HomeMy WebLinkAbout9 Glenshire Land Sale Agenda Item # 9
TRUCKEE�4
DONNER
Public Utility District
ACTION
To: Board of Directors
From: Mary Chapman
Date: February 18, 2009
Subject: Consideration of the Application of Glenshire Land Sale Proceeds
to the Remaining Internal Loan from District Funds
1. WHY THIS MATTER IS BEFORE THE BOARD
The District has sold one of the two remaining Glenshire properties. This agenda item
is for the purpose of requesting that the Board use the land sale proceeds and other
Glenshire funds on deposit to pay off the remaining Glenshire internal loan from the
District's Land Sales Funds.
2. HISTORY
In 2002, the District acquired the Glenshire Mutual Water Company (GMWC) and its
customers. In order to connect the GMWC pipelines and customers to the District's
system, capital improvements had to be completed. These projects included pipeline
extensions and replacements, pumping capacity increase at the District's Glenshire
Drive Well, well abandonment and other system upgrades. The GMWC customers
agreed to reimburse the District for these costs.
The GMWC transferred all of its assets to the Truckee Donner PUD. Included in the
asset transfer was cash and land. Most of the land has been sold. The cash and land
sales proceeds have been used to offset costs incurred by the District to install and
upgrade capital assets. The District also financed a portion of the upgrade cost with
both a 15 year external loan in the amount of$1,740,000 and an internal loan. To pay
off the external loan, the Glenshire customers were assessed a $10.75 surcharge on
their monthly water bills. Prior to the application of the recent land sale proceeds
received, the internal loan balance was $174,921.29.
Attached is a recap of the financial activity from 2002 to present.
3. NEW INFORMATION
In January, 2009 the District received $141,436.75 for the sale of the south portion of
the Glenshire Drive property to the Town of Truckee. After applying the land sale
proceeds of $141,436.75 toward the amount advanced by the District, the net amount
owed to the District is $33,484.54.
To date, we have collected $1,189,953.57 in monthly surcharges of $10.75. We have
paid $1,042,412.25 in principal and interest payments on the external loan. The
balance in the Surcharge Fund is $147,541.78. We are proposing that the Board
authorize the payoff of the $33,484.54 internal loan from the Surcharge Fund. This
will still leave a Surcharge Fund balance of $114,056.78. The principal balance of the
external loan is currently $1,170,996.28 and is scheduled to be paid off in 2017.
The appraised value of the remaining Glenshire parcel is $520,000. Once this parcel
sells, we will bring options back to the Board for consideration. At that time, we will
discuss:
1) Apply funds to lower payments
2) Apply funds to reduce term
There may be other alternatives that the Board would like to consider.
4. FISCAL IMPACT
The proposed action would eliminate the internal loan between the Glenshire
customers for water system improvement projects and the District's Land Sales Fund.
5. RECOMMENDATION
Approve the following:
1) Authorize staff to apply the Glenshire land sale proceeds in the amount of
$141,436.75 to the internal loan from the District's Land Sales Fund.
2) Authorize staff to transfer $33,484.54 from the Surcharge account to pay off the
balance owed to the District's Land Sales Fund.
Mary Charwan U Michael D. Holley
Administrative Services Manager General Manager
GLENSHIRE ACQUISITION AND EXPENDITURE RECAP: Through 1/13/2009 Updated 2/6/09
Part 1 ACQUISITION AND PROJECT COSTS
Plus:
Credit for cash and equipment received from Glenshire $907,648.40
Credit for land sales - Manchester Drive, Somerset Drive parcels, Glenshire Dr-South Side 345,395.97
Credit for use of Glenshire property for storage through 5/31/07 59,750.00
Subtotal cash and credits $1,312,794.37
Less:
Fixed charges for accruals and projects defined in contract between GMWC & District ($571,000.00)
Charges for additional projects necessary to connect to District water system (2,483,266.16)
Subtotal project costs ($3,054,266.16)
Total cash and credits less project costs ($1,741,471.79)
Plus:
Loan proceeds 1,740,000.00
Borrowed from District's Land Sales Fund ($1,471.79)
Less:
Interest on internal loans from District's Land Sales Fund 2004 through 1/13/09 (32,012.75)
Total due to District ($33,484.54)
Part 2 THE SURCHARGE
Plus:
Monies received from $10.75 per month billing surcharge since 2002 plus interest earnings $1,189,953.57
Less:
Principal and interest payments on $1,740,000 loan through 2/11/09 (1,042,412.25)
Balance in surcharge funds restricted account $147,541.32
Net difference between amount owed to District less balance in Glenshire restricted $114,056.78
fund (Part 1 total less Part 2 total)
Part 3 THE LOAN
Principal balance on Municipal Services Loan #1552 for$1,740,000 at 2/11/08 $1,170,996.28
(Loan taken out in 11/2002 -5.11% - 15 years - pays off in 2017)
Part 4 CURRENT STATUS
Total amount owed on Glenshire acquisition as of 2/06109 ($114,056.78#2 above less $1,056,939.50
$1,170,996.28#3 above)