Bolinas Community Public Utility District
A Meeting of the Finance Committee Of The Board Of Directors
September 24, 2014     270 Elm Road, Bolinas


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.