Bolinas Community Public
Utility District
A Special
Meeting Of The Board Of Directors
July 11, 2008 270 Elm Road, Bolinas
1. Call to Order
10:35 a.m.
2. Roll
Directors Amoroso, Kimball, McClellan,
Siedman and Smith present; director Siedman presiding.
3. Proposed Refinancing of the 1993 California Statewide Communities
Development Authority (“CSCDA”) Loan Agreement Between the Bolinas Community
Public Utility District and the CSCDA.
Staff explained that Brandis Tallman, the bond firm representing the BCPUD
in connection with the issuance of its Clean Renewable Energy Bonds (“CREBs”),
has recommended that the district refinance its 1993 CSCDA Loan. During
its review of the BCPUD’s long-term debt, Brandis Tallman discovered that
the 1993 CSCDA loan agreement contains certain provisions that are problematic
for the district’s CREBs issuance which can be addressed via refinancing
the loan with the same bank that will be purchasing the district’s CREBs.
The bank is willing to refinance the loan at a significantly lower interest
rate (4%, rather than the current 6.5% rate), so the district will benefit
from the proposed refinancing in the form of significant interest payment
savings. Brandis Tallman prepared two payment options for the district:
one involves pre-paying the upcoming December loan payment, thereby reducing
the total amount re-financed, and the second involved rolling all payments
currently due into the refinanced loan.
The Board discussed the two re-financing options and concluded that the first
option (i.e., prepayment of the December 2008 loan payment) was preferable
as it resulted in additional savings to the district. Board members
applauded the refinancing as an unexpected but very pleasant opportunity
for the district to reduce its long-term debt servicing costs.
B. Kimball/J. McClellan all in favor
to refinance the district’s 1993 CSCDA Loan in connection with the CREB’s
issuance, with a prepayment of the December 2008 loan payment to be made
by the district on August 1, 2008.
B. Kimball/J.McClellan all in
favor to authorize the BCPUD Board President and/or General
Manager to execute the documents necessary to accomplish the refinancing
of the district’s 1993 CSCDA Loan.
4. BCPUD Solar Projects: Approve Amended Agreement with SPG Solar,
Inc; Notice to Proceed to SPG Solar for Design Work; Limited Notice to Proceed
to SPG Solar, Inc. for Installation Work.
Director Smith stated that the company the district has selected to install
the photovoltaic solar arrays at the Water Treatment Plant and Wastewater
Treatment Plant sites, SPG Solar, Inc., has been placed on a very tight installation
schedule per the terms of the County coastal permits. SPG Solar would
like to start the installation work at the Water Treatment Plant site on
July 15th or as soon thereafter as possible. However, the district’s
CREB’s financing will not be secured until August 1st. The Board previously
conditioned its approval of any issuance of a Notice to Proceed to SPG Solar
on the district’s receipt of funds from the CREBs issuance, among other things,
so director Smith requested that the Board revise its decision in that regard.
Director Kimball said that it was her understanding, based on the Firehouse
& Clinic Project’s experience with its CREBs process and based on conversations
with Nikki Tallman, that once the BCPUD executes a Purchase Agreement for
the CREBs financing with the bank, that action locks in the bank’s commitment,
pricing and other terms and all risk shifts from the BCPUD to Brandis, Tallman
to complete the deal. While it does require a couple of weeks for the
related documentation to be completed and the funds to actually transfer,
the execution of the Purchase Agreement is the key milestone. David
Kimball, present on behalf of the Fire District Board, concurred with director
Kimball’s remarks. Director Kimball said that Nikki Tallman has advised
her that the firm is ready to price the district’s CREBs issuance next week,
close by July 28th and transfer the funds to the district on August 1st.
Director Amoroso commented that the district therefore
could decide to issue a partial or full Notice to Proceed to SPG Solar once
the Purchase Agreement was executed. Director Smith said the most urgent
issue right now is that SPG Solar would like to place an order as soon as
possible for the mounting poles needed for the solar panels as the delivery
is quite slow on this item and they would like to get the order in process;
in fact, SPG Solar has advised the district that the company will need to
pay an expedited shipping fee of approximately $10,000 to have the poles
delivered in time to complete the project. SPG Solar will be requesting
a Change Order to the installation agreement to cover that cost. On
the other hand, due to a change in panel specs, the size of the system has
come down by 2% and the cost by $10,000 in proportion, so there will be a
corresponding reduction in the contract price in that regard. SPG Solar
would also like to be authorized to proceed with their design work so they
are ready for the installation as soon as possible.
Director Siedman noted that the agenda also contains reference to an amended
agreement with SPG Solar and he inquired about that issue. Director
Smith explained that the contract needs to be amended to reflect the
constraints on the installation schedule imposed by the County of Marin for
environmental reasons during the coastal permit process, to reflect the reduced
size and cost of the system, to reflect the change order to authorize the
expedited shipping cost for the mounting poles, and certain other related
issues. SPG Solar has agreed to abide by the current liquidated damages
provision of $250 per day if the company fails to complete the installation
work by the required deadlines. (SPG Solar applied for and received
from the California Solar Initiative an extension of the previous November
2008 deadline until January 2009.) The amended agreement has been drafted
by the BCPUD attorneys and reviewed and approved by SPG Solar; director
Smith requested that the BCPUD Board approve the amended agreement.
B. Kimball/D. Smith all in favor to approve
the Amended Agreement with SPG Solar and to approve related change orders
to the amended agreement.
J. McClellan/B. Kimball all in favor
to issue a Limited Notice to Proceed to SPG Solar for design work, subject
to a cap of 5% of the total contract price.
J. McClellan/D. Smith all in favor
to issue a full Notice to Proceed to SPG Solar for the installation work
subject to execution of the Purchase Agreement for the CREBs issuance/
5. Community Expression
None.
6. Adjournment
11:39 a.m.