HomeMy WebLinkAbout04-08-14 Board Packet 1
OTAY WATER DISTRICT
BOARD OF DIRECTORS MEETING
DISTRICT BOARDROOM
2554 SWEETWATER SPRINGS BOULEVARD SPRING VALLEY, CALIFORNIA
TUESDAY
April 8, 2014
3:30 P.M.
AGENDA
1. ROLL CALL
2. PLEDGE OF ALLEGIANCE
3. APPROVAL OF AGENDA
4. APPROVE THE MINUTES OF THE REGULAR MEETING OF MARCH 11, 2014
5. PUBLIC PARTICIPATION – OPPORTUNITY FOR MEMBERS OF THE PUBLIC
TO SPEAK TO THE BOARD ON ANY SUBJECT MATTER WITHIN THE BOARD'S JURISDICTION BUT NOT AN ITEM ON TODAY'S AGENDA
CONSENT CALENDAR
6. ITEMS TO BE ACTED UPON WITHOUT DISCUSSION, UNLESS A REQUEST IS MADE BY A MEMBER OF THE BOARD OR THE PUBLIC TO DISCUSS A
PARTICULAR ITEM:
a) AWARD A CONTRACT TO LAYFIELD ENVIRONMENTAL SYSTEMS CORPORATION FOR THE MAINTENANCE OF FLOATING COVERS IN AN AMOUNT NOT-TO-EXCEED $108,800. THE CONTRACT WILL BE
FOR ONE YEAR, WITH FOUR (4) ONE-YEAR OPTIONS FOR RENEW-
AL AT THE DISTRICT’S DISCRETION
b) ADOPT RESOLUTION NO. 4231 DESIGNATING SPECIFIC STAFF PO-SITIONS TO BE AUTHORIZED AS AGENTS TO DEAL WITH THE
STATE OF CALIFORNIA, OFFICE OF EMERGENCY SERVICES, ON
THE DISTRICT’S BEHALF IN ALL MATTERS PERTAINING TO DISAS-
TER ASSISTANCE
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c) ADOPT RESOLUTION NO. 4228, AUTHORIZING THE GENERAL MAN-AGER TO ENTER INTO A REMARKETING AGREEMENT WITH
MITSUBISHI UFJ SECURITIES (USA), INC. TO ACT AS THE DIS-
TRICT’S REMARKETING AGENT FOR ITS 1996 VARIABLE RATE
CERTIFICATES OF PARTICIPATION
d) APPROVE CHANGE ORDER NO. 1 TO THE EXISTING CONTRACT
WITH AECOM TECHNICAL SERVICES, INC. FOR THE OTAY MESA
DESALINATION CONVEYANCE AND DISINFECTION SYSTEM PRO-
JECT IN AN AMOUNT NOT-TO-EXCEED $136,409; AND EXTEND THE
CONTRACT COMPLETION DATE TO JUNE 30, 2018
e) AWARD A CONSULTING SERVICES CONTRACT TO SILVA SILVA IN-
TERNATIONAL LLC (SSI) FOR PROFESSIONAL CONSULTING WORK
RELATED TO THE OTAY MESA DESALINATION CONVEYANCE AND
DISINFECTION SYSTEM PROJECT IN AN AMOUNT NOT-TO-EXCEED $115,000 FOR FISCAL YEARS 2014, 2015, AND 2016 (ENDING JUNE
30, 2016)
ACTION ITEMS
7. FINANCE, ADMINISTRATION AND INFORMATION TECHNOLOGY
a) ADOPT RESOLUTION NO. 4232 APPROVING THE FORM OF DOCU-
MENTS REQUIRED FOR EXTENDING THE LETTER OF CREDIT WITH
UNION BANK FOR THE 1996 VARIABLE RATE CERTIFICATES OF PARTICIPATION; AND AUTHORIZE THE GENERAL MANAGER TO
EXECUTE THE RELATED FIRST AMENDMENT TO THE REIMBURSE-
MENT AGREEMENT AND THE UNION BANK FEE LETTER [KOEPPEN]
8. BOARD
a) DISCUSSION OF THE 2014 BOARD MEETING CALENDAR
INFORMATIONAL ITEMS 9. THE FOLLOWING ITEMS ARE PROVIDED TO THE BOARD FOR INFORMA-
TIONAL PURPOSES ONLY. NO ACTION IS REQUIRED ON THE FOLLOWING
AGENDA ITEMS:
a) REPORT ON DIRECTORS EXPENSES FOR THE 2ND QUARTER OF FY 2014 (BENHAM)
b) INFORMATIONAL OVERVIEW REPORT ON THE ROSARITO DESALI-
NATION PLANT PROJECT (KENNEDY)
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c) FY 2013-2014 MID-YEAR STRATEGIC PLAN UPDATE REPORT (STE-VENS)
REPORTS
10. GENERAL MANAGER’S REPORT
a) SAN DIEGO COUNTY WATER AUTHORITY UPDATE
11. DIRECTORS' REPORTS/REQUESTS
12. PRESIDENT’S REPORT/REQUESTS
RECESS TO CLOSED SESSION
13. CLOSED SESSION
a) CONFERENCE WITH LEGAL COUNSEL – ANTICIPATED LITIGATION
[GOVERNMENT CODE §54956.9]
2 CASES
14. RETURN TO OPEN SESSION
15. REPORT ON ANY ACTIONS TAKEN IN CLOSED SESSION. THE BOARD
MAY ALSO TAKE ACTION ON ANY ITEMS POSTED IN CLOSED SESSION
16. BOARD PACKET ORIENTATION (SEGURA)
17. ADJOURNMENT
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All items appearing on this agenda, whether or not expressly listed for action, may be
deliberated and may be subject to action by the Board.
The Agenda, and any attachments containing written information, are available at the
District’s website at www.otaywater.gov. Written changes to any items to be considered
at the open meeting, or to any attachments, will be posted on the District’s website.
Copies of the Agenda and all attachments are also available through the District Secretary by contacting her at (619) 670-2280.
If you have any disability which would require accommodation in order to enable you to participate in this meeting, please call the District Secretary at (619) 670-2280 at least 24 hours prior to the meeting.
Certification of Posting
I certify that on April 4, 2014, I posted a copy of the foregoing agenda near the
regular meeting place of the Board of Directors of Otay Water District, said time being at
least 72 hours in advance of the regular meeting of the Board of Directors (Government
Code Section §54954.2).
Executed at Spring Valley, California on April 4, 2014.
/s/ Susan Cruz, District Secretary
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MINUTES OF THE BOARD OF DIRECTORS MEETING OF THE
OTAY WATER DISTRICT
March 11, 2014
1. The meeting was called to order by President Lopez at 3:35 p.m.
2. ROLL CALL
Directors Present: Gonzalez, Croucher, Lopez, Robak, and Thompson
Directors Absent: None
Staff Present: General Manager Mark Watton, General Counsel Dan
Shinoff, Asst. GM German Alvarez, Chief of Engineering
Rod Posada, Chief Financial Officer Joe Beachem, Chief of Information Technology Geoff Stevens, Chief of
Administration Rom Sarno, Chief of Operations Pedro
Porras and District Secretary Susan Cruz and others per
attached list.
3. PLEDGE OF ALLEGIANCE
4. APPROVAL OF AGENDA
A motion was made by Director Gonzalez, and seconded by Director Thompson and carried with the following vote:
Ayes: Directors Gonzalez, Croucher, Lopez, Robak, and Thompson
Noes: None Abstain: None Absent: None
to approve the agenda.
5. APPROVE THE MINUTES OF THE REGULAR MEETING OF FEBRUARY 5, 2014
A motion was made by Director Thompson, seconded by Director Lopez and
carried with the following vote: Ayes: Directors Gonzalez, Croucher, Lopez, Robak, and Thompson
Noes: None
Abstain: None
Absent: None to approve the minutes of the regular meeting of February 5, 2014.
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6. OVERVIEW OF 2014 LEGISLATIVE SESSION (CHRIS FRAHM AND ROSANNA CARVACHO, BROWNSTEIN HYATT FARBER AND SCHRECK)
Mss. Chris Frahm and Rosanna Carvacho of Brownstein Hyatt Farber and
Schreck LLP attended the District’s meeting to provide an update on bills of
specific interest to the District and the activities that have occurred in Sacramento. Ms. Frahm indicated that former San Diego City Council member
Ms. Toni Atkins was officially elected as the next California Assembly Speaker,
which Ms. Frahm believes is an advantage to have a speaker who is familiar with
the needs and interests of San Diegans. It was also indicated that Mr. Kevin
Deleon, another San Diegan, represents the 22nd Senate District. He was elected as the next Pro Tem President of the Senate.
Ms. Frahm stated that there are ten (10) water bonds that are being monitored
and indicated that the 2014 Water Bond is $11.14 billion. As negotiations
continue for water bonds, it was noted that republicans are advocating more towards water storage projects, whereas the southern members are advocating
for southern local water supply development. Ms. Frahm stated that one of the
front runners in the Senate is the bill sponsored by Assemblymember Anthony
Rendon.
Ms. Frahm reported that drought legislation was just passed by the Governor,
which was introduced on March 3, 2014 and signed by March 8, 2014 in order to
expedite funding to help with the drought issues in California. She stated that
BHFS will research if any of the District’s projects are eligible to receive funding
from this fund.
Ms. Carvacho provided an update on AB 1331 by Assemblymember Rendon,
which the bill was amended from $6.5 billion to $8 billion due to the increase in
Water Storage Projects ($1.5 billion to 2.5 billion). There was also an increase in Regional Water Projects/Recycled Water ($1.5 billion to $2 billion). A Water Bond Comparison as of March 2014 was provided to the board. Also provided to
the board were a 2014 Tentative Legislative Calendar and a 27-page document
that listed all the bills that BHFS is monitoring.
Ms. Carvacho indicated that AB 145 by Assemblymember Perea did not pass, but technically is still alive as it is now in the Senate Committee on
Appropriations. The drinking water program was transferred from the
Department of Public Health (DPH) to the State Water Resources Control Board
(SWRCB). The Governor’s Administration has moved the program to the SWRCB administratively, but the move has not yet occurred statutorily. It is believed that this bill is important as it will allow the drinking water program to be
monitored under one entity as opposed to many entities where it can become
disjointed.
With regards to the drought legislation, Ms. Carvacho indicated that it ties into the California Water Action Plan where many items were quickly moved forward.
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Director Robak commented that BHFS’ 27-page handout to the board indicates a position (i.e. Spot and No Position) on several bills. He inquired if those positions
were recommendations of what the District’s position should be. Ms. Frahm
stated that BHFS’s role is not to make any recommendations, but to provide
legislation information to the District and receive any direction that the District
may have for BHFS. The goal is to monitor as many bills that may have an impact on the District. There are several bills that the District believes are
important to watch, such as the CA AB 145 (Drinking Water) by
Assemblymember Perea, CA SB 1447 (Bay Delta Conservation Plan) by
Assemblymember Fuller, CA SB 1250 (Safe, Clean and Reliable Drinking Water
Supply Act) by Assemblymember Hueso and the water bonds.
In response to a question from Director Thompson, General Manager Mark
Watton indicated that Senator Hueso’s bill from last year has already been
signed by the Governor. That bill was generated from the IPR and was created to
establish timelines on the Health Department.
Director Robak commented that the governor recently signed a drought
legislation that would allocate funds to help alleviate drought issues. He inquired
if the San Diego region would receive any of those funds. Ms. Frahm stated that
it would depend on what projects in San Diego would be eligible for funding. BHFS plans to get together with General Manager Watton to research if any of
the District’s projects are eligible to receive a portion of the funding.
7. PUBLIC PARTICIPATION – OPPORTUNITY FOR MEMBERS OF THE PUBLIC
TO SPEAK TO THE BOARD ON ANY SUBJECT MATTER WITHIN THE BOARD'S JURISDICTION BUT NOT AN ITEM ON TODAY'S AGENDA
No one wished to be heard.
8. CLOSED SESSION
The board recessed to closed session at 4:03 p.m. to discuss the following
matter:
a) CONFERENCE WITH LEGAL COUNSEL – ANTICIPATED LITIGATION [GOVERNMENT CODE §54956.9]
1 CASE
b) CONFERENCE WITH LEGAL COUNSEL – EXISTING LITIGATION [GOVERNMENT CODE §54956.9]
CITY OF CHULA VISTA; CITY OF EL CAJON, et. al. v. TRACY
SANDOVAL in her official capacity as San Diego County Auditor-Controller, et. al.; CASE NO. 34-2014-80001723-CU-WM-GDS
4
c) CONFERENCE WITH LABOR NEGOTIATORS [GOVERNMENT CODE §54957.6]
AGENCY DESIGNATED REPRESENTATIVES:
PRESIDENT LOPEZ AND DIRECTOR THOMPSON
EMPLOYEE ORGANIZATION:
OTAY WATER DISTRICT EMPLOYEES’ ASSOCIATION
AND
ALL REPRESENTED AND UNREPRESENTED PERSONNEL
INCLUDING MANAGEMENT AND CONFIDENTIAL EMPLOYEES
The board reconvened at 5:07 p.m. and the District’s General Counsel, Dan
Shinoff, reported that the board met in closed session and took no reportable actions.
CONSENT CALENDAR
9. ITEMS TO BE ACTED UPON WITHOUT DISCUSSION, UNLESS A REQUEST IS MADE BY A MEMBER OF THE BOARD OR THE PUBLIC TO DISCUSS A
PARTICULAR ITEM:
Upon a motion by Director Croucher, seconded by Director Thompson and
carried with the following vote:
Ayes: Directors Croucher, Gonzalez, Lopez, Robak, and Thompson
Noes: None
Abstain: None Absent: None
to approve the following consent calendar items:
a) APPROVE THE ELIMINATION OF THE COLLECTION OF BETTERMENT FEES FOR THE NORTH DISTRICT AND IMPROVEMENT DISTRICTS (ID) 9 AND 10; AND ADOPT ORDINANCE
NO. 541 AMENDING SECTION 0.02 A, DEFINITIONS; SECTION 25.03
G, H AND I, DEFINITIONS OF WATER CATEGORIES, WATER RATES,
CHARGES AND FEES; AND APPENDIX A OF THE DISTRICT’S CODE OF ORDINANCES TO REFLECT THESE CHANGES EFFECTIVE JANUARY 1, 2015
b) ADOPT ORDINANCE NO. 542 AMENDING SECTION 2.01, AUTHORITY
OF THE GENERAL MANAGER, OF THE DISTRICT’S CODE OF ORDINANCE WITH REGARD TO AMENDMENTS FOR THE LEASE OF DISTRICT REAL PROPERY AND/OR SPACE ON DISTRICT FACILITIES
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TO CELLULAR COMPANIES AND RELATED ENTITIES FOR TELECOMMUNICATIONS PURPOSES
ACTION ITEMS
10. ADMINISTRATION, FINANCE AND INFORMATION TECHNOLOGY
a) AUTHORIZE THE DISTRICT TO DECLARE A LEVEL I DROUGHT
WATCH
Customer Service Manager Alice Mendez-Schomer stated that staff is recommending that the board declare a Water Shortage Response Level 1,
Supply Watch Condition, which calls for voluntary conservation measure and
direct staff to continue to educate customers about the benefits of water
conservation through bill messaging and inserts, the customer newsletter, etc.
Please reference the Committee Action notes (Attachment A) attached to staff’s report for the details of Ms. Mendez-Schomer’s report.
General Manager Mark Watton provided several handouts to the board that
included a draft Press Release from the Otay Water District that will be mailed
upon approval by the board.
Upon a motion by Director Croucher, seconded by Director Gonzalez and carried
with the following vote:
Ayes: Directors Croucher, Gonzalez, Lopez, Robak, and Thompson Noes: None
Abstain: None
Absent: None
to approve the authorization for the District to declare a Level I Drought Watch.
11. BOARD
a) ADOPT RESOLUTION NOs. 4229 AND 4230 APPROVING THE REAPPOINTMENT OF MARK WATTON (SECOND SEAT) AND GARY CROUCHER (FIRST SEAT) AS THE DISTRICT’S REPRESENTATIVES
TO THE SAN DIEGO COUNTY WATER AUTHORITY’S BOARD OF
DIRECTORS
Upon a motion by Director Thompson, seconded by Director Gonzalez and carried with the following vote:
Ayes: Directors Croucher, Gonzalez, Lopez, Robak, and Thompson
Noes: None Abstain: None Absent: None
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to approve the adoption of Resolution Nos. 4229 and 4230, approving the reappointment of Mark Watton (Second Seat) and Gary Croucher (First Seat) as
the District’s representatives to the San Diego County Water Authority’s Board of
Directors.
b) DISCUSSION OF DRAFT FISCAL YEAR 2015-2017 STRATEGIC PLAN
Chief Information Officer Geoff Stevens provided a presentation to the board on
the progress of the development of the 2015-2017 District Strategic Plan. Mr.
Stevens stated that staff has been engaged in many activities in the drafting of
the strategic plan, specifically reviewing other Districts’ strategic plans and researching the current trends and key points in the industry. Staff also re-
evaluated the District’s mission and values and spent a significant amount of time
defining the District’s key challenge. Mr. Stevens’ presented a Strategy Map and
stated that the map was a useful tool in assisting staff in drafting the 2015-2017
District Strategic Plan. It was indicated that the District is considering adding an additional year to the Strategic Plan, Fiscal Years 2015-2018, depending on the
scope of the plan. Please reference the Committee Action notes (Attachment A)
attached to staffs’ report for further details of Mr. Stevens’ report.
This was an informational item and no action was taken by the board.
c) DISCUSSION OF THE 2014 BOARD MEETING CALENDAR
President Lopez and Director Thompson both indicated that they would not be
able to attend the April 2, 2014 board meeting. President Lopez inquired of the member of the if they would be available to attend the April meeting if it were
moved to April 8. All members of the board members indicated that they would
be available to meet with the exception of Director Thompson.
Upon a motion by President Lopez, seconded by Director Croucher and carried with the following vote:
Ayes: Directors Croucher, Gonzalez, Lopez, Robak, and Thompson
Noes: None Abstain: None Absent: None
to move the April board meeting to Tuesday, April 8, 2014.
INFORMATIONAL ITEMS
12. THE FOLLOWING ITEM IS PROVIDED TO THE BOARD FOR
INFORMATIONAL PURPOSES ONLY. NO ACTION IS REQUIRED ON THE
FOLLOWING AGENDA ITEM: a) FISCAL YEAR 2014 SECOND QUARTER CAPITAL IMPROVEMENT
PROGRAM REPORT
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Engineering Manager Dan Martin provided an update on the District’s second
quarter of FY 2014 Capital Improvement Program. He indicated that the FY
2014 budget is broken into 63 projects totaling $13.9 million. The overall
expenditures for the second quarter are $2.8 million which is approximately 20%
of the FY 2014 budget. Please reference the Committee Action notes (Attachment A) attached to staff’s report for the details of Mr. Martin’s report.
In response to several questions from Director Thompson, Engineering Manager
Dan Martin stated that the CIP expenditures are a little behind in the budgeted
forecast due to several projects such as the Rosarito Beach Desalination project, the Otay Interconnect Pipeline project, and sewer projects that involve the
acquisition of easements. Director Thompson requested that staff review the
annual history of the CIP Budget Forecast vs. Expenditures in recent years to
determine if actual expenditures are significantly below the budgeted target.
Director Thompson explained that this may lead to a discussion on budgeting for the CIP and opportunities to maximize interest earnings on unexpended funds
during the fiscal year. Director Thompson requested that staff bring the
information to the Board at a future meeting.
In response to Director Thompson’s comments, Chief Financial Officer Joe Beachem stated that the variance in projected spending has a minimal impact on
the interest income but agreed that as the interest rates increase this impact
would grow.
Director Croucher indicated that there are many challenges that affect the alignment of budgeted forecasts and actual expenditures, which has fluctuated
over the years. He indicated that sometimes there are projects where the
bidding process can be expedited, but then unanticipated problems, that are out
of the District’s control, can occur that result in delayed projects. REPORTS
13. GENERAL MANAGER’S REPORT
General Manager Watton presented information from his report that included the SDRMA Longevity Distribution, RFID Access Control, District Strategic Plan,
Budget Awards, and the Opening Ceremony of the Dorcas E. Utter Memorial
Butterfly Pavillion. Mr. Watton also discussed the 30-Inch, 980 Zone, Hunte
Parkway – Proctor Valley/Use Area and the 944-1R Recycled Water Pump Station Upgrades and System Enhancement Projects. These projects went into mediation on December 11, 2013 and the decision not to pursue further
mediation was made on January 8, 2014. Mr. Watton indicated that the time
provided within the contract for Sepulveda to file for arbitration expired on
February 6, 2014. The District is closing both cases.
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SAN DIEGO COUNTY WATER AUTHORITY UPDATE
General Manager Watton provided an update on CWA’s Fiscal Sustainability
Task Force (FSTF) and its draft policy on rates. He stated that the District had
some concerns about the policy, specifically the proposed rates and some of its implications. Mr. Watton indicated that there is progress on the matter as FSTF
board members and their respective staffs have had an opportunity to carefully
review the policy and discuss its impact to rates. He stated that the numbers in
the policy are beginning to align. He thanked Director Croucher, who serves on
on the FSTF, for his efforts with the policy’s progress.
Several handouts were provided to the board: San Diego County Water
Authority’s Annual Report, Drought Response Communications, Water Supply
Conditions, Bay Delta Conservation Plan, and Fitch Affirms Otay Water District,
CA’s Water COPs at ‘AA-‘; Outlook Stable.
Director Croucher commented that San Diego, as a whole, has shown its efforts
in maintaining valuable and diverse water resources to ensure water availability
to its customers. He also thanked General Manager Mark Watton and Chief of
Operations Pedro Porras for their immediate response to a leaking fire hydrant valve on Jamacha Road. He stated that the incident could have waited to be
repaired during regular business hours, however, due to the state experiencing a
drought emergency and the public’s perception, he felt it was important for the
matter to be immediately taken care of. He expressed his gratitude to Mr. Porras
and his staff for responding to the incident within an hour.
14. DIRECTORS' REPORTS/REQUESTS
Director Robak stated that he provided a presentation at the CSDA Quarterly Meeting on Social Media and Twitter. He shared that he started a website (yestotap.org) that supports tap water and municipal water systems and indicated
that there is an iPhone application that maps out, via GPS, the locations of
drinking fountains. He also shared that he entered the San Diego County Water
Authority’s Love your Water Smartphone photo contest that began on March 22. Director Robak indicated that he felt it was a good move for the District to stay aligned with other agencies in declaring a drought level I emergency. He
discussed his disappointment over the termination of the consolidation of
Fallbrook Public Utility District (PUD) and the Rainbow Municipal Water District
(MWD) as Rainbow MWD board members asked to withdraw from the cost-saving merger. The two agencies entered into a joint powers authority agreement last year. Rainbow MWD’s withdrawal will become effective April 5.
Director Thompson commented that as a Water Conservation Garden board
member, he began to practice water conservation by taking advantage of the Rain Barrel Rebate Program. This program provides a rebate of $75 for each Rain Barrel purchased with a minimum purchase of four barrels. Director
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Thompson stated that he bought four barrels and set them up at his property, and with the recent rain he was able to water his entire landscape.
Director Gonzalez indicated that he is interested in participating in the Rain
Barrel Rebate Program.
15. PRESIDENT’S REPORT
President Lopez reported on meetings he attended during the month of February
2014 (a list of meetings he attended is attached). He highlighted that both he
and Director Gonzalez attended the Chula Vista Chamber of Commerce Annual Installation Dinner on February 8. He also highlighted that Director Robak
provided a presentation at the CSDA’s Quarterly Dinner meeting on February 27.
16. ADJOURNMENT
With no further business to come before the Board, President Lopez adjourned
the meeting at 6:09 p.m.
___________________________________ President
ATTEST:
District Secretary
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President’s Report March 11, 2014 Board Meeting
A) Meetings attended during the Month of February 2014:
1) February 5: Attended the District’s Regular Board Meeting
2) February 6: Attended a meeting of the Metro Commission: The Joint Resolution
supporting the development of a long range Regional Water Reuse Plan and Secondary
Equivalency for the Pt. Loma Wastewater Treatment Plant was brought back for possible action by the commission (see attached copy of agenda).
3) February 8: Attended the Chula Vista Chamber of Commerce Annual Installation
Dinner. Attendees: Director Gonzalez, Chief Information Technology Geoff Stevens
and Asst. Chief of Administration and Information Technology Adolfo Segura. i. Director Gonzalez was honored with an award, the 2013 Rookie of the Year
Award, and received recognition as the new chair of the Chula Vista Chamber of
Commerce’s International Business Committee.
4) February 10: Attended MWD’s Finance Committee Meeting. Attended to protest MWD’s proposed rate increase.
5) February 13: Committee Agenda Briefing. Met with General Manager Watton to
review items that will be presented at the February Committee meetings. 6) February 19: Attended a meeting of the Finance, Administration and
Communications Committee. Reviewed, discussed, and made recommendation on
items that will be presented at the March 2014 board meeting.
7) February 25:
a) Attended a meeting of the Ad Hoc Employee Negotiations Committee. Discussed
upcoming negotiations for a successor Memorandum of Understanding (MOU) with
the Otay Water District’s Employee Association. b) Attended the City of Chula Vista Mayor Cox’s State of the City Address.
8) February 26: Attended a meeting of the Metro Commission’s Finance Committee.
Copy of agenda attached. 9) February 27: Attended CSDA’s Quarterly Dinner. Director Robak provided a
presentation on the Social Media Programs Twitter and Facebook. Attendees: Directors
Robak and Thompson and Communications Officer Armando Buelna. 10) February 28 Board Agenda Briefing. Met with General Manager Watton and General
Counsel Dan Shinoff to review items that will be presented at the March Board Meeting.
STAFF REPORT
TYPE MEETING: Regular Board
MEETING DATE: April 8, 2014
SUBMITTED BY:
Gary Stalker System Operations Manager
PROJECT: DIV. NO. 5
APPROVED BY: Pedro Porras, Chief of Water Operations
German Alvarez, Assistant General Manager
Mark Watton, General Manager
SUBJECT: Award of Contract for Reservoir Floating Cover Maintenance
GENERAL MANAGER’S RECOMMENDATION:
That the Board awards a contract to Layfield Environmental Systems Corporation for the maintenance of the floating covers
on four potable and two recycled reservoirs for an amount not-to-exceed $108,800. The contract will be for one year, with
four (4) one–year options for renewal at the Districts discretion. COMMITTEE ACTION:
Please see attachment A. PURPOSE: To meet requirements by the California Department of Public
Health (CDPH) for periodic maintenance of floating covers, and per the American Water Works Association (AWWA) guidelines.
ANALYSIS:
The CDPH requires agencies that have potable water reservoirs with floating covers to maintain the covers according to “AWWA’s
California/Nevada Section Reservoir Floating Cover Guidelines.” The maintenance involves cleaning the entire cover, repairing
holes and tears, adjusting tensioning devices, and maintaining the rainwater removal system. The District has four potable
reservoirs with floating covers that need to be maintained twice a year. The District also has two recycled reservoirs with floating covers that will be included in the contract to be maintained once a year. The recycled reservoir cover maintenance is not required by CDPH, but will be done as a “Best
Management Practice” to extend the useful life of the covers.” Description of Reservoirs
Reservoir Name Type
Reservoir
Surface Area* Capacity (MG) 571-1(Roll Res.) Potable 195,000 36.7
711-3 Potable 157,000 16.0 624-1(Patzig Res.) Potable 110,000 12.0 870-1(Upper Res.) Potable 97,000 10.9
927-1 Recycled 163,000 16.3 944-1 Recycled 102,000 12.0
* = In square feet, approximate area at high water level
The Invitation to Bid on the contract was sent to four (4) prospective bidders on February 26, 2014. Two bids were
received. The bids were opened, non-publicly, on March 10, 2014, with the following results:
CONTRACTOR TOTAL AMOUNT
1. Layfield Environmental Systems Corp., $108,800 Spring Valley, CA
2. Erosion Control Applications, Inc., $114,000 Orange, CA
Layfield Environmental Systems Corporation (Layfield) has cleaned and maintained the District’s floating covers for the past five years. They also replaced the cover and liner on the 624-1 potable reservoir last year and are presently replacing
the cover and liner on the 927-1 recycled reservoir. Layfield is an industry leader in the design, installation, and maintenance of reservoir floating covers. District staff have found them to be a reliable, responsible, and accommodating company.
Staff is recommending the award of this maintenance contract to
Layfield Environmental Systems Corporation in the amount not-to-
exceed $108,800 for one year. The contract will be for one year, with four (4) one–year options for renewal at the
Districts discretion. The maximum price increase for the four option years would be based on the San Diego Consumer Price Index for the previous year. FISCAL IMPACT: Joe Beachem, Chief Financial Officer
$117,000 is budgeted in Fiscal Year 2014 and the same amount has been submitted for the Fiscal Year 2015 budget for this contract to cover all work related to this maintenance. The additional money is budgeted for repairs to the cover or equipment that is
outside of the scope of this maintenance contract. STRATEGIC GOAL:
This contract supports the Strategic Goal to “Minimize the
District’s total life cycle asset costs” by maximizing the useful life of the reservoir floating covers. Properly
maintained covers also protect the water quality within our District. LEGAL IMPACT:
None.
Attachment A: Committee Action Form
ATTACHMENT A
SUBJECT/PROJECT: Award of Contract for Reservoir Floating Cover Maintenance
COMMITTEE ACTION: This Engineering, Operations, and Water Resources Committee
reviewed this item on March 17, 2014, and the following comments were made:
• Staff recommended that the Board awards a contract to Layfield Environmental Systems Corporation for the
maintenance of the floating covers on four potable and two recycled reservoirs for an amount not-to-exceed $108,800.
The contract will be for one year, with four (4) one–year options for renewal at the Districts discretion.
• The purpose of the floating cover maintenance is to meet the requirements of the California Department of Public
Health (CDPH), and per the American Water Works Association (AWWA) guidelines.
• It was indicated that the District has four (4) potable reservoirs with floating covers that need to be maintained twice a year, and two (2) recycled reservoirs with with floating covers to be maintained once a year.
• Staff stated that an invitation to Bid on the contract was sent to four (4) agencies on February 26, 2014. Two bids were received. See page 2 of the staff report for
results.
• Staff indicated that Layfield was the lowest responsive bidder and is recommending the award of this maintenance contract to the company.
• It was noted that Layfield has cleaned and maintained the District’s floating covers for the past five years and
that staff have found them to be a reliable, responsible, and accommodating company.
• In response to a question by the Committee, staff stated that the floating covers made out of prolypropylene have a
20-year warranty (life expectancy) and those made of hypolon have a 30 year warranty.
Following the discussion, the Committee supported staffs’ recommendation and presentation to the full board as a consent
item.
STAFF REPORT
TYPE MEETING: Regular Board MEETING DATE: April 8, 2014
SUBMITTED BY:
Kevin Koeppen, Finance Manager
PROJECT: DIV. NO. All
APPROVED BY:
Joseph R. Beachem, Chief Financial Officer
German Alvarez, Assistant General Manager
Mark Watton, General Manager
SUBJECT: Adopt Resolution No. 4231 Designating Specific Staff Positions to be Authorized as Agents to Deal with the State of California, Office of Emergency Services (OES),
on the District’s Behalf in All Matters Pertaining to Disaster Assistance
GENERAL MANAGER’S RECOMMENDATION:
That the Board adopt Resolution No. 4231 designating specific staff
positions to be authorized as Agents to deal with the State of California, Office of Emergency Services (OES), on the District’s behalf in all matters pertaining to disaster assistance.
COMMITTEE ACTION:
See Attachment A. PURPOSE:
To authorize District staff in the positions of Safety and Security Specialist, Finance Manager, and Environmental Compliance Specialist, to be the authorized contacts on behalf of the District for all
matters pertaining to disaster assistance.
2
ANALYSIS:
It is important that, in the event of an emergency, the District is able to efficiently coordinate and execute claims with Cal EMA and/or FEMA. In December 2007, as a part of working with OES to obtain funds for
repairs to District property from the October 2007 Harris Fire, the Board passed Resolution No. 4115 to Designate District Agents for Disaster Assistance. In April 2011, as a part of working with the OES to obtain funds for
repairs to District property from the December 2010 rainstorms, the Board passed Resolution No. 4170 to Designate District Agents for
Disaster Assistance. In both instances above, the District applied to the Federal
Emergency Management Agency (FEMA) and the State of California, Office of Emergency Services (OES) for disaster assistance to help
pay for these repairs. FEMA requires all claims to be processed through OES. OES requires the governing body of each agency to formally designate specific agents, by position title, to represent
the agency in all matters pertaining to their application for disaster assistance. OES will not release any grant money to an
agency that has not provided them with a fully executed Agent Resolution, OES Form 130 (Attachment C).
OES policy mandates that this resolution is only valid for a maximum of 3 years. The District’s previous resolution, approved in April
2011, will expire in April 2014. The District has identified the following three positions as being
both knowledgeable and appropriate for working directly with OES and FEMA: 1) Safety and Security Specialist, 2) Finance Manager, and 3)
Environmental Compliance Specialist. These are the same positions that were identified for the previous resolution. This is a universal resolution and is effective for all open and future disasters up to three (3) years following the date of approval
below. The three (3) year limit is established by Cal EMA and the universal resolution would allow the list of authorized individuals to approve requests for financial assistance in the event of any disaster over the duration of the resolution.
3
FISCAL IMPACT: Joe Beachem, Chief Financial Officer
This specific action does not authorize any spending or the receipt of funds, it only facilitates future interactions to obtain financial assistance.
STRATEGIC GOAL:
The District ensures its continued financial health through the establishment of proper relief in the case of a natural disaster.
LEGAL IMPACT:
None.
Attachments: Attachment A – Committee Action Attachment B – Resolution No. 4231 Attachment C – Cal OES Form 130
ATTACHMENT A
SUBJECT/PROJECT:
Adopt Resolution No. 4231 Designating Specific Staff Positions to be Authorized as Agents to Deal with the
State of California, Office of Emergency Services (OES), on the District’s Behalf in All Matters Pertaining to
Disaster Assistance
COMMITTEE ACTION:
The Finance, Administration and Communications Committee reviewed this item at a meeting held on March 18, 2014 and the following comments
were made:
• Staff is recommending that the board adopt Resolution No. 4231
designating specific staff positions to be authorized as Agents to deal with the State of California, Office of Emergency
Services (OES), on the District’s behalf in all matters pertaining to disaster assistance. The adoption of the resolution is required to obtain any disaster assistance from
OES.
• The resolution currently in effect expires April 2014 and the proposed resolution will be in effect for any claims filed through April 2017. The three year limit is established by Cal
EMA.
• The resolution would authorize the following positions,
consistent with those selected in the previous resolution,
because of their knowledge and appropriateness for working with
OES and FEMA:
o Safety and Security Specialist
o Finance Manager
o Environmental Compliance Specialist.
• This action does not authorize any spending or receipt of funds. It only facilitates future interactions to obtain financial
assistance in the event of a disaster.
• In response to an inquiry from the committee, staff indicated that the identified positions must be listed on the form filed with the OES.
Following the discussion, the Committee supported staff’s
recommendation and presentation to the full board on the consent calendar.
RESOLUTION NO. 4231
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE
OTAY WATER DISTRICT
FOR DESIGNATION OF AGENTS TO
THE STATE OF CALIFORNIA,
OFFICE OF EMERGENCY SERVICES
WHEREAS, the Otay Water District Board of Directors have
been presented with a ‘‘Designation of Applicant’s Agent
Resolution’’ for the Otay Water District, authorizing it’s
agent(s) to execute for and on behalf of the District for the
purpose of obtaining certain federal financial assistance under
P.L. 93-288 as amended by the Robert T. Stafford Disaster Relief
and Emergency Assistance Act of 1988, and/or state financial
assistance under the Natural Disaster Assistance Act; and
WHEREAS, the Board needs to authorize its agent(s) to
provide to the State Office of Emergency Services for all matters
pertaining to such state disaster assistance the assurances and
agreements required; and
WHEREAS, it is in the interest of the District to so
designate agents;
NOW, THEREFORE, BE IT RESOLVED, DETERMINED AND ORDERED by
the Board of Directors of the Otay Water District that the
following three positions are so designated as Authorized Agents:
1) Safety and Security Specialist; 2) Finance Manager; and 3)
Environmental Compliance Specialist.
PASSED, APPROVED AND ADOPTED by the Board of Directors of
Otay Water District at a board meeting held this 2nd day of April
2014, by the following vote:
Attachment B
Ayes:
Noes:
Abstain:
Absent:
________________________
President
ATTEST:
____________________________
District Secretary
STAFF REPORT
TYPE MEETING: Regular Board MEETING DATE: April 8, 2014
SUBMITTED BY:
Kevin Koeppen, Finance Manager
PROJECT: DIV. NO. All
APPROVED BY:
Joseph R. Beachem, Chief Financial Officer
German Alvarez, Assistant General Manager
Mark Watton, General Manager
SUBJECT: Substitution of the Remarketing Agent for the 1996 Variable Rate Certificates of Participation
GENERAL MANAGER’S RECOMMENDATION:
That the Board adopt Resolution No. 4228, authorizing the General Manager to enter into a Remarketing Agreement with Mitsubishi UFJ Securities (USA), Inc. (MUS) to act as the District’s remarketing
agent for its 1996 Variable Rate Certificates of Participation. COMMITTEE ACTION: See “Attachment A”
PURPOSE:
In an effort to reduce bank fees and consolidate banking services, staff is requesting the Board of Directors authorize the General
Manager to terminate the existing Remarketing Agreement with J.P. Morgan and execute a new Remarketing Agreement with Mitsubishi UFJ
Securities (USA), Inc., which is an affiliate of the District’s current banking service provider Union Bank. ANALYSIS:
In 1996, the District issued $15,400,000 1996 Variable Rate Demand Certificates of Participation (COPs). The proceeds of the 1996 COPs were used for the construction of a series of public improvements
including, water storage, pump stations, reservoirs, pipeline and the District headquarters.
The outstanding principal balance of 1996 COPs is $9,900,000 and are scheduled to mature on September 1, 2026. The COPs bear interest at a
variable rate, which is reset weekly and bears a current interest rate before fees of approximately .03%. This is a simple substitution with no substantive changes in the debt. The 1996 COPs will have the same maturity and repayment
schedule. The Remarketing Agent is a dealer or dealer bank responsible for the pricing of variable-rate demand bonds. They periodically set and reset the interest rate for variable rate bonds. As remarketing
agent for the District’s Certificates, MUS is responsible for delivering the District the lowest interest rates available. MUS
also has a vested interest in achieving the lowest possible rates because MUS is essentially placing the credit of its affiliate, Union Bank, who serves as the letter of credit provider on for the COPs.
The District has been satisfied with Union Bank’s performance as its
provider of banking services and Union Bank has been a good partner to the District. By entering into a remarketing agreement with MUS the District will be consolidating its banking services and
strengthening its relationship with Union Bank.
MUS, along with their affiliate Union Bank, is part of the Mitsubishi UFJ Financial Group (MUFG), one of the largest financial services companies in the world. MUS serves as remarketing agent on nine
issues backed by a Union Bank Letter of Credit, totaling $255.8 million in outstanding par amounts. MUS is highly capitalized, with
Net Excess Capital of $220 million and access to the capital of their parent, MUFG, which has close to $2.5 trillion in assets.
According to the existing agreement, the Remarketing Agent may be removed at any time by the District upon thirty (30) day notice to
the Remarketing Agent by an instrument, signed by the District and filed with the Remarketing Agent, the Corporation, the Bank and the Trustee. FISCAL IMPACT: Joe Beachem, Chief Financial Officer
Remarketing fees are charged annually as a percentage of the
outstanding principal debt. Below is a table of the estimated fees for the remaining life of the debt. The District obtained quotes from
two financial services firms, Union Bank and J.P. Morgan.
Under the current remarketing agreement J.P. Morgan, charges a fee of
nine(9) basis points. The quotes obtained from both J.P. Morgan and Union Bank reduce fee to eight(8) basis points. The District estimates a total savings of $7,730 through 2027.
Bank Description
Rate(as a % of
outstanding
principal)
Average
Annual
Fee
Total Fees
through
2027
J.P. Morgan Current Price 0.09%$5,352 $69,570
J.P. Morgan Quote 0.08%$4,757 $61,840Union Bank Quote 0.08%$4,757 $61,840
RBC Capital Quote 0.10%$5,946 $77,300 In comparing the variable interest rates achieved by MUS on similar
variable rate debt issuances, it should be noted that MUS was able to achieve a rate of .02%, which is one basis point lower than the District’s current rate of .03%. The impact of this rate savings, if
continued through the debt’s maturity, would result in approximately $7,000 of additional savings through 2027.
The District estimates the cost for reassigning the remarketing agent to be no greater than $5,000. STRATEGIC GOAL:
The District ensures its continued financial health through long-term financial planning and debt planning.
LEGAL IMPACT:
None.
Attachments: Attachment A – Committee Action Attachment B – Resolution No. 4228 Attachment C – Remarketing Agreement(Draft)
ATTACHMENT A
SUBJECT/PROJECT:
Substitution of the Remarketing Agent for the 1996 Variable Rate Certificates of Participation
COMMITTEE ACTION:
The Finance, Administration and Communications Committee reviewed this item at a meeting held on March 18, 2014 and the following comments
were made:
• Staff is recommending that the board adopt resolution 4228,
authorizing the General Manager to enter into a Remarketing Agreement with Mitsubishi UFJ Securities to act as the District’s
remarketing agent for its 1996 Variable Rate Certificates of Participation. Mitsubishi is an affiliate of Union Bank, the District’s current banking provider.
• Staff indicated in an effort to reduce fees and consolidate
banking services, staff would like to terminate the current remarketing agreement with JP Morgan and execute a new agreement with Mitsubishi.
• Mitsubishi is well qualified based on their ability to effectively place debt and reach investors in the market. They also have a vested interest in remarketing the debt, because they are placing the debt of their own affiliate, essentially their
own debt.
• Mitsubishi is highly capitalized, which makes it well qualified to perform remarketing services for the District.
• Staff indicated that this is a simple substitution with no substantive changes in the debt. The 1996 COPs will have the same maturity and repayment schedule.
• The District has been satisfied with Union Bank’s performance and
they have been a good partner to the District.
• By contracting with Mitsubishi the District will save
approximately $10,000 over the life of the debt. In addition, staff believes that by strengthening the District’s relationship
with Union Bank, it will provide additional savings in the
future.
• The committee indicated that there is a $5,000 cost to reassign
the remarketing agent and it is a cost that the District would not incur if it remained with J.P. Morgan. Staff indicated that
the $5,000 is the fee from our bond counsel to review the reassignment agreement. The committee requested that staff negotiate with Mitsubishi to ask that they cover the cost of the
fee. Staff spoke with Mitsubishi and they have agreed to cover bond counsel’s fee.
Following the discussion, the Committee supported staffs’ recommendation and presentation of this item to the full board on the consent calendar.
RESOLUTION NO. 4228
RESOLUTION OF THE BOARD OF DIRECTORS OF THE OTAY
WATER DISTRICT APPPOINTING A REMARKETING AGENT AND APPROVING THE EXECUTION AND DELIVERY OF A REMARKETING AGREEMENT FOR THE THE OTAY WATER
DISTRICT VARIABLE RATE DEMAND CERTIFICATES OF
PARTICIPATION (1996 CAPITAL PROJECTS)
WHEREAS, the Otay Water District (the “District”) and the Otay Service Corporation (the “Corporation”) have previously entered into an Installment Sale Agreement dated as of June 1, 1996
as amended by the First Amendment to Installment Sale Agreement dated as of August 1, 2004 and
the Second Amendment to Installment Sale Agreement dated as of June 30, 2011 (collectively, the
“Installment Sale Agreement”) and that certain Trust Agreement dated as of June 1, 1996 as amended by the First Supplemental Trust Agreement dated as of May 25, 2011 and by the Second Supplemental Trust Agreement dated as of June 30, 2011 (collectively, the “Trust Agreement”) by
and among the District, the Corporation and the Bank of New York Mellon Trust Company, N.A. (as
successor trustee to Chemical Trust Company of California) (the “Trustee”) pursuant to which the
Otay Water District Variable Rate Demand Certificates of Participation (1996 Capital Projects) (the “Certificates”) are outstanding; and
WHEREAS, the Certificates evidence undivided fractional interests in the Installment
Payments to be made by the District under the Installment Agreement; and
WHEREAS, the District has previously appointed J.P. Morgan Securities, Inc. (the “JP Morgan”) to act as the Remarketing Agent for the Certificates under the Trust Agreement; and
WHEREAS, the District desires to replace JP Morgan as Remarketing Agent and in
accordance with the provisions of the Trust Agreement appoint Mitsubishi UFJ Securities (USA),
Inc. (“Mitsubishi”) to act as Remarketing Agent for the Certificates; and
WHEREAS, in order to effectuate the appointment of Mitsubishi, there has been presented to the District for approval the form of a Remarketing Agreement by and between the District and
Mitsubishi, a copy of which is on file with the Secretary of the Board of Directors; and
WHEREAS, the Board of Directors has determined to be in the best interests of the District;
NOW, THEREFORE, the Board of Directors of the Otay Water District does hereby RESOLVE, DETERMINE and ORDER as follows:
Section 1. Each of the above recitals is true and correct and is adopted by the legislative
body of the District.
Section 2. The form of the Remarketing Agreement is hereby approved and each of the President of the Board of Directors, the Vice President of the Board of Directors, the Treasurer, the General Manager, the Chief Financial Officer, and their written designees (each an “Authorized
Officer” and collectively the “Authorized Officers”), acting alone, is hereby authorized and directed
to execute and deliver the Remarketing Agreement in the name of and on behalf of the District, in
Attachment B
2
substantially the form and content now before this meeting, but with such changes, modifications,
additions and deletions therein as shall be deemed necessary, desirable or appropriate by the
Authorized Officer or Authorized Officers executing the same, such approval to be conclusively evidenced by the execution and delivery thereof by one or more of the Authorized Officers.
Section 3. The Authorized Officers are hereby authorized and directed, to do any and all
things and to execute and deliver any and all documents, including amendments to any of the existing
documents and agreements relating to the Certificates, which they may deem necessary or advisable
in order to consummate the appointment of the Remarketing Agent and otherwise to effectuate the purposes of this resolution.
Section 4. This resolution shall take effect upon its adoption.
ADOPTED, SIGNED and APPROVED at a regular meeting of the District this __ day of April, 2014.
President of the Board of Directors of the Otay Water
District
ATTEST:
Secretary of the
Board of Directors of the
Otay Water District
3
STATE OF CALIFORNIA )
) ss
COUNTY OF SAN DIEGO )
I, ________________, Secretary of the Board of Directors of the Otay Water District, do hereby certify that the foregoing Resolution No. ________ was duly adopted by the Board of
Directors of said District at a regular meeting thereof held on the __ day of April, 2014, and that it
was so adopted by the following vote:
AYES: DIRECTORS:
NOES: DIRECTORS:
ABSENT: DIRECTORS:
ABSTAIN: DIRECTORS:
Secretary of the Board of Directors of the Otay Water District
(SEAL)
STATE OF CALIFORNIA )
) ss COUNTY OF SAN DIEGO )
I, _____________________, Secretary of the Board of Directors of the Otay Water District,
do hereby certify that the above and foregoing is a full, true and correct copy of Resolution No.
________ of said Board, and that the same has not been amended or repealed.
DATED: _________________, 2014.
Secretary of the Board of Directors
of the Otay Water District
(SEAL)
1
$15,400,000 (Original Amount) Otay Water District
Variable Rate Demand Certificates of Participation (1996 Capital Projects)
REMARKETING AGREEMENT
THIS REMARKETING AGREEMENT (the “Remarketing Agreement”), dated as of ________________, is made by and between the Otay Water District (the “District”) and MITSUBISHI
UFJ SECURITIES (USA), INC., as Remarketing Agent (the “Agent”), in connection with the offering and sale from time to time in the above-captioned certificates of participation (the “Certificates”). The
Certificates were issued under and pursuant to a Trust Agreement dated as of June 1, 1996 (the "Trust Agreement"), between the District and the Bank of New York Mellon Trust Company, N.A. (as successor
trustee to Chemical Trust Company of California), as trustee (the “Trustee”). The District is party to a Reimbursement Agreement, dated as of June 1, 2011 (the "Reimbursement Agreement"), with Union
Bank, N.A. (the "Bank"), pursuant to which the Bank has issued an irrevocable letter of credit (the "Letter of Credit") in favor of the Trustee.
This Remarketing Agreement is effective as of the date hereof, it being acknowledged that the District has terminated its remarketing agreement with J.P. Morgan Securities LLC dated as of June 1,
1996 with respect to the Certificates, which termination is effective as of the date hereof.
Section 1. Definitions. Unless a different meaning clearly appears from the context, all
words and terms used in this Remarketing Agreement shall have the respective meanings assigned to such terms in the Trust Agreement.
Section 2. Acceptance of Appointment; Representations and Warranties of the Agent. The District hereby appoints the Agent as exclusive Remarketing Agent for the Certificates, and the Agent
hereby accepts such appointment and agrees to perform the duties and covenants of the Agent set forth herein and in the Trust Agreement.
Section 3. Representations and Warranties of the District. The District represents and warrants to the Agent that:
(a) This Remarketing Agreement (assuming due authorization, execution and delivery by the Agent) constitutes the valid and binding obligation of the District, enforceable against the District in
accordance with its terms, subject to applicable bankruptcy, insolvency, moratorium, liquidation, reorganization and other similar laws affecting creditors’ rights generally and to general principles of
equity (regardless of whether enforcement is sought in a proceeding in equity or at law).
(b) The District has all requisite power and authority to perform its obligations under the Trust
Agreement, and has all requisite power and authority to execute, deliver and perform its obligations under this Remarketing Agreement.
Section 4. Certain Agreements of the District. The District agrees with the Agent that:
(a) The District agrees to furnish to the Agent sufficient copies of a reoffering
statement (the “Reoffering Statement”), in preliminary (if applicable) and final form, in form and substance satisfactory to the Agent, and any other related material prepared for use by the District, as the Agent
reasonably determines may be necessary in connection with any remarketing of the Certificates that constitutes a “primary offering” within the meaning of Rule 15c2-12 (the “Rule”) promulgated, and as
amended from time to time, by the Securities and Exchange Commission (the “SEC”) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”); provided, however, that nothing in this Section
4 shall require the Agent to offer for sale any Certificates if such offer is subject to the Rule unless (i) the
Attachment C
2
Agent, in its sole discretion, decides to undertake such obligation and (ii) the Agent, in its sole discretion, determines that the requirements of the Rule have been satisfied. Further, the District agrees to
cooperate in the preparation of and to make available to the Agent revised Reoffering Statements or amendments or supplements thereto such as may be required so that the Reoffering Statement required
for use in any such “primary offering” will not contain any misstatement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they
were made, not misleading. Any costs or expenses incurred in connection with the preparation of a Reoffering Statement and any amendments or supplements thereto shall be the responsibility of the
District. The Agent acknowledges that the remarketing of Certificates, while such Certificates bear interest at a Weekly Interest Rate and such Certificates are remarketed in denominations of $100,000 or
more, is not considered a “primary offering” within the meaning of the Rule as interpreted by the SEC as of the date of execution of this Remarketing Agreement.
(b) If, during such time as the Reoffering Statement is used in connection with such “primary offering” and sale of the Certificates, any event occurs or condition exists relating to or
affecting the District or the Certificates as a result of which the Reoffering Statement would contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, the District upon learning of such event or condition shall promptly notify the
Agent in writing of the circumstances and details of such event. The District will cooperate with the Agent in the preparation of the additional marketing materials which the Agent reasonably determines are
necessary in connection with such “primary offering” and sale of the Certificates or which the Agent reasonably determines should be provided to owners and prospective owners of the Certificates.
(c) The District will furnish the Agent copies of all reports and financial statements relating to the financial affairs and condition of the District as required by the Trust Agreement
promptly after they are made available to the public by the District by posting on EMMA (Electronic Municipal Market Access) and such additional information concerning the operations and financial
condition of the District as required by the Trust Agreement or concerning the Certificates as the Agent may from time to time reasonably request;
(d) At the expense of the Agent, the District will furnish such information, execute such instruments and take such other action not inconsistent with law in cooperation with the
Agent as the Agent may request (i) to qualify the Certificates for offer and sale under the Blue Sky or other securities laws and regulations of such states and other jurisdictions of the United States as the
Agent may designate and (ii) to determine the eligibility of the Certificates for investment under the laws of such states and other jurisdictions, and will use commercially reasonable efforts to continue such
qualifications in effect until the termination of this Remarketing Agreement; provided, however, that the District shall not be required to execute a general or special consent to service of process or qualify to do
business in connection with any such qualification or determination in any jurisdiction.
(e) If a Reoffering Statement is not supplied as required by the provisions of
Section 4(a) above, the Agent’s obligation to remarket the Certificates pursuant to the Trust Agreement and under this Remarketing Agreement will be suspended until such time as a Reoffering Statement
satisfactory to the Agent and its counsel is supplied.
(f) The District represents and warrants to the Agent that the District will
furnish such information, execute such documents and take such other action in cooperation with the Agent as the Agent may reasonably request in order to remarket the Certificates; provided that the District
shall not be required to take any action which would submit it to, or constitute consent to, service of process or to qualify as a foreign corporation in any jurisdiction where it is not otherwise presently subject
to service or so qualified, as the case may be.
To assist the Agent in complying with its obligations under MSRB Rule G-34(c), the District shall provide
the Agent with a copy of the Credit Facility, Reimbursement Agreement, the Trust Agreement or any other
3
document to which the District is a party that establishes an obligation to provide credit and/or liquidity support with respect to the Certificates, including any amendments thereto, in the following manner:
(i) on the effective date of this Remarketing Agreement, a copy of the Credit Facility;
(ii) within ten Business Days prior to the proposed date of any amendment, extension, renewal, replacement or termination, as the case may be, of the Credit Facility
or any other document to which the District is a party that establishes an obligation to provide credit and/or liquidity support with respect to the Certificates, written notice that
such document is proposed to be amended, extended, renewed, replaced or terminated, as the case may be, and the expected date of execution and delivery of such
amendment, extension, renewal, replacement or termination, as the case may be;
(iii) within five Business Days after the execution and delivery of any
amendment, extension, renewal, replacement or termination, as the case may be, of the Credit Facility or any other document to which the District is a party that establishes an
obligation to provide credit and/or liquidity support with respect to the Certificates, a copy thereof; and
(iv) no later than three Business Days after receiving a request from the Agent for any document requested pursuant to this section, a copy thereof.
In each instance that a document is delivered to the Agent pursuant to this Section 4(f), the District shall provide: (A) a final execution copy of each relevant document; and (B) in any such document where any
redactions are made, (x) a redacted final execution copy of such document, and (y) a file containing a list describing the nature of all redactions that have been made to such document.
If there are any additional regulatory requirements, amendments or modifications to the securities laws with which the Agent must comply, the District shall take all steps reasonably requested by the Agent or
its counsel necessary to comply with such additional requirements. In the event the District does not provide the Agent with a copy of a document described in this Section 4(f), the District acknowledges that
the Agent may file a notice with the MSRB’s Short-Term Obligation Rate Transparency System (“SHORT System”) that such document will not be provided at such time as is specified by the MSRB and in the
SHORT System users’ manual
Section 5. Remarketing. (a) The District has appointed the Agent as the exclusive agent
for the remarketing of the Certificates pursuant to this Remarketing Agreement and, in reliance on the representations contained herein and subject to the terms hereof, the Agent accepts the duties and
obligations of the Remarketing Agent herein and under the Trust Agreement and agrees to use its best efforts to solicit offers to purchase, at a price of 100% of the principal evidenced thereby plus accrued
interest evidenced thereby, if any, the Certificates which have been tendered or deemed tendered by the holders thereof pursuant to the Trust Agreement and to perform the other obligations of the Remarketing
Agent as set forth herein and in the Trust Agreement; provided, however, that at no time shall the Certificates, while bearing interest at a Weekly Rate, be remarketed, or delivered by the Agent, in any
denomination other than in the amount of $100,000 or any integral multiple of $5,000 in excess thereof. The Agent further agrees to keep such books and records as shall be consistent with prudent industry
practice and to make such books and records available for inspection by the District at all times.
(b) In the event of (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange, (ii) a general moratorium on commercial banking activities in New York declared by either federal or New York State authorities or (iii) the engagement by
the United States in hostilities or escalation of existing hostilities or a declaration of a national emergency or war, if the effect of any of which in the Agent’s judgment makes it impracticable or inadvisable to
proceed with solicitation of offers to purchase the Certificates, and so long as such situation continues to exist (it being acknowledged by the parties hereto that as of the date hereof no such event is occurring),
4
the Agent shall have the right to terminate its obligations under this Remarketing Agreement at any time by notifying the District in writing or by facsimile transmission, telex or other electronic communication.
(c) In consideration of the Agent’s services hereunder, during periods when Certificates are in the Weekly Rate Mode, the District agrees to pay an annual fee of nine basis points
(0.09%) based upon the outstanding principal amount evidenced by the Certificates bearing interest at a Weekly Interest Rate on the first day of each calendar quarter, payable quarterly in arrears commencing
on the first day of the next following calendar quarter. Payment for any partial calendar quarter shall be made on a pro rata basis. The Agent’s fees for services hereunder for Certificates in the Extended Rate
Mode or the Long Term Rate Mode shall be as may be agreed upon by the Agent and the District. Any fee due but unpaid upon the termination of this Remarketing Agreement shall be payable by the District
upon termination. If this Remarketing Agreement terminates as provided in Section 10 hereof, the District shall pay to the Agent any portion of the annual fee due and owing the Agent
(d) The Agent shall suspend remarketing of any Certificates upon receipt of written notice from the Bank of an Event of Default under Section 6.01 of the Reimbursement Agreement
until such time as the Bank notifies the Agent that such Event of Default has been cured or waived.
Section 6. The Agent. (a) The Agent will be acting solely as the remarketing agent in the
re-sale of the Certificates, and the Agent’s responsibility is limited to the use of its best efforts to solicit offers to purchase the Certificates.
(b) The commitment to remarket the Certificates shall not be construed to obligate the Agent to use any of its own funds or otherwise incur financial liability in acting as Agent
hereunder.
(c) The Agent, in its individual capacity, either as principal or agent, may
buy, sell, own, hold and deal in any of the Certificates, and may join in any action which any holder of Certificates may be entitled to take, with like effect as if it did not act in any capacity hereunder. The
Agent, in its individual capacity, either as principal or agent, may also engage in or be interested in any financial or other transaction with the District and may act as depository, trustee or agent for any
committee or body of holders of Certificates or other obligations of the District as freely as if it did not act in any capacity hereunder. The District also acknowledges that the Agent is a full service firm that,
together with its affiliates, is engaged in securities trading and brokerage activities and provides investment banking, financing and financial advisory services. In the ordinary course of its trading,
brokerage and financing activities, the Agent (and/or its affiliates) may at any time hold long or short positions, and may trade or otherwise effect transactions, for their own accounts or the accounts of
customers, in debt or equity securities or financial instruments (including bank loans and other obligations) of the District.
(d) The District acknowledges and agrees that (i) the Agent is acting solely as a principal and not the agent or fiduciary of the District, and in particular that the Agent is not acting as
a “municipal advisor” (as defined in Section 15B of the Exchange Act) and the Agent has financial and other interests that differ from those of the District, (ii) the Agent has not assumed an advisory or fiduciary
responsibility in favor of the District with respect to the remarketing contemplated hereby or the process leading thereto (irrespective of whether the Agent has advised or is currently advising the District on other
matters) or any other obligation to the District except the obligations expressly set forth in this Remarketing Agreement and (iii) the District has consulted its own legal and financial advisors to the
extent it deemed appropriate. The District agrees that it will not claim that the Agent is a “municipal advisor” within the meaning of Section 15B of the Exchange Act, or owes a fiduciary or similar duty to the
District in connection with such transaction or the process leading thereto.
Section 7. Indemnification. The District agrees to indemnify and hold harmless the Agent
and its affiliates, and their respective directors, officers, agents and employees, and each other entity or person, if any, controlling the Agent or any of its affiliates within the meaning of either Section 15 of the
Securities Act or Section 20 of Exchange Act, as amended (the Agent and each such entity or person being
5
collectively referred to as the “Indemnified Parties” and each, an “Indemnified Party”), to the fullest extent permitted by law, from and against any losses, claims, damages, obligations, penalties, judgments, awards
and other liabilities (collectively, “Liabilities”) and will fully reimburse the Agent for any and all fees, costs, expenses and disbursements (collectively, “Expenses”), as and when incurred, of investigating, preparing or
defending any claim, action, suit, proceeding or investigation, whether or not in connection with pending or threatened litigation or arbitration and whether or not the Agent is a party (collectively, “Actions”) (including
any and all legal and other Expenses in giving testimony or furnishing documents in response to a subpoena or otherwise), directly or indirectly, (i) relating to, arising out of or in connection with the performance by the
Agent of the Agent’s obligations under this Remarketing Agreement or the Trust Agreement, whether or not the Agent is a party, (ii) caused by any untrue statement or alleged untrue statement of a material fact
contained in the Official Statement or Reoffering Statement, as amended or supplemented (including but not limited to any documents deemed to be incorporated therein by reference), or caused by any omission or
alleged omission to state therein a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading or (iii) relating to, arising out of or in
connection with the District taking any action or consent to the taking of any action, including, but not limited to, consents to amendments or supplements to any of the documents relating to the Certificates
without first obtaining the consent of the Agent. With respect to clause (i) above, the District will not, however, be responsible for any Liabilities (or Expenses relating thereto) that are finally judicially determined
by a court of competent jurisdiction to have resulted primarily and directly from the gross negligence or willful misconduct of any Indemnified Party. The District also agrees that no Indemnified Party shall have any
liability (whether direct or indirect, in contract or tort or otherwise) to the District for or in connection with the performance by the Agent of the Agent’s obligations under this Remarketing Agreement or the Trust
Agreement, except for any such Liability with respect to clause (i) above incurred by the District that are finally judicially determined by a court of competent jurisdiction to have resulted primarily and directly from the gross
negligence or willful misconduct of such Indemnified Party.
If any Action is commenced as to which the Agent proposes to demand indemnification hereunder, it will
notify the District with reasonable promptness; provided, however, that any failure by the Agent to notify the
District will not relieve the District from its obligations hereunder. The Agent will have the right to retain legal
counsel of its own choice to represent it, and the District will pay the Expenses of such legal counsel. The
District will be liable for any settlement of any claim against the Agent made with the District’s written consent,
which consent will not be unreasonably withheld. The District will not, without the prior written consent of the
Agent, settle or compromise any claim, or permit a default or consent to the entry of any judgment, in any
Action in which an Indemnified Party is or could have been a party and indemnity could have been sought
hereunder by such Indemnified Party, unless such settlement (x) includes an unconditional release of such
Indemnified Party from all liability on claims that are the subject matter of such proceeding and (y) does not
include a statement as to or admission of, fault, culpability or a failure to act by or on behalf of any such
Indemnified Party.
In order to provide for just and equitable contribution, if a claim for indemnification pursuant to this Section 7
is made but it is finally judicially determined by a court of competent jurisdiction that such indemnification may
not be enforced in such case, even though the express provisions hereof provide for indemnification in such
case, then the District, on the one hand, and the Agent, on the other hand, will contribute to the Liabilities and
Expenses to which the indemnified persons may be subject (i) in such proportion as is appropriate to reflect
the relative benefits received by the District, on the one hand, and the Agent, on the other hand, from the
marketing of the Certificates or (ii) if the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above
but also the relative fault of the District and of the Agent in connection with the actions, statements or
omissions that resulted in such Liabilities, as well as any other relevant equitable considerations. The District
agrees that for purposes of this paragraph, the relative benefits to the District and the Agent of any
contemplated marketing of the Certificates (whether or not successful) will be deemed to be in the same
proportion as the total value paid, issued or received or contemplated to be paid, issued or received to or by
the District or its stockholders in connection with such marketing of the Certificates bears to the fees actually
paid or payable to the Agent under this Remarketing Agreement. The relative fault of the District, on the one
hand, and the Agent, on the other hand (i) in the case of any untrue or alleged untrue statement of a material
6
fact or any omission or alleged omission to state a material fact, shall be determined by reference to, among
other things, whether such statement or omission relates to information supplied by the District and the
parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement
or omission, and (ii) in the case of any other action or omission, shall be determined by reference to, among
other things, whether such action or omission was taken or omitted to be taken by the District or by the Agent
and the parties' relative intent, knowledge, access to information and opportunity to prevent such action or
omission.
The District and the Agent agree that it would not be just and equitable if contribution pursuant to this Section
7 were determined by pro rata allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding paragraph. The amount paid or
payable by an Indemnified Party as a result of the Liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other Expenses
reasonably incurred by such Indemnified Party in connection with investigating or defending any such action
or claim. Notwithstanding any of the provisions of this Section 7, in no event shall the Agent's aggregate
contribution to the amount paid or payable exceed the aggregate amount of fees actually received by it under
this Remarketing Agreement.
Section 8. Intention of Parties. It is the expressed intention of the parties hereto that no
purchase, sale or transfer of any Certificates, as herein provided, or the setting of interest rates in respect thereof, shall constitute or be construed to be the extinguishment of the indebtedness evidenced thereby
or the reissuance or the refunding of any indebtedness evidenced thereby.
Section 9. Amendments. This Remarketing Agreement may not be amended except by a
writing signed by each of the parties hereto.
Section 10. Term. Unless previously terminated, this Remarketing Agreement shall remain
in full force and effect until payment in full, or the provision for payment in full, of the Certificates, or on the day after all Certificates are converted to bear interest at a Fixed Rate. The District shall have the right to
terminate this Remarketing Agreement at any time upon the giving of 30 days’ prior written notice to the Agent and the Agent shall have the right to terminate this Remarketing Agreement at any time upon the
giving of not less than 30 days’ prior written notice to the District, the Bank and the Trustee, provided that no such termination will be effective until a successor is appointed and has accepted the responsibilities
as Remarketing Agent in accordance with the Trust Agreement. The District shall promptly pay to the Agent the compensation, in accordance with Section 5(c) hereof, accrued through the effective date of
such termination.
Section 11. Notices. Unless otherwise provided herein, all notices, Certificates, requests or
other communications hereunder shall be deemed given when delivered in writing by hand or sent by facsimile transmission, telex or registered mail, postage prepaid, addressed as follows:
If to the District: ________________ ________________ ________________
Attention: ____________ Tel: ___________ Fax: ____________ E-mail: ________________ If to the Agent: Mitsubishi UFJ Securities (USA), Inc.
400 California Street, 11th Floor San Francisco, CA 94104
Attn: David Kelp
7
Tel: 415-489-3975 Fax: 646-434-3476
E-mail: dkelp@us.sc.mufg.jp (with copy to TransactionManagement@us.sc.mufg.jp)
If to the Bank (so long as the VRDB Credit Enhancement
Instrument is outstanding):
Union Bank, N.A. 445 South Figueroa Street G16-450
Los Angeles, CA 90071 Attn: Anne Kupfer
Tel: 213-236-6434 Fax: 213-236-6917
E-mail: anne.kupfer@unionbank.com
If to the Trustee:
________________________ ________________________
________________________ Attn: _____________________
Tel: ______________________ Fax: _____________________
E-mail: ____________________
Each of the above parties may, by written notice given hereunder to the others, designate any further or different addresses to which, or means by which, subsequent notices, Certificates, requests or
other communications shall be sent.
Section 12. Governing Law. This Remarketing Agreement shall be governed by and
construed in accordance with the laws of the State of California.
Section 13. Counterparts. This Remarketing Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument.
Section 14. Captions. The captions or headings in this Remarketing Agreement are for convenience of reference only and in no way define, limit or describe the scope or intent of any provisions
or sections of this Remarketing Agreement.
Section 15. Assignment. The obligations of the respective parties hereto may not be
assigned or delegated to any other person without the consent of the other party hereto and of the Bank, which shall not be unreasonably withheld. This Remarketing Agreement will inure to the benefit of and be
binding upon the District and the Agent and their respective successors and assigns, and will not confer any rights upon any other person, partnership, associations or corporation other than persons, if any,
controlling the Agent within the meaning of the Securities Act; provided the Bank shall be a third party beneficiary of this Remarketing Agreement. The terms “successors” and “assigns” shall not include any
purchaser of any of the Certificates merely because of such purchase.
Section 16. Mitsubishi UFJ Securities (USA), Inc. to be Sole Agent. The District agrees
that unless and until this Remarketing Agreement has been terminated as provided herein, no additional remarketing agent will be appointed unless the Agent consents in writing to such appointment.
Section 17. Severability. If any provisions of this Remarketing Agreement shall be held or deemed to be or shall, in fact, be invalid, inoperative or unenforceable as applied in any particular case in
any jurisdiction or jurisdictions, or in all jurisdictions, because it conflicts with any provisions of any constitution, statute, rule of public policy, or any other reason, such circumstances shall not have the
effect of rendering the provision in question invalid, inoperative or unenforceable in any other case or
8
circumstance, or of rendering any other provision or provisions of this Remarketing Agreement invalid, inoperative or unenforceable to any extent whatever.
IN WITNESS WHEREOF, the parties hereto have caused this Remarketing Agreement to be duly executed as of the day and year first above written.
Otay Water District
By:
MITSUBISHI UFJ SECURITIES (USA), INC.
By:
STAFF REPORT
TYPE MEETING: Regular Board MEETING DATE: April 8, 2014
SUBMITTED BY: Lisa Coburn-Boyd
Environmental Compliance Specialist
Bob Kennedy Engineering Manager
CIP./G.F. NO: P2451-
001102
DIV. NO. ALL
APPROVED BY: Rod Posada, Chief, Engineering
German Alvarez, Assistant General Manager
Mark Watton, General Manager
SUBJECT: Change Order No. 1 to the Contract with AECOM Technical Services, Inc. for the Otay Mesa Desalination Conveyance and Disinfection System Project
GENERAL MANAGER’S RECOMMENDATION:
That the Otay Water District (District) Board approve Change Order No. 1 to the existing contract with AECOM Technical
Services, Inc. (AECOM) for design of the Otay Mesa Desalination Conveyance and Disinfection System Project, in an amount not-to-
exceed $136,409 and to extend the contract completion date to June 30, 2018 (see Exhibit A for Project location). COMMITTEE ACTION:
Please see Attachment A. PURPOSE:
To obtain Board authorization for the General Manager to execute
Change Order No. 1 with AECOM (see Exhibit B) for the Otay Mesa Desalination Conveyance and Disinfection System Project (Project) in an amount not-to-exceed $136,409 and to extend the contract completion date to June 30, 2018.
2
ANALYSIS:
At the November 3, 2010 Board Meeting, AECOM was awarded a professional engineering services contract for the Otay Mesa Desalination Conveyance and Disinfection System Project. The contract amount approved by the Board was an amount not-to-
exceed $3,910,297 to be completed by the end of Fiscal Year 2016. The District restricted AECOM’s work to miscellaneous studies until January 24, 2013 when AECOM was authorized to initiate work on the preliminary design of a large diameter pipeline 3.5 miles long, a pump station, and a disinfection
facility, along with the environmental surveys and studies for CEQA/NEPA compliance. An additional Project Management budget
of $30,000 will be needed to extend this effort another six months until final design is initiated by the District.
An increase of $106,409 in the environmental budget is needed due to changes in the survey route and the biological survey
protocol for two (2) species. The area to be surveyed has increased as a result of recent changes to the SR-11 Otay Mesa East Port of Entry and the adjacent industrial developments that
have better defined the alignment available for the pipeline. These areas were not surveyed in the original cultural resources
and biological survey work, and need to be included so that the environmental document is not challenged on the basis of incomplete surveys.
The survey protocol for the California Burrowing Owl was
prepared in April, 1993 and was revised on March 7, 2012 by the State of California Department of Fish and Wildlife. The major change in this protocol was the change in the survey transects
from 100 meters apart to 7 to 20 meters apart which significantly increases the effort and amount of time needed to
complete these surveys. The second species affected by a survey protocol change was the Quino Checkerspot Butterfly (QCB). This updated survey protocol was released by the U.S. Fish and Wildlife Service on February 14, 2014 and increases the length of time that weekly surveys must be conducted. In addition, one
additional week of QCB surveys was needed in 2013 because of the abundance of host plants and butterflies that were found in the survey area. These protocol survey changes could not have been anticipated and occurred after the award of the contract to AECOM.
All of these changes have resulted in an increase of $136,409 to
the contract with AECOM. This Change Order will extend the
3
contract completion date for the Project from June 30, 2016 to June 30, 2018. FISCAL IMPACT: Joe Beachem, Chief Financial Officer
The total budget for CIP P2451, as approved in the FY 2014 budget, is $30,000,000. Expenditures to date are $2,480,962.
Total expenditures, plus outstanding commitments, including this contract, totals $6,219,479. Based on a review of the financial budget, the Project Manager anticipates that the budget is sufficient to support this
Project (see Attachment B).
Finance has determined that 40% of the funding is available from the Expansion Fund and 60% of the funding will be available from the Betterment Fund after Board approval of the FY 2015 fund
transfers. STRATEGIC GOAL: This Project supports the District’s Mission statement, “To
provide high value water and wastewater services to the customers of the Otay Water District in a professional,
effective, and efficient manner” and the General Manager’s Vision, “A District that is at the forefront in innovations to provide water services at affordable rates, with a reputation
for outstanding customer service.” LEGAL IMPACT: None
LCB/BK/RP:jf
P:\WORKING\CIP P2451 Desalination Feasibility Study\Staff Reports\Board 4-8-14\BD 04-08-14, Staff Report, AECOM CO No-1 (LCB-BK).doc Attachments: Attachment A – Committee Action Attachment B – Budget Detail
Exhibit A – Location Map Exhibit B – Change Order No. 1
ATTACHMENT A SUBJECT/PROJECT:
P2451-001102
Change Order No. 1 to the Contract with AECOM Technical Services, Inc. for the Otay Mesa Desalination Conveyance and Disinfection System Project
COMMITTEE ACTION:
The Desalination Project Committee reviewed this item at a meeting held on March 17, 2014 and the following comments were
made:
• Staff is recommending that the board authorize the approval of Change Order No. 1 to the District’s existing contract with AECOM Technical Services, Inc. for the
design of the Otay Mesa Desalination Conveyance and Disinfection System Project in an amount not-to-exceed
$136,409 and to extend the contract completion date to June 30, 2018.
• AECOM was awarded a professional engineering services contract for the Otay Mesa Desalination Conveyance and
Disinfection System Project on Nov. 3, 2010 in an amount not-to-exceed $3,910,297, and the contract was to be completed by the end of Fiscal Year 2016. AECOM’s work
was restricted to miscellaneous studies until January 24, 2013 when AECOM was authorized to initiate work on the
preliminary design of the pipeline, pump station, and disinfection facility, along with the environmental surveys and studies for CEQA/NEPA compliance. Project
Management of this effort is required for an additional six months until the start of final design at a cost of
$30,000.
• Staff indicated that an increase of $106,409 in the
environmental budget is needed due to changes in the survey route and the biological survey protocol for two
(2) species. The area to be surveyed has increased as a result of recent changes to the SR-11 Otay Mesa East Port of Entry and the adjacent industrial developments that
have better defined the alignment available for the pipeline. These areas were not surveyed in the original
survey work, and need to be included so that the
environmental document is not challenged on the basis of
incomplete surveys.
• Changes in the protocol for surveys of the California Burrowing Owl and the Quino checkerspot butterfly have been made by the resource agencies since the contract was
awarded to AECOM. These changes could not have been anticipated and have increased the costs for conducting
these surveys. In addition, one additional week of QCB surveys was needed in 2013 because of the abundance of host plants and butterflies that were found in the survey
area.
• All of these changes have resulted in an increase of $136,409 to the contract with AECOM. This Change Order will extend the contract completion date for the Project
from June 30, 2016 to June 30, 2018.
• In response to an inquiry from the committee, staff indicated that near the bottom of the pipeline on proposed pipeline alignment B, the pipe was moved
easterly because the District received better information as to where the Port of Entry will be located. This area
was not surveyed in the initial survey efforts. It is a very small area, but it will require biological surveys for numerous species and plants, and cultural resources
surveys to make sure the District is not disturbing any Indian/Archeological remains.
• In response to another inquiry from the committee, staff indicated that they will not require that the District go
back and redo all the surveys. The District will need only to do surveys for the new areas that have not yet
been surveyed. The old areas, are in a sense, grandfathered to the old regulations/requirement.
• Staff indicated that they are not aware of any new regulations that would require the District to redo any surveys that have already been done at this time. It was noted that this latest regulation was just released last month in February without any advanced notice. Staff
indicated that the District will not necessarily be aware of new regulations before they are published.
• It was further discussed that, though the areas where roads are planned have been cleared environmentally, the
District must still consider impacts off the road, such as construction noise, traffic, etc.
• The Committee inquired how certain/finalized the selected
alignments are as they would like to avoid having to relocate the alignments once the environmental surveys
are complete. Staff indicated that the alignment was moved further east at the request of Secretario de Infraestructura y Desarrollo Urbano del Estado (SIDUE;
Governor’s Staff which is Mexico’s lead agency). They wished that the District align the transmission pipeline
along one of the existing transmission gas lines.
In discussions with the U.S. Fish and Wildlife Service, they prefer that the District go down Alta Road. The District would prefer that as well as it would be less costly and the environmental impacts would be much less than the easterly alignment. The U.S. Fish and Wildlife
Service, however, is aware that the District’s alignment is dependent upon where the pipeline is aligned in
Mexico. It was further discussed that the infrastructure on
Mexico’s side of the border at the Alta Road alignment is much more complicated. It is very dense and it is near
the border crossing on the U.S. side of the border. The U.S. Border Patrol and Mexico are also very clear that they do not want any pipelines near the border crossings.
• Staff noted that the District has scheduled meetings with NSC Agua twice a month and the location of the transmission pipeline has been discussed at each meeting. The SIDUE has requested that the transmission line be
aligned as easterly as possible. His office has suggested that the alignment follow the gas transmission
lines which have been installed previously at the crossing. At this time, there are no alignment design plans yet laid out for the Mexico side of the border.
However, the easterly route is the most likely because of the right-of-way via the utility corridor along the
proposed highway. Staff indicated that the District also requires a proposed alignment to start the Presidential Permitting process as it entails a long lead time.
• The Committee inquired, with regard to proposed pipeline alignment B, if any of the alignment would be along a roadway or will the District be responsible for the environmental surveys through the length of the pipeline.
Staff indicated that there are other developments proposed for the area, such as Otay Crossings, a
landfill, etc., and so the easterly alignment has been surveyed quite a bit.
• Staff noted with regard to the environmental documents
that the District will need to assume that it will build first before any other developments, even though it is
not likely.
• Staff indicated that a contract will be forwarded soon
for the board’s approval for a consultant who will be working for the State Department to develop the National
Environmental Policy Act (NEPA) document as required for the Presidential Permit. The contract will be between the District and the consultant. However, the consultant
will actually be working with the State Department. The RFP for this consultant will be issued under the
guidelines of the State Department and selected by the State. The District will hire the consultant and pay for their services (third party oversight).
• Staff noted with regard to the environmental surveys that they must be accomplished during certain times of the year and if the window is missed, then the District must wait another year or cycle to perform the surveys.
• The District’s Attorney requested that the committee support an amendment to AECOM’s consultant contract as opposed to a change order to the contract. He noted that all terms will be the same.
Following the discussion, the Committee supported staffs’
recommendation and presentation of this item to the full board on the consent calendar.
ATTACHMENT B – Budget Detail
SUBJECT/PROJECT:
P2451-001102
Change Order No. 1 to the Contract with AECOM Technical Services, Inc. for the Otay Mesa Desalination Conveyance and Disinfection System Project
Committed Expenditures
Outstanding
Commitment &
Forecast
Projected Final
Cost Vendor/Comments
$ 98,577 $ 98,577 $ - $ 98,577 CAMP DRESSER & MCKEE INC
$ 13,311 $ 13,311 $ - $ 13,311 CPM PARTNERS INC
$ 12,200 $ 12,200 $ - $ 12,200 REA & PARKER RESEARCH
$ 70,078 $ 70,078 $ - $ 70,078 MARSTON+MARSTON INC
$ 437,200 $ 349,600 $ 87,600 $ 437,200 HECTOR I MARES-COSSIO
$ 4,173 $ 4,173 $ - $ 4,173 SALVADOR LOPEZ
$ 254,000 $ 124,279 $ 129,721 $ 254,000 SILVA SILVA INTERNATIONAL
Travel $ 19,481 $ 19,481 $ - $ 19,481 STAFF
Printing $ 61 $ 61 $ - $ 61 MAIL MANAGEMENT GROUP INC
$ 162,041 $ 162,041 $ - $ 162,041 GARCIA CALDERON & RUIZ LLP
$ 43,175 $ 43,175 $ - $ 43,175 SOLORZANO CARVAJAL GONZALEZ Y
$ 16,114 $ 16,114 $ - $ 16,114 STUTZ ARTIANO SHINOFF
$ 106 $ 106 $ - $ 106 SAN DIEGO DAILY TRANSCRIPT
$ 500 $ 500 $ - $ 500 REBECA SOTURA NICKERSON
(INTERPRETOR)Standard Salaries $ 705,745 $ 705,745 $ - $ 705,745
Total Planning $ 1,836,762 $ 1,619,441 $ 217,321 $ 1,836,762
$ 4,046,706 $ 593,010 $ 3,453,696 $ 4,046,706 AECOM TECHNICAL SERVICES INC
$ 5,109 $ 5,109 $ - $ 5,109 MARSTON+MARSTON INC
$ 114,175 $ 114,175 $ - $ 114,175 MICHAEL R WELCH PHD PE
$ 8,818 $ 8,818 $ - $ 8,818 CPM PARTNERS INC
$ 5,000 $ 5,000 $ - $ 5,000 ATKINS
$ 50,293 $ 15,293 $ 35,000 $ 50,293 BROWNSTEIN HYATT FARBER &
SCHRECK LLP
$ 50,000 $ 17,500 $ 32,500 $ 50,000 BUSTAMANTE & ASSOCIATES LLC
Travel $ 2,631 $ 2,631 $ - $ 2,631 STAFF
Prof Legal Fees $ 7,761 $ 7,761 $ - $ 7,761 STUTZ ARTIANO SHINOFF
$ 114 $ 114 $ - $ 114 REPROHAUS CORP
$ 343 $ 343 $ - $ 343 SAN DIEGO UNION-TRIBUNE LLC
Standard Salaries $ 91,440 $ 91,440 $ - $ 91,440
Total Design $ 4,382,388 $ 861,192 $ 3,521,196 $ 4,382,388
Construction Standard Salaries $ 329 $ 329 $ - $ 329
Total Construction $ 329 $ 329 $ - $ 329
Budget $30,000,000.00
Total $ 6,219,479 $ 2,480,962 $ 3,738,517 $ 6,219,479
(March 23, 2005 through January 21, 2014)
Design Consultants
Service Contracts
Budget: $30,000,000.00
Project Budget Detail
P2451-Otay Mesa Desalination Conveyance and Disinfection System Project
Planning Consultants
Prof Legal Fees
Service Contracts
571-136.7 MG
870-110.9 MG
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Z:\60283939\100 Contract Files\103 Contract Modifications\Change Order No 1 2014-04-02 (Final from Client).doc
OTAY WATER DISTRICT
2554 SWEETWATER SPRINGS BLVD., SPRING VALLEY, CA. 91978, (619) 670-2222 CONTRACT/P.O. CHANGE ORDER No. 1
PROJECT/ITEM: Otay Mesa Conveyance and Disinfection System Project CIP P2451
CONTRACTOR/VENDOR: AECOM REF.CIP No.: P2451-001102
APPROVED BY: Board on 4-2-14 REF. P.O. No: 713889 DATE: 2014-02-27
DESCRIPTION:
Change Order Proposal from AECOM Technical Services, Incorporated dated February 27th, 2014. Change Order
Proposal includes Changes in the Scope of Work for specific work and delay in schedule.
REASON:
1. Provide additional funding in the amount of $30,000 due to a delay in schedule and extension of 6 months for Task 1
Project Management – Planning Phase. 2. Provide additional funding in the amount of $106,409 for Task 7 Environmental Documentation due to a change in
protocol by the United States Fish and Wildlife Service for Western Burrowing Owl and Quino Checkerspot Butterfly, and additional survey for WBO, QCB, and Rare Plants for areas outside the original survey corridors. 3. Authorization of funding in the amount of $40,770 for Task 4 Geotechnical Investigation for support efforts
associated with the Environmental Impact Report / Environmental Impact Statement (EIR/EIS). 4. Authorization of funding in the amount of $49,408 for Task 5 Contaminated Soil and Groundwater Investigation for
support efforts associated with the Environmental Impact Report / Environmental Impact Statement (EIR/EIS).
CHANGE P.O. TO READ: Revise contract to add $136,409.00 for a total contract authorization of $1,632,430.00.
Revise contract to authorize $90,178.00 for a total contract authorization of $1,722,608.00 Revise contract to add $136,409.00 for a total contract amount of $4,046,706.00.
________________________________________________________________________________________________
ORIGINAL CONTRACT/P.O. AMOUNT: $ 3,910,297.00
ADJUSTED AMOUNT FROM PREVIOUS CHANGE: $ 0.00
TOTAL COST OF THIS CHANGE ORDER: $ 136,409.00
NEW CONTRACT/P.O. AMOUNT IS: $ 4,046,706.00
ORIGINAL CONTRACT COMPLETION DATE: 06-30-2016
CONTRACT/P.O. TIME AFFECTED BY THIS CHANGE: Yes
REVISED CONTRACT COMPLETION DATE: 06-30-2018
IT IS UNDERSTOOD WITH THE FOLLOWING APPROVALS, THAT THE CONTRACTOR/VENDOR IS AUTHORIZED AND DIRECTED TO MAKE THE HEREIN DESCRIBED CHANGES. IT IS ALSO AGREED THAT THE TOTAL COST FOR THIS CHANGE ORDER CONSTITUTES FULL AND COMPLETE COMPENSATION FOR OBLIGATIONS REQUIRED BY THE CONTRACT/P.O. ALL OTHER PROVISIONS AND REQUIREMENTS OF
THE CONTRACT/P.O. REMAIN IN FULL FORCE AND EFFECT. CONTRACTOR/VENDOR: STAFF APPROVALS: SIGNATURE: _____________________________________________ PROJ. MGR : Sr Eng (Int) DATE: ________
NAME : ________________________________________ DIV. MGR : _____ DATE: ________
TITLE: _________________________________DATE : ___________ CHIEF: _ N/A _ DATE: ________ COMPANY ASST. GM : N/A DATE: ________ & ADDRESS:
DISTRICT APPROVAL:
________________________________________________ GEN. MANAGER: N/A DATE: ________ COPIES: FILE (Orig.), CONTRACTOR/VENDOR, INSPECTION
EXHIBIT B
Otay Mesa Desalination Conveyance and Disinfection System Project
Project: P2451
Consultant:AECOM Subproject: 0011002
APPROVED
C.O. AMOUNT BY DATE DESCRIPTION TYPE C.O.
1 $136,409.00 Chief Provide additional funding for Project Management Owner
and environmental survey due to changes in protocl
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
3334
Total C.O.'s To Date: $136,409.00 3.5%
Original Contract Amount:$3,910,297.00
Current Contract Amount:$4,046,706.00
Change Order Breakdown for the Month:
Month Net C.O.$ Limit Authorization C.O. %
$0.00 $2,000 Insp 0.0%
$20,000 DivM 0.0%
$25,000 Chief 0.0%
$50,000 GM 0.0%
Apr-14 Board 3.5%
CHANGE ORDER LOG
STAFF REPORT
TYPE MEETING: Regular Board
MEETING DATE: April 8, 2014
SUBMITTED BY:
Bob Kennedy Engineering Manager
PROJECT: P2451-001101
DIV. NO. ALL
APPROVED BY: Rod Posada, Chief, Engineering
German Alvarez, Assistant General Manager
Mark Watton, General Manager
SUBJECT: Award of a Consulting Services Contract for Professional Consulting Work Related to the Otay Mesa Desalination Conveyance and Disinfection System Project for Fiscal Years
2014, 2015, and 2016
GENERAL MANAGER’S RECOMMENDATION:
That the Otay Water District (District) Board of Directors (Board)
authorize the General Manager to execute a Consulting Services Agreement with Silva-Silva International (SSI) in an amount not-to-
exceed $115,000 for Fiscal Years 2014, 2015 and 2016 (ending June 30, 2016) for professional consulting work related to the Otay Mesa Desalination Conveyance and Disinfection System Project (see Exhibit
A for Project location). COMMITTEE ACTION: Please see Attachment A.
PURPOSE: To obtain Board authorization for the General Manager to enter into a Consulting Services Agreement with SSI for professional consulting work related to the Otay Mesa Desalination Conveyance and Disinfection System Project in an amount not-to-exceed $115,000 for
Fiscal Years 2014, 2015 and 2016 (ending June 30, 2016).
2
ANALYSIS: The District is working with a private developer and several
binational governmental agencies to support the design, build, and operation of a seawater desalting facility in the area of Rosarito, Baja California. The Otay Mesa Conveyance and Disinfection System Project (Project) will provide a potable water transmission pipeline and pump station to convey the desalinated water from the Border of
Mexico to Roll Reservoir in Otay Mesa. The primary purpose of the Project is to provide water service at a potable level to customers in both the U.S. and Mexico. Given the many challenges in advancing this Project, Peter Silva, the
principal of SSI, is uniquely positioned to provide technical, regulatory, and policy assistance in water and wastewater matters.
Mr. Silva has 34 years of experience in the water and wastewater fields. Additionally, Mr. Silva has worked on U.S.-Mexico border issues for over 30 years. SSI’s extensive experience in the U.S.
includes the Regional Water Quality Control Board in Los Angeles and San Diego, the California Water Resources Control Board, the State
Department of Health Services, the California State Fish and Wildlife Service, the U.S. Bureau of Reclamation, and the Environmental Protection Agency in Washington, D.C. plus, worked with agencies and
officials at the federal and state levels in Mexico, i.e., for former Governor Osuna Millan, in the Secretaria de Infraestructura y
Desarrollo Urbano, the Comisión Estatal de Agua, and the Comisión Estatal de Servicios Públicos de Tijuana y Rosarito and the Federal agencies which include Comisión Nacional de Agua, and the Comisión
Internacional de Limites y Aguas.
The current agreement approved by the Board on May 2, 2012 for $96,000 expires June 30, 2014. SSI has been providing consulting services to the District since March 17, 2011. Based on past work between the District and SSI, the District feels
SSI is uniquely qualified to best meet the District’s needs for technical, regulatory, and policy expertise to advance this Project (see Exhibit B for Scope of Work). FISCAL IMPACT: Joe Beachem, Chief Financial Officer
The Fiscal Year 2014 budget for CIP P2451 is $30,000,000. Total expenditures, plus outstanding commitments and forecast, including this contract for $115,000, are $6,219,479.
3
Based on a review of the financial budget, the Project Manager anticipates that the budget is sufficient to support this Project (see Attachment B).
Finance has determined that 40% of the funding is available from the Expansion Fund and 60% of the funding will be available from the Betterment Fund after Board approval of the FY 2015 fund transfers. STRATEGIC GOAL:
This Project supports the District’s Mission statement, “To provide high value water and wastewater services to the customers of the Otay Water District in a professional, effective, and efficient manner” and the General Manager’s Vision, “A District that is at the
forefront in innovations to provide water services at affordable rates, with a reputation for outstanding customer service.”
LEGAL IMPACT:
None.
BK\RP:jf
P:\WORKING\CIP P2451 Desalination Feasibility Study\Staff Reports\Board 4-8-14\BD 04-08-14, Staff Report, Award of Consulting Services Contract to SSI, (BK).docx Attachments: Attachment A – Committee Action
Attachment B – Budget Detail Exhibit A – Location Map
Exhibit B – Scope of Work
ATTACHMENT A
SUBJECT/PROJECT: P2451-001101
Award of a Consulting Services Contract for Professional Consulting Work Related to the Otay Mesa Conveyance and Disinfection System Project for Fiscal Years 201, 2015, and 2016
COMMITTEE ACTION:
The Desalination Project Committee reviewed this item at a meeting held on March 17, 2014 and the following comments were made:
• Staff is recommending that the board approve a consulting
services agreement with Silva Silva International, LLC (SSI) for professional consulting work related to the Otay Mesa Desalination Conveyance and Disinfection System Project in an
amount not-to-exceed $115,000 for Fiscal Years 2014, 2015 and 2016 (ending June 30, 2016).
• It was indicated that the current agreement with SSI was approved by the Board on May 2, 2012 for $96,000 and the
agreement is scheduled to expire on June 30, 2014. SSI has been providing consulting services to the District since March
17, 2011.
• Mr. Silva has 34 years of experience in the water and
wastewater fields and has worked on U.S./Mexico border issues for over 30 years. His extensive experience in the U.S. includes working with the Regional Water Quality Control Board in Los Angeles and San Diego, the California Water Resources Control Board, the California State Fish and Wildlife Service,
the U.S. Bureau of Reclamation, and the Environmental Protection Agency in Washington, D.C.
• Staff is recommending the engagement of Mr. Silva as a sole source consultant based on his experience and knowledge in
these matters. Based on past work between the District and SSI, the District feels SSI is uniquely qualified to best meet the District’s needs for technical, regulatory, and policy expertise to advance the Desalination Project (see Exhibit B
to staffs’ report for the Scope of Work related to the proposed contract).
• In response to an inquiry from the Committee, Mr. Pete Silva,
who was in attendance of the meeting, indicated that he is focused more on the U.S. issues, however, he has been involved in the discussions with Mexico through the bi-national
process. He indicated that he has been assisting with the regulatory issues related to the State Regional Water
Resources Control Board (SRWRCB),the Environmental Protection Agency (EPA), California Department of Public Health (CDPH), etc.
• It was indicated that Mr. Silva has many contacts at the State
level and with the Federal Agencies of the U.S. and Mexico. Specifically, the Comisión Internacional de Límites y Aguas (CILA) and the International Boundary Water commission (IBWC),
etc.
• In response to an inquiry from the committee, Mr. Silva indicated that on the U.S. side he will continue working on the EPA Permit and the SRWRCB Permit. On the bi-national side
he will be working with General Manager Watton. He stated, in response to another inquiry from the Committee, that he is
also a consultant for Metropolitan Water District (MWD). His work, however, is not related to the Rosarito Desalination Project. He is working with MWD on Minute 319 which amends
the 1944 U.S.-Mexico Water Treaty by establishing new rules for the sharing of the Colorado River water.
• It was discussed that the Rosarito Desalination Project will strengthen local water supplies and will not reduce CWA’s take
from the Colorado River. The Rosarito Desalination Project also does not have a conflict or competing interest with CWA.
CWA would like to have as much of its own stable water supply, separate from imported water. The fact that Otay WD, City of Oceanside, or the City of San Diego is developing its own
water supplies, only strengthens the region’s supplies.
Following the discussion, the Committee supported staffs’ recommendation and presentation of this item to the full board on the consent calendar.
ATTACHMENT B – Budget Detail
SUBJECT/PROJECT: P2451-001101
Award of a Consulting Services Contract for Professional Consulting Work Related to the Otay Mesa Conveyance and
Disinfection System Project for Fiscal Years 2014, 2015, and 2016
Committed Expenditures
Outstanding
Commitment &
Forecast
Projected Final
Cost Vendor/Comments
$ 98,577 $ 98,577 $ - $ 98,577 CAMP DRESSER & MCKEE INC
$ 13,311 $ 13,311 $ - $ 13,311 CPM PARTNERS INC
$ 12,200 $ 12,200 $ - $ 12,200 REA & PARKER RESEARCH
$ 70,078 $ 70,078 $ - $ 70,078 MARSTON+MARSTON INC
$ 437,200 $ 349,600 $ 87,600 $ 437,200 HECTOR I MARES-COSSIO
$ 4,173 $ 4,173 $ - $ 4,173 SALVADOR LOPEZ
$ 254,000 $ 124,279 $ 129,721 $ 254,000 SILVA SILVA INTERNATIONAL
Travel $ 19,481 $ 19,481 $ - $ 19,481 STAFF
Printing $ 61 $ 61 $ - $ 61 MAIL MANAGEMENT GROUP INC
$ 162,041 $ 162,041 $ - $ 162,041 GARCIA CALDERON & RUIZ LLP
$ 43,175 $ 43,175 $ - $ 43,175 SOLORZANO CARVAJAL GONZALEZ Y
$ 16,114 $ 16,114 $ - $ 16,114 STUTZ ARTIANO SHINOFF
$ 106 $ 106 $ - $ 106 SAN DIEGO DAILY TRANSCRIPT
$ 500 $ 500 $ - $ 500 REBECA SOTURA NICKERSON
(INTERPRETOR)Standard Salaries $ 705,745 $ 705,745 $ - $ 705,745
Total Planning $ 1,836,762 $ 1,619,441 $ 217,321 $ 1,836,762
$ 4,046,706 $ 593,010 $ 3,453,696 $ 4,046,706 AECOM TECHNICAL SERVICES INC
$ 5,109 $ 5,109 $ - $ 5,109 MARSTON+MARSTON INC
$ 114,175 $ 114,175 $ - $ 114,175 MICHAEL R WELCH PHD PE
$ 8,818 $ 8,818 $ - $ 8,818 CPM PARTNERS INC
$ 5,000 $ 5,000 $ - $ 5,000 ATKINS
$ 50,293 $ 15,293 $ 35,000 $ 50,293 BROWNSTEIN HYATT FARBER &
SCHRECK LLP
$ 50,000 $ 17,500 $ 32,500 $ 50,000 BUSTAMANTE & ASSOCIATES LLC
Travel $ 2,631 $ 2,631 $ - $ 2,631 STAFF
Prof Legal Fees $ 7,761 $ 7,761 $ - $ 7,761 STUTZ ARTIANO SHINOFF
$ 114 $ 114 $ - $ 114 REPROHAUS CORP
$ 343 $ 343 $ - $ 343 SAN DIEGO UNION-TRIBUNE LLC
Standard Salaries $ 91,440 $ 91,440 $ - $ 91,440
Total Design $ 4,382,388 $ 861,192 $ 3,521,196 $ 4,382,388
Construction Standard Salaries $ 329 $ 329 $ - $ 329
Total Construction $ 329 $ 329 $ - $ 329
Budget $30,000,000.00
Total $ 6,219,479 $ 2,480,962 $ 3,738,517 $ 6,219,479
(March 23, 2005 through January 21, 2014)
Design Consultants
Service Contracts
Budget: $30,000,000.00
Project Budget Detail
P2451-Otay Mesa Desalination Conveyance and Disinfection System Project
Planning Consultants
Prof Legal Fees
Service Contracts
EXHIBIT B
SUBJECT/PROJECT: P2451-001101
Award of a Consulting Services Contract for Professional Consulting Work Related to the Otay Mesa Conveyance and Disinfection System Project for Fiscal Years 2014, 2015, and 2016
SCOPE OF WORK.
STAFF REPORT
TYPE MEETING: Regular Board MEETING DATE: April 8, 2014
SUBMITTED BY:
Kevin Koeppen, Finance Manager
PROJECT: DIV. NO. All
APPROVED BY:
Joseph R. Beachem, Chief Financial Officer
German Alvarez, Assistant General Manager
Mark Watton, General Manager
SUBJECT: Extension of the Letter of Credit for the 1996 Variable Rate Certificates of Participation
GENERAL MANAGER’S RECOMMENDATION:
That the Board adopts Resolution No. 4232 approving the form of documents required for the extending the Letter of Credit (LOC) with
Union Bank for the outstanding variable rate debt and authorize the General Manager to execute the related First Amendment to the
Reimbursement Agreement (Attachment C) and Union Bank Fee Letter (Attachment D). COMMITTEE ACTION:
See Attachment A. PURPOSE:
To obtain approval by the Board to amend the LOC extending the date
of termination to June 29, 2017 and to execute the First Amendment to Reimbursement Agreement and Fee Letter with Union Bank in connection with the existing LOC securing the 1996 Variable Rate Demand
Certificates of Participation (1996 COPs). ANALYSIS: The District has five outstanding debt issuances that total
approximately $112 million. The debt is used to fund the District’s CIP program. One of the debt issuances is a variable rate debt,
which is a very low cost debt for the District and thus, the District would like to maintain it. The outstanding variable rate debt is currently $9.9 million, which represents 9% of the District’s overall debt portfolio.
In 1996, the District issued $15,400,000 1996 Variable Rate Demand Certificates of Participation (COPs) with an outstanding principal of $9,900,000. They are scheduled to mature on September 1, 2026 and currently bear an interest rate before fees of .03%, which is reset weekly. The effective rate after fees is currently 1.48%.
The proceeds of the 1996 COPs were used for the construction of a
series of public improvements including, water storage, pump stations, reservoirs, pipelines and the District headquarters.
In order for the variable rate debt to remain on the market, a bank must provide a LOC to guarantee the debt payments to the certificate
holders. Staff has discussed that the District could convert the debt to a fixed rate debt. Under the amendment to the LOC agreement the effective variable rate is approximately 1.33%. The effective
rate the District achieved on its most recent fixed rate refinancing, which was of a similar size and duration, was 1.7%. Based on this
evaluation and considering the cost of refinancing, staff determined that it is still less expensive to maintain this debt as a variable rate issuance. In addition, the District may also consider paying
the debt down or off, if it became cost beneficial. At this time, paying the debt down or off is not cost beneficial as it would reduce
reserve levels below targeted amounts resulting in a need to issue debt. The variable rate debt is a small portion of the District’s debt portfolio, so any volatility in interest rates would not have a
dramatic effect on the net portfolio interest expense.
Currently, 1996 COPs are secured by a LOC provided by Union Bank. The agreement with Union Bank was executed on June 29, 2011 and is scheduled to expire on June 29, 2014. Prior to Union Bank, Helaba provided the LOC for the 1996 COPs for a period of 15 years until they terminated the LOC in 2011. Helaba terminated the contract
because the District’s debt was smaller than they wished to work with and they wanted to limit their exposure to California debt. Obtaining a new LOC is normally cost prohibitive as it is similar to the costs of issuing new debt. The cost of obtaining a new LOC provider in 2011 was approximately $150,000.
Staff has obtained an amendment to the existing Union Bank LOC
agreement extending the current terms entered into on June 29, 2011 until June 29, 2017.
The District’s continued Capital Improvement Program requires the ongoing financial funding provided by this debt while the variable
rate accomplishes this at a very low cost.
The amendment to extend the LOC will enable the 1996 COP’s to remain as variable rate debt. FISCAL IMPACT: Joe Beachem, Chief Financial Officer
Under the terms of the proposed extension, Union Bank has reduced the LOC rate from 110 basis points to 95 basis points. This rate
reduction is estimated to save the District approximately $34,000 over the three years extension, net of $9,000 in legal fees. Obtaining a new LOC provider is considered cost prohibitive. The District would need to achieve a rate of approximately 40 basis
points to offset the costs associated with changing LOC providers. Another impediment to changing LOC banks is the small size of this
debt. There is no competitive market for this small of an LOC. STRATEGIC GOAL:
To provide sound financing of District facilities.
LEGAL IMPACT:
None.
Attachments: Attachment A – Committee Action Attachment B – Resolution No. 4232
Attachment C – First Amendment to Reimbursement Agreement
Attachment D – Union Bank Fee Letter
ATTACHMENT A
SUBJECT/PROJECT:
Extension of the Letter of Credit for the 1996 Variable Rate Certificates of Participation
COMMITTEE ACTION:
The Finance, Administration and Communications Committee reviewed this
item at a meeting held on March 18, 2014 and the following comments were made:
• Staff is recommending that the board adopt Resolution No. 4232 approving the form of documents required for extending the Union
Bank Letter of Credit related to the 1996 Variable Rate Certificates of Participation.
• The current LOC will expire on June 29, 2014. In order for variable rate debt to remain on the market a bank must provide a LOC to guarantee the debt payments to the certificate holders.
• Staff reviewed the options of converting the variable issuance to
a fixed rate, which would eliminate the need for a LOC. Based on the inexpensive borrowing costs and the limited exposure to rising interest costs it was not cost effective to convert the
issuance to a fixed rate. Currently there is $9.9 million of outstanding principal related to the variable rate issuance.
• The committee inquired what the rate differential was between the fixed rate versus the variable rate plus the LOC. Staff
indicated to pay for the cost of refinancing the issuance and interest, the District would need to achieve a rate of about .4%,
which is not likely. Staff further indicated that if the rate were increased to 2.3%, the District would, at this point, want to look at converting the debt to a fixed rate.
• The committee inquired what Union Bank’s credit rating was. It
was indicated that Union Bank has an “A+” rating. In response to another inquiry from the committee, staff indicated that it’s required that there be another party, other than the District,
that can provide immediate funds. This is necessary for all variable rate debt issuances.
• The committee further inquired if Union Bank were no longer in business, if the District would have the ability to substitute
with another Bank’s Letter of Credit without having to reissue
the bonds. Staff indicated that the District would effectively be reissuing bonds which would be very expensive.
• Staff indicated that the District’s experience with Union Bank has been very positive and they are very proactive in lowering
the cost to the District. The LOC is a very small part of the services they provide to the District.
• The proposed 3 year extension would expire on June 29, 2017 and is a simple substitution with no substantive change in the debt.
The 1996 COPs will have the same maturity and repayment schedule.
• Union Bank has reduced the rate from 110 basis points to 95 basis
points, which will result in a net savings, after legal fees, of $34,000 over 3 years. The reduction was based on the District’s
credit rating and its relationship with Union Bank. Following the discussion, the Committee supported staff’s
recommendation and presentation to the full board as an action item.
Attachment B
RESOLUTION NO. 4232
RESOLUTION OF THE BOARD OF DIRECTORS OF THE OTAY
WATER DISTRICT APPROVING THE EXECUTION AND DELIVERY OF DOCUMENTS FOR A LETTER OF CREDIT EXTENSION FOR THE THE OTAY WATER DISTRICT
VARIABLE RATE DEMAND CERTIFICATES OF
PARTICIPATION (1996 CAPITAL PROJECTS)
WHEREAS, the Otay Water District (the “District”) and the Otay Service Corporation (the “Corporation”) have previously entered into an Installment Sale Agreement dated as of June 1, 1996
as amended by the First Amendment to Installment Sale Agreement dated as of August 1, 2004 and
the Second Amendment to Installment Sale Agreement dated as of June 30, 2011 (collectively, the
“Installment Sale Agreement”) and that certain Trust Agreement dated as of June 1, 1996 as amended by the First Supplemental Trust Agreement dated as of May 25, 2011 and by the Second Supplemental Trust Agreement dated as of June 30, 2011 (collectively, the “Trust Agreement”) by
and among the District, the Corporation and the Bank of New York Mellon Trust Company, N.A. (as
successor trustee to Chemical Trust Company of California) (the “Trustee”) pursuant to which the
Otay Water District Variable Rate Demand Certificates of Participation (1996 Capital Projects) (the “Certificates”) are outstanding; and
WHEREAS, the Certificates evidence undivided fractional interests in the Installment
Payments to be made by the District under the Installment Agreement; and
WHEREAS, the letter of credit from Union Bank, N.A. (the “Bank”) securing the repayment of the Certificates under the Trust Agreement expires on June 29, 2014 and the District and the Bank desire to extend the maturity date to June 29, 2017; and
WHEREAS, in order to effectuate the extension of the Letter of Credit, there has been
presented to the District the forms of the following documents for approval which are on file with the Secretary of the Board of Directors:
(1) A letter from the Bank regarding various fees related to the Letter of Credit (the “Fee
Letter”);
(2) A First Amendment to Reimbursement Agreement (the “First Amendment to
Reimbursement Agreement”) by and between the District and the Bank; and
WHEREAS, the execution and delivery of the foregoing documents are necessary to effectuate the extension of the Letter of Credit which the Board of Directors has determined to be in
the best interests of the District;
NOW, THEREFORE, the Board of Directors of the Otay Water District does hereby
RESOLVE, DETERMINE and ORDER as follows:
Section 1. Each of the above recitals is true and correct and is adopted by the legislative
body of the District.
2
Section 2. The forms of the Fee Letter and the First Amendment to Reimbursement
Agreement (collectively, the “District Agreements”) are hereby approved and each of the President
of the Board of Directors, the Vice President of the Board of Directors, the Treasurer, the General Manager, the Chief Financial Officer, and their written designees (each an “Authorized Officer” and collectively the “Authorized Officers”), acting alone, is hereby authorized and directed to execute
and deliver the District Agreements in the name of and on behalf of the District, in substantially the
form and content now before this meeting, but with such changes, modifications, additions and
deletions therein as shall be deemed necessary, desirable or appropriate by the Authorized Officer or Authorized Officers executing the same, such approval to be conclusively evidenced by the
execution and delivery thereof by one or more of the Authorized Officers.
Section 3. The Authorized Officers are hereby authorized and directed, to do any and all
things and to execute and deliver any and all documents, including amendments to any of the existing documents and agreements relating to the Certificates, which they may deem necessary or advisable in order to consummate the extension of the Letter of Credit and otherwise to effectuate the purposes
of this resolution.
Section 4. This resolution shall take effect upon its adoption.
ADOPTED, SIGNED and APPROVED at a regular meeting of the District this __ day of
April, 2014.
President of the Board of Directors of the Otay Water District
ATTEST:
Secretary of the Board of Directors of the Otay Water District
3
STATE OF CALIFORNIA )
) ss
COUNTY OF SAN DIEGO )
I, ________________, Secretary of the Board of Directors of the Otay Water District, do hereby certify that the foregoing Resolution No. ________ was duly adopted by the Board of
Directors of said District at a regular meeting thereof held on the __ day of April, 2014, and that it
was so adopted by the following vote:
AYES: DIRECTORS:
NOES: DIRECTORS:
ABSENT: DIRECTORS:
ABSTAIN: DIRECTORS:
Secretary of the Board of Directors of the Otay Water District
(SEAL)
STATE OF CALIFORNIA )
) ss COUNTY OF SAN DIEGO )
I, _____________________, Secretary of the Board of Directors of the Otay Water District,
do hereby certify that the above and foregoing is a full, true and correct copy of Resolution No.
________ of said Board, and that the same has not been amended or repealed.
DATED: _________________, 2014.
Secretary of the Board of Directors
of the Otay Water District
(SEAL)
885910.1 93301.022 Union Bank/Otay Water District
FIRST AMENDMENT TO REIMBURSEMENT AGREEMENT
Dated as of May 1, 2014
by and between
OTAY WATER DISTRICT
and
UNION BANK, N.A.
Otay Water District $11,300,000 Variable Rate Demand Certificates of Participation (1996 Capital Projects)
Attachment C
885910.1 93301.022
Union Bank/Otay Water District 1
FIRST AMENDMENT TO REIMBURSEMENT AGREEMENT
THIS FIRST AMENDMENT TO REIMBURSEMENT AGREEMENT, dated as of
May 1, 2014, by and between OTAY WATER DISTRICT, a water district duly organized and
existing under the Constitution and laws of the State of California (the “District”), and UNION BANK, N.A., a national banking association organized and existing under the laws of the United States (the “Bank”), amending that certain Reimbursement Agreement, dated as of June 1, 2011 (the
“Initial Reimbursement Agreement”).
RECITALS
A. The District and the Otay Service Corporation, a nonprofit public benefit corporation duly organized and existing under the laws of the State of California (the “Corporation”) entered into an Installment Sale Agreement, dated as of June 1, 1996 (as from time to time amended, the
“Installment Sale Agreement”), whereby the Corporation agreed to sell to the District the Project (as
defined herein), and the District agreed to purchase the Project from the Corporation.
B. Under the Installment Sale Agreement, the District is obligated to pay to the Corporation or its assigns Installment Payments and Additional Costs (as both items are defined herein) for the purchase of the Project.
C. Pursuant to a Trust Agreement, dated as of June 1, 1996 (as from time to time
amended or supplemented, the “Trust Agreement”), among the District, the Corporation and The
Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”), the successor to Chemical Trust Company of California, as original trustee, the District caused the execution and delivery of $15,400,000 aggregate principal amount of Valuable Rate Demand Certificates of
Participation (1996 Capital Projects) (the “Certificates”) of which $9,900,000.00 principal amount is
currently outstanding.
D. The Corporation assigned the rights to receive the Installment Payments and Additional Costs, and the Corporation and the District granted a security interest in all monies held by the Trustee under the Trust Agreement not expressly held for the benefit of the District, to the
Trustee for the benefit of the Owners of the Certificates and the Bank.
E. The District and the Bank entered into the Initial Reimbursement Agreement pursuant
to which the Bank issued its irrevocable Letter of Credit, as such term is defined in the Initial Reimbursement Agreement.
F. The District and the Bank desire to amend the provisions of the Initial
Reimbursement Agreement as set forth below.
G. The term “Reimbursement Agreement” shall hereinafter refer to the Initial
Reimbursement Agreement, as amended by this Amendment.
885910.1 93301.022
Union Bank/Otay Water District 2
NOW, THEREFORE, in consideration of the above premises and of the mutual covenants hereinafter contained and for good and valuable consideration, the parties hereto agree as follows:
1. Definitions. Capitalized terms used herein and not otherwise defined shall have the
same meaning as ascribed to such terms in the Reimbursement Agreement.
2. Amendments to the Reimbursement Agreement
(a) Section 1.01 of the Reimbursement Agreement is hereby amended by deleting, in the definition of “Maturity Date,” the date “June 29, 2014” and substituting in lieu
thereof the date “June 29, 2017.”
(b) Section 1.01 of the Reimbursement Agreement is hereby further
amended by adding the following new definitions:
“Dodd-Frank Act” means the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, as enacted by the United
States congress, and signed into law on July 21, 2010, and all statutes,
rules, guidelines or directives promulgated thereunder.
“Fee Letter” means that certain letter from the Bank to the District dated May 1, 2014, in which the fees charged for issuing the Letter of Credit are set forth, as the same may, from time to time, be
amended or modified.
“Governmental Authority” means any nation or government,
any state, department, agency or other political subdivision thereof, and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to any government, and any
corporation or other entity owned or controlled (through stock or
capital ownership or otherwise) by any of the foregoing.
(c) Section 2.03 of the Reimbursement Agreement is hereby amended by deleting in its entirety and substituting in lieu thereof the following:
SECTION 2.03 Commissions. The commissions and fees
charged by the Bank are set forth in a separate Fee Letter. Any
reference therein to commissions and fees set forth in Section 2.03 or
any subpart thereof shall be deemed to refer, hereafter, to the applicable provisions of the Fee Letter.
(d) Section 2.07(e) of the Reimbursement Agreement is hereby amended
by adding to the end of such Section the following:
Notwithstanding the foregoing, for purposes of this Reimbursement
Agreement (i) all requests, rules, guidelines or directives in connection with the Dodd-Frank Act shall be deemed to be a change
in law, as described in this subsection (c), regardless of the date
885910.1 93301.022
Union Bank/Otay Water District 3
enacted, adopted or issued, and (ii) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the
Basel Committee on Banking Regulations and Supervisory Practices
(or any successor or similar authority) or any Governmental
Authority shall be deemed a change in law, as described in this subsection (c), regardless of the date enacted, adopted or issued.
(e) Article VII of the Reimbursement Agreement is hereby amended by
adding the following new Section thereto:
SECTION 7.22 Electronic Transmissions Regarding Letter of
Credit. The Bank is authorized to accept and process any amendments, instructions, consents, waivers and all documents relating to the Letter of Credit which are sent to the Bank by
electronic transmission, including SWIFT, electronic mail, telecopy,
courier, mail or other computer-generated telecommunications, and
such electronic communication shall have the same legal effect as if written and shall be binding upon and enforceable against the District and the Trustee to the same extent as if in writing. The Bank may,
but shall not be obligated to, require authentication of such electronic
transmission prior to acting on such electronic transmission.
3. Effect. All other Related Documents which reference the Reimbursement Agreement shall be deemed hereinafter to refer to the Reimbursement Agreement as amended hereby. Except as specifically amended herein, the Reimbursement Agreement and all other Related Documents shall
remain in full force and effect and are hereby ratified and confirmed.
4. Representations and Warranties.
As part of the consideration for this Amendment, the District represents and warrants to the Bank as follows:
(a) The execution, delivery and performance by the District of this
Amendment is within the District’s powers, have been duly authorized by all necessary government
actions, and do not and will not contravene or constitute a default under the provisions of applicable
law or regulation or of any law, determination, award, regulation, judgment, injunction, order, decree, rule or writ applicable to the District, or any indenture, lease, instrument, agreement or other
contractual restriction binding on the District or its property; the District is not in violation of or in
default under any law, order, rule, regulation, writ, judgment, injunction, decree, determination or
award or any indenture, agreement, lease, instrument or contractual restriction binding on or
affecting the District which violation or default would adversely impair the ability of the District to perform its obligations hereunder.
(b) All authorizations, approval, legal required orders, consents and other
action by, and the notice to or filing or registration with, any governmental authority, regulatory
body or other public board or bodies have been obtained or will be obtained for the due execution,
885910.1 93301.022
Union Bank/Otay Water District 4
delivery and performance by the District of this Amendment and all of the transactions contemplated hereby.
(c) This Amendment has been fully authorized, executed and delivered by
the District and, assuming the due authorization, execution and delivery by other parties hereto
constitutes the legal, valid and binding obligation of the District, enforceable against the District in accordance with its terms. After giving effect to this Amendment, no event of default has occurred and is continuing, and after giving effect to this Amendment, the representations and warranties of
the District contained in the Reimbursement Agreement and other Related Documents are true and
correct in all material respects as of the date hereof as if made on the date hereof.
5. Expenses. The District shall pay reasonable out-of-pocket expenses of the Bank, including fees and disbursements of its counsel, in connection with the negotiation, preparation and administration of this Amendment, any waiver, forbearance or consent thereunder, or any further
amendment thereof. The obligations of the District hereunder are in addition to and not in lieu of its
obligations under Section 7.07 and Section 7.09 of the Reimbursement Agreement.
6. Conditions to the Effectiveness of this Amendment. This Amendment shall become effective on the date (the “Effective Date”) when each of the following shall have been delivered to the Bank:
(a) Amendment. Counterparts of this Amendment duly executed by each
of the parties hereto.
(b) Fees, Costs and Expenses. All fees payable to the Bank pursuant to Section 5 above.
(c) Legal Opinion. A favorable written opinion of legal counsel to the
District in form and substance satisfactory to the Bank.
(d) Other Documents. All other certificates, consents and documents
which may be reasonably requested by the Bank.
7. Counterparts, Effectiveness. This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed
and delivered shall be deemed to be an original and all of which taken together shall constitute but
one and the same instrument.
8. Governing Law; Dispute Resolution. THIS FIRST AMENDMENT IS SUBJECT TO THE PROVISIONS OF SECTIONS 7.14 AND 7.17 OF THE REIMBURSEMENT
AGREEMENT, RELATING TO GOVERNING LAW AND DISPUTE RESOLUTION, THE
PROVISIONS OF WHICH ARE BY THIS REFERENCE HEREBY INCORPORATED HEREIN
IN FULL.
9. Severability. Any provision of this Amendment which is prohibited, unenforceable or not authorized in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such
prohibition, unenforceability or non-authorization without invalidating the remaining provisions
hereof or affecting the validity, enforceability or legality of such provision in any other jurisdiction.
885910.1 93301.022
Union Bank/Otay Water District 5
10. Headings. Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose.
[Signatures on the following page]
885910.1 93301.022
Union Bank/Otay Water District 6
IN WITNESS WHEREOF, this Amendment has been entered into by the parties as of the
date first above written:
OTAY WATER DISTRICT
By: ________________________________
Name:___________________________
Title:____________________________
UNION BANK, N.A.
By: ________________________________
Anne Kupfer Vice President
885714.1 93301.022
UB/Otay Water District
[UNION BANK, N.A. LETTERHEAD]
May 1, 2014
Mr. Joseph R. Beachem Finance Director
Otay Water District 2554 Sweetwater Springs Boulevard Spring Valley, California 91978
Re: Reimbursement Agreement dated as of June 1, 2011
Dear Mr. Beachem:
In connection with that certain Reimbursement Agreement dated as of June 1, 2011, by and between Otay
Water District (the “District”) and Union Bank, N.A. (the “Bank”), as amended by that certain First Amendment to Reimbursement Agreement dated as of May 1, 2014 (collectively, the “Reimbursement
Agreement”), we have set forth below the Bank’s fees for the subject transaction. This letter is the “Fee
Letter” defined in Section 1.01 of the Reimbursement Agreement. All other capitalized terms not otherwise defined herein shall have the meanings ascribed to such terms in Section 1.01 of the Reimbursement
Agreement.
The District, by signing this Fee Letter, agrees to pay or cause to be paid, the following fees and commissions:
(a) Facility Fee: The District shall pay, or cause to be paid, to the Bank a facility fee based on
the Available Amount in effect, from the Closing Date until the Stated Termination Date, at the rate of 0.950% per annum beginning June 30, 2014 (and at the previous rate of 1.10% per annum prior to this date).
The facility fee shall be payable quarterly in advance, upon issuance of the Letter of Credit, and on the last
day of each September, December, March and June thereafter. Once paid, the facility fee shall be deemed earned and shall not be refundable. The foregoing to the contrary notwithstanding, in addition to and not in
lieu of any other fees charged by the Bank, should the S&P rating for the Certificates change, the facility fee shall be payable as set forth below for the period of time the new rating is in effect. Any increase in the
facility fee shall be paid by the District, or caused to be paid, within thirty (30) days of the increase, calculated
from the date of the increase until the next date on which the facility fee is to be paid and continuing thereafter until the next change of rating, if any:
Level S&P Rating Facility Fee Rate Increase to
1 AA 0.950% p.a. 2 AA- 0.950% p.a.
3 A+ 1.05% p.a.
4 A- 1.30% p.a.
5 BBB+ 2.30% p.a.
6 BBB 2.80% p.a.
7 Below BBB 4.30% p.a.
Attachment D
885714.1 2
(b) Transfer Fee: The District shall pay, or cause to be paid, to the Bank, upon each transfer of the Letter of Credit in accordance with its terms, a transfer commission equal to $2,000.00. A transfer is
deemed to have occurred whenever the Trustee is replaced, substituted or changed as a result of sale,
assignment, merger, consolidation, reorganization or an act of law.
(c) Draw Fee: The District shall pay, or cause to be paid, to the Bank upon each draw under the
Letter of Credit a sum equal to $250.00, payable on the Draw Date.
(d) Default Fee: The District shall pay, or cause to be paid, to the Bank during the occurrence and continuance of any Event of Default hereunder, regardless of whether the Bank has exercised any of its
remedies as described in Section 6.02 of the Reimbursement Agreement, a default fee based on the Available Amount in effect, from the date such Event of Default has occurred until the earlier of the date such Event of
Default is cured or the Stated Termination Date at the rate of 3% per annum. The default fee shall be payable
monthly in arrears, on the last day of each month, and on the day the Event of Default is cured or, if earlier, the Stated Termination Date.
Any controversy or claim arising out of or relating to this letter, including any alleged torts, shall be
determined by the terms of Section 7.14 of the Reimbursement Agreement. The following Sections of the Reimbursement Agreement shall be applicable to this letter and shall be incorporated herein by this reference:
Sections 7.03; 7.08; 7.09; 7.10; 7.17 and 7.19.
We look forward to receiving your signed acceptance.
Very truly yours,
Anne Kupfer Vice President
AGREED AND ACCEPTED ON ________, 2014:
OTAY WATER DISTRICT
By: _________________________________
Name: ___________________________
Title: ___________________________
STAFF REPORT
TYPE MEETING: Regular Board Meeting MEETING DATE: April 8, 2014
SUBMITTED BY: Mark Watton,
General Manager
W.O./G.F. NO: DIV. NO.
APPROVED BY:
Susan Cruz, District Secretary
Mark Watton, General Manager
SUBJECT: Board of Directors 2014 Calendar of Meetings
GENERAL MANAGER’S RECOMMENDATION:
At the request of the Board, the attached Board of Director’s meeting calendar for 2014 is being presented for discussion.
PURPOSE:
This staff report is being presented to provide the Board the
opportunity to review the 2014 Board of Director’s meeting calendar and amend the schedule as needed.
COMMITTEE ACTION:
N/A
ANALYSIS:
The Board requested that this item be presented at each meeting so they may have an opportunity to review the Board meeting calendar schedule and amend it as needed.
STRATEGIC GOAL:
N/A FISCAL IMPACT:
None.
LEGAL IMPACT:
None.
Attachment: Calendar of Meetings for 2014
G:\UserData\DistSec\WINWORD\STAFRPTS\Board Meeting Calendar 4-8-14.doc
Board of Directors, Workshops
and Committee Meetings
2014
Regular Board Meetings:
Special Board or Committee Meetings (3rd
Wednesday of Each Month or as Noted)
January 7, 2014
February 5, 2014 March 11, 2014 April 8, 2014
May 7, 2014
June 4, 2014
July 2, 2014 August 6, 2014 September 3, 2014
October 1, 2014
November 5, 2014
December 3, 2014
January 21, 2014
February 19, 2014 March 17, 2014 April 16, 2014
May 21, 2014
June 18, 2014
July 16, 2014 August 20, 2014 September 17, 2014
October 15, 2014
November 19, 2014
December 17, 2014
SPECIAL BOARD MEETINGS:
BOARD WORKSHOPS:
May 19, 2014
STAFF REPORT
TYPE MEETING: Regular Board
MEETING DATE: April 8, 2014
SUBMITTED BY:
Wales Benham
Senior Accountant
PROJECT: DIV. NO. All
APPROVED BY: Joseph R. Beachem, Chief Financial Officer
German Alvarez, Assistant General Manager
Mark Watton, General Manager
SUBJECT: Director’s Expenses for the 2nd Quarter of Fiscal Year 2014
GENERAL MANAGER’S RECOMMENDATION:
This is an informational item only. COMMITTEE ACTION:
Please see Attachment A.
PURPOSE:
To inform the Board of the Director’s expenses for the 2nd quarter of Fiscal Year 2014. ANALYSIS:
The Directors’ expense information is being presented in order to comply with Otay’s Board of Directors Policy 8, requiring staff to
create a quarterly report showing expenses for the Directors. In addition, California Government Code Section 53065.5 requires special districts, at least annually, to disclose any reimbursement paid by a
district within the immediately preceding fiscal year. The disclosure requirement shall be fulfilled by including the reimbursement
information in a document published or printed, at least annually by
2
a date determined by that district, and shall be made available for public inspection. (See Attachment B for the Summary and C-H for
Details.) FISCAL IMPACT:
None.
STRATEGIC GOAL:
Prudently manage District funds. LEGAL IMPACT:
Compliance with state law.
Attachments: Attachment A Committee Action Attachment B Director’s Expenses and per Diems
Attachment C-H Director’s Expenses Detail
ATTACHMENT A
SUBJECT/PROJECT:
Director’s Expenses for the 2nd Quarter of Fiscal Year 2014
COMMITTEE ACTION:
This item was presented to the Finance, Administration and Communications Committee at a meeting held on March 18, 2014. The
expenses for each director from October 1, 2013 thru December 31, 2013 was presented. It was indicated that directors’ expenses totaled $4,759.42 for the second quarter of Fiscal Year 2014. The total
expense from July 1, 2013 through December 31, 2013 is $12,144.36. It is projected that directors expenses for Fiscal Year 2014 will total
approximately $24,100 based on the first two (2) quarters of actual expenses. The committee received staffs’ report and recommended presentation to the full board as an informational item.
BOARD OF DIRECTORS’
EXPENSES AND PER-DIEMS
Board of Directors Meeting April 8, 2014
ATTACHMENT B
Policy 8 requires that staff present the Expenses and
Per-Diems for the Board of Directors on a Quarterly
basis:
•Fiscal Year 2014, 2nd Quarter.
•The expenses are shown in detail by Board
member, month and expense type.
•This presentation is in alphabetical order.
•This information was presented to the Finance,
Administration, and Communications Committee
on March 18, 2014.
Board of Directors’ Expenses and Per-Diems
Fiscal Year 2014 Quarter 2 (Oct 2013 - Dec 2013)
Director Croucher $400.00
Director Gonzalez $1,607.19
Director Lopez $1,545.77
Director Robak $20.00
Director Thompson $1,186.46
Total $4,759.42
Director Croucher
Fiscal Year 2014 Quarter 2
Oct 2013 Nov 2013 Dec 2013
Business Meetings 0.00 0.00 0.00
Director’s Fees 100.00 100.00 200.00
Mileage Business 0.00 0.00 0.00
Conferences and Seminars 0.00 0.00 0.00
Travel 0.00 0.00 0.00
Monthly Totals 100.00 100.00 200.00
Quarterly Total $400.00
Fiscal Year-to-Date 2014 (Jul 2013-Dec 2013)$600.00
Meetings Attended 1 1 2
Meetings Paid 1 1 2
Director Gonzalez
Fiscal Year 2014 Quarter 2
Oct 2013 Nov 2013 Dec 2013
Business Meetings 0.00 0.00 0.00
Director’s Fees 200.00 400.00 100.00
Mileage Business 0.00 138.39 0.00
Conferences and Seminars 0.00 600.00 0.00
Travel 0.00 168.80 0.00
Monthly Totals 200.00 1,307.19 100.00
Quarterly Total $1,607.19
Fiscal Year-to-Date 2014 (Jul 2013-Dec 2013)$4,221.25
Meetings Attended 4 4 1
Meetings Paid 2 4 1
Director Lopez
Fiscal Year 2014 Quarter 2
Oct 2013 Nov 2013 Dec 2013
Business Meetings 0.00 0.00 0.00
Director’s Fees 500.00 400.00 500.00
Mileage Business 6.78 40.68 19.21
Mileage Commuting 33.90 22.60 22.60
Conferences, Seminars, and Travel 0.00 0.00 0.00
Monthly Totals 540.68 463.28 541.81
Quarterly Total $1,545.77
Fiscal Year-to-Date 2014 (Jul 2013-Dec 2013)$3,894.51
Meetings Attended 6 5 7
Meetings Paid 5 4 5
Director Robak
Fiscal Year 2014 Quarter 2
Oct 2013 Nov 2013 Dec 2013
Business Meetings 0.00 0.00 20.00
Director’s Fees 0.00 0.00 0.00
Mileage Business 0.00 0.00 0.00
Mileage Commuting 0.00 0.00 0.00
Conferences, Seminars, and Travel 0.00 0.00 0.00
Monthly Totals 0.00 0.00 0.00
Quarterly Total $20.00
Fiscal Year-to-Date 2014 (Jul 2013-Dec 2013)$666.42
Meetings Attended 1 3 2
Meetings Paid 0 0 0
Director Thompson
Fiscal Year 2014 Quarter 2
Oct 2013 Nov 2013 Dec 2013
Business Meetings 0.00 0.00 13.00
Director’s Fees 600.00 100.00 300.00
Mileage Business 65.54 0.00 19.78
Mileage Commuting 44.07 14.69 29.38
Conferences, Seminars, and Travel 0.00 0.00 0.00
Monthly Totals 709.61 114.69 362.16
Quarterly Total $1,186.46
Fiscal Year-to-Date 2014 (Jul 2013-Dec 2013)$2,762.18
Meetings Attended 7 3 4
Meetings Paid 6 1 3
Board of Directors’ Expenses and Per Diems
Fiscal Year 2014 to Date (Jul 2013 - Dec 2013)
Director Croucher $600.00
Director Gonzalez $4,221.25
Director Lopez $3,894.51
Director Robak $666.42
Director Thompson $2,762.18
Total $12,144.36
Board of Directors’ Expenses and Per Diems
Fiscal Year 2014 Projected (July 2013- June 2014)
Director Croucher $1,200.00
Director Gonzalez $8,400.00
Director Lopez $7,800.00
Director Robak $1,300.00
Director Thompson $5,400.00
Total $24,100.00
Based on six months of actuals
`
STAFF REPORT
TYPE MEETING: Regular Board
MEETING DATE: April 8, 2014
SUBMITTED BY:
Bob Kennedy
Engineering Manager
PROJECT: P2451-
001102
DIV. NO. ALL
APPROVED BY: Rod Posada, Chief, Engineering
German Alvarez, Assistant General Manager
Mark Watton, General Manager
SUBJECT: Project Overview Related to the Rosarito Desalination Plant Project
GENERAL MANAGER’S RECOMMENDATION:
This is an informational item only and does not require Board action. COMMITTEE ACTION: Please see Attachment A.
PURPOSE:
To provide the Board a project overview related to the Rosarito Desalination Plant Project.
ANALYSIS: On February 5, 2014 the Desalination Committee requested an Ad Hoc project overview of the Rosarito Desalination Plant Project (Project) which includes an update on NSC Agua, advantages of the Rosarito Desalination Plant Project, the District’s due diligence,
desalination costs, and an assessment of the benefits and disadvantages of a seawater desalination project.
2
FISCAL IMPACT: Joe Beachem, Chief Financial Officer
No budget impacts. (See Attachment B - Budget Detail).
STRATEGIC GOAL: This Project supports the District’s Mission statement, “To provide
high value water and wastewater services to the customers of the Otay Water District in a professional, effective, and efficient manner” and the General Manager’s Vision, “A District that is at the forefront in innovations to provide water services at affordable rates, with a reputation for outstanding customer service.”
LEGAL IMPACT:
None.
BK/RP:jf
P:\WORKING\CIP P2451 Desalination Feasibility Study\Staff Reports\Board 4-8-14\BD 04-08-14, Stff Report, Project Overview for the Rosarito Desal Plant, (BK-RP)).docx Attachments: Attachment A – Committee Action Attachment B – Budget Detail Exhibit A – Project Location
Attachment C – Rosarito Desalination Plant Project Overview
Attachment D – KPMG Report to CWCO
ATTACHMENT A
SUBJECT/PROJECT: P2451-001102
Project Overview Related to the Rosarito Desalination Plant
Project
COMMITTEE ACTION:
The Desalination Project Committee reviewed this item at a meeting
held on March 17, 2014 and the following comments were made:
• On February 5, 2014 the Desalination Project Committee
requested an Ad Hoc project overview of the Rosarito Desalination Plant Project (Project) which would include an
update on NSC Agua, advantages of the Rosarito Desalination Plant Project, the District’s due diligence, desalination costs, and an assessment of the benefits and disadvantages of
a seawater desalination project.
• The Otay Water District’s (District) Integrated Resources Master Plan (IRP) prepared in 2007 by CDM Engineers advised that for the District to reduce dependence from imported water
from the Sacramento Delta and the Colorado River, it should start pursuing alternative sources of water. Included in the
report was a recommendation that the District consider participating in a Bi-National Desalination Project.
• The District has expanded its network of recycled water and concluded the take-or-pay agreement with San Diego County
Water Authority (SDCWA)/Helix Water District for a 10,000 AF/YR of potable water. It also has been pursuing other water supply projects such as the Rancho del Rey Brackish Water
Project.
• The District’s interest in participating in a desalination project goes back to 2005, when a joint bi-national effort lead by CWA concluded a Feasibility Study evaluating several
alternative sites for a binational desalination project on either side of the U.S. Mexico Border.
• The District’s intent has been to purchase desalinated water delivered at the Border that meets federal, state, and
District quality standards and the use of the District’s existing and/or proposed infrastructure.
• The District’s estimates that the cost of imported water would continue to escalate and that the cost of desalinated water
would become more cost effective.
• N.S.C. Agua, S.A. de C.V. (NSC Agua), is a Mexican company, majority-owned by Consolidated Water Cooperatief, U.A., a wholly-owned Netherlands subsidiary of Consolidated Water Co.
Ltd. (CWCO). Staff presented background information on CWCO and its officers (see Attachment C to staffs’ report).
• NSC Agua has engaged two engineering firms, GHD and Carollo Engineers, Inc., both companies with extensive regional and
global experience. NSC Agua has also partnered with Doosan Heavy Industries and Construction (DHIC), a global leader in
the engineering, procurement, and construction of large water desalination plants to build the pilot plant for the Rosarito Desalination Project.
• From a project management point of view, NSC Agua has ample experience in developing desalination projects. They have done their due diligence, which makes the success of the plant highly likely. There could, however, be political, logistical
and regulatory challenges that the District is not yet aware of.
• NSC Agua has acquired the first parcel of land required for the desalination plant to be built in Rosarito and will close
escrow on the second parcel on May 15, 2014.
• Staff provided copies of a report written by KPMG, a well-
known international finance/auditing company, regarding the financing process for the Rosarito Desalination Project. They
project the cost of the plant to be approximately $750 million ($600 million for the cost of the desalination facility plus $150 million in financing costs).
• The potential customers to the Rosarito Desalination Project
include the Comisión Estatal de Servicios Públicos de Tijuana (CESPT), a Mexican State agency, and the Comisión del Nacional del Agua (CONAGUA), a Mexican Federal agency that controls the
water in Mexico, and the Otay WD. CESPT will be the largest customer to the plant.
• Staff noted NSC Agua’s activities towards the completion of the plant and indicated that they have spent approximately $10
million through the end of 2013 (see Attachment C to staffs’ report).
• Otay WD has signed two non-binding Letters of Intent to
purchase water from the Rosarito plant. The District will soon be starting negotiations for a water purchase agreement.
• Staff indicated that the water crisis in Mexico is very serious due to the drought, but it is much worse in Baja, California. The cities of Tijuana and Rosarito receive 90% of their water from the Colorado River. In the spring of 2010 an earthquake damaged the Colorado River transmission
infrastructure in Mexicali and the damage has not been repaired to this date, further impacting their water
situation. The CESPT Director, during a public presentation, announced that they estimate that the region of Tijuana and Rosarito will run out of water in 15 years. They indicate
that the main solution to their water issues is to build desalination plants. In 2030, it is estimated that the City
of Tijuana will demand about 160,000 AF per year while the Colorado River water deliveries will remain at 140,000 AF per year. If the drought continues, deliveries from the river
could be much less than 140,000 AF.
• It was indicated that Mexico has 436 desalination plants throughout the country. Many are very small and mainly provide water for hotels. There are two larger plants on
Mexico’s west coast:
o A 5 MGD Publicly owned Plant in Cabo San Lucas o A proposed 6 MGD Publicly owned Plant in Ensenada, Baja California
• Some of the advantages of the Rosarito Desalination Project is
that it will be co-located with the Benito Juarez Power Generation Plant which provides for:
o Proximity to a power plant for electrical power. o The use of existing infrastructure, intake and outfall
facilities, which would provide savings and less disruption to the ocean environment. o More efficiency for the SWRO membranes as the water
from the electricity plant will be warmer.
Another advantage of the Rosarito location is its closer proximity to the U.S.-Mexico border.
• The District has engaged AECOM who has assisted the District in designing the alignment of the conveyance pipeline from the
U.S.-Mexico border to the Otay WD’s system. They have also written a couple reports:
o A White Paper or roadmap for the California Department of Public Health (CDPH) permit approval process. The
paper also discusses issues the District needs to be aware of when negotiating the Water Purchase Agreement with NSC Agua, such as water quality issues. o A report on the blending of the desalinated water into the District’s system and how to prevent corrosion
issues. The District needs to perform studies and testing before the water can be blended into the District’s system. The plan is to deliver the water into a reservoir where it will be conditioned before it is blended into the District’s distribution system.
The District will also have an opportunity to learn from CWA as they will have to deal with the same
issues with the blending of water from the Carlsbad Desalination plant into their distribution system. The Carlsbad plant is about two years ahead of the
Rosarito Desalination Plant.
• There are two projects that are being discussed; they are the same project, but two different agencies are proposing developing the project either as public or private. The
private project is being developed by NSC Agua and the Public Project is proposed by the Comisión Internacional de Límites y Aguas (CILA) and CONAGUA. Mexico must select a project and it is likely that they will select the private project proposed by NSC Agua as there will be no cost to Mexico to build the
Rosarito Desalination Plant.
• It was indicated with regard to desalination costs that a study was done by Nicolay Voutchkov and the study found that the cost of desalinated water ranged from $652/AF from the 108
MGD Sorek Plant in Israel to $3,700/AF from a 40 MGD plant in Adelaide, Australia. The median cost worldwide is $1,3080/AF for medium and large-size desalination projects. The 50 MGD Carlsbad desalination plant cost is estimated to be from $2,062/AF to $2,329/AF.
• CWA estimates that the cost for all in-treated water will range between $1,550/AF to $1,724/AF by 2018. Otay staff, based on its projections, estimates the District’s cost for imported water by 2018 will be $2,006/AF.
• It was indicted that staff believes it is a reasonable assumption that the cost of desalinated water from the
Rosarito Desalination Plant will be close to the cost of imported water based on the average cost of desalinated water
worldwide.
• Staff wished to note with regard to the Reverse Osmosis (RO)
process that the efficiency of a RO Desalination Plant is
about 50%. That is, out of every two units of source water, one (1) unit becomes potable water and one (1) unit becomes
brine water which is sent back to the ocean (see Attachment C to staffs’ report).
• Staff indicated that NSC Agua has done their due diligence and has spent in excess of $10 million plus $20 million for the
purchase of the land for the Rosarito Desalination Plant. The Otay WD has spent approximately $2.5 million. A possible alternate site for a desalination plant is located about one
kilometer to the north of the Rosarito site. However, it will cost approximately $80 million to build additional pumping
facilities and a pipeline from the generation plant to the site.
• Investments in alternative water supplies does involve at risk money. However, a $5 million investment is not unreasonable
for the size of the Rosarito Desalination Project and its potential to provide future long-term water supplies for the region. The only other alternative is to not do anything to
pursue alternative supplies. This, though, would put the future water supply to our region and its ratepayers at risk.
• In response to an inquiry from the committee, staff indicated that the Rosarito Desalination Project is 10 to 15 times
larger than any of Consolidated’s/NSC Agua’s previous projects.
• It was discussed that the financiers are interested in who the Engineering, Procurement, and Construction (EPC) contractor
is, if all the documents are in place and if the contractor can bring the plant to fruition. If the contractor cannot
complete the plant, then the equity partners can step in because it is non-recourse. The equity partners will decide, at this point, if they wish to move the project forward or to
close the project. This is similar to the Carlsbad (Poseidon) Desalination Project agreement.
• The committee inquired how the equity partners in the Poseidon deal were able to get comfortable with the agreement with the
contractors in relation to potential cost overruns, etc. Staff indicated that they looked to Israeli Desalination
Enterprises (IDE), the Carlsbad Desalination Plant EPC Contractor, and Kewit/Shea, the construction company. These companies are world class and have a great deal of experience
in building desalination plants. Poseidon is the developer who puts the project together, but the two organizations
actually do the work. This is where the risk is. IDE is owned by the government of Israel.
• The committee indicated that there is a lot of different risks in these type projects and the involved organizations are
investing funds at different times based on their analysis of the risks. The committee felt that a little more detailed analysis of the project is worthwhile because of the breadth
and size of the Rosarito project versus past projects that the developer has done. The committee asked staff to explain how
the risk factors are mitigated by each financial player. Staff indicated that they would forward the committee additional information regarding the EPC. NSC Agua is not
responsible for overages or overruns, design issues, etc. They are the developers. The EPC takes all such risks to
assure that the project is built and that the required quality of water is achieved as per NSC Agua’s specifications.
• The District’s Water Purchase Agreement (WPA) will include a take or pay provision and would have requirements for delivery
dates, performance, water quality, etc. The District wants to be sure that the amount it decides to take from the Rosarito Plant is accurate. There will only be two customers to the
plant, Mexico and the Otay Water District, and the amount that each is obligated to take must be enough to support the
project financially, thus, making the project financeable.
• The committee noted that, at the moment, everything is
preliminary and felt that the finance structuring must be more refined. The committee suggested that the District require,
as part of its WPA, that it receive periodic updates showing that the project continues to be financially feasible and that the District is advised of any major deal points between the
financial partners.
• Staff will provide the committee a copy of the Poseidon purchase agreement with CWA. The agreement will give the committee a feel for the EPC, etc., and their importance to
the deal. It will also show how CWA’s credit rating played a part in the deal.
Following the discussion, the Committee supported staffs’ recommendation and presentation of this item to the full board as an
informational item.
ATTACHMENT B – Budget Detail
SUBJECT/PROJECT: P2451-001102
Project Overview Related to the Rosarito Desalination Plant
Project
Committed Expenditures
Outstanding
Commitment &
Forecast
Projected Final
Cost Vendor/Comments
$ 98,577 $ 98,577 $ - $ 98,577 CAMP DRESSER & MCKEE INC
$ 13,311 $ 13,311 $ - $ 13,311 CPM PARTNERS INC
$ 12,200 $ 12,200 $ - $ 12,200 REA & PARKER RESEARCH
$ 70,078 $ 70,078 $ - $ 70,078 MARSTON+MARSTON INC
$ 437,200 $ 349,600 $ 87,600 $ 437,200 HECTOR I MARES-COSSIO
$ 4,173 $ 4,173 $ - $ 4,173 SALVADOR LOPEZ
$ 254,000 $ 124,279 $ 129,721 $ 254,000 SILVA SILVA INTERNATIONAL
Travel $ 19,481 $ 19,481 $ - $ 19,481 STAFF
Printing $ 61 $ 61 $ - $ 61 MAIL MANAGEMENT GROUP INC
$ 162,041 $ 162,041 $ - $ 162,041 GARCIA CALDERON & RUIZ LLP
$ 43,175 $ 43,175 $ - $ 43,175 SOLORZANO CARVAJAL GONZALEZ Y
$ 16,114 $ 16,114 $ - $ 16,114 STUTZ ARTIANO SHINOFF
$ 106 $ 106 $ - $ 106 SAN DIEGO DAILY TRANSCRIPT
$ 500 $ 500 $ - $ 500 REBECA SOTURA NICKERSON
(INTERPRETOR)
Standard Salaries $ 705,745 $ 705,745 $ - $ 705,745
Total Planning $ 1,836,762 $ 1,619,441 $ 217,321 $ 1,836,762
$ 4,046,706 $ 593,010 $ 3,453,696 $ 4,046,706 AECOM TECHNICAL SERVICES INC
$ 5,109 $ 5,109 $ - $ 5,109 MARSTON+MARSTON INC
$ 114,175 $ 114,175 $ - $ 114,175 MICHAEL R WELCH PHD PE
$ 8,818 $ 8,818 $ - $ 8,818 CPM PARTNERS INC
$ 5,000 $ 5,000 $ - $ 5,000 ATKINS
$ 50,293 $ 15,293 $ 35,000 $ 50,293 BROWNSTEIN HYATT FARBER &
SCHRECK LLP
$ 50,000 $ 17,500 $ 32,500 $ 50,000 BUSTAMANTE & ASSOCIATES LLC
Travel $ 2,631 $ 2,631 $ - $ 2,631 STAFF
Prof Legal Fees $ 7,761 $ 7,761 $ - $ 7,761 STUTZ ARTIANO SHINOFF
$ 114 $ 114 $ - $ 114 REPROHAUS CORP
$ 343 $ 343 $ - $ 343 SAN DIEGO UNION-TRIBUNE LLC
Standard Salaries $ 91,440 $ 91,440 $ - $ 91,440
Total Design $ 4,382,388 $ 861,192 $ 3,521,196 $ 4,382,388
Construction Standard Salaries $ 329 $ 329 $ - $ 329
Total Construction $ 329 $ 329 $ - $ 329
Budget $30,000,000.00
Total $ 6,219,479 $ 2,480,962 $ 3,738,517 $ 6,219,479
(March 23, 2005 through January 21, 2014)
Design Consultants
Service Contracts
Budget: $30,000,000.00
Project Budget Detail
P2451-Otay Mesa Desalination Conveyance and Disinfection System Project
Planning Consultants
Prof Legal Fees
Service Contracts
571-136.7 MG
870-110.9 MG
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OTAY WATER DISTRICT
Otay Mesa Conveyance and
Disinfection Facility ProjectEXHIBIT A
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3.7 mi.24 mi.
Existing OWD Pipelines
Proposed Pipeline AProposed Pipeline B
Mexico Pipeline
ROSARITO DESALINATION PLANT
PROJECT OVERVIEW
BACKGROUND
The Otay Water District’s (District) Integrated Resources Master Plan (IRP) prepared in
2007 by CDM Engineers(1) advised that for the District to reduce dependence from
imported water from the Sacramento Delta and the Colorado River, it should start pursuing alternative sources of water.
Since then, the District has expanded its network of recycled water and concluded the
take-or-pay agreement with San Diego County Water Authority (SDCWA)/Helix Water
District for a 10,000 AF/YR of potable water. It also has been pursuing other water supply projects such as the Rancho del Rey Brackish Water Project and the Rosarito
Desalination Plant Project.
The District’s interest in participating in a desalination project goes back to 2005, when
a joint binational effort lead by SDCWA, California-American Company, City of Chula Vista, City of San Diego, International Boundary Commission (IBWC), Otay Water
District, Port of San Diego, Sweetwater Authority in the United States and Comisión
Internacional de Limites y Aguas (CILA), the Comisión del Nacional del Agua
(CONAGUA), Comisión Estatal de Servicios Públicos de Tijuana (CESPT) in Mexico,
concluded a Feasibility Study evaluating several alternative sites for a binational desalination project on either side of the U.S. Mexico Border(2).
The District has also been developing relationships with staff at federal, state, local
government, and utilities of both countries. In 2008, the District commissioned a
Feasibility Study with CDM Engineers(3) with the specific task of evaluating what would be the issues and opportunities for the District in participating in a binational
desalination project.
The District’s intent has been to purchase desalinated water delivered at the Border that
meets federal, state, and District quality standards and the use of the District’s existing and/or proposed infrastructure to blend and distribute to District customers. The District
has envisioned this project as being privately-owned, with the State of Baja California,
Mexico and the District as the main water off-takers. Since 2009, the District has had
conversations with N.S.C. Agua, S.A. de C.V. about the potential and feasibility of this
project.
WHO IS NSC AGUA?
N.S.C. Agua, S.A. de C.V. (NSC Agua), is a Mexican company, majority-owned by
Consolidated Water Cooperatief, U.A., a wholly-owned Netherlands subsidiary of
Consolidated Water Co. Ltd. (CWCO). CWCO is publicly traded on the NASDAQ stock market since 1995(4).
2
CWCO was established in 1973 as a private water utility in Grand Cayman, Cayman Islands. It operates 14 reverse osmosis (RO) desalination plants in the Cayman
Islands, the Bahamas, Belize, British Virgin Islands, Bali (Indonesia), and is expanding
operations to Mexico. CWCO supplies water to government-owned distributors and
directly to water end users including residential, commercial, and government
customers. CWCO also provides engineering and management services for desalination projects, including design and construction of desalination plants and
managing and operating desalination plants owned by other companies, i.e., through
Desal Co. Ltd. Desal Co manufactures Seawater Reverse Osmosis (SWRO)
desalination plants. Aguilex, Inc., a wholly-owned U.S. subsidiary, provides financial,
engineering, and supply chain support services.
According to the latest SEC filing by CWCO on May 10, 2013, as of March 31, 2013, the
company had $153M in total assets with cash and equivalents worth $36M. As of
February 4, 2014, CWCO was trading at $12.18 per share and had a market
capitalization of $178.4M(5).
Concerning CWCO’s principals(6), Wilmer F. Pergande is an independent consultant
and Chairman of the Board. He has been associated with CWCO since 2009.
Mr. Pergande’s 45 years of experience in management and engineering in the
desalination industry include 4 years as global leader for desalination and process equipment for G.E. Infrastructure, Water, and Process Technologies.
Frederick (Rick) McTaggart, CWCO’s President, Chief Executive Officer and Director,
has been associated with the company since 1998 and has been the CEO since 2004.
Mr. McTaggart served as the CFO from 2001-2004. Before his career with CWCO, he was associated for almost 10 years at Water Authority-Cayman, a government-owned
utility.
John Tonner, CWCO’s Chief Operating Officer and Vice-President, has been working in the desalination and water industry since 1985. He is a world authority in desalination issues and has written extensively on all aspects of desalination technology including
RO and membrane technologies.
NSC Agua was formed to pursue a 100 million gallons per day (MGD) SWRO desalination plant in Rosarito, Baja California, Mexico. The project includes using existing inlets and outfalls and other facilities belonging to the Benito Juárez Generation
Plant owned by the Comisión Federal de Electricidad (CFE), a Mexican federal
government-owned electrical utility. The project includes the SWRO plant, pumps,
pipelines from the generation plant to the SWRO plant, and a transmission line to the Baja California State’s off-taker, the CESPT, and to the United States Border where the District is planning to build a pipeline, a pump station, and other facilities to an existing
37 MG reservoir(5).
To assist with the technical feasibility of this project, NSC Agua has engaged two engineering firms, GHD and Carollo Engineers, Inc., both companies with extensive
3
regional and global experience. NSC Agua has also partnered with Doosan Heavy Industries and Construction (DHIC), a global leader in the engineering, procurement,
and construction of large water desalination plants(5, 7). DHIC completed at the end of
2013, a nine month pilot project of the pre-treatment process of the desalination plant.
NSC Agua has decided to go to the open market for the EPC (Engineering,
Procurement, and Construction) contractor. DHIC as well as other well-known companies will be competing for the contract of the Rosarito Desalination Project, as is
customary for a facility this large. With the information obtained, any ECP could start
the design of the actual SWRO desalination plant.
IS NSC AGUA POSITIONED WELL TO BRING THIS PROJECT TO COMPLETION? From a project management perspective, NSC Agua, owned by CWCO, has ample
experience in developing desal projects, has hired the appropriate technical expertise
with the appropriate financial and engineering skills, has partnered with a global
desalination company such as DHIC and moreover, will obtain commitments from off-
takers on both sides of the Border. Finally, NSC Agua has spent their own capital to start the project. NSC Agua has shown due diligence that makes the project highly
likely to succeed.
However, for a project of this magnitude, there are factors beyond NSC Agua’s control
such as political, logistical, regulatory, and public opinion challenges that may surface as the project moves forward. In addition, SDCWA’s intent to increase the fixed cost on
the District’s meters to pay for the Carlsbad Desalination project may impact the cost of
water from the Rosarito Plant.
As is customary in these types of projects(3), a company like NSC Agua invests money to develop the concept: preliminary engineering, Right of First Refusal and/or land
purchases, obtain some easements and rights from the generation plant, negotiates
electricity rates, negotiates water purchase agreements (WPAs) with off-takers, etc.;
then assembles a financial package and joins forces with an equity partner. The equity partner becomes the majority owner of the project; NSC Agua maintains a minority stake in the project. The EPC company, such as DHIC, may also finance portions of
the project and get paid with the proceeds from selling the water. This is the same
model that Poseidon Resources used in the Carlsbad project. The difference is
issuance of Non-Recourse California Housing bonds used at Carlsbad project while NSC Agua is seeking a private equity partner and commercial financing; the more usual course of financing for a project of this type. The Rosarito Desal project is roughly
estimated at $700M. As of the end of CY 2013, NSC Agua has spent about $10M in the
following activities:
- Preliminary engineering for the design of the pipeline alignment. - Negotiating leases for the right to take water from the generation plant for piloting
purposes.
- Lease of CFE property for intake and outfall structures.
- Acquisition of 50 acres of land. The cost of the land is approximately $20M and final closing is expected on May 15, 2014.
4
- Preliminary environmental investigation and completion of discrete studies. - Holding conversations with the Mexican authorities at the federal/state/local
levels to negotiate a WPA.
- Obtaining from Otay Water District two non-binding Letters of Intent (LOI) and
agreement to exclusive negotiations.
NSC Agua has hired global companies to assist with the above endeavors: GHD, an
Australian company which has developed similar projects, and KPMG which serves as
a financial consultant/auditor for large projects. For the EPC contract, NSC Agua has
had preliminary conversations with DHIC to design/build/operate/finance the SWRO
plant and expects to expose the project to market to obtain the most favorable and effective EPC contract.
WATER NEEDS IN BAJA CALIFORNIA
The northern Baja California region is one of the largest metropolitan areas of Mexico
with 2.7 million people and rapid growth. It is expected that the population of this region will grow to 4.5 million by the year 2030, a 60% increase.
This area is a semi-arid climate and about 90% of its water comes from the Colorado
River. In the spring of 2010, an earthquake damaged the transmission system in the
Mexicali Valley. This caused a great disturbance to the water supply in Tijuana and Playas de Rosarito, Mexico.
As recently as February 6, 2014, Alfonso Alvarez Juan, the director of CESPT, stated
during a public presentation that “...for the region of Tijuana-Tecate and Rosarito, only
15 years of water supply availability remain...” He also added that CESPT “…has started to seek alternative water supplies including ocean water for treatment and
use…,” and that in “…less than 2 years, desalination plants must be installed in B.C...”(9)
According to CESPT, the potable water demand for Tijuana will be more than 160,000 AF/YR by 2030; while the Colorado River water conveyance will remain at 140,000 AF/YR, assuming that a supply of this magnitude is available in Mexicali. See Graph
#1.
In response to this gap in supply, the State of Baja California is considering two (2) desalination projects in Rosarito. One is publically-owned and the other is privately-owned. NSC Agua is pursuing a determination from the state government that its
private project be the one finally adopted.
5
Source: CESPT – Planning Department, 2014 Graph #1
FEASIBILITY OF DESALINATION PLANTS IN MEXICO
As of 2009, Mexico already had over 436 desalination plants throughout the country(10);
most of these plants are very small, used by hotels to provide water to their guests. In
the Mexican west coast, there are several privately-owned desal plants, mostly in the
area of Cabo San Lucas. In Cabo San Lucas there is a publicly-owned desal plant with an original capacity of 5 MGD; the plant has been in operation since 2007. In
Ensenada, Baja California, the state government awarded a contract in 2012 for the
construction of a 6 MGD desal plant. The project is still in design, and construction is
scheduled to commence in the summer of 2014. The Mexican government, especially for the western states and particularly for Baja
California and Baja California Sur states, considers that desalination is one of the few
options available to supply water in a semi-arid area with a population growth rate of
10,000
30,000
50,000
70,000
90,000
110,000
130,000
150,000
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Water Supply and Demand for Tijuana Region
DEMAND SUPPLY
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more than 60% by 2030. Thus, the potential for desalination plants in Baja California is high, due to water scarcity, weather, high population growth, and ocean water intrusion
of existing potable water aquifers along the coastal zones.
According to CONAGUA, the federal agency in charge of water supply, the availability of
water in Mexico has decreased from 2.6 MG/person/year in 1970 to 1.1 MG/person/year in 2010 and is projected to reduce farther to 1 MG/person/year by 2025(10). Thus, as
stated above, desalination plants are the only option in some cases, especially in coastal
areas to provide supply of potable water to the population in Mexico.
ADVANTAGES OF THE ROSARITO DESALINATION PLANT PROJECT The Rosarito Desalination Plant project has multiple advantages over other projects.
First, it will be co-located with the Benito Juárez Power Generation Plant. This is
advantageous because of the proximity of the available electricity. Second, because
the desal plant will use the existing infrastructure such as the intake and outfall, it is
anticipated there will be some savings and less disruption to the ocean environment. Finally, the warmer water from the plant provides more efficiency for the SWRO
membranes.
NSC Agua’s parcel of land upon which the plant will sit will easily accommodate the
proposed facility and will support expansion in the future, if required, with an area of 50 acres, ready for multiple expansions, and very close to the power plant. This is the only
available piece of land large enough and in proximity to the power plant. NSC Agua has
exclusive control of this parcel of land. Originally, this parcel of land was owned by an
Ejido, a feudal form of land ownership, tenants-in-common, where land is owned by
several community members, and heirs of original owners. NSC Agua went through the arduous, lengthy, and costly process of consolidating the ownership into a single entity
to facilitate the purchase.
During the preliminary land research, other parcels of land were identified, but they were too small. CESPT owns a parcel of land that is only 3 acres - this is the parcel of land identified in the IBWC/CILA desal project. Another parcel of land about 1 km north-
east of the power plant was also available, but a back-of-the-envelope calculation of the
potential pumping costs from the ocean to the site suggested that it was unfeasible.
OTAY WATER DISTRICT’S DUE DILIGENCE To better understand the District’s role in the project and to define the type of
infrastructure north of the Border to receive desalinated water, and what kind of
regulatory compliance is needed, the District hired AECOM Technical Services, Inc. in
October 2010 for the design of a large diameter pipeline, a pump station, and a disinfection facility. To date, AECOM is moving forward on the federal and state environmental reports, selected a preferred alignment, filed a Presidential Permit, and
has written a California Department of Public Health (CDPH) permit approval roadmap.
The District’s investment on the preliminary engineering and other technical studies is
$2.48M as of January 21, 2014.
7
This roadmap is of critical importance because the CDPH requirements will have a direct impact on the water quality requirements and how the approval of the facility and
monitoring will be performed for a facility that is out of the State of California and in
another country. CDPH executives and staff are aware of the project and have shown
interest in further information that is discussed in the permit approval roadmap.
DESALINATION COSTS
Desalination cost estimates typically include three key concepts: capital costs, O&M,
and cost of water production. Desalination costs vary in a wide range and are driven by
many site-specific factors(11).
According to Nicolay Voutchkov, in Graph #2, the cost of desalination water at the
plants range from $652/AF for the 108 MGD Sorek Plant in Israel to $3,700/AF for the
40 MGD plant in Adelaide, Australia. The average cost is $1,380/AF for medium and
large-size seawater desalination projects. The cost negotiated by SDCWA in November
2012 for the 50 MGD Carlsbad Desalination Plant will range from $2,062/AF to $2,329/AF, depending on debt service charges, cost of electricity, and water authority
improvements; this cost is for water delivered to the Twin Oaks Reservoirs. The cost of
transportation also varies widely, depending on the distance from the plant to the
distribution area.
Source: Voutchkov & Henthorne, 2011 Graph #2 * Added the lowest negotiated cost between SDCWA & Poseidon Resources in November 2012
0
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It is expected that the cost of desalinated water from the Rosarito Desalination Plant be roughly or equivalent to the cost the District is expected to be paying for imported water
by 2017, which according to a SDCWA presentation on November 8, 2012 at the
Special Board Meeting, it was estimated that the cost of all in-treated water will range
between $1,550/AF and $1,724/AF(13).
The District estimates that by 2018 the cost of the water, including the portion of
Carlsbad desalinated water, will be $2,006/AF. Recent developments with Metropolitan
Water District (MWD), which lowered its planned water rate increases from 5% to 1.5%
in each of the next two (2) fiscal years (FY 2015 and FY 2016), could slightly lower the
District’s estimates (which will be known after SDCWA finishes its rate projection in the summer of 2014).
The energy costs associated with desalination are 20-35% of the water production costs
for SWRO desalination plants(11). Below is a breakdown of the costs:
Direct Capital Costs 30-40%
Indirect Capital Costs/Financing 10-20%
O&M Costs 15-30%
Power 20-35%
Source: Voutchkov, 2013 Energy costs are outside the control of the desalination plant owner. Favorable rates
for off-peak are normally not taken because the maximum water consumption coincides
with peak hours of energy rates. For the Rosarito Desalination Plant project, the energy
rates are set on the national rate basis. The District will seek expertise to understand
rate-making in Mexico.
TYPICAL COMPONENTS OF A RO DESALINATION PLANT
Reverse Osmosis is a process where ocean or brackish water is forced under pressure
through a membrane (reverse osmosis). Most water constituents are retained,
becoming the “reject,” while the purified water or permeate passes through the membranes. The efficiency of a RO desalination plant is about 50%, meaning that out
of two units of source water, one becomes permeate and the other reject(12). The main
components of a RO desalination plant are shown on Figure 1:
9
Plant Intake: The plant intake is designed to collect source water. There are two
kinds of intakes, surface (open) and subsurface (ground water intakes). Open intakes have screens and other devices to prevent marine life from entering the intake. At the end of the intake, before entering the plant, there are pump
stations to deliver source water to the pretreatment units. For the Rosarito Desal
project, the intake will be after the source water passes through the generation
plant cooling towers. Source Water Conditioning and Pre-Treatment: The pre-treatment process is
used to remove organics and sand from the seawater. If the organics are not
removed, then the membranes get clogged or fouled. Before pre-treatment,
chemicals are added to the source water such as coagulants, flocculants, scale inhibitors, acids, and biocides such as chlorine. This process is called source water conditioning. The pre-treatment consists of sand removal, sedimentation,
and dissolved-air flotation. This process minimizes the content of coarse
materials and suspended solids collected by the plant intake and protects
downstream filtration facilities from solids overloading. Filtration: The filtration process is also called reverse osmosis separation. The
pre-treated water is conveyed and fed through high-pressure pumps to the RO
pressure vessels that contain the membrane elements where the actual
desalination process occurs. After the separation process is completed, the permeate goes for post-conditioning and distribution, while the concentrate or
reject goes to the outfall. For the Rosarito Desal project, the SWRO plant
concentrate is mixed with the cooling water from the generation plant to mitigate
marine environmental impacts.
Energy Recovery Systems: A large portion (40-50%) of energy consumed during
desalination of seawater is contained in the concentrate produced by the RO
Source: Voutchkov & Henthorne, 2011
Figure 1 Desalination Plant-Construction Costs
10
system. This energy will be recovered and reused for pumping of new saline source water by equipment specifically designed for this purpose.
The typical distribution of the construction costs for a RO desalination plant are shown
in Table 1:
Intake 5-20%
Pre-treatment 15-20%
RO System 40-60%
Discharge 3-15%
Source: Voutchkov & Henthorne, 2011 Table 1
Annual O&M typical costs of a high-complexity project are shown in Table 2:
Cost Item
Percentage of Total O&M Cost (%)
High-Complexity Project
Variable O&M costs
Power 35.0-58.0
Chemicals 5.5-9.0
Replacement of Membranes
and Cartridge filters
6.5-11.0
Waste Stream Disposal 3.5-7.0
Subtotal, variable O&M costs 50.5-85.0
Fixed O&M costs
Labor 4.0-11.0
Maintenance 3.0-13.0
Environmental and Performance Monitoring 1.0-5.0
Indirect O&M costs 7.0-20.5
Subtotal, fixed O&M costs 15.0-49.5
Source: Voutchkov, 2013 Table 2
CONCLUSION
The semi-arid climate in the greater Baja California and San Diego County Region, characterized by scarcity of rain and groundwater resources, paired with reliance on
imported water from the Sacramento Delta for San Diego and from the Colorado River
for both San Diego and Northern Baja California, determines that few options, besides
water reuse and conservation, are available other than using the Pacific Ocean as a
drinking water resource.
• In the last several years, NSC Agua and the District have worked at becoming
more familiar with the project and have made substantial investments; in the
case of NSC Agua, over $10M, in the case of the District, nearly $2.48M as of January 21, 2014.
11
• NSC Agua‘s obtaining control of the land is a key accomplishment in the project.
The success that Poseidon Resources enjoys today in the Carlsbad Desalination
project is founded on obtaining control of the land early in the process to exclude
potential competitive projects.
• In addition, NSC Agua started the environmental process, completed the piloting
of the pre-treatment process, and has started the planning of the pipe alignment
from Rosarito to the Border.
• On the District’s part, the environmental documentation, both State (CEQA) and
Federal (NEPA), started the Presidential Permit process, written two white
papers on the CDPH approval process, and the alignment of the pipe is mostly
defined.
• The proposed 100 MGD SWRO plant is large enough to meet the water needs of
the greater region of northern Baja California/South San Diego County. This
offers economies of scale and more opportunities for emergency supply in case of a disaster or other imported water supply interruptions.
• Desalination is a mature technology that is widely used around the globe. NSC
Agua is well positioned to develop such a facility in Rosarito to serve as a water supply for Tijuana/Rosarito and the Otay Water District. Although there are still
several hurdles to overcome on both sides of the Border, the due diligence being
performed by the District and NSC Agua makes this project highly achievable.
For a project of this magnitude, there are factors beyond NSC Agua’s control such as political, logistical, regulatory, and public opinion challenges that may surface as the
project moves forward. In addition, SDCWA’s intent to increase the fixed cost on the
District’s meters to pay for the Carlsbad Desalination project may impact the cost and
feasibility of obtaining water from the Rosarito Plant.
Investment in alternative water supplies, such as this project which was identified in the
2007 IRP, involved at-risk money; $5M is not unreasonable for the size of this type of
project and the effect on potential future long-term water supplies for the region.
Examples of new water supply projects that involve at-risk money includes the CWA’s
Quantification Settlement Agreement (QSA) for tens of millions of dollars, the City of San Diego’s Indirect Potable Reuse (IRP) project with at-risk money in excess of $10M
and the El Monte Valley project which Helix Water District spent $5M on before it was
suspended. The alternative to not pursuing these water resources projects is to do
nothing. Doing nothing will imperil the future supply of water to our ratepayers.
12
BIBLIOGRAPHY 1. Otay Water District’s Integrated Water Resources Master Plan, CDM
Engineers, 2007
2. Mexico and United States – Feasibility Study of Seawater Desalination
Developments Opportunities for the San Diego/Tijuana Region, San Diego
County Water Authority, PB Water, March 2005 3. Binational Desalination Feasibility Study Otay Water District – CDM June 2008
4. Consolidated Water Company, LTD, The New York Times-Business Day,
February 4, 2014 web search
5. United States Securities and Exchange Commission Form 10-Q. Quarterly
Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 – Consolidated Water Co. LTD Commission File #0-24238, March 31, 2013
6. Reuter’s People, Consolidated Water LTD (CWCO.O) undated. Web search
performed on February 4, 2014
7. Doosan Heavy Industries & Construction, Doosan Water Plants PowerPoint
presentation dated March 2013 8. Rubin, Debra K., “Mining Firms move forward on $3.43B Desal Plants in Chile,”
Engineering News Records, November 11, 2013
9. Castro, Guadalupe, “Queda Agua Para 15 Años,” Frontera Info, Tijuana B.C.
Mexico, February 6, 2014
10. Dévora-Isiordia, German Eduardo, et.al, “Evaluación de Procesos de Desalinizacion y su Desarrollo en México,” Instituto Technologico de Sonora,
Ciencias del Agua, Vol. IV, Num 3, Julio-Agosto 2013
11. Voutchkov, Nikolay, Desalination Engineering Planning & Design, Water Reuse
Foundation, McGraw-Hill, 2013
12. Voutchkov, Nikolay & Henthorne, Lisa, “Current & Future Desalination Trends.” WateReuse Research Foundation, 2011 Strategic Planning Session,
January 18, 2011
13. SDCWA’s Special Board Meeting, November 8, 2012, PowerPoint Presentation
14 March 2014
Frederick McTaggart
Chief Executive Officer
Consolidated Water Co. Ltd.
5810 Coral Ridge Drive, Suite 220
Coral Springs, FL 33076
NSC Agua S.A de C.V.
Blvd . Sanchez Taboada 10488-801
Zona Rio
Tijuana B.C. Mexico CP 22320
De'ar Mr. McTaggart,
KPMG Corporate Finance LLC
Suite 1200 1676 International Drive
Mclean, VA 22102
Re: Financing process for the Rosarito Desalination Project
Background
Telephone 703 286 8000
Internet www.kpmgcorporatefinance.com
The Rosarito Desal ination Project (the "Project") is comprised of a 4.4 cubic meters per second
(approximately 100 million gallons per day) sea water reverse osmosis ("SWRO") desalination plant,
accompanying pump station and conveyance pipeline to transport water produced by the plant to
Tijuana, Mexico and (to a lesser extent) to the United States border with Mexico. The primary purpose
of the Project is to provide potable water to customers in Mexico. The Project will also serve as a source
of potable water to the Otay Water District ("Otay") in the United States as the amount of water
produced by its plant exceeds the demand from its Mexico customers.
NSC Agua S.A. de C.V. ("NSC") is a Mexican corporation established specifically to complete the Project.
NSC's parent company Consolidated Water Co. Ltd. ("CWCO") is a U.S. public company whose stock is
traded on the NASDAQ Global Select Market. CWCO specializes in developing and operating SWRO
desalination water plants in the Caribbean and Asia.
Letters of Intent
NSC Agua has obtained a letter of intent from Otay for the supply of up to approximately 150,000 cubic
meters {40 million gallons) of potable water per day. There is significant progression of the Project on
the U.S side of the border by Otay (please see attached minutes at Appendix A), including in respect to
the environmental permitting that will be required for the Project.
KPMG Corporate Finance LLC
Suite 1200 1676 International Drive
Mclean, VA22102
Telephone 703 286 8000
Internet www.kpmgcorporatefinance.com
We understand that NSC expects the Comisi6n Estatal de Servicios Publicos de Tijuana ("CESPT") will
sign a letter of intent with NSC in the near future for the supply of 285,000 cubic meters per day.
KPMG's role and credentials
NSC engaged KPMG Corporate Finance LLC ("KPMG") in May 2013 to serve as its financial advisors for
the Project. As part of that engagement, we will provide NSC with advice on raising the debt and equity
for the Project. Currently the funding requirement for the Project is estimated to be approximately US$
750 million.
KPMG is an independent advisor with extensive experience in assisting developers of infrastructure
projects, whether public sector agencies or private sector companies, to procure, finance and manage
infrastructure assets.
We have a global practice and specialize in advising on public private partnerships and have earned
numerous awards and possess extensive credentials, as described at Appendix B to this letter. We have
been instrumental in successfully raising finance for approximately $15 billion in the U.S. in the last six
years. As an example, we can highlight the role KPMG recently played in Australia, advising Sydney
Water on the development and financing strategy of its 250 million liters per day desalination project.
The table below details our market leading position through 2012, and in 2013 we provided advice on
transactions with an aggregate value of approximately$ 2.8 billion.
US P3 Financial Advisors (January 2008 ·December 2012)
Deal Value Deal Market
Rank Company (US$m) Volume Share
1 KPMG 11 .393.6 9 22.0%
2 Macquarie 10.163.0 6 19.6%
3 Goldman Sachs 6,263.6 3 12.1%
4 JPMorgan 3.602.6 2 7.0%
5 Depfa Bank 2,789.0 2 5.4%
6 High Street Consulting Group 2,661.0 1 5.1%
7 Montague DeRose 2,661.0 1 5.1%
8 Jeffrey Parke r & Associates 2,530.4 2 4.9%
9 T aylor-DeJongh 2,52 1.0 2 4.9%
10 Scully Capital 2,231.4 2 4.3%
Source: Infrastructure Journal March 2013 {excludes ORB transaction)
It is important to note that KPMG is neither an underwriter of finance nor a provider of equity for such
deals. We typically advise our clients on how best to structure and procure financeable transactions and
KPMG Corporate Finance LLC
Suite 1200 1676 International Drive
Mclean, VA 22102
Telephone 703 286 8000
Internet www.kpmgcorporatefinance.com
then assist our clients in running competitive processes to raise the required finance. We explore a
number of options for financing in the process to ensure that our client has access to the best value
solution and the lowest possible cost of capital. Our competitive financing process typically helps to
create a lower price to the ultimate public sector client for the product it purchases from our client.
Representative KPMG transactions
We have a board range of experience in structuring projects across diverse infrastructure sectors that
require significant amounts of capital to be raised. These examples include:
• Sydney Desalination -The Sydney Desalination project consisted of the design, construction,
commissioning and operation of a 250 million liters per day desalination plant to deliver drinking
water to Sydney, Australia. Sydney Water engaged KPMG as commercial and financial advisor
for the project. The $2.2 billion project was funded with $605 million of equity and $1.6 billion
of bank debt.
• MT Falcon Holdings Co -MT Falcon Holdings Co., a joint venture 70 percent owned by Mitsui,
was acquired for $1.2 billion and included five power plants with a combined capacity of 2,233
megawatts, and a 54-kilometer {34-mile) gas pipeline. KPMG effectively worked as the exclusive
advisor for the Japanese conglomerate participating in the transaction. In that capacity, KPMG
assisted in evaluating various financing scenarios with the team in Mexico, the United States and
Japan.
• Long Beach Courthouse-KPMG advised Meridiam Infrastructure on their bid and financial close
of the Long Beach Courthouse project. KPMG was the lead financial advisor to Meridiam's
consortium and assisted with all commercial and financial aspects of their proposal. The project
involved the raising of $450 million of bank debt in addition to approximately $50m of equity.
• East End Crossing -KPMG advised the Indiana Finance Authority on the East End Crossing
project, a $1.3 billion project connecting Indiana and Kentucky in Louisville. KPMG served as sole
financial advisor to IFA and assisted with all commercial and financial aspects of the
procurement process. The project involved the raising of $677 million of private activity bonds
and $78 million of equity.
Approach to financing process1
Consistent with many prior similar infrastructure projects, the Project will be financed through a limited
or non-recourse project finance structure which uses highly leveraged debt. An example of such a
structure is the Carlsbad desalination projection in Carlsbad, California, U.S., which closed in 2012.
1 N.B. to date none of the institutions referenced here have been approached in relation to the project
KPMG Corporate Finance LLC
Suite 1200 1676 International Drive
Mcl ean, VA 22 102
Telephone 703 286 8000
Internet www.kpmgcorporatefinance.com
KPMG intends to run separate competitive processes to raise the debt and equity financing required for
the Project. At this stage we anticipate that bank financing may be more flexible than capital market
financing (although capital market financing has not yet been ruled out) and that development banks
such as Banobras, Fonadin, Nafinsa, IDB and NADB will be interested in participating in the Project given
its purpose and high level profile on both sides of the US-Mexican border and its national significance to
both countries.
These multi-lateral institutions will typically also require a commercial lender (bank) with experience in
infrastructure (such as BBVA, Santander or Banorte) to participate in the financing alongside them.
KPMG will run a competitive process to secure the cheapest finance in the market at the appropriate
point in time.
Equity partners are typically sourced in a number of ways and are of different types. For example key
members of the supply chain can be involved (e.g. the EPC contractor, O&M provider etc.). Typically
participating in the financing with these parties are institutional investors, such as infrastructure funds
(e.g. Stonepeak Infrastructure Partners which invested in Carlsbad, Macquarie Mexican Infrastructure
Fund {MMIF) or InfraRed Capital Partners), pension funds (e.g. lnfraestructura lnstitucional, CaiPERS and
Ontario Teachers' Pension Plan) and other third party equity providers or strategic partners (such as
GMD or Acciona). Equity can be sourced via competitive processes although it frequently can be simpler
to introduce investors to the Project on the basis of existing relationships and known appetite for
certain asset classes. KPMG will be leveraging its contacts with an extensive network of infrastructure
investors.
Role and significance of the water purchase agreements (WPAs)
Under project finance structures lenders do not typically rely on security over the assets as they tend to
be much more focused on security over contracted cash flows for the Project (i.e. the revenues of the
Borrower). The WPAs are the key contractual commitments for the Borrower and underpin the revenue
stream of the Project; so these contracts and the dependent allocation of risk between public sector
agencies and the private sector provider they describe are central to the lender's due diligence of the
Project and its credit risk.
Under a capital markets financing it would be necessary to ensure that the senior debt is investment
grade rated by one or more credit rating agencies (at BBB-or above). Bank lenders can be more flexible
but are usually looking for very similar (strong) credit characteristics.
KPMG will be advising on key aspects of the WPAs to ensure that each is acceptable to lenders and
contains key terms that lenders will require, in particular:
KPMG Corporate Finance LLC
Suite 1200 1676 International Drive
Mclean, VA 22 102
Telephone 703 286 8000
Internet www.kpmgcorporatefinance.com
• A commitment to pay by the public client that in almost all circumstances covers certain fixed costs
including debt service, and additional payments that hedge against variable costs such as electricity
(subject always to the satisfactory performance of the service);
• Protections for lenders against certain risks beyond the Borrower's control such as Force Majeure
and Change in Law;
• Rights for lenders to step-in if sub-contractors fail; and
• In extremis, certain protections for lenders on termination of the Project.
We further consider it likely to be necessary to secure a federal level guarantee (from a federal agency)
of the CESPT payment commitments described above.
Properly structured WPAs, that are acceptable to the public sector clients, the private sector developer,
and third party investors and lenders, are the starting points for the commencement of a financing
process and the due diligence that lenders will require before committing funding. Each WPA is a long
term agreement that requires careful consideration by all parties as well as close coordination with their
respective various advisors.
The WPA is typically executed by the public sector client in advance of the conclusion of the financing
process, which in no event should be later than [6] months after execution of the WPA.
Other dependencies
Lenders will also perform due diligence on all other aspects of the project -whether legal , technical or
otherwise-that may be a condition precedent ("CP") to the execution of the WPAs and associated sub-
contracts. This diligence will include:
• a review that the public sector clients have the appropriate authorizations to enter into the
agreements;
• verifying that all planning and environmental permits have been, or will be, obtained before
disbursement of funding;
• obtaining a technical evaluation to ensure the technology and equipment is satisfactory;
• determining that counterparty credit quality, particularly that of the Project's clients and key sub-
contractors, is sufficient; and
• assessing the Borrower's ability to cope with various potential adverse financial situations, such as
loss of revenue or increased costs and inflation, etc ..
Once the above diligence has been completed lenders will take the Project before its credit committee
to approve and commit to the loan.
Outline program
KPMG Corporate Finance LLC
Suite 1200 1676 International Drive
Mclean, VA 22102
Telephone 703 286 8000
Internet www.kpmgcorporatefinance.com
On the basis of the foregoing, we recommend (following the execution of the letter of intent between
the parties) that CESPT, Otay and NSC begin joint preparation of draft WPAs that meet the requirements
to obtain financing from third party investors and lenders, in order to enable NSC to launch the financing
process for the Project by the autumn of 2014.
In parallel NSC Agua will also be developing the ancillary commercial contracts required to deliver the
Project, such as the Engineering, Procurement and Construction contract and various other supply
contracts. These different commercial negotiations will need to converge so that a number of them can
be executed at commercial close. Final due diligence and the satisfaction of various conditions
precedent will then enable financial close to be reached. We understand that the target date for
financial close is currently in 2015, and if the key dependencies are met we believe this to be an
aggressive but deliverable timeline.
Conclusion
To summarize, we believe that NSC is developing an attractive Project that, correctly structured, will not
have difficulty raising sufficient financing at the appropriate time. Currently we believe that liquidity in
the market for investment grade projects is good.
The key risks for projects arise either in securing development funding, or the timely obtaining of the
various required authorities and permits, or in the failure to structure an investment grade deal.
The single most important contracts from a lender's perspective in assessing the credit quality of the
Project are the WPAs and associated guarantees. Banks will really only properly engage in a financing
process once the development of these key documents in particular is well advanced, and when there is
a real commitment from both the developer and clients to move to commercial close.
We believe NSC and its advisers are now extremely well placed to commence to develop the WPAs with
CESPT and Otay with a view to commencing the financing process in the autumn of 2014.
Yours sincerely,
Nick Greenwood
Managing Director, KPMG Corporate Finance LLC
STAFF REPORT
TYPE MEETING: Regular Board MEETING DATE: April 8, 2014
PROJECT: Various DIV. NO.: ALL
SUBMITTED BY: Geoffrey Stevens Chief Information Officer
APPROVED BY: German Alvarez, Assistant General Manager
Mark Watton, General Manager
SUBJECT: FY 2014 MID-YEAR STRATEGIC PLAN AND PERFORMANCE MEASURES
REPORT
GENERAL MANAGER’S RECOMMENDATION:
No recommendation -- informational item only. COMMITTEE ACTION:
See “Attachment A”. PURPOSE: To provide a mid-year report on the District’s Strategic Performance
Plan for FY 2014. ANALYSIS: The District is in the final year of the three-year Strategic Plan
for Fiscal Years 2012-2014. At the end of the 2nd quarter, FY 2014 results for the objectives are below target averages, and the performance measures exceed the target averages of 90% and 75%, respectively.
Strategic Plan Objectives Strategic Plan Objectives are designed to ensure we are making the
appropriate high-level changes necessary to move the agency in the planned direction to meet new challenges and opportunities.
2
Objective results were below target at 74% complete, ahead, or on schedule (target is 90%). These results are lower than the previous
year-end report. The lower rating appears to be attributed to timing issues with several projects where deliverables are delayed into the next quarter. 74% of Strategic Plan Objectives (25 of 34) Completed or On Schedule
Legend
Completed
On Schedule
Behind Schedule
On Hold
Annual Measure
Not Scheduled to Start Yet
Performance Measures
Performance measures are designed to track the day-to-day performance
of the District. These items measure the effectiveness and efficiency of daily operations, and where possible, we utilize the AWWA QualServe Benchmarks as the basis for comparison. The overall
goal is that at least 75% of these measures be rated “on target”. Mid-year FY 2014 District results exceed the goal of 75%, with 39 of
43 (91%) items achieving the desired target or above.
91% of Performance Measures (39 of 43) On or Above Target
3
Next Steps Staff briefed the Board last month on the District’s progress towards development of the FY 15-18 Strategic Plan, which will be presented
with the FY 15 Budget in May 2014. Committee Reports – Slideshow The Strategic Plan results are presented to both the Finance,
Administrative, and Communications Committee and the Engineering and Operations Committee with a specific focus on the most relevant
information for each Committee. Strategic Plan Available to Board Online
All of the strategic plan results and associated details are provided
in a real-time, interactive web-based application available to the Board via a VPN connection, available from the District Secretary. FISCAL IMPACT: Joe Beachem, Chief Financial Officer
None -- informational item only. STRATEGIC GOAL: Strategic Plan objectives and performance measures reporting is a
critical element in providing performance reporting to the Board and staff.
LEGAL IMPACT:
None.
Attachments: Attachment A – Committee Action Report Attachment B – FY 14 Mid-Year Strategic Plan Results
ATTACHMENT A
SUBJECT/PROJECT: FY 2014 MID-YEAR STRATEGIC PLAN AND PERFORMANCE MEASURES
REPORT
COMMITTEE ACTION:
The Engineering and Operations Committee and the Finance, Administration, and Communications Committee reviewed this item at
meetings held on March 17 and 18, respectively and the following comments were made:
• The District is in the final year of the three-year Strategic Plan for Fiscal Years 2012-2014. At the end of the 2nd quarter,
FY 2014 results for the objectives are below target averages at 74% and the performance measures exceed the target at 91%.
• Staff noted that the Strategic Plan Objectives were below target due to timing issues with several projects where deliverables are
being delayed into the next quarter.
• It was indicated that the Performance Measures result of 91% is the highest the District has achieved.
• Staff presented a review of the results of each of the measures (please reference Attachment B to the staff report).
• It was indicated in response to an inquiry from the committee regarding the Health & Safety Severity Rate measure, that if an
employee had a recurring back injury, each instance would be reflected in the measure’s performance as the measure counts the number of days employees are absent due to injuries.
• Staff noted with regard to the Website Hits measure that is much above target as it now includes hits from customers who pay their bills online. The measure did not include such hits in the past.
• At the March 5, 2014 board meeting, staff briefed the Board on the District’s progress towards the development of the FY 2015-2018 Strategic Plan. It was indicated that some of the items from the FY 2012-2014 Strategic Plan will be included in the FY 2015-2018 Strategic Plan.
• It was discussed that the Project Closeout Time is a little
behind target in the 2nd quarter and it will be substantially behind target in the 3rd quarter due to a delay in the completion of punch list work by the Contractor for the 944-1R Recycled
Water Pump Station Upgrades project (R2091). The project has been accepted.
• It was indicated that the District will focus on Water Loss Statistics which currently is at 5%. The goal is to decrease
this percentage by focusing more on leak detection and looking at the District’s system integrity. Staff will also focus on
Disaster Preparedness which will include radio systems, assuring the District can be self-sufficient for a certain amount of time, and playing out various scenarios to prepare for future
disasters.
• It was discussed that the committee documents are available to the public via the District’s website. This staff report will also be posted with next month’s board packet (April 8, 2014).
Following the discussion, the Committee supported staffs’
recommendation and presentation of this item to the full board as an informational item.
STAFF REPORT
TYPE MEETING: Regular Board MEETING DATE: April 8, 2014
SUBMITTED
BY:
Mark Watton
General Manager
W.O./G.F.
NO:
N/A DIV.
NO.
N/A
APPROVED BY: Mark Watton, General Manager
SUBJECT: General Manager’s Report
ADMINISTRATIVE SERVICES: Purchasing and Facilities:
• Purchase Orders – There were 76 purchase orders processed in
March for a total of $152,909.48.
Human Resources:
• Medical/Life Insurance Summary Plan Documents (SPD) – HR received and distributed new Summary Plan Benefit Booklets for
our Medical Insurance Plans to active employees.
• Recruitments - HR has completed recruitments for Purchasing and
Facilities Manager, Utility Maintenance Supervisor and Information Technology Manager. The Purchasing and IT Managers will start in early April. The Utility Maintenance Supervisor
recruitment resulted in a promotion of a Utility Crew Leader in March. HR is preparing to post the Utility Crew Leader vacancy.
• New Hires – There were no new hires in the month of March.
Safety & Security:
• Safety & Security SharePoint Site Makeover - Working with IT to enhance our internal SharePoint safety page (95% done). The
purpose is to centralize all safety and security information under an improved central repository that is user-friendly and can best meet and satisfy the informational needs of internal
staff.
• Alarm Security Testing and Inspection – A District-wide facility alarm security testing and inspection program is
2
underway. 12 out of 32 District facilities are completed with
the remainder on schedule for completion.
• NIMS/SEMS/ICS Program Review Update – Completed an Executive
Team briefing on the training steps required for each
individual section, in particular, for new employees.
• Safety Workshops - Staff attended “Social Media for Natural Disaster Response and Recovery” and “Cal/ARP” workshops for
updates, proposed changes and requirements.
• California Environmental Reporting Systems (CERS) – Staff has been working on satisfying the requirements under the CalEPA
California Environmental Reporting System (CERS). Starting January 1, 2013, all CUPA regulated businesses are required by law (Assembly Bill 2286) to submit and update business information electronically. The District has 26 facilities that must meet this requirement. INFORMATION TECHNOLOGY AND STRATEGIC PLANNING:
• Network Upgrades - IT staff is in the detailed planning stages for upgrading the switch and storage environment for the
District data center. Primary improvements include the upgrading of switch capacity to the gigabit level and storage
of over 100 terabytes. The storage will be configured to take advantage of both onsite and cloud-based storage. Particular attention is paid to security and encryption so that the data is both secure and replicated in the event of an emergency.
• iWater Inframap – GIS staff has implemented the iWater Inframap
product in the Survey and Inspection sections of Engineering. This was done to better handle the many USA Markout requests we get each day and to replace a piece of software (FieldMaplet)
that was obsolete.
• Tyler Spring Conference – An IT staff member will be attending the Spring Tyler Conference in San Antonio. The conference
provides education to our staff on changes to both our billing system and financial software. A member of Customer Service
will also be attending. Likewise, we will also have one IT staff member attending the Cityworks conference next month in Salt Lake City. Cityworks is the new work management software we are implementing this year.
• Safety and Security Documentation - IT staff assisted the
Safety and Security Specialist in developing a SharePoint web-based repository for all safety and security related information. The new structure will allow important information
such as safety procedures, resources, and checklists to be readily available and easy to find.
3
FINANCE:
• FY2014 Financial Audit – Staff is preparing for preliminary
fieldwork related to the FY14 Financial Audit, which is scheduled for the week of May 12th.
• Large Meter Testing Program - Meter Shop has identified 98
meters that are 3” and larger to be tested this fiscal year. These meters are the largest in the system and have consumption greater than 4,500 hcf per year.
• Operations Calls to Customer Service - Staff is making changes to the phone system, which will allow for any non-emergency
operations calls to be routed to Customer Service.
• Developer Meeting - The District has a meeting with developers on April 16th to discuss topics related to their developments.
There will be a presentation by Tom Gould of HDR on the Capacity and Annexation Fee Study the District is currently performing. Gary London from the London Group will be presenting on the District’s economic outlook. Staff will give updates on the Water Facilities Master Plan, Rosarito Desal,
Carlsbad Desal, and the Water Supply Watch Condition.
• Financial Reporting: o For the eight months ended February 28, 2014, there are
total revenues of $59,352,774 and total expenses of $58,180,903. The revenues exceeded expenses by $1,171,871.
o The market value shown in the Portfolio Summary and in the Investment Portfolio Details as of February 28, 2014 total $82,017,829.28 with an average yield to maturity of 0.36%.
The total earnings year-to-date are $197,716.65. ENGINEERING AND WATER OPERATIONS:
Engineering:
• SR-11 Potable Water Utility Relocations – Sequence 1: This
project consists of the relocation of existing pipelines in Sanyo Avenue and utility easements to accommodate the construction of the future SR-11 right-of-way. At the request
of Caltrans, the District’s relocations were bid as six (6) separate “work windows” to provide flexibility to Caltrans’
contractor and coordinate with the SR-11 freeway construction. The project was awarded to Coffman Specialties Incorporated and a Notice to Proceed was issued to begin work on February 10,
2014. The current work includes submittal review/approval. The project is within budget and on schedule and is anticipated
to be completed in August 2016. (P2453)
4
• 927-1 Reservoir Liner and Cover Replacement: This project
consists of replacing the liner and floating cover on the 927-1 recycled water reservoir which is also known as Pond 4 located
in the Salt Creek Golf Course. The existing liner and cover have reached the end of their useful life and are in need of replacement. The project was awarded to Layfield Environmental
Systems Corporation and a Notice to Proceed was issued on November 18, 2013 and the current work involves installation of
the new liner, performing the liner leak testing, and repairs to the existing facilities provided for under the bid allowance items. The project is within budget and on schedule and
anticipated to be complete in May 2014. (R2108)
• 803-3 & 832-2 Reservoirs Interior/Exterior Coatings and Upgrades: This project consists of removing and replacing the interior and exterior coatings of the 803-3 Reservoir 2.0 MG and the 832-2 Reservoir 2.0 MG, along with providing structural
upgrades to ensure the tanks comply with both State and Federal OSHA Standards as well as American Water Works Association and
County Health Department Standards. The Contractor, Advanced Industrial Services, has completed all work on the project. On November 23, 2013 the 832-2 tank was put back into service.
The 803-3 tank was put back into service on December 13, 2013. All field work is complete and project acceptance is
anticipated for early April 2014. The project is within budget and on schedule. (P2518 & P2519)
• 624-2 Reservoir Interior/Exterior Coatings & Upgrades: This
project consists of removing and replacing the interior and exterior coatings of the 624-2 8.0 MG Reservoir, along with providing structural upgrades to ensure the tanks comply with both State and Federal OSHA standards as well as American Water Works Association and County Health Department standards. At
the January 2014 Board Meeting, the Board awarded the construction contract to Advanced Industrial Services. The current work consists of completing the planned structural improvements and blasting operations and coating operations to the interior of the reservoir. The project is within budget
and on schedule and is anticipated to be completed in June 2014. (P2493)
• Palomar Bridge Utility Relocation: This is a Caltrans project
that consists of replacing the East Palomar Bridge over I-805. The District maintains a 10-inch potable water pipeline through
the bridge, which will be temporarily out of service. Water service will not be interrupted during the construction. Caltrans has completed the bridge demolition, and is currently
erecting the new overpass. The new pipeline will be upsized from 10-inch to 12-inch, and installation is currently planned
for mid-May 2014. The project is on schedule and within budget. (P2507)
5
• 832-1&2 New Cingular Wireless Amendment: New Cingular Wireless (New Cingular) approached the District
with a request to lease additional area at the 832-1&2 for the purposes of upgrading to their new LTE technology and constructing the associated power backup facilities. As a
result of the request by New Cingular, an amendment to their existing lease agreement using the most current language
approved by the Board was initiated and approved by the General Manager under the Board’s amended Section 2.01 of the Otay Water District’s Code of Ordinances. As part of the lease
amendment, the Rent shall be increased by Eight Hundred One and 07/100 Dollars ($801.07) per month, for a total monthly rental
payment of $4,372.51. (AS001-CS0011)
• County Water Authority Request for Electrical Service: The San
Diego County Water Authority (Water Authority) has requested
that the District provide electrical power for a new acoustic assessment system to be installed in an existing Water
Authority vault that is currently receiving electrical power from an existing District metering facility on Ruxton Road. The Water Authority has offered to pay the entire electricity
bill for the District facility. The new acoustic system is anticipated to be on-line for three (3) years. The District
sent three signed copies of the letter agreement to the Water Authority for signature.
• Administration Building Fire Sprinkler Replacement: This
project consists of removing and replacing the existing fire sprinkler system in the Administration Building. A recent inspection of the fire sprinkler system identified corrosion throughout the systems as the cause for leaks the District experienced last year. Staff determined that replacing the
entire fire protection system was costly and unnecessary, and requested a second opinion to rectify the corrosion issue. A&D Fire Sprinkler, Inc. recommended the first phase to be a replacement of the visually corroded fixtures. This was completed on January 21, 2014, and as a result, the District
received a 5 year certification on the Administration Building. The second phase includes installing an automated system to
inject a chemical solution that will treat the corrosion. Staff is currently evaluating the different types of treatment to be included in the RFP for the second phase. (P2538)
• Approximately 1,276 linear feet of both CIP and developer pipeline was installed in February 2014. The Construction Division performed quality assurance and quality control for
these pipelines.
• For the month of February 2014, the District sold 11 meters (11 EDUs) generating $105,095 in revenue. Projection for this
6
period was 17.5 meters (29.5 EDUs) with budgeted revenue of
$266,447. Total revenue for Fiscal Year 2014 through February 2014 is $1,267,189 against the annual budget of $3,197,767.
• The following table summarizes Engineering's project purchases issued during the period of December 27, 2013 through March 25, 2014 that were within staff signatory authority:
Date Action Amount
Contractor/ Consultant Project
12/27/13 P.O. $7,545.00 A&D Fire Sprinklers, Inc Fire Sprinkler Repair (P2538)
3/3/14 Check Request
(advance deposit)
$232,345.51 State of Calif. Dept. of Trans.
East Palomar
Street Utility Relocation
(P2507)
Water Operations:
• Total number of potable water meters is 49,207.
• The February potable water purchases were 1982.0 acre-feet which is 3.3% above the budget of 1917.9 acre-feet. The
cumulative purchases through February is 21,973.2 acre-feet which is 2.4% above the cumulative budget of 21,456.3 acre-
feet.
7
• The February recycled water purchases and production was 169.9
acre-feet which is 8.9% above the budget of 156.0 acre-feet. The cumulative production and purchases through February is
3,281.1 acre-feet which is 14.4% above the cumulative budget of 2,868.7 acre-feet. This increase was caused by less rainfall and higher than normal temperatures, a temporary customer that
was not anticipated in the FY 2014 budget, and a new meter from the City for water sales from the SBWRP that is running
approximately 10% higher than Otay’s meter.
• Recycled water consumption for the month of February is as follows:
o Total consumption was 217.5 acre-feet or 70,857,292 gallons
and the average daily consumption was 2,530,618 gallons per day.
o Total recycled water consumption as of February for FY 2014 is 3,301.2 acre-feet. o Total number of recycled water meters is 712.
• Wastewater flows for the month of February were as follows:
o Total basin flow, gallons per day: 1,665,631. o Spring Valley Sanitation District Flow to Metro, gallons per day: 548,239. o Total Otay flow, gallons per day: 1,107,392.
o Flow Processed at the Ralph W. Chapman Water Recycling Facility, gallons per day: 869,853.
o Flow to Metro from Otay Water District was 237,539 gallons per day.
• By the end of February there were 6,088 wastewater EDUs.
Page 1 of 12
Check Total
1,605.46
6,395.11
1,883.75
2,345.84
297.00
CHECK REGISTER
Otay Water District
Date Range: 2/20/2014 - 3/19/2014
Check #Date Vendor Vendor Name Invoice Inv. Date Description Amount
2039571 03/05/14 08488 ABLEFORCE INC 4154 02/06/14 PROGRAMMING SERVICES (COMPLETED 2/4/14)4,125.00 4,125.00
2039519 02/26/14 15421 ADELA MILES Ref002432694 02/24/14 UB Refund Cst #0000143424 36.49 36.49
2039676 03/19/14 02654 ADVANCED COMMUNICATIONS SYSTEM 15043 02/27/14 PORTABLE RADIOS 1,170.68 1,170.68
2039633 03/12/14 13901 ADVANCED INDUSTRIAL SVCS INC 1B 03/05/14 RESERVOIR UPGRADE (ENDING 2/28/14)105,698.33 105,698.33
2039520 02/26/14 13901 ADVANCED INDUSTRIAL SVCS INC 5A 02/23/14 COATINGS/UPGRADES (ENDING 2/20/14)47,795.80 47,795.80
2039572 03/05/14 13901 ADVANCED INDUSTRIAL SVCS INC 00014471 02/23/14 RETAINAGE RELEASE 43,678.07 43,678.07
2039677 03/19/14 12174 AECOM TECHNICAL SERVICES INC 15 02/24/14 DISINFECTION SYSTEM (ENDING 1/24/14)65,064.29 65,064.29
2039634 03/12/14 11462 AEGIS ENGINEERING MGMT INC 1306 02/14/14 DEVELOPER PROJECTS (1/4/14-1/31/14)14,017.86 14,017.86
2039678 03/19/14 11803 AEROTEK ENVIRONMENTAL OE01018556 03/13/14 TEMPORARY EMPLOYMENT (ENDING 3/1/14)1,378.58
OE01016696 03/06/14 TEMPORARY EMPLOYMENT (ENDING 2/22/14)226.88
2039679 03/19/14 07732 AIRGAS SPECIALTY PRODUCTS INC 131325228 02/28/14 AQUA AMMONIA 3,385.80
131325227 02/28/14 AQUA AMMONIA 3,009.31
2039521 02/26/14 13753 AIRGAS USA LLC 9915950315 01/31/14 BREATHING AIR 41.75 41.75
2039680 03/19/14 15024 AIRX UTILITY SURVEYORS INC 4 02/25/14 LAND SURVEYING (1/1/14-1-31-14)6,379.50 6,379.50
2039681 03/19/14 14811 ALARMS UNLIMITED INC 160004 02/27/14 CAMERA INSTALLATION 1,862.48
160161M 03/13/14 ALARM/VIDEO MONITORING (3/10/14-3/31/14)21.27
2039573 03/05/14 14811 ALARMS UNLIMITED INC 159250 02/14/14 ALARM SERVICES (2/12/14)1,404.23
159209 02/11/14 ALARM SERVICES (2/7/14)941.61
2039635 03/12/14 14811 ALARMS UNLIMITED INC 159567 03/01/14 ALARM/VIDEO MONITORING #1 (MAR 2014)200.00
159568 03/01/14 ALARM/VIDEO MONITORING #4 (MAR 2014)39.00
159570 03/01/14 ALARM/VIDEO MONITORING #2 (MAR 2014)29.00
159569 03/01/14 ALARM/VIDEO MONITORING #3 (MAR 2014)29.00
2039522 02/26/14 15440 ALASKAN COPPER & BRASS CO WOD0901 02/20/14 W/O REFUND D0901-090158 98.00 98.00
2039523 02/26/14 15434 ALEXANDRA VINSON Ref002432707 02/24/14 UB Refund Cst #0000198546 54.24 54.24
2039574 03/05/14 01463 ALLIED ELECTRONICS INC 9002684053 02/04/14 POWER SUPPLY 487.10 487.10
2039575 03/05/14 02362 ALLIED WASTE SERVICES # 509 0509005496849 02/25/14 TRASH SERVICES (MAR 2014)530.33 530.33
2039636 03/12/14 02362 ALLIED WASTE SERVICES # 509 0509005498469 02/25/14 TRASH SERVICES (MAR 2014)67.49 67.49
Page 2 of 12
Check Total
CHECK REGISTER
Otay Water District
Date Range: 2/20/2014 - 3/19/2014
Check #Date Vendor Vendor Name Invoice Inv. Date Description Amount
8,220.00
4,007.88
2039682 03/19/14 15468 ALTA PARCELS LP WOD0835 03/14/14 W/O REFUND D0835-060061 68.42 68.42
2039576 03/05/14 14462 ALYSON CONSULTING CM201411 02/12/14 MGMT/INSP - R2108 (1/1/14-1/31/14)2,690.00
CM201412 02/12/14 MGMT/INSP - P2493 (1/1/14 - 1/31/14)2,550.00
CM201413 02/12/14 MGMT/INSP - P2453 (1/1/14-1/31/14)1,350.00
CM201408 02/12/14 MGMT/INSP - D0551 (12/22/13-1/2/14)880.00
CM201410 02/12/14 MGMT/INSP - P2518/P2519 (1/1/14-1/31/14)600.00
CM201409 02/12/14 MGMT/INSP - R2091 (1/1/14-1/31/14)150.00
2039637 03/12/14 06166 AMERICAN MESSAGING L11095700C 03/01/14 PAGER SERVICES (FEB 2014)206.92 206.92
2039524 02/26/14 15433 AMY PARSON Ref002432706 02/24/14 UB Refund Cst #0000197175 23.14 23.14
2039577 03/05/14 00002 ANSWER INC 9573 02/22/14 ANSWERING SERVICES (MONTHLY)1,100.00 1,100.00
2039578 03/05/14 08967 ANTHEM BLUE CROSS EAP 41203 02/20/14 EMPLOYEE ASSISTANCE PROGRAM (MAR 2014)321.12 321.12
2039525 02/26/14 15436 ASLAN REASIDENTIAL V LLC Ref002432709 02/24/14 UB Refund Cst #0000204399 30.64 30.64
2039526 02/26/14 05758 AT&T 61967053090214 02/15/14 LONG DISTANCE (MONTHLY)37.78 37.78
2039527 02/26/14 05758 AT&T 33784130450214 02/07/14 ACCESS TRANSPORT SVCS (2/7/14-3/6/14)31.56 31.56
2039579 03/05/14 05758 AT&T 61942256050214 02/20/14 ACCESS TRANSPORT SVCS (2/20/14-3/19/14)84.02 84.02
2039580 03/05/14 05758 AT&T 61969851400214 02/24/14 LONG DISTANCE (MONTHLY)37.78 37.78
2039638 03/12/14 05758 AT&T 082164572802251 02/25/14 ACCESS TRANSPORT SVCS (2/25/14-3/24/14)2,293.08 2,293.08
2039683 03/19/14 12810 ATKINS 1188867 03/01/14 DESALINATION PROJECT (1/12/14-1/14/14)2,352.00 2,352.00
2039581 03/05/14 13392 AZTECA SYSTEMS INC 9085 02/13/14 LICENSE AGREEMENT 60,000.00 60,000.00
2039684 03/19/14 11519 BACKFLOW APPARATUS & VALVE CO 655822 02/25/14 FIRE SERVICE BACKFLOW 3,003.20 3,003.20
2039685 03/19/14 15243 BAILEY RSD SELF STORAGE LP WOD0877 03/14/14 W/O REFUND D0877-090128 270.19 270.19
2039528 02/26/14 03584 BIOTECHNICAL SERVICES INC 1099169 01/27/14 LABORATORY MAINTENANCE 790.00 790.00
2039639 03/12/14 15456 BLUE MOUNTAIN AIR Ref002432949 03/10/14 UB Refund Cst #0000185780 75.00 75.00
2039582 03/05/14 10970 BRENNTAG PACIFIC INC BPI387318 02/06/14 SODIUM HYPOCHLORITE 2,099.32
BPI389180 02/13/14 SODIUM HYPOCHLORITE 1,022.41
BPI387508 02/06/14 SODIUM HYPOCHLORITE 886.15
2039686 03/19/14 10970 BRENNTAG PACIFIC INC BPI391784 02/21/14 SODIUM HYPOCHLORITE 1,993.59
BPI393297 02/27/14 SODIUM HYPOCHLORITE 1,722.18
Page 3 of 12
Check Total
CHECK REGISTER
Otay Water District
Date Range: 2/20/2014 - 3/19/2014
Check #Date Vendor Vendor Name Invoice Inv. Date Description Amount
7,059.86
1,045.23
3,442.53
BPI391372 02/20/14 SODIUM HYPOCHLORITE 1,423.52
BPI393298 02/27/14 SODIUM HYPOCHLORITE 1,022.41
BPI391371 02/20/14 SODIUM HYPOCHLORITE 898.16
2039529 02/26/14 01004 CALOLYMPIC SAFETY 324943 01/27/14 CALIBRATION GAS 335.14 335.14
2039687 03/19/14 01004 CALOLYMPIC SAFETY 326141 02/26/14 HAZWOPPER GASTECH 192.95 192.95
2039640 03/12/14 15447 CANNON, LARRY E000064 03/06/14 SAFETY BOOTS REIMBURSEMENT 114.45 114.45
2039583 03/05/14 15177 CAROLLO ENGINEERS INC 133219 02/14/14 DESIGN 870-2 PS (1/1/13-1/31/14)28,010.00 28,010.00
2039688 03/19/14 09801 CENTERBEAM INC 19997 02/27/14 NETWORK MAINTENANCE (1/15/14)525.00 525.00
2039530 02/26/14 15431 CHARLES LAFLAIR Ref002432704 02/24/14 UB Refund Cst #0000189108 82.34 82.34
2039584 03/05/14 15441 CHERRI MEGASKO UB230743937 03/03/14 CUSTOMER REFUND 956.84 956.84
2039585 03/05/14 15444 CHRISTOBAL CHAPMAN UB026004110 03/03/14 CUSTOMER REFUND 173.70 173.70
2039689 03/19/14 02026 CHULA VISTA ELEM SCHOOL DIST AR042870 02/28/14 GARDEN TOURS (1/29-1/30/2014)540.00 540.00
2039531 02/26/14 15256 CIGNA GROUP INSURANCE / LINA 09520492670214 02/26/14 AD&D & SUPP LIFE INS (FEB 2014)4,519.60 4,519.60
2039532 02/26/14 12674 CITY OF CHULA VISTA 071060PU0040114 01/30/14 UTILITY PERMITS (1/1/13-12/31/13)22,275.00 22,275.00
2039533 02/26/14 00234 CITY TREASURER 1000095859 01/16/14 RECLAIMED WATER PURCHASE (CY 2013)306,271.00 306,271.00
2039690 03/19/14 04119 CLARKSON LAB & SUPPLY INC 71960 02/28/14 BACTERIOLOGICAL TESTING SERVICES 241.00 241.00
2039691 03/19/14 08160 COMPLETE OFFICE 15828360 02/26/14 TONER 808.71
15826570 02/26/14 PRINTER 236.52
2039586 03/05/14 08160 COMPLETE OFFICE 15757280 02/04/14 COPY PAPER 1,071.01 1,071.01
2039692 03/19/14 10727 COMPUTER AIDED SOLUTIONS LLC 19918 02/28/14 DIGITAL DATA LOGGER 1,635.67 1,635.67
2039693 03/19/14 15467 CORKY MCMILLIN CONSTRUCTION WOD0032b 03/14/14 W/O REFUND D0032-010140 2,103.89
WOD0032a 03/14/14 W/O REFUND D0032-XX6445 673.78
WOD0032 03/14/14 W/O REFUND D0032-XX6437 664.86
2039694 03/19/14 00099 COUNTY OF SAN DIEGO DPWAROTAYMW 02/20/14 EXCAVATION PERMITS (JAN 2014)1,349.80 1,349.80
2039587 03/05/14 00184 COUNTY OF SAN DIEGO A000070 02/25/14 HAZMAT CHARGES (FUEL ISLAND)10,000.00 10,000.00
2039588 03/05/14 00184 COUNTY OF SAN DIEGO A000072 02/25/14 ADMINISTRATIVE REIMBURSEMENT 4,160.60 4,160.60
2039589 03/05/14 00184 COUNTY OF SAN DIEGO DEH140251D11 02/21/14 SHUT DOWN TEST (1/14/2014)142.00
Page 4 of 12
Check Total
CHECK REGISTER
Otay Water District
Date Range: 2/20/2014 - 3/19/2014
Check #Date Vendor Vendor Name Invoice Inv. Date Description Amount
284.00
530.04
3,000.00
1,345.00
2,343.86
1,005.00
DEH140255D11 02/21/14 SHUT DOWN TEST (1/27/2014)142.00
2039590 03/05/14 02122 COUNTY OF SAN DIEGO 2014010701214 01/07/14 PERMIT FEES 01214 (03/14-03/15)356.00 356.00
2039591 03/05/14 15443 COUNTY OF SAN DIEGO DPW20114930893 02/19/14 PERMIT FOR DEPOSIT 380.04
DPW20114930893 02/19/14 DEPOSIT FOR PERMIT 150.00
2039641 03/12/14 02756 COX COMMUNICATIONS SAN DIEGO 28810214 02/27/14 INTERNET SERVICES (3/1/14-3/28/14)1,500.00
27170214 02/27/14 INTERNET SERVICES (3/1/14-3/28/14)1,500.00
2039642 03/12/14 15448 DANIEL HINDI UB625127928 03/10/14 CUSTOMER REFUND 860.00 860.00
2039643 03/12/14 15461 DAVID BENSOUSSAN Ref002432954 03/10/14 UB Refund Cst #0000203315 74.42 74.42
2039644 03/12/14 15459 DEBRA GRADY Ref002432952 03/10/14 UB Refund Cst #0000199176 50.52 50.52
2039645 03/12/14 08679 DEPARTMENT OF TRANSPORTATION 14004515 02/06/14 UTILITY RELOCATION DEPOSIT 232,345.51 232,345.51
2039695 03/19/14 03417 DIRECTV 22608345265 03/05/14 SATELLITE TV (3/4/14-4/3/14)18.00 18.00
2039534 02/26/14 00196 DRAWINGBOARD PRINTING 8646399 01/14/14 MAILING LABELS 498.16 498.16
2039592 03/05/14 02447 EDCO DISPOSAL CORPORATION 1554580214 02/28/14 RECYCLING SERVICES (FEB 2014)95.00 95.00
2039535 02/26/14 15429 ELOY BEAS Ref002432702 02/24/14 UB Refund Cst #0000188139 37.37 37.37
2039593 03/05/14 03227 ENVIROMATRIX ANALYTICAL INC 4020461 02/10/14 RECYCLED WATER ANALYSIS (1/24/14-1/30/14)600.00 600.00
2039696 03/19/14 03227 ENVIROMATRIX ANALYTICAL INC 4030406 03/03/14 RECYCLED WATER ANALYSIS (2/13/14-2/20/14)555.00
4020590 02/18/14 RECYCLED WATER ANALYSIS (1/31/14-2/6/14)445.00
4020756 02/24/14 RECYCLED WATER ANALYSIS (2/7/14-2/12/14)345.00
2039594 03/05/14 02259 ENVIRONMENTAL RESOURCE 710818 02/10/14 LABORATORY CERTIFICATION 1,370.68
710702 02/17/14 LABORATORY CERTIFICATION 973.18
2039697 03/19/14 14320 EUROFINS EATON ANALYTICAL INC L0156481 02/25/14 OUTSIDE LAB SERVICES (2/10/14)750.00
L0156464 02/25/14 OUTSIDE LAB SERVICES (2/4/14)255.00
2039646 03/12/14 15455 EVA FELICIANO Ref002432948 03/10/14 UB Refund Cst #0000175460 6.97 6.97
2039595 03/05/14 15396 EVOQUA WATER TECHNOLOGIES LLC 901582725 02/10/14 CL2GAS PM 240.87 240.87
2039536 02/26/14 00645 FEDEX 256702788 02/21/14 MAIL SERVICES (2/13/14)6.24 6.24
2039537 02/26/14 03546 FERGUSON WATERWORKS # 1083 0459836 01/07/14 VALVE CAN 864.00 864.00
2039596 03/05/14 03546 FERGUSON WATERWORKS # 1083 0461635 02/10/14 FILTER AIR SCOUR VALVES 2,578.50
Page 5 of 12
Check Total
CHECK REGISTER
Otay Water District
Date Range: 2/20/2014 - 3/19/2014
Check #Date Vendor Vendor Name Invoice Inv. Date Description Amount
5,880.88
1,539.00
761.11
2,517.19
0464695 02/14/14 INVENTORY 1,652.14
0463608 02/10/14 16" SPOOLS 1,155.38
0465191 02/14/14 WAREHOUSE SUPPLIES 494.86
2039698 03/19/14 03546 FERGUSON WATERWORKS # 1083 0464192 02/18/14 REDI-CLAMPS 768.96
0465187 02/20/14 HYDRANT PARTS 712.80
04651871 02/25/14 HYDRANT PARTS 57.24
2039699 03/19/14 12187 FIRST AMERICAN DATA TREE LLC 9003400214 02/28/14 ONLINE DOCUMENTS (MONTHLY)99.00 99.00
2039597 03/05/14 04066 FIRST CHOICE SERVICES - SD 015319 02/14/14 COFFEE SUPPLIES 496.14 496.14
2039700 03/19/14 04066 FIRST CHOICE SERVICES - SD 016424 02/26/14 FILTER EXCHANGE 485.51
015898 03/03/14 COFFEE SUPPLIES 275.60
2039598 03/05/14 14478 FISHER WIRELESS SERVICES INC 220888 02/17/14 RADIO UPGRADES 1,183.95 1,183.95
2039701 03/19/14 11962 FLEETWASH INC x240171 02/21/14 FLEET VEHICLE WASHING (2/21/14)170.82 170.82
2039599 03/05/14 11962 FLEETWASH INC x237757 02/14/14 FLEET VEHICLE WASHING (2/14/14)137.97 137.97
2039538 02/26/14 01612 FRANCHISE TAX BOARD Ben2432753 02/27/14 BI-WEEKLY PAYROLL DEDUCTION 50.00 50.00
2039647 03/12/14 01612 FRANCHISE TAX BOARD Ben2433012 03/13/14 BI-WEEKLY PAYROLL DEDUCTION 50.00 50.00
2039539 02/26/14 02344 FRANCHISE TAX BOARD Ben2432755 02/27/14 BI-WEEKLY PAYROLL DEDUCTION 81.00 81.00
2039648 03/12/14 02344 FRANCHISE TAX BOARD Ben2433014 03/13/14 BI-WEEKLY PAYROLL DEDUCTION 81.00 81.00
2039702 03/19/14 13563 FRIENDS OF THE WATER 187 02/25/14 GARDEN TOURS (FEB 2014)3,720.00 3,720.00
2039540 02/26/14 10817 GEXPRO 580343422 12/18/13 RX3I PLC 6,500.44 6,500.44
2039703 03/19/14 00101 GRAINGER INC 9374419258 02/25/14 WAREHOUSE SUPPLIES 346.84 346.84
2039600 03/05/14 00101 GRAINGER INC 9363984114 02/12/14 FLUKE MULTIMETER 1,060.45 1,060.45
2039704 03/19/14 12907 GREENRIDGE LANDSCAPE INC 11737 02/26/14 LANDSCAPING SERVICES (FEB 2014)8,909.50 8,909.50
2039601 03/05/14 00174 HACH COMPANY 8692223 02/11/14 HACH APA6000 2,482.79
8657388 01/20/14 LABORATORY SUPPLIES 34.40
2039649 03/12/14 00174 HACH COMPANY 8662636 01/22/14 HACH APA PARTS 635.02 635.02
2039650 03/12/14 15457 HAMANN CONSTRUCTION Ref002432950 03/10/14 UB Refund Cst #0000186747 1,497.51 1,497.51
2039602 03/05/14 02350 HARPER & ASSOCIATES ENG4871 02/04/14 COATING INSPECTION SERVICES (ENDING 1/31/14)1,185.00 1,185.00
Page 6 of 12
Check Total
CHECK REGISTER
Otay Water District
Date Range: 2/20/2014 - 3/19/2014
Check #Date Vendor Vendor Name Invoice Inv. Date Description Amount
85.86
15,737.22
1,684.65
575.60
7,201.45
2039541 02/26/14 02795 HARTFORD INSURANCE CO, THE Ben2432741 02/27/14 MONTHLY CONTRIBUTION TO LTD 5,522.46 5,522.46
2039651 03/12/14 15453 HAYDEE MUNOZ Ref002432946 03/10/14 UB Refund Cst #0000072934 20.32 20.32
2039705 03/19/14 15349 HDR INC 141753B 03/11/14 CONSULTING SERVICES (JAN-FEB 2014)15,924.00 15,924.00
2039542 02/26/14 00062 HELIX WATER DISTRICT 178540010214 02/11/14 WATER PURCHASE (12/5/13-2/6/14)42.93
174639860214 02/11/14 WATER PURCHASE (12/5/13-2/6/14)42.93
2039603 03/05/14 12335 HP ENTERPRISE SERVICES LLC U3152277 02/12/14 IVR PAYMENT SERVICES (JAN 2014)2,220.15 2,220.15
2039543 02/26/14 15435 IBRAHIM SABBAGH Ref002432708 02/24/14 UB Refund Cst #0000203258 246.89 246.89
2039604 03/05/14 08969 INFOSEND INC 77028 02/04/14 BILL PRINTING SERVICES (JAN 2014)2,046.80 2,046.80
2039706 03/19/14 08969 INFOSEND INC 77817 02/28/14 BILL PRINTING SERVICES (FEB 2014)12,360.59
77816 02/28/14 BILL PRINTING SERVICES (FEB 2014)3,376.63
2039707 03/19/14 02372 INTERIOR PLANT SERVICE INC 7352 02/20/14 PLANT SERVICES (FEB 2014)205.00 205.00
2039652 03/12/14 13899 INTERMEDIA.NET INC 2013166040 03/01/14 EMAIL SERVICES (2/2/14-3/2/14)3,466.36 3,466.36
2039544 02/26/14 15420 IRMA CHAVEZ Ref002432693 02/24/14 UB Refund Cst #0000083572 10.25 10.25
2039545 02/26/14 15419 JAMES BIEDERER Ref002432692 02/24/14 UB Refund Cst #0000062013 9.04 9.04
2039708 03/19/14 03077 JANI-KING OF CALIFORNIA INC SDO02140145 02/01/14 JANITORIAL SERVICES (FEB 2014)1,135.50 1,135.50
2039605 03/05/14 10563 JCI JONES CHEMICALS INC 609035 CREDIT MEMO -3,000.00
608990 02/06/14 CHLORINE 4,684.65
2039709 03/19/14 02269 JENAL ENGINEERING CORP 14456 02/25/14 FUEL ALARM 475.60
14493 03/03/14 DUSTO INSPECTIONS (FEB 2014)100.00
2039546 02/26/14 15427 JESSICA CARTER Ref002432700 02/24/14 UB Refund Cst #0000187668 12.67 12.67
2039606 03/05/14 03172 JONES & STOKES ASSOCIATES INC 0099170 02/12/14 ENVIRONMENTAL CONSULTING (1/1/14-1/24/14)3,500.00
0099169 02/12/14 ENVIRONMENTAL CONSULTING (1/1/14-1/24/14)1,038.15
0099175 02/12/14 ENVIRONMENTAL CONSULTING (1/1/14-1/24/14)1,010.80
0099173 02/12/14 ENVIRONMENTAL CONSULTING (1/1/14-1/24/14)860.00
0099172 02/12/14 ENVIRONMENTAL CONSULTING (1/1/14-1/24/14)792.50
2039653 03/12/14 15465 JORGE AHUAGE UB625305917 03/10/14 CUSTOMER REFUND 1,500.49 1,500.49
2039547 02/26/14 15432 JOSE CORDERO Ref002432705 02/24/14 UB Refund Cst #0000195246 17.62 17.62
2039654 03/12/14 15460 KATE CRAFTS Ref002432953 03/10/14 UB Refund Cst #0000199245 56.65 56.65
Page 7 of 12
Check Total
CHECK REGISTER
Otay Water District
Date Range: 2/20/2014 - 3/19/2014
Check #Date Vendor Vendor Name Invoice Inv. Date Description Amount
2,187.97
2039710 03/19/14 10089 KENNEDY, ROBERT 030914031214 03/17/14 TRAVEL EXPENSES (3/9/14-3/12/14)199.30 199.30
2039607 03/05/14 15445 KENT PAYNE 02252014 02/25/14 FINGERPRINTING 18.00 18.00
2039655 03/12/14 15464 KIRK PAVING INC Ref002432957 03/10/14 UB Refund Cst #0000207118 1,843.76 1,843.76
2039711 03/19/14 04996 KNOX ATTORNEY SERVICE INC 4037121 02/28/14 DELIVERY SERVICES (1/31/14-2/14/14)299.25 299.25
2039608 03/05/14 15442 KRIS PROVO UB031176043 03/03/14 CUSTOMER REFUND 82.16 82.16
2039609 03/05/14 14460 KUBE ENGINEERING TEQE636 02/10/14 SUN SHIELDS 409.36 409.36
2039656 03/12/14 09511 LAYFIELD ENVIRONMENTAL SYSTEMS 2A 02/28/14 COVER/LINER REPLACEMENT (ENDING 2/28/14)227,917.16 227,917.16
2039548 02/26/14 15422 LESLIE MADRID Ref002432695 02/24/14 UB Refund Cst #0000162425 57.09 57.09
2039712 03/19/14 13749 LONDON GROUP REALTY ADVISORS 887 02/21/14 ECONOMIC OUTLOOK REPORT 2015-2020 6,250.00 6,250.00
2039713 03/19/14 03019 LOPEZ, JOSE 020114022814 03/11/14 MILEAGE REIMBURSEMENT (FEB 2014)44.80 44.80
2039549 02/26/14 15418 LYNETTE SHAW Ref002432691 02/24/14 UB Refund Cst #0000035719 56.51 56.51
2039657 03/12/14 15452 MARGARET DOERR Ref002432945 03/10/14 UB Refund Cst #0000062219 100.50 100.50
2039658 03/12/14 15450 MARIO HERNANDEZ Ref002432943 03/10/14 UB Refund Cst #0000031465 47.24 47.24
2039550 02/26/14 15430 MARLYS SLOCUM Ref002432703 02/24/14 UB Refund Cst #0000188541 22.22 22.22
2039714 03/19/14 02902 MARSTON & MARSTON INC 20143 03/03/14 COMMUNITY OUTREACH (FEB 2014)1,780.00 1,780.00
2039715 03/19/14 01183 MCMASTER-CARR SUPPLY CO 75085876 02/24/14 WAREHOUSE SUPPLIES 976.47
75531990 02/27/14 TOOLS FOR TP 804.98
75348793 02/26/14 NITRATE SENSOR MATERIALS 377.54
75254411 02/25/14 WAREHOUSE SUPPLIES 28.98
2039551 02/26/14 15424 MCMILLIN Ref002432697 02/24/14 UB Refund Cst #0000173138 1,872.78 1,872.78
2039610 03/05/14 01824 MERKEL & ASSOCIATES INC 14021102 02/12/14 ENVIRONMENTAL SERVICES (1/1/14-1/31/14)13,351.40 13,351.40
2039659 03/12/14 15463 MIKE HARLAN Ref002432956 03/10/14 UB Refund Cst #0000204315 123.38 123.38
2039716 03/19/14 14699 MISSION COMMUNICATIONS LLC 40023837 02/24/14 MISSION UNIT BATTERIES 157.00 157.00
2039611 03/05/14 00237 MISSION JANITORIAL & ABRASIVE 39945300 02/14/14 JANITORIAL SUPPLIES 2,301.35 2,301.35
2039717 03/19/14 15136 MISSION UNIFORM SERVICE 340272601 02/24/14 UNIFORM SERVICES 397.23
340273656 03/03/14 UNIFORM SERVICES 397.23
Page 8 of 12
Check Total
CHECK REGISTER
Otay Water District
Date Range: 2/20/2014 - 3/19/2014
Check #Date Vendor Vendor Name Invoice Inv. Date Description Amount
1,214.14
1,212.05
12,200.50
104,056.43
746.59
334.80
1,840.48
340272600 02/24/14 UNIFORM SERVICES 127.65
340273655 03/03/14 UNIFORM SERVICES 114.17
340272604 02/24/14 UNIFORM SERVICES 88.93
340273659 03/03/14 UNIFORM SERVICES 88.93
2039612 03/05/14 15136 MISSION UNIFORM SERVICE 340270513 02/10/14 UNIFORM SERVICES 402.48
340271558 02/17/14 UNIFORM SERVICES 397.23
340271557 02/17/14 UNIFORM SERVICES 114.57
340270512 02/10/14 UNIFORM SERVICES 114.17
340270516 02/10/14 UNIFORM SERVICES 94.67
340271561 02/17/14 UNIFORM SERVICES 88.93
2039660 03/12/14 15462 MONTY'S MAINTENANCE INC Ref002432955 03/10/14 UB Refund Cst #0000204286 19.80 19.80
2039613 03/05/14 12908 NARASIMHAN CONSULTING SERVICES 039014REVISED 02/10/14 HYDRAULIC MODELING SERVICES (10/6/13-12/31/13 10,126.00
039013REV ISED 02/10/14 HYDRAULIC MODELING SERVICES (9/1/13-10/25/13)2,074.50
2039552 02/26/14 03523 NATIONAL DEFERRED COMPENSATION Ben2432747 02/27/14 BI-WEEKLY DEFERRED COMP PLAN 10,808.27 10,808.27
2039661 03/12/14 03523 NATIONAL DEFERRED COMPENSATION Ben2433006 03/13/14 BI-WEEKLY DEFERRED COMP PLAN 10,808.27 10,808.27
2039718 03/19/14 14856 NEXUS IS INC JC638607 02/18/14 SOFTWARE PROGRAMMING 102,515.41
JC639123 02/28/14 ACCESS POINTS 1,541.02
2039719 03/19/14 00510 OFFICE DEPOT INC 694667221001 02/28/14 OFFICE SUPPLIES 606.10
694670065001 02/28/14 OFFICE SUPPLIES 132.39
694667402001 03/03/14 OFFICE SUPPLIES 8.10
2039720 03/19/14 03149 ON SITE LASER LLC 48280 03/10/14 PRINTER SERVICES (3/7/14)505.60 505.60
2039553 02/26/14 03149 ON SITE LASER LLC 48159 01/08/14 PRINTER SERVICES (1/8/14)183.60
48164 01/09/14 PRINTER SERVICES (1/8/14)151.20
2039614 03/05/14 01002 PACIFIC PIPELINE SUPPLY 165001 02/05/14 INVENTORY 1,752.84
165213 02/11/14 INVENTORY 87.64
2039721 03/19/14 05497 PAYPAL INC 30265715 02/28/14 PHONE PAYMENT SVCES (FEB 2014)54.10 54.10
2039722 03/19/14 00053 PITNEY BOWES INC 818990 03/03/14 EQUIPMENT RENTAL (4/1/14-6/30/14)207.36 207.36
2039615 03/05/14 06419 PLANT SOUP INC 941 12/17/13 PROFESSIONAL WRITING SERVICES 967.50 967.50
2039662 03/12/14 06419 PLANT SOUP INC 941a 12/17/13 PROFESSIONAL WRITING SERVICES 161.25 161.25
Page 9 of 12
Check Total
CHECK REGISTER
Otay Water District
Date Range: 2/20/2014 - 3/19/2014
Check #Date Vendor Vendor Name Invoice Inv. Date Description Amount
653.18
1,074.20
129,727.03
2039616 03/05/14 10929 PORTABLE POWER SYSTEMS INC 166269 01/15/14 UPS BATTERIES 104.23 104.23
2039554 02/26/14 03351 POSADA, ROD 021914022114 02/24/14 TRAVEL EXPENSES (2/19/14-2/21/14)935.64 935.64
2039723 03/19/14 01733 PRICE TRONCONE &12789 02/07/14 ANTENNA SUBLEASE (APR-JUNE 2014)4,128.00 4,128.00
2039724 03/19/14 13059 PRIORITY BUILDING SERVICES 38432 02/01/14 JANITORIAL SERVICES (FEB 2014)3,664.00 3,664.00
2039617 03/05/14 00078 PUBLIC EMPLOYEES RET SYSTEM Ben2432743 02/27/14 BI-WEEKLY PERS CONTRIBUTION 160,499.86 160,499.86
2039725 03/19/14 00078 PUBLIC EMPLOYEES RET SYSTEM Ben2433002 03/13/14 BI-WEEKLY PERS CONTRIBUTION 160,902.50 160,902.50
2039726 03/19/14 01342 R J SAFETY SUPPLY CO INC 32242200 02/26/14 SAFETY SUPPLIES 407.70 407.70
2039618 03/05/14 01342 R J SAFETY SUPPLY CO INC 32211900 02/14/14 SAFETY SUPPLIES 331.77
32108901 02/05/14 SAFETY SUPPLIES 321.41
2039619 03/05/14 00766 RANROY PRINTING COMPANY 020221 02/11/14 POSTCARD 301.32 301.32
2039555 02/26/14 15426 REBECCA GAINES Ref002432699 02/24/14 UB Refund Cst #0000185709 8.96 8.96
2039663 03/12/14 15449 ROBERT GREGORY Ref002432942 03/10/14 UB Refund Cst #0000022624 30.64 30.64
2039556 02/26/14 15417 RODOLFO VELASCO Ref002432690 02/24/14 UB Refund Cst #0000031635 150.00 150.00
2039664 03/12/14 15458 RYAN KOHLER Ref002432951 03/10/14 UB Refund Cst #0000197344 93.24 93.24
2039727 03/19/14 02683 SAFECHECKS INC 0523062 02/25/14 CHECK STOCK 851.59
0523068 02/25/14 CHECK STOCK 222.61
2039665 03/12/14 15451 SAN DIEGO BUSINESS PARK Ref002432944 03/10/14 UB Refund Cst #0000049679 100.00 100.00
2039620 03/05/14 02586 SAN DIEGO COUNTY ASSESSOR 2013181 02/11/14 ASSESSOR DATA (MONTHLY)125.00 125.00
2039728 03/19/14 00003 SAN DIEGO COUNTY WATER AUTH 0000000967 03/03/14 SOCAL WATERSMART (MAR 2014)35.00 35.00
2039729 03/19/14 00247 SAN DIEGO DAILY TRANSCRIPT 422041 02/21/14 BID ADVERTISEMENT 124.10 124.10
2039621 03/05/14 00121 SAN DIEGO GAS & ELECTRIC 022614 02/26/14 UTILITY EXPENSES (MONTHLY)53,443.43
022514 02/25/14 UTILITY EXPENSES (MONTHLY)49,754.21
021914 02/19/14 UTILITY EXPENSES (MONTHLY)25,792.47
022414 02/24/14 UTILITY EXPENSES (MONTHLY)736.92
2039622 03/05/14 15446 SCOTT, ADAM 03032014 03/03/14 TUITION REIMBURSEMENT 345.00 345.00
2039557 02/26/14 05512 SD COUNTY VECTOR CONTROL PROG SD100370214 02/20/14 VECTOR CONTROL PROGRAM 539.25 539.25
2039558 02/26/14 12904 SEPULVEDA CONSTRUCTION INC 00011791A 02/11/14 RETAINAGE RELEASE 62,646.40 62,646.40
Page 10 of 12
Check Total
CHECK REGISTER
Otay Water District
Date Range: 2/20/2014 - 3/19/2014
Check #Date Vendor Vendor Name Invoice Inv. Date Description Amount
1,065.00
685.00
498.07
2039666 03/12/14 06357 SHEA HOMES LP E000065 03/06/14 RECYCLED RETROFIT REIMBURSEMENT 9,485.50 9,485.50
2039559 02/26/14 15428 SHEA HOMES LP Ref002432701 02/24/14 UB Refund Cst #0000187873 1,872.78 1,872.78
2039730 03/19/14 15048 SIEMENS WATER TECHNOLOGIES LLC 901599866 02/24/14 MICRO2000 PARTS 3,895.28 3,895.28
2039731 03/19/14 15307 SIERRA ANALYTICAL LABS INC 4B12046 02/12/14 LABORATORY SERVICES (2/5/14)220.00
4B28003 02/28/14 LABORATORY SERVICES (2/19/14)220.00
4C06004 03/06/14 LABORATORY SERVICES (2/26/14)220.00
4C14009 03/14/14 LABORATORY SERVICES (3/5/14)220.00
4B19022 02/19/14 LABORATORY SERVICES (2/10/14)185.00
2039623 03/05/14 04544 SIGN CRAFTERS 130680 01/22/14 NO TRESPASSING SIGNS 3,177.68 3,177.68
2039667 03/12/14 13327 SILVA-SILVA INTERNATIONAL 1403 03/01/14 PROJECT CONSULTANT (FEB 2014)4,000.00 4,000.00
2039668 03/12/14 15454 SONIA GIL Ref002432947 03/10/14 UB Refund Cst #0000146928 25.72 25.72
2039732 03/19/14 11618 SOUTH COAST COPY SYSTEMS AR146248 02/25/14 COPIER MAINTENANCE (MAR 2014)1,682.59 1,682.59
2039733 03/19/14 03103 SOUTHCOAST HEATING &C53062 02/10/14 AC MAINTENANCE (FEB 2014)480.00
C53081 02/10/14 IT AC MAINTENANCE (FEB 2014)205.00
2039734 03/19/14 15176 SOUTHCOAST HEATING &C53080 02/10/14 AC MAINTENANCE (FEB 2014)1,068.00 1,068.00
2039624 03/05/14 06853 SOUTHERN CALIFORNIA SOIL 366738 02/15/14 GEOTECHNICAL SERVICES (2/1/14-2/15/14)1,742.36 1,742.36
2039560 02/26/14 03760 SPANKY'S PORTABLE SERVICES INC 980134 01/31/14 PORTABLE TOILET RENTAL (1/30/14-2/26/14)98.17 98.17
2039669 03/12/14 03760 SPANKY'S PORTABLE SERVICES INC 982675 02/27/14 PORTABLE TOILET RENTAL (2/27/14-3/26/14)98.17
980896 02/10/14 PORTABLE TOILET RENTAL (2/8/14-3/7/14)79.98
981861 02/24/14 PORTABLE TOILET RENTAL (2/19/14-3/18/14)79.98
980899 02/10/14 PORTABLE TOILET RENTAL (2/7/14-3/6/14)79.98
980898 02/10/14 PORTABLE TOILET RENTAL (2/7/14-3/6/14)79.98
980897 02/10/14 PORTABLE TOILET RENTAL (2/7/14-3/6/14)79.98
2039735 03/19/14 03516 SPECIAL DISTRICT RISK 46204 02/28/14 WORKERS' COMPENSATION (4/1/14-6/30/14)56,637.00 56,637.00
2039625 03/05/14 02354 STANDARD ELECTRONICS 19743 02/06/14 MONITORING SERVICES (FEB 2014)1,352.50 1,352.50
2039736 03/19/14 14906 STATE MEDIATION AND A000076 03/17/14 ARBITRATOR LIST 50.00 50.00
2039626 03/05/14 03738 STEVEN ENTERPRISES INC 0313779IN 02/13/14 BOND PAPER (ENGINEERING)168.67 168.67
2039627 03/05/14 07678 STREAMLINE FORMS & GRAPHICS 39129 02/06/14 TAG-COURTESY NOTICE 414.72 414.72
Page 11 of 12
Check Total
CHECK REGISTER
Otay Water District
Date Range: 2/20/2014 - 3/19/2014
Check #Date Vendor Vendor Name Invoice Inv. Date Description Amount
20,058.19
13,910.80
21,940.61
724.85
2039670 03/12/14 12809 STUTZ ARTIANO SHINOFF 94311 02/24/14 LEGAL SERVICES (JAN 2014)31,475.08 31,475.08
2039561 02/26/14 15439 SUNRANCH CAPITAL PARTNERS LLC WOD0894 02/20/14 W/O REFUND D0894-090152 504.97 504.97
2039737 03/19/14 10339 SUPREME OIL COMPANY 395390 02/27/14 UNLEADED FUEL 14,121.00
395391 02/27/14 DIESEL FUEL 5,937.19
2039738 03/19/14 02376 TECHKNOWSION INC 2493 02/25/14 ETHERNET CONVERSIONS 3,240.00 3,240.00
2039628 03/05/14 02376 TECHKNOWSION INC 2496 02/14/14 DISTRICT GENERATORS PROGRAMMING 12,166.00 12,166.00
2039562 02/26/14 03608 TELLIARD CONSTRUCTION OWD32014 01/31/14 CONDUIT INSTALLATION 1,500.00 1,500.00
2039563 02/26/14 15437 TEMPORARY ACCOMODATIONS Ref002432710 02/24/14 UB Refund Cst #0000205956 35.02 35.02
2039739 03/19/14 14177 THOMPSON, MITCHELL 020114022814 03/04/14 MILEAGE REIMBURSEMENT (FEB 2014)34.72 34.72
2039564 02/26/14 15423 TOSHIHIRO WAKAYAMA Ref002432696 02/24/14 UB Refund Cst #0000172843 13.62 13.62
2039740 03/19/14 15469 TRIMONT REAL ESTATE ADVISORS WOD0871 03/14/14 W/O REFUND D0871-090123 6,458.40 6,458.40
2039671 03/12/14 13743 TURNKEY HOME AND LOANS UB203159029 03/10/14 CUSTOMER REFUND 75.00 75.00
2039741 03/19/14 00427 UNDERGROUND SERVICE ALERT OF 220140471 03/01/14 UNDERGROUND ALERTS (MONTHLY)306.00 306.00
2039565 02/26/14 00350 UNITED STATES POSTAL SERVICE 10433951xxxx 02/24/14 PREPAID POSTAGE MACHINE 6,000.00 6,000.00
2039629 03/05/14 07674 US BANK A000069 12/23/13 CAL-CARD EXPENSES (MONTHLY)13,871.25
MW0114 01/22/14 CAL CARD EXPENSES (MONTHLY)39.55
2039566 02/26/14 07674 US BANK O0000000077 01/22/14 CAL CARD PURCHASES 26,744.43 26,744.43
2039742 03/19/14 07674 US BANK MW0214 02/24/14 CAL CARD EXPENSES (MONTHLY)36.73 36.73
2039672 03/12/14 07674 US BANK A000075 12/21/04 CAL-CARD EXPENSES (MONTHLY)16,603.60
E000067 02/24/14 CAL CARDS EXPENSES (MONTHLY)5,070.46
E000066 02/24/14 CAL CARD EXPENSES (MONTHLY)243.60
SC0114 01/22/14 CAL CARD EXPENSES (MONTHLY)22.95
2039567 02/26/14 06829 US SECURITY ASSOCIATES INC 466949 01/31/14 ALARM RESPONSE (JAN 2014)417.30
432622 12/31/13 ALARM RESPONSE (DEC 2013)307.55
2039568 02/26/14 01095 VANTAGEPOINT TRANSFER AGENTS Ben2432749 02/27/14 BI-WEEKLY DEFERRED COMP PLAN 12,665.65 12,665.65
2039673 03/12/14 01095 VANTAGEPOINT TRANSFER AGENTS Ben2433008 03/13/14 BI-WEEKLY DEFERRED COMP PLAN 12,751.88 12,751.88
2039674 03/12/14 06414 VANTAGEPOINT TRANSFER AGENTS Ben2433010 03/13/14 BI-WEEKLY 401A PLAN 5,100.00 5,100.00
Page 12 of 12
Check Total
CHECK REGISTER
Otay Water District
Date Range: 2/20/2014 - 3/19/2014
Check #Date Vendor Vendor Name Invoice Inv. Date Description Amount
2,500.00
2039569 02/26/14 06414 VANTAGEPOINT TRANSFER AGENTS Ben2432751 02/27/14 BI-WEEKLY 401A PLAN 6,277.00 6,277.00
2039630 03/05/14 03329 VERIZON WIRELESS 9720475883 02/21/14 VERIZON SERVICES (1/22/14-2/21/14)6,636.35 6,636.35
2039570 02/26/14 15425 VIVIAN BARAJAS Ref002432698 02/24/14 UB Refund Cst #0000174912 35.54 35.54
2039675 03/12/14 03781 WATTON, MARK 020114022814 03/10/14 MILEAGE REIMBURSEMENT (FEB 2014)188.40 188.40
2039743 03/19/14 01343 WE GOT YA PEST CONTROL 87651 02/21/14 BEE REMOVAL SERVICES 115.00 115.00
2039631 03/05/14 15181 WILLDAN FINANCIAL SERVICES 01023265 02/05/14 ARBITRAGE REBATE SERVICES 1,250.00
01023266 02/05/14 ARBITRAGE REBATE SERVICES 1,250.00
2039744 03/19/14 15466 WINDINGWALK MASTER ASSOCIATION WOD0017 03/13/14 W/O REFUND D0017-XX6456 5,403.00 5,403.00
2039632 03/05/14 15438 ZIOMEK, JEANETTE 022014 02/11/14 TUITION REIMBURSEMENT 375.50 375.50
Amount Pd Total:2,333,914.70
Check Grand Total:2,333,914.70