TO:Andrew P. Powers, City Manager
FROM:Jaime Boscarino, Finance Director
DATE:July 11, 2023
SUBJECT: CI 5527 Conejo Canyons Bridge Standby Letter of Credit RECOMMENDATION:
1. Authorize Finance Director to apply for Irrevocable Standby Letter of Credit (Letter of Credit) as required by California Department of Fish and Wildlife (CDFW) for performance security in an amount not to exceed $250,000.
2. Delegate authority to the Finance Director to complete Wells Fargo Bank Letter of Credit application and administer Letter of Credit, including renewals and periodic reductions, until canceled by CDFW.
3. Find that this action is not a project as defined under the California Environmental Quality Act.
FINANCIAL IMPACT:
No Additional Funding Requested. The Conejo Open Space Conservation Agency (COSCA) Board has reserved $250,000 in the Woolsey Fire settlement proceeds to reimburse Wells Fargo for the issuance costs and for any draws on the Letter of Credit. Minimal staff time to manage the Letter of Credit is included in the Adopted FY 2023-24 General Fund Budget.
BACKGROUND:
The City and COSCA are working in collaboration to construct a bridge spanning the Arroyo Conejo Creek southwest of Hill Canyon Road in the Conejo Canyons Open Space (Attachment #1). The bridge will connect two COSCA trails systems, provide for emergency access to open space, divert visitors from the Hill Canyon Treatment Plant access road onto safer trails, and provide secondary access for City staff between the Treatment Plant and the City’s Municipal Service Center.
Construction is anticipated to begin in fall of 2023.
Since the bridge project will have minor temporary and permanent impacts to natural resources, it is subject to the permitting authority of the CDFW. CDFW has issued a Streambed Alteration Agreement that sets forth the conditions under
CI5527 Conejo Canyons Bridge Standby Letter of Credit
July 11, 2023
which the project may proceed. Among the requirements is the mitigation of environmental impacts through the restoration of nearby degraded habitat areas.
These requirements are typical for projects such as the construction of bridges, and COSCA staff has prepared a formal mitigation plan.
To ensure the City, as permittee, completes the required mitigation work, CDFW requires financial security equal to the anticipated costs for the mitigation activities.
For this project, the security will be in the form of a Letter of Credit.
DISCUSSION/ANALYSIS:
If approved, the City will apply for a Wells Fargo Bank, N.A. Letter of Credit as required by CDFW. The amount of the Letter of Credit is based on the mitigation costs and will be in an amount not to exceed $250,000. Staff expects that CDFW will reduce the amount of the Letter of Credit over the five-year mitigation period as restoration project milestones are met.
Because the Letter of Credit is expected to remain outstanding for five years, current funds must be reserved for any draws on the Letter of Credit. COSCA has appropriated and encumbered Woolsey Fire settlement funds allocated for invasive plant management and land restoration to be held as that reserve. The reserved funds will not be used unless the Letter of Credit is drawn on by CDFW following a failure of the City and COSCA to complete the required work or a failure by the City to renew the Letter of Credit until the Letter of Credit is canceled by CDFW. The area to be restored is small and the restoration plan provides clear direction to achieve project success. Staff does not anticipate that draws on the Letter of Credit will be necessary.
COUNCIL GOAL COMPLIANCE:
Meets the following City Council goals:
C. Operate City government in a fiscally and managerially responsible and prudent manner to ensure that the City of Thousand Oaks remains one of California's most desirable places to live, work, visit, recreate, and raise a family.
F. Provide and enhance essential infrastructure to ensure that the goals and policies of the Thousand Oaks General Plan are carried out and the City retains its role and reputation as a leader in protecting the environment and preserving limited natural resources.
PREPARED BY: Jane Adelmann, Debt and Investment Analyst Attachments:
Attachment #1 – Vicinity and Location Maps
FIN:320-10\ja\H:\COMMON\Council\2023\Adminstration\071123 LC5527 Conejo Canyons Bridge LC Staff Report.docx