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HomeMy WebLinkAbout07-23-13 FA&C Committee Packet 1 OTAY WATER DISTRICT FINANCE, ADMINISTRATION AND COMMUNICATIONS COMMITTEE MEETING and SPECIAL MEETING OF THE BOARD OF DIRECTORS 2554 SWEETWATER SPRINGS BOULEVARD SPRING VALLEY, CALIFORNIA BOARDROOM TUESDAY July 23, 2013 11:30 A.M. This is a District Committee meeting. This meeting is being posted as a special meeting in order to comply with the Brown Act (Government Code Section §54954.2) in the event that a quorum of the Board is present. Items will be deliberated, however, no formal board actions will be taken at this meeting. The committee makes recommendations to the full board for its consideration and formal action. AGENDA 1. ROLL CALL 2. 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 DISCUSSION ITEMS 3. APPROVE TWO (2) AGREEMENTS WITH BMB TOWER HOLDINGS, LLC, AN OKLAHOMA LIMITED LIABILITY COMPANY, FOR THE INSTALLATION OF A COMMUNICATIONS FACILITY AT THE 485-1 AND 458-1 RESERVOIR SITES (MARTIN) [5 minutes] 4. DECLARE THE IDENTIFIED VEHICLES AND EQUIPMENT AS SURPLUS TO THE DISTRICT’S NEEDS (SARNO) [5 minutes] 5. APPROVE A ONE-YEAR FIXED WITH FOUR OPTION YEAR RENEWALS (FIVE-YEAR TERM) AGREEMENT WITH PAYMENTUS TO PROVIDE PHONE PAYMENT SERVICES IN AN AMOUNT NOT-TO-EXCEED $250,000 ($50,000 ANNUALLY) (CAREY) [5 minutes] 6. ADJOURNMENT BOARD MEMBERS ATTENDING: David Gonzalez Jose Lopez 2 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 Secre- tary 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 670-2280 at least 24 hours prior to the meeting. Certification of Posting I certify that on July 19, 2013 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 24 hours in advance of the meeting of the Board of Directors (Government Code Section §54954.2). Executed at Spring Valley, California on July 19, 2013. ______/s/_ Susan Cruz, District Secretary _____ STAFF REPORT TYPE MEETING: Regular Board MEETING DATE: August 7, 2013 SUBMITTED BY: Dan Martin Engineering Manager PROJECT/ SUBPROJECT: AS588- CS0001 & AS588- CS0002 DIV. NO. 2, 4 APPROVED BY: Rod Posada, Chief, Engineering German Alvarez, Assistant General Manager Mark Watton, General Manager SUBJECT: Request to Approve Two (2) Agreements with BMB Tower Holdings, LLC, an Oklahoma Limited Liability Company, for the Installation of a Communications Facility at the 485-1 & 458-1 Reservoir Sites GENERAL MANAGER'S RECOMMENDATION: That the Otay Water District (District) Board of Directors (Board) authorize the General Manager to execute two (2) agreements with BMB Tower Holdings, LLC, an Oklahoma Limited Liability Company, (BMB) for the installation of a communications facility at the 485-1 & 458-1 Reservoir Sites (see Exhibit A for Project location). COMMITTEE ACTION: See Attachment A. PURPOSE: To obtain Board approval authorizing the General Manager to execute two (2) agreements (see Attachments B-1 and B-2) with BMB that allows the installation of a communications facility at the 485-1 & 458-1 Reservoir Sites. The agreement will grant BMB the right to use approximately 177 square feet of leased area at the 458-1 Reservoir Site and approximately 147 square feet of leased area at the 485-1 Reservoir Site. AGENDA ITEM 3 2 ANALYSIS: The District currently has two lease agreements with BMB, as reflected in Exhibit A: 1. Point Barrow Drive (458-1 Reservoir) 2. East H Street (485-1 Reservoir) The original leases for the sites were signed in September 2006 between the District and Cricket Communications (Cricket). Subsequently, in April 2011 the leases were assigned from Cricket to Global Tower Partners, LLC (GTP). Lastly, in June 2011, the leases were assigned from GTP to BMB. In June 2012, the District was made aware that BMB was subleasing both the Point Barrow Drive site and the East H Street site back to Cricket. The agreements that BMB assumed under the assignment specifically prohibit subleasing of the sites without the District’s prior written consent. As a result, letters were sent to BMB notifying them of the default of the agreement for each site along with a request to cure. As a requirement to cure the agreements, the District has requested that BMB enter into new lease agreements for the both sites. The new agreements will memorialize the change in ownership, provide for a sublease only to Cricket, and strengthen the terms of the existing leases with language that reflects the current District lease terms. The language in the proposed lease agreements includes terms for the following:  Security Deposit equal to the sum of two months’ rent.  Elimination of pro-rating language to simplify the billing process.  20 percent penalties for late payment.  Non-curable Event of Default for failure to pay rent.  Magnetic mount or other non-destructive alternative attachment requirement.  Utilities and back-up power provisions.  New Assignment of Lease requirement to assist in documenting change of ownership.  Assessment of a one-time payment of $1,000.00. As part of the lease agreements, the Rent shall be increased on each calendar anniversary of the Commencement Date at a rate of four percent (4%) per annum. At the beginning of an extension term or 3 additional term the rent will be adjusted to the rate of four percent (4%) per annum or the annual Consumer Price Index change (“CPI”), whichever is greater. The lease agreements also include a non-refundable administrative fee of $4,500 for each amendment that will be due within (30) days of the date of execution of the lease agreements by both parties to reimburse the District for administrative expenses and costs related to the District's supervision and assistance of the lease default cure. FISCAL IMPACT: Joseph Beachem, Chief Financial Officer The District will continue to receive rent which will now be subject to an annual inflation adjustment of four percent effective upon the execution of the lease agreements. STRATEGIC GOAL: The District ensures its continued financial health through long-term financial planning, formalized financial policies, enhanced budget controls, fair pricing, debt planning, and improved financial reporting. LEGAL IMPACT: The agreement has been reviewed and approved by District General Counsel for content and form. DJM/RP:jf P:\WORKING\CELLULAR LEASE FILE\BMB, Tower Holdings LLC\Staff Report\BD 08-07-13\BD 08-07-13, Staff Report, BMB @ 485-1 and 458-1 Res Sites, (DM).docx Attachments: Exhibit A – Location Map Attachment A – Committee Action Attachment B-1 – 458-1 Reservoir Agreement Attachment B-2 – 485-1 Reservoir Agreement ATTACHMENT A SUBJECT/PROJECT: AS588-CS0001 AS588-CS0002 Request to Approve Two (2) Agreements with BMB Tower Holdings, LLC, an Oklahoma Limited Liability Company, for the Installation of a Communications Facility at the 485-1 & 458-1 Reservoir Sites COMMITTEE ACTION: The Finance, Administration, and Communications Committee (Committee) reviewed this item at a meeting held on July 23, 2013. The Committee supported Staff's recommendation. NOTE: The "Committee Action" is written in anticipation of the Committee moving the item forward for Board approval. This report will be sent to the Board as a Committee approved item, or modified to reflect any discussion or changes as directed from the Committee prior to presentation to the full Board. AGREEMENT BETWEEN BMB TOWER HOLDINGS, LLC AND OTAY WATER DISTRICT TO LOCATE A COMMUNICATIONS FACILITY AT OTAY'S 458-1 RESERVOIR SITE (651 Pt.Barrows Drive,Chula Vista CA,91911) This Telecommunication Facility Agreement (the "Agreement")is entered into and effective on the date specified in the signature page (the "Commencement Date"),by and between the Otay Water District,a municipal water district organized and operated pursuant to the Water Code Section 71000,et seq.("Otay"),and BMB Tower Holdings,LLC ("Tenant"). Special terms and conditions are set forth on Exhibit A. RECITALS A.Otay owns a site on which it has constructed water facilities known as the "458-1 RESERVOIR SITE,"as depicted on Attachment A to Exhibit B (the "Reservoir Site"). B.On September 14,2006,Otay entered into that certain lease agreement (the "Original Lease")with Cricket Communications,Inc.,a Delaware corporation for the Reservoir Site. C.On or about April 14,2011 Otay consented to an assignment of the Original Lease from Cricket Communications Inc.to Global Tower Partners,LLC ("GTP"). D.On or about June 6,2011 Otay consented to an assignment of the Original Lease from GTP Communications Inc.to BMB Tower Holdings,LLC ("BMB"). E.On or before April 19,2012 BMB subleased of a portion of the Original Lease space without Otay's consent and failed to pay rent in a timely manner in violation of the terms of the Original Lease and subsequent assignments. F.Tenant has cured the Original Lease defaults including a one-time payment to Otay of $1,000.00. G.Tenant has requested Otay to allow it to continue the use of the Property for location of a communications facility and transmitting and receiving antennas at the Reservoir Site pursuant to the terms and conditions set forth herein. H.Otay is willing to allow Tenant to locate the Facilities (defined below)at the Reservoir Sites pursuant to the terms and conditions set forth herein. AGREEMENT For good and valuable consideration,the receipt and sufficiency of which is hereby acknowledged,Otay and Tenant agree as follows: 1.Premises.Otay owns the real property described in Attachment B to Exhibit B (the "Property").Otay agrees to lease to Tenant,for the installation of antennas and related telecommunications equipment within the Property,as more particularly described on Attachment C to Exhibit B (the "Premises"). 2.Grant of Non-Exclusive Trench and Utility Easements).Upon written request from Tenant,Otay agrees to grant a non-exclusive easement,as legally described and depicted in Exhibit C to this Agreement (the "Easement"),for certain agreed-upon portions of the Property for the purpose of trenching and for the installation and maintenance of the Otay approved utilities needed by Tenant for the Facilities.It is expressly agreed that any such Easement shall Telecommunication Facilities Agreement Page I Form:10-10 AGREEMENT BETWEEN BMB TOWER HOLDINGS, LLC AND OTAY WATER DISTRICT TO LOCATE A COMMUNICATIONS FACILITY AT OTAY'S 485-1 RESERVOIR SITE (996 East H Street,Chula Vista,CA 91910) This Telecommunication Facility Agreement (the "Agreement")is entered into and effective on the date specified in the signature page (the "Commencement Date"),by and between the Otay Water District,a municipal water district organized and operated pursuant to the Water Code Section 71000,et seq.("Otay"),and BMB Tower Holdings,LLC ("Tenant"). Special terms and conditions are set forth on Exhibit A. RECIIALS A.Otay owns a site on which it has constructed water facilities known as the "485-1 RESERVOIR SITE,"as depicted on Attachment A to Exhibit B (the "Reservoir Site"). B.On September 14,2006,Otay entered into that certain lease agreement (the "Original Lease")with Cricket Communications,Inc.,a Delaware corporation for the Reservoir Site. C.On or about April 14,2011 Otay consented to an assignment of the Original Lease from Cricket Communications Inc.to Global Tower Partners,LLC ("GTP"). D.On or about June 6,2011 Otay consented to an assignment of the Original Lease from GTP Communications Inc.to BMB Tower Holdings,LLC ("BMB"). E.On or before April 19,2012 BMB subleased of a portion of the Original Lease space without Otay's consent and failed to pay rent in a timely manner in violation of the terms of the Original Lease and subsequent assignments. F.Tenant has cured the Original Lease defaults including a one-time payment to Otay of $1,000.00. G.Tenant has requested Otay to allow it to continue the use of the Property for location of a communications facility and transmitting and receiving antennas at the Reservoir Site pursuant to the terms and conditions set forth herein. H.Otay is willing to allow Tenant to locate the Facilities (defined below)at the Reservoir Sites pursuant to the terms and conditions set forth herein. AGREEMENT For good and valuable consideration,the receipt and sufficiency of which is hereby acknowledged,Otay and Tenant agree as follows: 1.Premises.Otay owns the real property described in Attachment B to Exhibit B (the "Property").Otay agrees to lease to Tenant,for the installation of antennas and related telecommunications equipment within the Property,as more particularly described on Attachment C to Exhibit B (the "Premises"). 2.Grant of Non-Exclusive Trench and Utility Easementfs).Upon written request from Tenant,Otay agrees to grant a non-exclusive easement,as legally described and depicted in Exhibit C to this Agreement (the "Easement"),for certain agreed-upon portions of the Property for the purpose of trenching and for the installation and maintenance of the Otay approved utilities needed by Tenant for the Facilities.It is expressly agreed that any such Easement shall Telecommunication Facilities Agreement Page 1 Form:10-10 STAFF REPORT TYPE MEETING: Regular Board MEETING DATE: August 7, 2013 SUBMITTED BY: Stephen Dobrawa Purchasing Manager PROJECT: Various DIV. NO. ALL APPROVED BY: Rom Sarno, Chief of Administrative Services German Alvarez, Assistant General Manager Mark Watton, General Manager SUBJECT: DECLARATION OF SURPLUS VEHICLES AND EQUIPMENT GENERAL MANAGER’S RECOMMENDATION: That the Board declare the identified vehicles and equipment as surplus to the District’s needs. COMMITTEE ACTION: See “Attachment A”. PURPOSE: To present a list of vehicles and equipment and obtain Board declaration that the items identified on the list are surplus to the District’s needs. ANALYSIS: Listed below are various vehicles and equipment that have been determined by the user departments to be of no use, obsolete (spare parts and service not available), beyond useful life, and/or not cost-effective to repair or operate and therefore, surplus to the District’s needs. AGENDA ITEM 4 2 Vehicles Identified as Surplus Item Qty Description Reason for Declaration 1 1 Unit 135, 2001 Ford Expedition, FA#8135, VIN 1FMPU16L11LB51855, 126,700 miles No longer cost-effective to maintain and operate. Vehicle is no longer required. 2 1 Unit 134, 2002 Ford F-250 Utility Truck, FA#8134, VIN 1FTNF20L02EA58304, 51,000 miles No longer cost-effective to maintain and operate. Vehicle is no longer required. 3 1 Unit 115, 2000 Ford Ranger Pickup Truck, FA#8115, VIN 1FTYR14X8YPA21493, 50,000 miles No longer cost-effective to maintain and operate. Vehicle is no longer required. Equipment Identified as Surplus Item Qty Description Reason for Declaration 4 4 Chlorinators, Pennwalt Wallace & Tiernan, SN’s An-16274, AN-16299, AK-16113, AL-16304 No longer supported by the manufacturer, no longer cost-effective to maintain and operate, and is no longer required. 5 4 Chlorine Analyzers Pennwalt Wallace & Tiernan, SN’s AL-28284, AK-15975, AN-16304, AN-16303 No longer supported by the manufacturer, no longer cost-effective to maintain and operate, and is no longer required. 6 1 Survey Base Station FA# 3987, consisting of Trimble 4800 receivers SN 220179258 and SN 220156335, Trimble Trimmark IIE Base and Repeater SN 220154847, Trimble TSCI Data Collector SN 220149134, and associated wires and antennas No longer required. 7 3 GPS Receiver, Geo Explorer XT, SN’s 4511E00029, 4423E00088, 4423E00179 Inoperable, no longer supported by manufacturer, and no longer serviceable. 8 3 GPS Receiver, Geo Explorer XH, SN’s 4625482501, 4626483207, 4623478371 No longer required. 9 3 Right Angle Gear Drives, SN’s 154977, 154975, 154974 No longer required. 10 2 Caterpillar Diesel Engines, Model No longer supported by 3 No. 3406, FA #1512, and SN 17727 manufacturer, no longer cost-effective to maintain and operate. Engines no longer meet APCD requirements. 11 1 Auto Crane Brand Truck Mounted Crane, SN 320304-228BT-0598 No longer required. 12 2 Lamson Process Air Blower, SN’s 911825, 911810 Broken and inoperable and no longer required. 13 1 NEC PBX phone system, hand sets, and associated hardware and cables No longer required, replaced. Before vehicles and equipment (where the individual acquisition cost exceeded $5,000) can be disposed of, the Board must first declare the items as surplus (ref: Purchasing Manual, Section 12). The District’s Purchasing Manual identifies the process for disposing of material, equipment, and supplies that have been declared surplus. Typically, items declared surplus are disposed of by sale through public auction. FISCAL IMPACT: Joe Beachem, Chief Financial Officer The salvage value and associated gain or loss on items is not determined until their disposal. Therefore, the fiscal impact of the recommended action is not known at this time. STRATEGIC GOAL: This action supports the District’s goal to ensure financial health through efficient operations. LEGAL IMPACT: None. Attachments: Attachment A – Committee Action Report ATTACHMENT A SUBJECT/PROJECT: DECLARATION OF SURPLUS VEHICLES AND EQUIPMENT COMMITTEE ACTION: The Finance, Administration and Communications Committee met on July 23, 2013, to review this item. The Committee supports presentation to the full Board for their consideration. NOTE: The “Committee Action” is written in anticipation of the Committee moving the item forward for Board approval. This report will be sent to the Board as a committee approved item, or modified to reflect any discussion or changes as directed from the committee prior to presentation to the full Board. STAFF REPORT TYPE MEETING: Regular Board MEETING DATE: August 7, 2013 SUBMITTED BY: Andrea Carey Customer Service Manager PROJECT: DIV. NO. All APPROVED BY: Joseph R. Beachem, Chief Financial Officer German Alvarez, Assistant General Manager Mark Watton, General Manager SUBJECT: Authorize the General Manager to Negotiate and Enter into an Agreement with Paymentus for Phone Payment Services GENERAL MANAGER’S RECOMMENDATION: That the Board authorize the General Manager to negotiate and enter into a one-year fixed with four option year renewals (five-year term) agreement with Paymentus to provide phone payment services in an amount not to exceed $250,000 ($50,000 annually). COMMITTEE ACTION: See Attachment A. PURPOSE: To authorize the General Manager to negotiate and enter into an agreement with Paymentus to provide phone payment services. ANALYSIS: The District accepts approximately 2,000 payments per month through the automated phone system. In 2010, the District began offering customers the option to pay by phone at no charge to the customer. Prior to that, the cost to the customer was a $4.80 flat fee per phone payment transaction. The decision to absorb the cost of this service was made to provide a greater range of free payment methods to customers and to take advantage of credit card discount programs through Visa and MasterCard. The District receives approximately $1,000,000 in Visa and MasterCard payments per month through the District’s web payment portal, the phone payment service and the AGENDA ITEM 5 front desk. Visa and MasterCard each offer a utility discount to qualified businesses. This discount reduces the fees charged by Visa and MasterCard to the District from an average of 1.8% to approximately 1%. In order to receive the discounted rate, the District cannot charge a convenience fee to its customers for initiating a payment through any payment portal (i.e. web, phone, front desk). The discounted rates from Visa and MasterCard save the District approximately $8,000 per month in credit card fees; outweighing the costs incurred by the District to offer payment over the phone at no charge. In order to evaluate the cost effectiveness of our current vendor, HP Enterprises, Inc., a request for proposal (RFP) to provide phone payment services for the District was sent to seven vendors. The District received proposals from three vendors. Evaluation criteria consisted of the vendor’s ability to meet District specifications; number of years experience in this type of business with accounts similar to Otay in size; competence and customer service; on time experience in delivery of comparable goods and services; financial stability; and cost. The phone payment services listed below are based on 30,000 credit card payments per year. This number reflects a higher average than the current 2,000 phone transactions processed monthly. This higher number reflects the historical annual increases in phone payments and the added option to pay using a bank account which is not currently available to customers. Vendor Annual Price Paymentus $49,500 Billtrust $55,200 Alacriti $59,400 Otay is currently paying HP Enterprises, Inc. approximately $2.40 per phone payment. With Paymentus, Otay will pay approximately $1.65 per phone payment, resulting in a 30% cost savings to the District. The savings may be greater as the cost to the District is less if customers use their bank account or a debit card instead of credit card to pay. Paymentus handles payment processing for over 60 utilities in California, including Sweetwater Authority. District staff contacted three current Paymentus customers and all had positive feedback on their relationship with Paymentus and the services offered. The proposed agreement will ensure that Paymentus is unable to raise prices for five years and that the District is able to terminate for cause, at any time. Additionally, after the initial one-year period, the District will have the option not to renew should opportunities, circumstances or business practices change. FISCAL IMPACT: Joe Beachem, Chief Financial Officer The annual cost for Paymentus services will be approximately $50,000 per year. Based on the current volume of payments, the expected savings will be approximately $18,000 annually. STRATEGIC GOAL: Evaluate the most cost effective and efficient processes and tools to communicate service related issues to customers. LEGAL IMPACT: None. Attachments: Attachment A - Committee Action ATTACHMENT A SUBJECT/PROJECT: Authorize the General Manager to Negotiate and Enter into an Agreement with Paymentus for Phone Payment Services COMMITTEE ACTION: The Finance, Administration, and Communications Committee recommend that the Board authorize the General Manager to negotiate and enter into an agreement with Paymentus for phone payment services. NOTE: The “Committee Action” is written in anticipation of the Committee moving the item forward for board approval. This report will be sent to the Board as a committee approved item, or modified to reflect any discussion or changes as directed from the committee prior to presentation to the full board.