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ITEM: |
CONSENT CALENDAR |
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10. |
AUTHORIZE FIRST SUPPLEMENT
TO UNDERWRITING SERVICES AGREEMENT RELATING TO PUBLIC FINANCING OF A PORTION
OF THE CAL-AM DESAL PROJECT |
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Meeting Date: |
April 20, 2015 |
Budgeted: |
Partial |
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From: |
David J. Stoldt |
Program/ |
Cal-Am Desal Project |
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General Manager |
Line Item No.: |
1-9-1 |
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Prepared By: |
David J. Stoldt |
Cost Estimate: |
$45,000 (FY2015) $50,000 (FY2016) Reimbursable |
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General Counsel Approval: N/A |
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Committee Recommendation: N/A |
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CEQA Compliance: N/A |
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SUMMARY: At its November 18, 2013 meeting, the Board authorized the hiring of Raymond James Associates to be the eventual underwriter of a financing mechanism called “securitization” whereby a non-bypassable surcharge would be collected on Cal-Am bills and dedicated to the repayment of Ratepayer Relief Bonds. Such a financing structure would significantly reduce the cost of the desalination project to ratepayers. The structure required testimony, modeling, legal structuring, and many activities that will be ongoing in the next 12 month.
To implement the financing, similar to agenda Item 9, there are additional phases of work as described in the draft Underwriting Agreement attached as Exhibit 10-A. The $45,000 for activities to date was authorized at the November 18, 2013 Board meeting and expected to be expended in FY 2015 and already budgeted. The remainder would need to be budgeted in FY 2016.
This proposed contract also makes a slight modification in the future underwriting fees and will not be reduced by these amounts expended in advance of the issuance of bonds. The reason for the change is the increased demands on Raymond James personnel to complete the Financing Order within the 2015 calendar year, whether a financing eventually occurs or not.
The expenditures are subject to reimbursement from bond proceeds, thereby replenishing District reserves.
RECOMMENDATION: The General Manager recommends that the Board of Directors approve additional services from Raymond James not-to-exceed $95,000 and subject to reimbursement from bond proceeds, and authorize the General Manager to enter into the form of contract attached.
EXHIBIT
10-A Underwriting Agreement between Monterey Peninsula Water Management District and
Raymond James & Associates, Inc.
U:\staff\Boardpacket\2015\20150420\Consent
Calendar\10\Item 10.docx