RESOLUTION NO. 23-06
A RESOLUTION OF THE BOARD OF DIRECTORS OF
THE CENTRAL COAST WATER AUTHORITY APPROVING
THE SURPLUS WATER TRANSFER PROGRAM
RECITALS
A. In 1963, the Santa Barbara County Flood Control and Water Conservation District (“District”) and the Department of Water Resources (“DWR”), acting on behalf of the State of California, executed that certain agreement dated February 26, 1963 for the supply and delivery of State Water Project (“SWP”) water (“State Water Contract”). The State Water Contract has been amended on numerous occasions, including by the Water Management Amendment dated April 22, 2021 (the “Water Management Amendment”).
B. On November 12, 1991, the District and Central Coast Water Authority (“ CCWA”) entered into the Transfer of Financial Responsibility Agreement whereby the District transferred to CCWA and CCWA accepted and assumed responsibility for the District’s obligations pursuant to the State Water Contract.
C. CCWA entered into a series of “Water Supply Agreements” with various cities, water districts, and other water supply retailers who purchase and deliver water to their customers, and other end users, in Santa Barbara County (each a “ CCWA Participant” and collectively, the “CCWA Participants”).
D. From time to time, such as in years of high precipitation, the SWP is capable of delivering to CCWA more water than is needed by each CCWA Participant. Additionally, in some years, water that is available for delivery to one or more CCWA Participants, but is not delivered in that year, may be lost due to delivery, storage, and other constraints within the SWP and local facilities.
E. The Water Management Amendment provides CCWA Participants with flexibility to manage their water supplies in a changing environment by permitting transfers and exchanges of SWP water which in turn improves water supply reliability.
F. CCWA has determined that it should create a program (the “ Surplus Water Transfer Program”), on behalf of CCWA Participants that elect to participate in the program (each a “Participating Contractor ”), to utilize the water management tools provided in the Water Management Amendment to transfer or exchange water that may be available to each Participating Contractor under its Water Supply Agreement that is surplus to the needs of the Participating Contractor.
G. For this purpose, CCWA has prepared and proposes to enter into the Surplus Water Transfer Program Participation Agreement (“Agreement”) attached hereto as Exhibit A with any Participating Contractor that determines to participate in the Surplus Water Transfer Program and to share in the expenses pertaining thereto in accordance with the terms and conditions of the Agreement.
H. Under the Agreement, CCWA would identify opportunities for Participating Contractors to transfer or exchange their surplus SWP water to other parties that contract with DWR for SWP water (“Transfer Opportunity”).
ATTACHMENT A
25848139
Central Coast Water Authority
Resolution No. 23-06
I. To proceed
with a Transfer Opportunity, each interested Participating Contractor would enter into an agreement with CCWA to transfer or exchange a particular quantity of SWP water on the terms and conditions stated therein (“Transfer Agreement”), including numerous conditions precedent to the effectiveness of CCWA’s approval of the Transfer Agreement, such as CCWA’s receipt of payment and certification of certain matters required by Article 57(g) of the State Water Contract.
J. Each Transfer Agreement would be subject to the terms and conditions of the State Water Contract, as amended by the Water Management Amendment, and shall be carried out consistent with CCWA Resolution No. 2021-01, adopted on February 17, 2021, under which a “proposed transfer outside of the County of Santa Barbara shall be subject to a right of first refusal of all [CCWA] Participants on a pro rata basis to take delivery of such SWP Water on the same terms and conditions.”
K. Each Transfer Agreement would require DWR’s approval, which is anticipated in the form of a Change in Point of Delivery Agreement (“DWR Agreement”).
L.
For so long as the District remains the contracting party to the State Water Contract for Santa Barbara County, it is anticipated that DWR
will require the District’s execution of the
DWR Agreement, on behalf of CCWA. To obtain the District’s execution of the DWR Agreement, it is anticipated that the District will require CCWA to indemnify the District from all liabilities associated with the DWR Agreement, as provided in an Assignment, Assumption, Indemnification and Release Agreement (“SBCFCWCD Agreement”).
M. Compliance with the California Environmental Quality Act (“ CEQA”) for each Transfer Opportunity will occur on a project-specific basis.
N. The CCWA Board of Directors has considered, agrees with, and incorporates herein all of the findings made by the Executive Director in the Staff Report accompanying this Resolution, including but not limited to, the determinations that the Agreement is exempt from CEQA, including pursuant to the “common sense” exemption to environmental review under Section 15061 subdivision (b)(3) of Title 14 of the California Code of Regulations, because the Parties’ actions pursuant to the Agreement do not have the potential for causing a significant effect on the environment, and because CEQA compliance for each Transfer Opportunity will occur on a project-specific basis.
NOW, THEREFORE, BE IT RESOLVED as follows:
SECTION 1
The above recitals are true and correct and are incorporated herein as though set forth in full.
SECTION 2
Based on the findings set forth herein, the Board of Directors approves the Surplus Water Transfer Program and the Agreement and authorizes the Executive Director to execute the Agreement on behalf of CCWA.
SECTION 3
ATTACHMENT A
25848139
Central Coast Water Authority
Resolution No. 23-06
The Board of Directors authorizes the Executive Director to do and cause to be done any and all acts and things necessary or proper for carrying out the Surplus Water Transfer Program, including but not limited to making such non-substantive modifications to the Agreement as may be required prior to executing the Agreement with any Participating Contractor.
The Board of Directors further authorizes the Executive Director to prepare all agreements necessary to effectuate the Surplus Water Transfer Program with respect to any Transfer Opportunity, including any Transfer Agreement, DWR Agreement, and SBCFCWCD Agreement, and to bring those agreements back to the Board of Directors for its consideration and related CEQA findings.
I certify that the foregoing resolution was duly and regularly introduced and adopted by the Board of Directors of the Central Coast Water Authority at a special meeting held on July 27, 2023.
Eric Friedman, Chairman
Attest:
Elizabeth Watkins
Secretary to the Board of Directors
APPROVED AS TO FORM:
Brownstein Hyatt Farber Schreck LLP
Stephanie Osler Hastings
VOTING
PERCENTAGE AYE NAY ABSTAIN ABSENT
City of Buellton 2.21%
Carpinteria Valley Water
District 7.64%
Goleta Water District 17.20%
City of Guadalupe 1.15%
Montecito Water District 9.50%
City of Santa Barbara 11.47%
City of Santa Maria 43.19%
Santa Ynez River Water
Conservation District,
Improvement District
No. 1 7.64%
ATTACHMENT A
25848139
Central Coast Water Authority
Resolution No. 23-06
Exhibit:
A. Surplus Wat
er Transfer Program Participation Agreement
ATTACHMENT A
25845810.4
Surplus Water Transfer Program
Participation Agreement
CENTRAL COAST WATER AUTHORITY
SURPLUS WATER TRANSFER PROGRAM
PARTICIPATION AGREEMENT
This Surplus Water
Transfer Program Participation Agreement (“ Agreement”) is made as of [MONTH AND DAY], 2023 by and between
CENTRAL COAST WATER AUTHORITY (“CCWA”)
and
each signatory to this Agreement (each a “ Participating Contractor ,” and if more than one, “Participating Contractors”). CCWA and each Participating Contractor are each a “Party” and together the “Parties.”
RECITALS
A. Pursuant to the Transfer of Financial Responsibility Agreement, the Santa Barbara County Flood Control and Water Conservation District (“SBCFCWCD”) transf erred to CCWA,
and CCWA accepted and assumed, all rights and oblig ations to the State Wat er Supply Contract between SBCFCWCD and the Depa rtment of Water Resources (“ DWR”) that provides for the delivery of water from Califor nia’s State Water Project (“ SWP”) to portions of Santa Barbara County (“State Water Supply Contract”).
B. Additionally, CCWA owns, operates, and maintains water conveyance, storage and treatment facilities to deliver water made available to CCWA pursuant to the State Water Supply Contract to cities, water districts and other water purveyors and users in portions of Santa Barbara County pursuant to one or more water supply agreements (c ollectively, the “ CCWA Participants”).
C. CCWA and each Participating Contractor ar e parties to a water supply agreement related to the matters described in Recitals A and B (“Water Supply Agreement”).
D. From time to time, such as in years of high precipita tion, the SWP is capable of delivering to CCWA more water than is needed by each Participating Contractor. Additionally, in some years, water that is available for delivery to one or more CCWA Participants, but is not delivered in that year, may be lost due to delive ry, storage, and other constraints within the SWP or local facilities.
E. Amendment No. 21 of the State Water Supply Contract dated April 22, 2021 (the “Water Management Amendment”) provides CCWA Participants with flexibility to manage
ATTACHMENT A
25845810.4
Surplus Water Transfer Program
Participation Agreement
their water supplies in a changing environment by permitting transfers and exchanges of SWP water which in turn improves water supply reliability.
F. CCWA has determined that it sh ould create a program (the “ Surplus Water Transfer Program”), on behalf of each Participating Contr actor, to fully utilize the flexibilities in the Water Management Amendment to transfer or exchange water that is or may be available to each Participating Contractor under its Water Supply Agreement but that is surplus to the needs of the Participating Contractor in any year during the term of this Agreement (“Surplus Water”).
G. Each Participating Contractor has determined that it wishes to participate in the Surplus Water Transfer Program and is willing to share in the expenses pertaining thereto in accordance with the terms and conditions of this Agreement. From time to time, additional CCWA Participants may wish to participate in the Surplus Water Transfer Program.
H. The Surplus Water Transfer Program shall be carried out consistent with the State Water Contract, as amended by the Water Management Amendment, and CCWA Resolution No. 2021-01, adopted on February 17, 2021, under which a “proposed transfer outside of the County of Santa Barbara shall be subject to a right of first refusal of all [CCWA] Participants on a pro rata basis to take delivery of such SWP Water on the same terms and conditions.” I. The Parties have determined that this Agreement is exempt from the California Environmental Quality Act (“CEQA”), including pursuant to the “common sense” exemption to environmental review under Section 15061 subdivision (b)(3) of Title 14 of the California Code of Regulations, because the Parties’ actions pursuant to this Agreement do not have the potential for causing a significant effect on the enviro nment, and because CEQA compliance for each Transfer Opportunity, as that te rm is defined in Paragraph 3.1, will occur on a project-specific basis.
NOW, THEREFORE, in consideration of the foregoing recitals, the mutual representations, warranties, covenants and agreements contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
AGREEMENT
1. Purpose and Intent. T
he purpose of this Agreement is to provide for CCWA’s general administration of the Surplus Water Transfer Program, including the identification of one or more opportunities for Participating Contractors to transfer or exchange Surplus Water, in exchange for the Participating Contractors’ reimbursement of CCWA’s Total Expenses, as that term is defined in Paragraph 4.1, arising from and associated with such activities. It is the further intention of the Parties that CCWA Participants may participate in the Surplus Water Transfer Program from year to year, on an ongoing basis, but shall not be obligat ed to participate in any specific transfer or exchange of Surplus Water. The terms and conditi ons of any transfer or exchange of Surplus Water shall be governed by a sepa rate agreement between CCWA and one or more Participating Contractors referred to as a “Transfer Agreement,” as furthe r described in Paragraph 3.2.2.
Finally, it is the intention of the Parties that neither CCWA nor any CCWA Participant that is not
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25845810.4
Surplus Water Transfer Program
Participation Agreement
also a Participating Contractor sh all incur any expense or liability related to or arising from this Agreement or the Surplus Water Transfer Program.
2. Cooperation; Annual Transfer Goal
2.1 Cooperation. Each Participating Contractor acknowledges that CCWA’s ability to identify, structure and negotiate one or more opportunities for the transfer or exchange of Surplus Water, as provided in this Agreement, requires Participating Contractors’ cooperation. The Parties shall reasonably cooperate with each other in all ways as may be necessary to carry out the terms and conditions of this Agreement.
2.2 Annual Transfer Goal. Each Participating Contractor agrees that by April 1 of each calendar year, each Participating Contractor shall notify CCWA’s Executive Director in writing of the amount of Surplus Water the Participating C ontractor is seeking to transfer or exchange in that calendar year (“ Annual Transfer Goal ”). After receiving each Participating Contractor’s Annual Transfer Goal, CCWA shall provide notice to all Parties in a form substantially similar to that set forth in Exhibit A to this Agreement. In any year during the term of this Agreement, any Participating Contractor may request an increase, but not a decrease, in their Annual Transfer Goal by providing notice to CCWA. No such request shall be effective unless and until it is approved in writing by CCWA’s Executive Director. Any increased Annual Transfer Goal supersedes any prior Annual Transfer Goal for al l purposes related to this Agre ement and without regard to the date on which any Annual Transfer Goal is increased. In the event any Participating Contractor’s Annual Transfer Goal is increased, CCWA shall provide notice to all Parties.
2.3 Additional Parties. From time to time, additional CCWA Participants may wish to participate in the Surplus Water Transfer Program. By executing this Agreement on or before December 31 of any calendar year, a CCWA Participant becomes a Party to this Agreement and a Participating Contractor beginning on January 1 of the following calendar year.
3. Notification of Transfer Opportunity; St atement of Intent; Allocation of Surplus Water
3.1 Notification of Transfer Opportunit y. CCWA shall give notice to each Participating Contractor of each opportunity to transfer or exch ange Surplus Water identified by CCWA (each, a “Transfer Opportunity”). Each notice (the “Opportunity Notice”) shall include a deadline for Participating Contractors’ responses and, to the extent it is available to CCWA, the following information: transfer or exchange quantity (“Total Transfer Quantity”) desired by the proposed purchaser (“Proposed Purchaser”), price, date of scheduled delivery, and delivery risk, including anticipated transmission losses.
3.2 Statement of Intent
3.2.1 Upon receipt of the Opportunity Notice, any Participating Contractor that wishes to participate in the specified Transfer Opportunity shall provide notice to CCWA of the Participating Contractor’s intent (“Statement of Intent” or “SOI”), which notice shall include the quantity of Surplus Water the Pa rticipating Contractor intends to transfer or exchange in connection with a particular Transfer Opportunity (“SOI Quantity”).
ATTACHMENT A
25845810.4
Surplus Water Transfer Program
Participation Agreement
3.2.2 If any Participating Contractor submits a Statement of Intent prior to the deadline set forth in the Opportunity Notice, CCWA shall provide to that Participating Contractor (a) a proposed agreement between CCWA and Par ticipating Contractor whereby Participating Contractor agrees to transfer or exchange the SOI Quantity on the terms and conditions stated therein (“Transfer Agreement”), and (b) the deadline by which Participating Contractor must elect to execute the Transfer Agreement if it wants to participate in a specific Transfer Opportunity.
Participating Contractors who s ubmit a Statement of Intent ar e referred to herein as “ Transfer Opportunity Participants” for each Transfer Opportunity.
3.3 Right of First Refusal. After the dead line by which each Participating Contractor must elect to execute a Transfer Agreement, CCWA shall provide notice to all CCWA Participants of the deadline by which CCWA Participants must notify CCWA of their intent to exercise a right of first refusal under CCWA Resolution No. 2021-01. Any CCWA Participant(s) that timely notify CCWA of their intent to exercise a right of first refusal under CCWA Resolution No. 2021- 01 shall be entitled on a pro rata basis to take delivery of the Total Transfer Quantity on the same terms and conditions as the Proposed Purchaser.
3.4 Oversubscription; Allocation of Surplus Water. As to each Tr ansfer Opportunity, if CCWA receives signed Statements of Intent from Transfer Oppor tunity Participants where the aggregate SOI Quantity from all Transfer Opportunity Participants exceeds the Total Transfer Quantity, the amount of Surplus Water for each Tran sfer Opportunity shall be allocated between the Transfer Opportunity Participants in proportion to the respective Annual Transfer Goal of each Transfer Opportunity Participant without regard to whether the Tr ansfer Opportunity Participant has elected to participate in any other Transfer Opportunity; provided, however, that no such Transfer Opportunity Participant shall be allo cated an amount that exceeds that Transfer Opportunity Participant’s Annual Transfer Goal, whether under a particular Transfer Opportunity or in aggregate across multiple Transfer Opportunities.
4. Allocation of Costs; Deposit; Participating Contractor Payment
4.1 In each calendar year during the term of this Agreement, each Participating Contractor shall pay to CCWA the Participating C ontractor’s pro-rata share of all out-of-pocket expenditures made by CCWA pursu ant to this Agreement, including consultant and legal expenses, any expenses incurred by CCWA in defense of this Agreement, and any other costs related to or arising under this Agreement (“ Total Expenses”). Each Participating Contractor’s pro-rata share of CCWA’s Total Expenses in each calendar year shall be calculated as follows:
4.1.1 For Total Expenses arising from serv ices rendered by CCWA pursuant to this Agreement, a Participating Contractor’s pro- rata share shall be equal to that Participating Contractor’s Annual Transfer Go al divided by the sum of the Annual Transfer Goal for all Participating Contractors.
4.1.2 For Total Expenses related to a specific Transfer Opportunity before one or more Transfer Agreements are ex ecuted, each Participating Contractor’s pro-rata share of such expenses shall be equal to the Participating Contractor’s SOI Quantity for that Transfer Opportunity divided by the sum of the SOI Quantities set forth in the Statements of Intent submitted by all Transfer Opportunity Particip ants for that Transfer Opportunity. If no
ATTACHMENT A
25845810.4
Surplus Water Transfer Program
Participation Agreement
Participating Contractor delivers a Statements of Intent to CCWA for a particular Transfer Opportunity, each Participating Contractor’s pro-rata share under this Paragraph shall be calculated in accordance with Paragraph 4.1.1 above.
4.1.3 For Total Expenses arising from servi ces that are of be nefit to only one Participating Contractor, that Participating Contractor shall pay for the Total Expenses related to said services.
4.2 Initial Deposit. Prior to execution of this Agreement, CCWA prepared and delivered to each Participating Contractor an estimate of the Participating Contractor’s anticipated financial obligations under Paragraph 4.1.1 of this Agreement for the calendar year in which the Participating Contractor becomes a Party. Concu rrently with each Participating Contractor’s execution of this Agreement, Participating C ontractor shall place on deposit with CCWA the amount stated in the estimate.
4.3 Annual Deposit. Prior to the end of each calendar year during the term of this Agreement, CCWA shall provide to each Participating Contractor an estimate of the Participating Contractor’s annual financial obligations under Paragraph 4.1.1 of this Agreement for the following calendar year. Each Participating Contractor shal l place on deposit with CCWA the amount stated in the estimate no later than the deadline established by CCWA’s Executive Director.
4.4 Supplemental Deposits. Prior to the end of each calendar year during the term of this Agreement, CCWA shall provide to each Participating Contractor an estimate of any additional anticipated financial obligations fo r that calendar year no t covered by the deposit required by Paragraph 4.2 or Paragraph 4.3 of this Agreement. Each Participating Contractor shall place on deposit with CCWA the amount stated in the estimate no later than the deadline established by CCWA’s Executive Director.
4.5 Invoices and Payments. In the event CCWA reasonably determines that the deposit paid by any Participating Contr actor to CCWA pursuant to Pa ragraph 4.2, Paragraph 4.3 and/or Paragraph 4.4 will be insufficient to cover that Participating Contractor’s financial obligations hereunder, CCWA is authorized to deliver to any Partic ipating Contractor a revised estimate of those financial obligations and an invoice for an additional deposit. Participating Contractor shall remit the amount stated in the invoice within 30 days of receipt.
4.6 Reconciliation. Upon termination of this Agreement, CCWA shall provide to each Participating Contractor an accounting of the act ual amounts the Participating Contractor is obligated to pay hereunder. Any overpayment by any Participating Contract or shall be promptly refunded by CCWA and any underpayment by any Participating Contractor shall be promptly paid to CCWA.
5. Party’s Authorized Representative. Concurrent with execution of this Agreement, in the signature block of this Agreement, each Party sh all identify and provide the contact information for its authorized representative (“Authorized Representative”). Each Participating Contractor represents and warrants that its Authorized Representative has full authority to grant, provide and enter into, by and on behalf of Participating Contractor, any and al l consents, approvals,
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Surplus Water Transfer Program
Participation Agreement
instructions, authorizations or agreements by Pa rticipating Contractor in connection with this Agreement (collectively, “ Contractor Directions”). CCWA shall be entitled to rely upon, without inquiry, the full authority of Participa ting Contractor’s Authorized Representative.
Without limiting the foregoing, Participating Contra ctor’s Authorized Representative shall be solely responsible for requesting and obtaining in advance any special or further authorizations on behalf of Participating Contract or that may be necessary in connection with any Contractor Directions given to CCWA hereunder and CCWA may assume, without further inquiry, that all such authorizations have been obtained. Par ticipating Contractor ma y designate a different individual as its Authorized Representative in connection with this Agreement at any time by providing written notice to CCWA.
6. Obligation in the Event of Default
6.1 Written Demand Upon Failure to Make Payment or Perform Obligation
6.1.1 Upon any Participating Cont ractor’s failure to make any payment in full when due under this Agreement or to perform any other obligation hereunder, CCWA shall make written demand upon the Participating Contractor, and if such failure is not remedied within 30 days from the date of such demand, such failure shall constitute a default and breach of this Agreement. CCWA shall also provide a copy of the notice of such demand to all other Participating Contractors.
6.1.2 Upon failure of CCWA to perform a ny obligation of CCWA hereunder, a Participating Contractor shall make written demand upon CCWA, and if said failure is not remedied within 30 days from the date of such demand, such failure shall constitute a default and breach of this Agreement. Participating Contractor shall also provide a copy of the notice of such demand to all other Participating Contractors.
6.2 Termination of Contractual Rights; Continuing Obligations. Notwithstanding any provision in this Agreement to the contrary , including Paragraph 10. 2, upon any Participating Contractor’s failure to make any payment, which failure constitutes a default under this Agreement, CCWA may terminate this Agreement as to the defaulting Participating Contractor.
Irrespective of such ter mination, all obligations of the defa ulting Participating Contractor under this Agreement shall continue in full force and effect. CCWA’s termination as to the defaulting Participating Contractor pursuant to this Paragraph is in addition to all other remedies provided by this Agreement.
6.3 CCWA’s Use of Other Funds. CCWA ma y draw upon and use any unobligated funds held by CCWA as credits payable to the defaulting Participating Contractor, including “O&M Year-end Credits” and any other credits held by CCWA for the benefit of the defaulting Participating Contractor, and any cash that the de faulting Participating C ontractor may have on deposit with CCWA, for example in the “DWR Reserve Fund” or the “Rate Coverage Reserve Fund,” to satisfy the defaulting Participating Contractor’s payment obligation, in whole or in part.
CCWA shall provide to the defaulting Participating Contractor an accounting of any such credits or deposits applied. CC WA’s use of other defaulting Participating Contractor funds pursuant to this Paragraph is in addition to all other remedies provided by this Agreement.
ATTACHMENT A
25845810.4
Surplus Water Transfer Program
Participation Agreement
6.4 Increase in Non-defaulting Pa rticipating Contractor Costs . Notwithstanding any provision in this Agreement to the contrary, includi ng Paragraphs 4.1.2 a nd 10.2, in the event a defaulting Participating Contractor’s paymen t obligations under this Agreement exceed the amount of funds available under Paragraph 6.3, the pro-rata share of each non-defaulting Participating Contractor shall be automatically in creased pro rata with the other non-defaulting Participating Contractors for the remaining term of this Agreement. Each Participating Contractor acknowledges and agrees that its pro rata share of Total Expenses may increase as a result of a default by another Participating Contractor.
6.5 Right of Recovery from Defa ulting Participating Contractor. If a Participating Contractor fails or refuses to pay any amounts due to CCWA under this Agreement, the non- defaulting Participating Contractors’ increased obligations to make such payments shall not relieve the defaulting Participati ng Contractor of its liab ility for such payments. Each non-defaulting Participating Contractor shall have a right of recovery from the defaulting Participating Contractor to the extent of such non-defaul ting Participating Contractor’s respective increase in obligation caused by the defaulting Participating Contr actor. Any amounts received by CCWA from the defaulting Participating Contractor for costs that were previously paid by a non-defaulting Participating Contractor pursuant to Paragr aph 6.4, shall be reimbursed by CCWA to the non- defaulting Participating Contractor.
7. Remedies
7.1 If any Party does not timely perform its obligations pursuant to this Agreement, all other Parties shall be en titled to proceed to protect and enforc e their rights as provided in this Agreement by such appropriate judicial proceedings as each Party may deem most effectual, either by suit in equity or by action at law, whether for the specific performance of any covenant or agreement contained herein or to enforce any other legal or equitabl e right vested by this Agreement or by law. The provisions of this Agreement and the duties of each Party and its elected officials, officers, agents, or employees shall be enforceable by mandamus or other appropriate suit, action, or proceeding in any court of competent jurisdiction.
7.2 The Parties agree that in the event of a default of this Agreement by a Party, all other Parties shall have all reme dies in law or equity availabl e to them, including specific performance and termination of this Agreement, and no remedy or election shall be deemed exclusive but shall, whenever possible, be cumulative with all other remedies at law or in equity.
8. Disclaimer of Liability
8.1 Each Participating Contractor acknowledges and agrees that CCWA is in good faith administering the Surplus Water Transfer Program and facilitating the transfer or exchange of Surplus Water on behalf of the Participating C ontractors, in exchange for the Participating Contractors’ full reimbursement of CCWA’s Total Expenses and full assumption of CCWA’s liabilities related to or arising out of this Agreement or any related agreements to which CCWA is a party for purposes of the Surplus Water Transfer Program. As a result, it is the intent and agreement of each Participating Contractor and CCWA that CCWA shall not incur any liability for assistance to any Participating Contractor under this Agreement for any cause, except for any
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25845810.4
Surplus Water Transfer Program
Participation Agreement
loss or damage to the extent caused by CCWA’s sole negligence or willful misconduct or CCWA’s breach of this Agreement.
8.2 To the maximum extent permitted by law, neither CCWA, nor any of its elected officials, officers, agents, employees, consultants, or attorneys, nor any CCWA Participant that is not also a Participating Contractor, shall be liable to any Participating Contractor pursuant to this Agreement or otherwise for any an d all claims, liabilities, damages, losses, actions, penalties, proceedings, or expenses in the event any Transfer Opportunity is not finalized and Surplus Water is not able to be transferred or exchanged by CCWA, Surplus Water is not available for transfer or exchange on the terms and conditions acceptable to any Participating Contractor, or any approval required to permit the delivery of Surplus Water is not obtained or is conditioned in any manner that is not acceptable to any Pa rticipating Contractor, for any reason, whether such claims, liabilities, damages, losses, actions, penalties, proceedings, or expenses arise prior to or following termination or expiration of this Agreement, except for any loss or damage to the extent caused by CCWA’s sole negligence or willful misconduct or CCWA’s breach of this Agreement.
9. Indemnification and Defense
9.1 Indemnification. Each Participating Contractor (“Indemnifying Party”) agrees to indemnify, defend, protect and hold harmless CCWA and its officers, directors, employees, agents, consultants and attorneys and CCWA Participants who are not also Participating Contractors (each an “Indemnified Party” and collectively, the “Indemnified Parties”) from and against any and all claims, liabilities, damages, losses, actions, penalties, proceedings, or expenses, including attorneys’, paralegals’, consultants’, and experts’ fees, costs and expenses, arising from or relating to this Agreement, whether such claims, lia bilities, damages, losses, actions, penalties, proceedings, or expenses arise prior to or follow ing termination or expiration of this Agreement, except to the extent any liability, loss, cost or expense is caused by the Indemnified Party’s sole negligence or willful misconduct or CCWA’s breach of this Agreement.
9.2 Defense of Action. If requested by an Indemnified Party, an Indemnifying Party shall assume on behalf of the Indemnified Party, and conduct with due diligence and in good faith, the defense of such Indemnified Party with coun sel reasonably satisfactory to the Indemnified Party; provided, however, that if the Indemnifying Party is a defendant in any such action and the Indemnified Party reasonably believes that there may be legal defenses available to it that are inconsistent with those available to the Indemnifying Party, the Indemnified Party shall have the right to select separate counsel to participate in its defense of such action at the Indemnifying Party’s expense. If any claim, action, proceeding or investigation arises as to which the indemnity provided for in this Paragraph 9.2 applies, and the Indemnifying Party fails to assume the defense of such claim, action, proceeding or investigati on after having been requested to do so by the Indemnified Party, then the Indemnified Party may, at the Indemn ifying Party’s expense, contest or, with the prior written c onsent of the Indemnifying Part y, which consent shall not be unreasonably withheld, settle such claim, acti on, proceeding or investigation. All costs and expenses incurred by the Indemnified Party in connection with any such contest or settlement shall be paid upon demand by the Indemnifying Party.
ATTACHMENT A
25845810.4
Surplus Water Transfer Program
Participation Agreement
10. Term; Termination
10.1 Term. Except as provided in Paragra ph 10.2, the term of this Agreement shall commence on the date included in the first sentences of this Agreement and shall continue until terminated by all Parties, or until each Particip ating Contractor’s final payment to CCWA of all costs attributable to this Agreement, whichever is later.
10.2 Termination
10.2.1 This Agreement may be terminated by CCWA at any time, provided all Participating Contractors agree in writing thereto. Irrespective of such termination, the obligations of each Participating Contractor to CCWA to pay its share of CCWA’s Total Expenses under this Agreement shall continue in full force and effect.
10.2.2 This Agreement may be terminated by any Participating Contractor as to that Participating Contractor only upon the expiration of 30 days following the later of (i) delivery of written notice of termination to CCWA, and (ii) discharge by the Participating Contractor, or satisfactory assurance of perform ance, of all financial obliga tions hereunder. CCWA shall promptly provide a copy of any such notice of termination received by CCWA to all other Participating Contractors.
10.2.3 Notwithstanding any provision in this Agreement to the contrary, the obligations set forth in Paragra phs 4, 7, 8, and 9 shall su rvive in full force and effect until the expiration of the applicable statute of limitati ons, or any claim or li tigation concerning this Agreement within the applicable statute of limitations is finally resolved, whichever occurs later.
11. General Provisions
11.1 Assignability. This Agreement shall not be assigned by a Participating Contractor without the prior written consent of CCWA, whic h consent shall not be unreasonably withheld.
Any attempted assignment without the prior written approval of CCWA shall be void.
11.2 Attorneys’ Fees. In any action to enforce or interpret this Agreement, the prevailing party shall recover from the non-prevailing party, in addition to any damages, injunctive or other relief, all costs (whether or not allowable as “cost” items by law) reasonably incurred by the prevailing party at, before and after trial or on appeal, or in any bankruptcy proceeding, including attorneys’ and witness (expert a nd otherwise) fees, deposition co sts, copying charges and other expenses.
11.3 Construction. The provisions of this Agreement should be liberally construed to effectuate its purposes. The language of all part s of this Agreement shall be construed simply according to its plain meaning. Any rule of contract interpretation to the effect that ambiguities or uncertainties are to be interpreted against the drafting party or the party who caused it to exist shall not be employed in the interpretation of this Agreement or any document executed in connection herewith, as each party has participated in the drafting of this document and had the opportunity to have their legal counsel review it. The Recitals to this Agr eement are incorporated herein and made a part hereof by this reference. The head ings in this Agreement are for convenience of reference only and shall not be used in construing this Agreement. The defined terms in this
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Agreement shall apply equally to both the singul ar and the plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corre sponding masculine, feminine and neuter forms. Th e terms “person” and “party” in clude individuals, corporations, partnerships, trust, and other en tities and associations. The wo rds “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.”
11.4 Counterparts; Electronic Si gnatures; Delivery by Email. The Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which when taken together shall constitute one and the same document. Counterparts may be delivered via electronic mail (including PDF or any electronic signature complying with the federal Electronic Signatures in Global and National Commerce (ESIGN) Act of 2000 (P.L. 106-229), e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
11.5 Due Authority. Each Party hereby represen ts and warrants that the individual(s) executing this Agreement are expressly authorized to do so on behalf of such Party and to bind that party to perform all acts required by this Agreement, and th at the consent, approval, or execution of or by any additional person or party is not required to legally bind that party to the terms and conditions of this Agreement.
11.6 Entire Agreement; Modification. The ma king, execution and delivery of this Agreement have not been induced by any representations, statemen ts, warranties or agreements other than those herein expressed. This Agreement constitutes the entire agreement and understanding of the Parties concerning the subject matter hereof. This Agreement supersedes all prior negotiations, agreements, representation a nd understandings of the Parties relating to the subject matter hereof, including similar agreements from prior years. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both Parties.
11.7 Good Faith. The Parties agree to exercise their best efforts and utmost good faith to effectuate all the terms and conditions of this Agreement and to execute such further instruments and documents as are necessary or appropriate to effectuate all of the terms and conditions of this Agreement.
11.8 Governing Law; Venue. This Agreement and all matters relating to this Agreement shall be governed by the laws of the State of Califo rnia, without regard to principles of conflicts of laws. Venue for any disputes under this Agreement shall be in Santa Barbara County, California.
11.9 Legal Advice. Each Party has received independent legal advice from its attorneys with respect to the advisability of executing this Agreement and the meaning of the provisions of this Agreement.
11.10 No Agency. This Agreement shall not create, nor shall it be construed to create any agency, partnership or similar relationship among the Parties.
11.11 Notices. All notices, approvals, acceptances, requests, demands and other communications required or permitte d under this Agreement, to be e ffective, shall be in writing and shall be delivered, either in person or by email or by Federal Express or other similar overnight
ATTACHMENT A
25845810.4
Surplus Water Transfer Program
Participation Agreement
delivery service, to the Authorized Representative of the Party to whom the notice is directed. Any communication given by email shall be deemed delivered on such mailing date and any communication given by overnight service shall be deemed deliver ed one (1) business day after the dispatch date. Any Party may change its em ail and overnight service addresses by giving all other Parties written notice of its new addresses.
11.12 Severability. If any provision of this Agr eement or its application to any party or circumstance is held invalid or unenforceable, then the remai nder of this Agreement and the affected provision to the extent it is not so held shall remain valid and enforceable and in full force and effect. The forgoing shall not apply, however , if the invalid or un enforceable provision in question or, as applicable, the portion or applic ation thereof held invalid or unenforceable, is a fundamental and material provision of this Agreement.
11.13 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and assigns.
11.14 Third Party Beneficiary; Enforcement. The Parties agree that this Agreement is for the benefit of (i) Participating Contractors, (ii) CCWA, and (iii ) all CCWA Participants that are not Participating Contractors. A ll of the aforementioned entities and persons shall be entitled to enforce the provisions of this Agreement.
11.15 Time of the Essence. Except as otherwis e provided in this Agreement, time is of the essence with respect to this Agreement and the performance of each and every obligation contained in this Agreement.
11.16 Time for Performance. Notwithstanding a ny provision of this Agreement to the contrary, in the event a Party fails to perform a ny obligation under this Agreement (other than an obligation to pay money) because of strikes, loc kouts, labor disputes, acts of God, inability to obtain labor or materials or reason able substitutes for labor or ma terials, government or judicial actions, inclement weather or other causes beyond its reasonable control, that failure will not constitute a default under this Agreement, and the performance in question will be excused during the period in which the cause for failure continues.
—Signatures Follow On Next Page(s)—
ATTACHMENT A
25845810.4
Surplus Water Transfer Program
Participation Agreement
IN WITNESS WHEREOF, the Parties have execut ed and entered into this Agreement as of the date first written above.
CENTRAL COAST WATER AUTHORITY
By: ____________________________
Name: Ray A. Stokes
Title: Executive Director
Approved as to form:
Brownstein Hyatt Farber Schreck, LLP
By: ____________________________
Name: Stephanie Osler Hastings
Authorized Representative:
Central Coast Water Authority
255 Industrial Way
Buellton, CA 93427
Attn: Ray Stokes, Executive Director
Telephone: (805) 688-2292
Email: [email protected]
Date: ____________________________
–signatures continue on next pages–
ATTACHMENT A
25845810.4
Surplus Water Transfer Program
Participation Agreement
[PARTICIPATING CONTRACTOR]
By: ___________________________ Date: __________ __________________ Name: [Name of Authorized Representative]
Title: [Title]
Approved as to form:
[Attorney’s Office]
By: _______________ ________________
Name: [Attorney Name, Title]
Authorized Representative:
[Participating Contractor]
[Street Address]
[City, CA ZIP]
Attn: [Authorized Representative Name, Title]
Telephone: [(XXX) XXX-XXXX]
Email: [email]
ATTACHMENT A
25845810.4
Surplus Water Transfer Program
Participation Agreement
Exhibit:
Exhibit A – Form of Annual Transfer Goal Summary
ATTACHMENT A
25845810.4
Surplus Water Transfer Program
Participation Agreement
EXHIBIT A
FORM OF ANNUAL TRANSFER GOAL SUMMARY FOR [YEAR]
Participating Contractor Transfer Goal (in AF)
TOTAL
ATTACHMENT A
Issued 7/13/23
AB C D E F G H I J K L M N O P Q R S T U V W X Y Z
Project Participant 2023
Project Table
A Amount
Drought
Buffer + GWD
Add Table A
Total Table A Delivery
Schedule
Table A
Allocation
Internal CCWA
Transfer
Revised
Table A
Allocation
SLO Water
Transfer
SWP#23002
Carryover
Spill
Article 21
3/22-6/30/23
2023 Total
Available to
Turnout
Turnout
Deliveries as of
6/30/23
Deliveries
out of CCWA
Service Area
as of 6/30/23
Estimated
Remaining
Available to
Turnout as of
6/30/23
Palmdale 2011
SWPAO#11006
Irvine
Ranch/Stran
d Ranch
Semitropic
Groundwater
Bank, as of
9/30/19
Total Banked
Water
2020 Mojave
Exchange
SWPAO#
20004
2016 AVEK
Exchange
SWPAO#
16017
2015 AVEK
Exchange
SWPAO#
15005
Total Water
Debt
100% Art 56C
Carryover
Art 14b
Carryover
Total
Carryover
1000 1455 2644
City of Guadalupe 550 55 605 216 605 16 621 11 7 18 14 0 167 820 262 558 1 1 0 City of Santa Maria 16,200 1,620 17,820 2,348 17,820 462 18,282 275 210 485 414 (193) 1,290 20,278 1,784 18,494 0 0 0 Golden State Water Co. 500 50 550 185 550 0 550 (1) 43 1 3 (8) 0 558 103 455 0 0 0 Vandenberg AFB 5,500 550 6,050 2,235 6,050 157 6,207 537 72 609 141 (639) 544 6,862 616 6,246 203 203 0 City of Buellton 578 58 636 82 636 0 636 (11) 0 (11) 15 0 52 692 77 615 21 21 0 Santa Ynez ID#1 (Solvang) 1,500 0 1,500 214 1,500 43 1,543 162 20 182 38 (132) 161 1,792 245 1,547 0 0 0 Santa Ynez ID#1 500 200 700 300 700 14 714 195 7 202 13 (205) 430 1,154 437 717 0 0 0 Goleta WD 4,500 2,950 7,450 765 7,450 0 7,450 (139) 0 (139) 115 0 0 7,426 0 7,426 167 167 (2,500) (2,500) Morehart Land Company 200 20 220 95 220 6 226 103 3 106 5 (100) 0 237 7 230 0 0 0 La Cumbre Mutual WC 1,000 100 1,100 355 1,100 29 1,129 592 13 605 26 (145) 0 1,615 16 450 1,149 0 187 187 (100) (100) Raytheon Systems Co. 50 5 55 0 55 1 56 8 1 9 1 (9) 0 57 05 7 0 0 0 City of Santa Barbara 3,000 300 3,300 510 3,300 (728) 2,572 (32) 0 (32) 77 (24) 0 2,593 0 2,593 0 0 0 0 0 Montecito WD 3,000 300 3,300 510 3,300 0 3,300 118 0 118 77 0 0 3,495 0 300 3,195 0 2,070 2,070 0 Carpinteria Valley WD 2,000 200 2,200 440 2,200 0 2,200 740 0 740 51 0 0 2,991 0 800 2,191 0 0 0 SUBTOTAL 39,078 6,408 45,486 8,255 45,486 0 45,486 2,558 337 2,895 1,000 (1,455) 2,644 50,570 3,547 1,550 45,473 392 187 2,070 2,649 (100) 0 (2,500) (2,600) Summary by Region
North Santa Barbara County 25,328 2,533 27,861 5,580 27,861 1,168 320 1,488 648 (1,177) 2,644 32,156 3,524 0 28,632 225 0 0 225 0 0 0 0 South Santa Barbara County 13,750 3,875 17,625 2,675 17,625 1,390 17 1,407 352 (278) 0 18,414 23 1,550 16,841 167 187 2,070 2,424 (100) 0 (2,500) (2,600) SLOCFC&WCD 4,830 n/a 4,830 4,347
System Total 43,908 50,316 12,602
Water Debt, AF
Carryover
Table A Amt, AF Water Made Available in 2023 Year, AF 2023 Delivery Status, AF Banked Water, AF
ATTACHMENT B
RESOLUTION NO. _
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA MARIA,
CALIFORNIA, AUTHORIZING PARTICIPATION IN THE SURPLUS WATER TRANSFER PROGRAM FOR 2023 WITH THE CENTRAL COAST WATER
AUTHORITY
WHEREAS, in 1991, the City of Santa Maria (“City”) and seven other public agencies that provide retail water supply service within Santa Barbara County (collectively, “Members”), formed the Central Coast Water Authority (“CCWA”) as a Joint Powers Agency pursuant to Government Code section 6500 et seq. by that certain Joint Exercise of Powers Agreement dated August 1, 1991; and
WHEREAS, the City has been receiving water from the State Water Project (“State Water”) through CCWA since 1997 and has imported over 215,000 acre -feet (“AF”) to provide higher quality water to the residents and businesses of Santa Maria , to assist in meeting discharge requirements at the Wastewater Treatment Plant, and to augment total water supplies available to the City; and
WHEREAS, persistent drought conditions intermixed with excessive precipitation, as well as operational constraints placed on the State Water Project, have reduced State Water reliability; and
WHEREAS, State Water inconsistency requires the City to explore options to augment water supplies during dry years and consider options to prepare for dry years during wet years; and
WHEREAS, CCWA has created and authorized a Surplus Water Transfer Program to provide opport unities for Members to enter exchanges or transfers of surplus State Water; and
WHEREAS, the City may have up to 10,000 AF of surplus State Water available this year; and
WHEREAS, the City wishes to explore and potentially participate in opportunities for the exchange or transfer of surplus State Water.
///
///
///
///
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2 NOW, THEREFORE, IT IS HEREBY RESOLVED by the City Council of the City of Santa Maria, California, as follows:
1. Authorize participation in the Surplus Water Transfer Program for 2023 with the Central Coast Water Authority; and
2. Designate the Director of Utilities as the City’s authorized representative for the Surplus Water Transfer Program for 2023; and
3. Authorize the Director of Utilities to exchange or transfer up to 10,000 AF of surplus State Water at an e xchange rate of two -to-one and/or a transfer price of not less than $125 per AF; and
4. Authorize the Chief Deputy City Clerk to make minor changes herein to address clerical errors, so long as substantial conformance of the intent of this document is maintained. In doing so, the Chief Deputy City Clerk shall consult with the City Manager and City Attorney concerning any changes deemed necessary.
PASSED AND ADOPTED at a regular meeting of the City Council of the City of Santa Maria, California, held this 15th day of August 2023.
ATTEST:
Chief Deputy City Clerk
Mayor
APPROVED AS TO FORM:
_______________________________
City Attorney
APPROVED AS TO CONTENT:
_______________________________
Department Director
_______________________________
City Manager
FOR THE COUNCIL MEETING OF AUGUST 15, 2023
COUNCIL AGENDA REPORT
TO: City Council
FROM: City Manager
Prepared by: Director of Community Development
SUBJECT: Fiscal Year 2024-25 Proposed CDBG Funding Priorities
Description:
The City Council will conduct a public hearing to receive comments on the Community Development Block Grant funding priorities for Fiscal Year 2024-25.
Environmental Notice: This activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required.
RECOMMENDATIONS:
Adopt a Resolution approving the Community Development Block Grant (CDBG) priorities for the 2024-25 Fiscal Year funding process.
BACKGROUND:
On an annual basis, the Block Grants Advisory Committee (BGAC) reviews the priorities outlined in the City’s Five-Year Consolidated Plan and decides whether they should be modified based on the needs of the community. The priorities are one of the tools used by the BGAC and the City Council in determining what activities and projects should receive funding to maximize the impact the City’s CDBG funds will have on City residents.
DISCUSSION:
As part of the CDBG funding process, staff conducted a Community Needs Workshop on Monday, July 31, 2023. The gathering is d esigned to obtain information from residents and non-profit agencies concerning the unmet needs in the community. Approximately two dozen people attended this workshop and shared the need for programs to assist those who are low-income, the elderly, at-risk youth, the unhoused, those in need of minor home repair, and those suffering from abuse, mental and physical health, and/or trauma.
The needs expressed are reflected in the existing CDBG funding priorities; therefore, the BGAC recommends no changes be made to the priorities outlined in the City’s Five-Year Consolidated Plan.
2 Alternative(s)
The City Council can amend the priorities with the understanding that it differs from the BGAC’s recommendation and that the changes may not accurately reflect the overall expressed needs of the community.
Fiscal Considerations
No fiscal impacts.
Impact to the Community
The proposed action will have a positive impact on the community by providing the BGAC and potential sub -recipients with a decisive outline of the priorities for the upcoming funding cycle.
ATTACHMENT A Proposed FY 2024-25 CDBG Funding Priorities
ATTACHMENT A
CITY OF SANTA MARIA
COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM
BGAC PROPOSED FUNDING PRIORITIES
FOR FISCAL YEAR 2024-2025
Approved by the Block Grants Advisory Committee (BGAC) on Monday, July 31, 2023
1. Prevent homelessness, address critical needs, and assist at-risk youth, elderly, and underserved populations
Assist low- to moderate-income people in need of food, shelter, clothing, health care and/or safety.
Prevent juvenile delinquency and divert at -risk youth from gang involvement, crime, substance abuse, family violence, school problems, and out-of-control behavior. Address the housing, health care , accessibility , and service needs of underserved populations such as, but no t limited to the elderly and persons with mental, physical, emotional, and developmental disabilities and/or diseases.
2. Expand educational and development opportunities
Support and develop social services and facilities and provide opportunities for youth development that will provide positive experiences needed by youth to achieve success.
Encourage programs to improve academic performance and educational outcomes for youngsters aged preschool through post K-12.
Support and encourage programs to provide adult literacy training and encourage life- long learning.
3. Provide affordable housing
Develop and support programs and projects to increase the supply of affordable housing for low to moderate-income persons.
Maintain and upgrade existing low to moderate -income neighborhoods and preserve affordable housing stock.
Provide services that will assist low to moderate -income homeowners and renters to continue living in their homes safely.
4. Revitalize existing neighborhoods
Revitalize existing neighborhoods in low to moderate -income areas by increasing services such as supportive social services, and upgrading public infrastructures, such as street lighting, improved sidewalks, parks, and recreational public facilities.
Note: The priorities are not listed in order of importance. They are numbered for reference purposes only.
Priorities #1 and #2 will only be considered for CDBG public services funding.
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA
MARIA, CALIFORNIA, APPROVING THE COMMUNITY
DEVELOPMENT BLOCK GRANT (CDBG) PRIORITIES FOR
2024-2025 FISCAL YEAR FUNDING PROCESS
WHEREAS, the City of Santa Maria has been eligible for Federal funding on an annual basis since 1975 under the Community Development Block Grant (CDBG) Program; and
WHEREAS, the funds may be used at the discretion of the City if the City’s activities comply with Federal regulations and meet one of three national objectives; and
WHEREAS, the national objectives are: 1) primary benefit to low and moderate - income persons; 2) prevention or elimination of slums or blight; or 3) meet an urgent community-wide need, such as one caused by a major catastrophic event (i.e. flooding, earthquake, etc.); and
WHEREAS, the Block Grants Advisory Committee (BGAC) annually reviews the priorities from the previous fiscal year which were adopted and approved by the City Council; and
WHEREAS, based on community partici pation and the U.S. Department of Housing and Urban Development (HUD) recommendations, the BGAC recommends that the priorities stay the same for the 2024-2025 Fiscal Year, as they have been for the past year.
NOW, THEREFORE, IT IS HEREBY RESOLVED by the City Council of the City of Santa Maria, California, as follows:
1) Authorize and direct the BGAC to adopt the funding priorities for the upcoming 2024-2025 Fiscal Year; and
2) The City Manager, or designee, is hereby authorized to make minor changes to these adopted priorities, so long as substantial conformance of the intent of the document is maintained; and
3) Authorize and direct the Chief Deputy City Clerk to make minor changes herein to address clerical errors, so long as substantial conformance of the intent of this document is maintained. In doing so, the Chief Deputy City Clerk shall consult with the City Manager and City Attorney concerning any changes deemed necessary.
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PASSED AND ADOPTED at a regular meeting of the City Council of the City of Santa Maria held this 15th day of August 2023.
ATTEST:
Chief Deputy City Clerk
Mayor
APPROVED AS TO FORM:
_______________________________
City Attorney
APPROVED AS TO CONTENT:
_______________________________
Department Director
_______________________________
City Manager
FOR THE COUNCIL MEETING OF AUGUST 15, 2023
COUNCIL AGENDA REPORT
TO: City Council
FROM: City Manager
Prepared by: Director of Finance
SUBJECT: Financing Options for Fire Station No.1 Expansion and Other Facility Improvements
Description:
The City Council will receive a presentation for financing options relating to facilities improvements, specifically for the Fire Station No.1 Expansion Project, as well as actions being taken by City staff to research available funding options.
Environmental Notice: The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required.
RECOMMENDATION:
Consider financing options relating to facilities improvements, specifically for the Fire Station No.1 Expansion Project.
BACKGROUND:
On June 20, 2023, the City Council received a presentation on amendments to the 2023- 24 Mid -Cycle City Budget. This presentation included a discussion on $6 million necessary to fund the Fire Station No.1 Expansion Project. In addition to the Fire Station No.1 Project, there are several other deferred maintenance and capital projects identified among sever al other City facilities. Public Works is currently undergoing a facilities condition assessment project which will result in prioritizing needs and identifying cost estimates across City facilities.
Generally, there are two options for financing capital projects: 1) Pay-as-you-go utilizing cash and savings, and 2) Pay -as-you-use, or debt financing. Historically, the City has utilized pay-as-you-go. With the increased need for improvements to City facilities, it may now be advantageous to look at pay-as-you-use, or debt financing, to fund these projects.
During the budget presentation, the City Council directed staff to research debt financing options and bring an update to the City Council within eight weeks.
DISCUSSION:
Since the June 20 th City Council meeting, staff have begun researching options for debt financing, utilizing municipal guidance from the State of California, California Debt and Investment Advisory Commission (CDIAC), and International City/County Management 2 Association (ICMA). Staff also met with the municipal finance advisors which assisted the City in a 2021 Water Bond Refinancing and contacted the City’s banking services provider, Bank of America. In addition, staff reviewed the City Debt Policy in compliance with Government Code Section 8855(i).
Staff will continue to research available options and bring additional information back to the City Council, based on City Council direction. In the meantime, two options have been tentatively identified:
1. As there may be a more immediate nee d for the $6 million Fire Station No.1 Expansion project, the first option could involve securing a loan from a private bank.
Typically, these loans range from 5 to 10 years, they carry a higher interest rate, however a lower cost of issuance and less administrative requirements. Given the current interest rate environment, and the federal funds rate at 5 to 5.25 percent, private bank loans are currently much higher than historical rates. Staff are currently working to receive estimated loan interest rates.
2. A second option is to utilize the findings from the facilities condition assessment and consider a revenue bond issuance, leveraging general fund (Measure U) revenues.
This option would depend on the size of the issuance, the readiness of any projects, and the term of the loan selected. This option would carry a lower interest rate, however it’s a more complicated process with increased administrative obligations, including compliance with securities laws, and continuing disclosures.
Utilizing revenue bonds would not require voter approval. However, if the City were to seek a new revenue source, such as General Obligation (GO) Bonds, this would require a two -thirds voter approval. The City would need to consider tax exempt bonds, which carry a lower rate, however IRC Section 54A requires that issuers of qualified tax-credit bonds spend 100 percent of the available project proceeds of the issue by the close of the expenditure period (generally, the three-year period beginning on the date of issuance).
Another item to consider, if the City were to move forward with the private bank loan for the Fire Station No.1 Project, a bank loan could be refinanced into a revenue bond issuance later.
Since the City has very little debt currently outstanding, the financial advisors have stated it would likely not be difficult to obtain debt finance; however additional information will be needed, such as the estimated dollar amount for the bonds and how quickly capital projects will be ready. It is advised that borrowing does not occur until the funding is ready to spend. Additional considerations still need to be researched further, such as alternative grant funding, and market interest rates available.
Alternative(s)
The City Council could choose to continue funding facility improvements with the pay-as- you-go strategy by authorizing use of reserves. This strategy will likely further delay facility 3 improvements because City reserves are not sufficient to accommodate multiple facility expansion or rehabilitation projects.
Fiscal Considerations
This item does not have any direct fiscal considerations and is intended as an update to the City Council.
Impact to the Community
None.