect changes in terms of the Loan Contract agreed to by the parties thereto. 2. Compensate Fiscal Agent for services as follows: Bank of New York Western Trust Company fiscal agent fees $1,500.00 3. Promptly furnish Fiscal Agent with copies of any amendments to the Loan Contract, especially any changes In repayment terms, principal amount,or interest rate. 4. This Agreement shall terminate when the loan and interest are repaid to the Department in full or upon 90 days written notice of termination by either party transmitted to the other party. Fiscal Agent and Depositor shall notify the Department immediately upon receipt of issuance of 90-day notice of termination.At the time of termination any remaining balance not owed to the Department pursuant to the Loan Contract, less any accrued service charges,shall be returned to the Depositor. 5. This Agreement shall not be amended without written approval of the Department. 6. The special Account(s)established for purposes of this Agreement is/are identified as follows: 7. In performing its services hereunder,the Fiscal Agent shall incur no liability to the Department for the funds deposited hereunder or the amount of any payment to be made by Depositor to the Department provided the actions of the Fiscal Agent are taken in good faith. _Truckee Donner Public Utility District Bank of New York Western Trust Company Depositor Fiscal Agent _Post Office Box 309 ____ 700 South Flower Street Suite 200 Mailing Address Mailing Address Truckee California _96160 _ Los An eles_, California 90017 City State Zip Code City State Zip Code Phone No.(,530)587-3896_. Phone No.(213)630-6243 __ By__,,, _ - Signature Signature James A. Maass _ Hugh L.Black Print Name Print Name President Board of Directors Assistant Vice President Corporate Trust Title Administration __ ______ Title Approved: STATE OF CALIFORNIA DEPARTMENT OF WATER RESOURCES BY_...___- __.._..- Signature Title Chief _ __ Safe Drinking DWR 4280(Rev.4100)Page Two