1. Call to Order.
3:00 p.m.
2. Roll.
Directors Amoroso and Comstock present; General
Manager Jennifer Blackman also present, as well as Mesa Park Board members
Bryan Lee and Dylan Squires.
3. Memorandum
of Understanding between the BCPUD and Mesa Park Concerning the Mesa Park
Ballfield Irrigation and Public Restroom Project.
Staff recommended that the BCPUD require Mesa Park
to enter into a Facilities Use Agreement, as it did in 2008 when the skatepark
was installed, per the requirements of the BCPUD’s insurance authority,
ACWA/Joint Powers Insurance Authority (“JPIA”), to address Mesa Park’s
insurance and indemnification obligations after the Project is installed. Staff confirmed with ACWA/JPIA that such an
agreement is appropriate and that BCPUD shall be the owner of the Project
improvements installed on its land, so the BCPUD’s property insurance will
cover those improvements. In response to
questions from director Amoroso, staff clarified that the Facilities Use
Agreement will cover Mesa Park’s responsibility for any claims that might arise
from use of the Project improvements at the park.
Staff explained that the BCPUD has secured from the
state an advance of $400,000 out of the total $500,000 in grant funds allocated
to the Project. The advance funds will
pay for the prefabricated restrooms (approximately $85,000) and for nearly all
of the Project installation costs ($350,000).
The MOU is designed to address how the Project costs not covered by the
advance (and any cost-overruns) will be funded until the final $100,000 in
grant funds is released (which will occur after the Project is fully installed
and has been inspected by the state grant agency). Turning to the Project budget, staff said
that non-construction costs -- including permit fees (which Mesa Park already
has paid), CEQA costs (which have been incurred but not paid) and construction
management costs (which are accruing now) -- total $55,200 and this amount can
be deferred for payment and until after the final $100,000 is received. As such, the amount of $44,800 will need to
be available to pay Project costs prior to the receipt of the final $100,000.
Director Comstock said that the fundamental issue is
that Mesa Park has the responsibility for ensuring the Project is completed,
notwithstanding the fact that the BCPUD is the grantee and landowner. The BCPUD is permitting the Project to be
installed on its land and agreed to apply for the grant funds as the eligible
applicant, but the Project is Mesa Park’s obligation. As such, to the extent Mesa Park has cash that
can be used to pay the costs that need to be covered, it will be used before
any BCPUD funds are contributed – and, if any BCPUD funds are contributed,
those funds must be repaid by Mesa Park and this must be clearly set forth in
the MOU. Director Comstock said his
primary concern is how to deal with any unforeseen circumstances that will
cause cost overruns as he is not worried about whether the state agency will
release the full $500,000 in Project funds.
Bryan Lee agreed that cost overruns are the main
concern. He noted that the installation
of the irrigation system and piping of the water source are nearly complete and
on-budget, and the restrooms are prefabricated and on-budget, so the risk of
cost overruns is relatively low as these are the main components of the
Project. Bryan and Dylan confirmed that Mesa
Park’s available funds are approximately $70,000 in annual revenue based on its
parcel tax and Measure A receipts.
Matt Lewis inquired where money would come from if
BCPUD were to advance any funds for the Project; staff said the money likely
would come from district reserves, and director Amoroso then stated that the
source of funds has not been decided and the Board ultimately would decide on the
source of funds.
Director Comstock asked how much money Mesa Park
needs to operate its existing facilities on an annual basis relative to the
$70,000 in annual receipts. Bryan
estimated the amount to be approximately $45,000 – $50,000 per year to maintain
both parks, pay insurance premiums, utilities and mowing costs, clean bathrooms,
etc. Director Amoroso inquired about
Mesa Park’s reserves, which he thought were about $85,000 at this point in
time. Dylan said that $25,200 of that
will be used to pay for Bid Items #1 and #2, which are not covered by the
grant. Director Amoroso said he has
attended Mesa Park meetings to be sure that the agency has funds to borrow
against to pay for costs not advanced by the state agency.
Discussion ensued about the amount of money Mesa
Park currently has in reserves and whether it can be dedicated to Project
costs, or whether amounts are needed for anticipated operating expenses at the
park sites. Director Comstock asked
about the park’s cash position, noting that available Mesa Park funds should be
used before any BCPUD funds are contributed.
Christine Cunha, bookkeeper for Mesa Park, reported that Mesa Park has
approximately $85,400 in cash (which includes the $25,200 it will pay for Bid
Items #1 and #2) and Dylan estimated that Mesa Park will receive approximately
$17,000 in Measure A funds in December, so the total available cash is
approximately $100,000 through the end of the year. With regard to expenses, discussion ensued
about Mesa Park’s cash needs (other than the Project) until such time as Mesa
Park receives its next revenue installment in April 2015 – it was agreed that
Mesa Park’s cash needs are approximately $45,000. Accordingly, Mesa Park “on paper” can cover
the anticipated Project costs that must be paid before the final $100,000 in
grant funds is released. Director Comstock
noted that BCPUD therefore is serving as a “back up” in the event Mesa Park’s
cash flow is inadequate for any reason not foreseen right now.
Discussion then ensued about a repayment schedule
acceptable to Mesa Park in the event of cost overruns. Director Amoroso noted that Mesa Park will
have about $20,000 per year in revenue over its $50,000 operating expenses and
suggested that amount be dedicated to repayment. Bryan Lee expressed concern about how Mesa
Park then would cover unexpected expenses, and he suggested that $15,000 per
year would be a more reasonable amount. Director
Comstock expressed concern about a repayment schedule that might stretch out
over a long period of years; he suggested a 2-year repayment schedule, maximum.
Director Amoroso agreed and noted that
Mesa Park does not have a good record of repaying its debts to the BCPUD. Dylan and Bryan disputed this; Bryan said
that he has years of his life into this project and would hope that Mesa Park
and BCPUD can agree on a constructive approach and work together and improve
the BCPUD’s property for the community’s benefit. Director Amoroso said that BCPUD cannot pay
for this project without being reimbursed by Mesa Park as that would be an
inappropriate use of BCPUD’s public funds.
Director Comstock said he appreciates that Mesa Park
has a volunteer board; he said the issue is not personal, but rather what to do
if things go awry. He noted that
director Amoroso essentially is asking:
what if Mesa Park defaults in the event BCPUD advances funds to complete
the Project? Director Amoroso said that
if Mesa Park defaults, it should be dissolved – if it fails here, the community
should try a different approach to run its parks. Director Amoroso referred to $8,000 in past
debt for a reclamation study owed by Mesa Park to the BCPUD and said it has
“never been paid back”; he therefore questioned Mesa Park’s commitment to repay
funds the BCPUD may loan for this Project.
Staff said the record will be checked, but her recollection is that the
BCPUD Board agreed to defer the repayment of the $8,000 several years ago pending
a decision on whether it is reimbursable under the grant.
Director Comstock said that if Mesa Park will commit
to repay a minimum of $15,000 per year and will repay the total amount owed up
to $50,000, if any, to the BCPUD within no longer than two years, he would be
satisfied. Matt Lewis asked if the
meeting is covering only costs incurred since the Project started and not costs
incurred prior to the Project starting, such as BCPUD staff time and well
installation costs, etc. Director
Comstock said the discussion is limited to what will happen if the BCPUD needs
to advance funds for the Project installation in order for it to be timely completed. Matt Lewis said that as a taxpayer, he would
like to know how much BCPUD staff time has been spent on the project.
Director Comstock said that he also would like to
see a provision in the MOU to make clear that BCPUD has priority of
reimbursement from the final grant funds ahead of Mesa Park if Mesa Park has to
borrow from BCPUD to complete the Project.
Director Amoroso concurred. Staff
suggested the Finance Committee have a follow-up meeting to review a revised
version of the MOU which will incorporate all of the points discussed at this
meeting prior to the next regularly scheduled meetings of the Mesa Park and
BCPUD Boards. Staff suggested the next
meeting take place on October 7, 2014, so that the MOU is then finalized for
review by the two Boards -- the Mesa Park Board next meets on October 13th
and the BCPUD Board next meets on October 15th. Staff was directed to calendar another
Finance committee meeting for October 7, 2014.
Dylan Squires asked if the meeting could begin at 4:00 p.m. rather than
3:00 p.m.; there was no objection.
Director Comstock commended Bryan and Dylan for
their dedication to an important community project and said that he hopes they
understand that the meeting was necessary to fulfill the BCPUD’s responsibility
to ensure its funds are appropriately spent and protected in the event of
unforeseen circumstances.
4. Community Expression.
Matt Lewis said that all mention of the Project has
been removed from the BCPUD website; staff said that the information is under a
“Current Projects” link on the BCPUD website.
Matt said that there is no information about who at Mesa Park to contact
about the Project. Bryan Lee said that
Ed Pohlman is the Project Manager. Matt
said there should be better information about who the public can contact with
questions about the Project; he noted that it is big news, something to
celebrate and a project that might engender good will for Mesa Park. Matt said his biggest concern is how much
money and staff time the BCPUD has put into the Project until this point; he
said he knows that staff has spent hundreds of hours on the Project and
taxpayers therefore have paid for it if Mesa Park has not. Bryan noted that taxpayers have paid for the
entire Project as it is grant-funded and it is a project of a public
agency. Dylan said that BCPUD staff time
has been tracked and will be reimbursed.
Matt said he would like an accounting of BCPUD staff time; he also said
he is glad that information about the Project is on the BCPUD website
6.
Adjournment.
4:35 p.m.