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ITEM: |
CONSENT
CALENDAR |
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2. |
CONSIDER (A) ADOPTION OF
RESOLUTION NO 2012-11 TO OBTAIN CREDIT WITH BANK OF AMERICA; AND (B) RENEWAL
OF DISTRICT’S LINE OF CREDIT AND INCREASING THE CREDIT LINE TO $2.5 MILLION WITH
BANK OF AMERICA TO FUND DEVELOPMENT OF WATER SUPPLY PROJECTS |
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Meeting
Date: |
August 20, 2012 |
Budgeted: |
Yes |
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From: |
David J.
Stoldt, |
Program/ |
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General
Manager |
Line Item No.: Acct. No.
9840 |
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Prepared
By: |
Suresh
Prasad |
Cost
Estimate: |
$5,000 |
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General Counsel Review: N/A |
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Committee Recommendation: The Administrative Committee considered this item on August 13, 2012 and voted 3 to 0 to recommend adopting Resolution No. 2012-11 to obtain credit with Bank of America and approving a one-year renewal of the line of credit with Bank of America in the amount of $2.5 million. |
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CEQA Compliance: N/A |
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SUMMARY: In
2008, the District entered into a Loan Agreement with Bank of America (BofA) to fund for development of water projects. The original credit line was renewed in 2010
and the amount was reduced from $2.5 million to $1.5 million. The District is in need to renew the Loan
Agreement and increase the credit line amount to $2.5 million to complete the
Aquifer Storage Recovery (ASR) Well No. 4 project. The terms of the agreement remains the same
from the 2010 Amended and Restated Loan Agreement.
RECOMMENDATION: The Administrative Committee considered this item on August 13, 2012 and voted 3 to 0 to recommend adoption of resolution to obtain credit with Bank of America and a one-year renewal of the line of credit in the amount of $2.5 million with an interest rate equal to the BBA LIBOR Daily Floating Rate plus 3% and a renewal fee of $5,000.
BACKGROUND: In October 2008, the District entered into a
Loan Agreement with BofA to establish a $2.5 million line of credit to fund
development of water supply projects. The
line of credit expired on January 31, 2010, but the District renewed the
Agreement with reduced credit line amount of $1.5 million to continue through
May 10, 2012. Since the expiration of
the credit line, BofA has continued to extend the
Agreement to the District until a new Agreement is in place. The terms proposed by BofA
for renewal and increase in the credit line to $2.5 million remains the
same. The interest rate will be equal to BBA LIBOR
Daily Floating Rate plus 3% and a reduced renewal fee of $5,000.
The increase in the credit line from $1.5
million to $2.5 million is necessary to complete the ASR Well No. 4
project. All of the costs for the
project will be reimbursed by the California American Water.
2-B Amendment No. 1 to Amended and Restated Loan Agreement
U:\staff\Boardpacket\2012\20120820\ConsentCal\02\item2.docx