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


  6.  Adjournment

     11:39 a.m.