HomeMy WebLinkAbout1970-06-29; Water Committee Ad Hoc; MinutesMINUTES OF: WATER COMMITTEE MEETING
DATE OF MEETING: June 29, 1970 - 7:00 P.M.
PLACE OF MEETING: City Manager's Conference Room
PRESENT: Bob Watson, Bill Esterline, Don Hickethier, Bob Neely,
Thelraa Sowell, Bill Cannon, Knox Williams, Win Friday,
Hunter Cook, Stuart Wilson, Chief Anear
Special Guests: Fritz Stradling—Rutan & Tucker
Ed Wells & Archie Madison—Bartle Wells
Wayne Carroll—Iverson, Rabe & Co.
Absent: Glenn McComas, Carl Prince
Mr. Watson stated some consensus is needed as to exactly what
the ability of the City is in terms of its projected bond sale and
what can be accomplished regarding the water systems improvement
project.
Mr. Carroll was asked to voice his findings. Mr. Carroll
stated his basic interest is what has taken place in the past. He
had raised the question of how the City would pay for the proposed
bond.
Discussion was held on the required amount of bond reserves.
Mr. Stradling stated O'Melveny & Myers have a doubt about the neces-
sary amount required in the reserves. $119,000 will be kept in the
reserve fund.
Further discussion was held on the matter of figuring depre-
ciation into the cost and on the Resolution. Mr. Wells stated
depreciation is not related to the revenue bonds and what is
necessary to maintain and conform to the requirements of the
existing bonds.
Mr. Carroll and Mr. Wells agreed to meet tomorrow to discuss
and settle the matter of available funds for the bond.
Mr. Wells displayed their formula for net revenues which he
explained. He further stated now is the best time to establish the
right to sell additional bonds. It amounts to coordinating our
work sufficiently so that we can proceed with the bond sell with
sufficient coverage.
It was stated that the accumulated total of all money available
for the project is $2,250.000.
Water Committee - 2 - June 29, 1970
Mr. Cook reported a priority list for the various portions of
the project has been made. He stated the total construction project
will cost approximately $1,800,000 plus engineering, land acquisition,
etc. The complete total cost would be approximately $2,400,000.
The amount of the discount was discussed and Mr. Wells stated
the exact amount is not yet available.
It was stated $300,000 would have to be transferred from Reserve
to Const, account in order to use the money for this project.
Mr. Stradling stated that a 7 percent water rate is legal
without a vote by the people.
After much discussion on the time schedule of the completion
of the City books, Mrs. Sowell stated the earliest date for this
completion would be August 15. Mr. Wells stated they would need a
minimum of ten weeks additional to complete the bond
sale .
It was moved that this Committee recommend to the Council that
approximately $300,000 be transferred from the excess bond service
funds, as outlined by the City's Bonding Attorney, to the Construction
fund and that Bartle Wells and Rutan and Tucker be urged to proceed
in preparing the necessary formal documents for the sale of approxi-
mately $1,100,000 worth of bond sales with a sale of the bond at the
earliest possible date. The motion was seconded and approved.
Mr. Wells reported the Council should make a statement of policy
to go on record to the effect that the proceeds from the sale or
lease of any non-productive assets of the Water Department are to
be placed in the Construction fund and not in the reserve fund.
This should be handled as soon as possible. It was therefore moved
that this Committee recommend to the Council to adopt a policy with
the proceeds from the sale or lease of non-productive Water Depart-
ment assets be placed in the Construction fund. The motion was
seconded and approved.
The term "construction fund" was explained as any extraordinary
repairs or any construction work of the water Department.
Mr. Wilson indicated he would prepare the necessary resolutions
for the motions and will attend the next Council meeting to review
the items.
Mr. Wells stated he would also attend the Council meeting since
they are concerned with their fees and will request progress payments.
Water Committee - 3 - June 29, 1970
Mr. Esterline questioned how the net proceeds of $900,000 were
arrived at. Mr. Wells and Mr. Madison explained their figures and
how they arrived at each.
The meeting was adjourned at 8:30 P.M.
Respectfully submitted,
Barbara Bishop
Recording Secretary