HomeMy WebLinkAbout2020-04-28 - Board of Directors Meeting Agenda Packet (B)AGENDA
YORBA LINDA WATER DISTRICT
BOARD OF DIRECTORS REGULAR MEETING
Tuesday, April 28, 2020, 6:30 PM
1717 E Miraloma Ave, Placentia CA 92870
1. TELECONFERENCE INFORMATION
In an effort to help mitigate the spread of Coronavirus (COVID19), the District will be facilitating
participation in this meeting via teleconference pursuant to Paragraph 3 of Executive Order N2920
issued by the Governor of California on March 17, 2020. Information for accessing this meeting is
provided below. Public comment related to items on this agenda or other matters within the District’s
jurisdiction will be facilitated on the teleconference or can be submitted in writing via email to the
Board Secretary at bodsecretary@ylwd.com by 3:00 p.m. on Tuesday, April 28, 2020. If you choose to
submit comments via email, please identify the agenda item you wish to address (if applicable). Your
comments will be shared with the Board prior to the meeting. For questions regarding participation
please call 7147013020.
Computer/Mobile Device: https://zoom.us/j/94616317240
Telephone: 6699006833 or 3462487799
Meeting ID: 946 1631 7240 (No participant ID is required.)
2. CALL TO ORDER
3. PLEDGE OF ALLEGIANCE
4. ROLL CALL
Phil Hawkins, President
Andrew J. Hall, Vice President
Brooke Jones, Director
J. Wayne Miller, PhD, Director
Al Nederhood, Director
5. ADDITIONS/DELETIONS TO THE AGENDA
Items may be added to the agenda upon determination by a twothirds vote of the Board, or a
unanimous vote if only three Directors are present, that there is a need to take immediate action which
came to the District's attention subsequent to the agenda being posted. (GC 54954.2(b)(2))
6. INTRODUCTIONS AND PRESENTATIONS
6.1. Elected Official Liaison Reports
6.2. Federal and State Legislative Update
Page 1 of 163
7. PUBLIC COMMENTS
Any individual wishing to address the Board or Committee is requested to identify themselves and state
the matter on which they wish to comment. If the matter is on the agenda, the Chair will recognize the
individual for their comment when the item is considered. No action will be taken on matters not listed
on the agenda. Comments are limited to three minutes and must be related to matters of public interest
within the jurisdiction of the Water District. (GC 54954.3)
8. CONSENT CALENDAR
All items on the consent calendar are considered routine and may be approved by a single motion.
There will be no discussion of these items unless a member of the Board, staff, or public requests
separate consideration.
8.1.Minutes of the Board of Directors Special Meeting Held April 9, 2020
Recommendation: That the Board of Directors approve the minutes as
presented.
8.2.Minutes of the Board of Directors Special and Regular Meetings Held April 14,
2020
Recommendation: That the Board of Directors approve the minutes as
presented.
8.3.Payments of Bills, Refunds, and Wire Transfers
Recommendation: That the Board of Directors ratify and authorize
disbursements in the amount of $2,125,113.32.
8.4.Budget to Actual Reports for the Month Ending March 31, 2020
Recommendation: That the Board of Directors receive and file the Budget to
Actual Reports for the Month Ending March 31, 2020.
8.5.Cash and Investment Report for Period Ending March 31, 2020
Recommendation: That the Board of Directors receive and file the Cash and
Investment Report for Period Ending March 31, 2020.
8.6.Notice of Completion for the Camino Verde and Mickel Waterline Improvement
Project
Recommendation: That the Board of Directors authorize staff to file the Notice
of Completion for the Camino Verde and Mickel Waterline Improvement
Project, Job No. J201803.
8.7.Notice of Completion for the 2019 Sewer Main CIPP Rehabilitation Project
Recommendation: That the Board of Directors authorize staff to file the Notice
of Completion for the 2019 Sewer Main CIPP Rehabilitation Project, Job No.
J201939S.
9. ACTION CALENDAR
This portion of the agenda is for items where staff presentations and Board or Committee discussions
are needed prior to formal action.
Page 2 of 163
9.1.Approving Issuance of Negotiable Promissory Notes for the Purpose of
Financing Capital Projects
Recommendation: That the Board of Directors adopt Resolution No. 2020XX
Approving the Issuance of Negotiable Promissory Notes for the Purpose of
Financing Capital Projects and Approving the Execution and Delivery of
Certain Documents in Connection Therewith and Certain Other Matters.
9.2.PFAS Treatment Facilities and Program Agreement
Recommendation: That the Board of Directors authorize the General Manager
and General Counsel to execute, in its substantial form, the PFAS Treatment
Facilities and Program Agreement among the Orange County Water District
(OCWD), Yorba Linda Water District, and other Groundwater Producers.
9.3.Amending Schedule for Regular Board of Directors Meetings
Recommendation: That the Board of Directors adopt Resolution No. 2020XX
amending Section 10.1 (A) of the Board of Directors' Policies and Procedures
Manual regarding the schedule for regular meetings.
9.4.Nominations for OC LAFCO Regular Special District Member Seat
Recommendation: That the Board of Directors consider nominating
candidate(s) for election to OC LAFCO's Regular Special District Member Seat
and designate two Directors to serve as the primary and alternate voting
representatives in the associated election.
10. DISCUSSION ITEMS
This portion of the agenda is for matters that cannot reasonably be expected to be concluded by action
of the Board or Committee at the meeting, such as technical presentations, drafts of proposed policies,
or similar items for which staff is seeking advice and counsel. Time permitting, it is generally in the
District’s interest to discuss these more complex matters at one meeting and consider formal action at
another meeting. This portion of the agenda may also include items for information only.
10.1. Review of Projected Expenses to Budget for Fiscal Year 2020
10.2. Treatment of Groundwater Supplies to Remove Per and Polyfluoroalkyl
Substances (PFAS)
11. REPORTS, INFORMATION ITEMS, AND COMMENTS
11.1. Directors' Reports
11.2. Assistant General Manager's Report
11.3. General Counsel's Report
11.4. Future Agenda Items and Staff Tasks
12. COMMITTEE REPORTS
Page 3 of 163
12.1. Interagency Committee with MWDOC and OCWD
(Hawkins/Nederhood)
Next meeting is scheduled Thursday, May 28, 2020 at 4:00 p.m.
12.2. Joint Agency Committee with City of Yorba Linda
(Hawkins/Jones)
Next meeting is scheduled Monday, July 27, 2020 at 4:00 p.m.
12.3. Joint Agency Committee with City of Placentia
(Hawkins/Hall)
Next meeting is scheduled Wednesday, April 29, 2020 at 3:00 p.m.
13. BOARD OF DIRECTORS ACTIVITY CALENDAR
13.1. Meetings from April 29 June 30, 2020
14. ADJOURNMENT
14.1. The next Regular Board Meeting will be held Tuesday, May 12, 2020. Closed
Session (if necessary) will begin at 5:30 p.m. and regular business at 6:30
p.m.
Items Distributed to the Board Less Than 72 Hours Prior to the Meeting
Prior to the Governor’s ‘StayatHome’ Executive Orders regarding COVID19, nonexempt materials related to
open session agenda items that were distributed to a majority of the Board of Directors or Committee Members
less than seventytwo (72) hours prior to the meeting were made available for public inspection in the lobby of the
District’s Administrative building during regular business hours and posted on the District’s website shortly
thereafter (GC 54957.5). As the District’s lobby has been closed to the public in accordance with the Governor’s
Executive Orders and to help mitigate the spread of COVID19, staff will make these materials available on the
District’s website (https://ylwd.com/) as soon as possible following receipt.
Accommodations for the Disabled
Requests for disabilityrelated modifications or accommodations, including auxiliary aids or services, required for
participation in the above posted meeting should be directed to the Board Secretary at (714) 7013020 at least 24
hours in advance. (GC 54954.2(a))
Page 4 of 163
ITEM NO. 8.1.
AGENDA REPORT
MEETING DATE:April 28, 2020
TO:Board of Directors
FROM:Brett R. Barbre, Assistant General Manager
STAFF CONTACTS:Annie Alexander, Executive Assistant/Board Secretary
SUBJECT:Minutes of the Board of Directors Special Meeting Held April 9,
2020
RECOMMENDATION:
That the Board of Directors approve the minutes as presented.
ATTACHMENTS:
1.Draft Meeting Minutes (Special)
Page 5 of 163
Minutes of the YLWD Board of Directors Special Meeting Held April 9, 2020 at 5:00 p.m.1
2020-XXX
MINUTES OF THE
YORBA LINDA WATER DISTRICT
BOARD OF DIRECTORS SPECIAL MEETING
(TELECONFERENCE)
Thursday, April 9, 2020, 5:00 p.m.
1717 E Miraloma Ave, Placentia CA 92870
1.SPECIAL NOTICE
As noted on the agenda, this meeting was facilitated via teleconference pursuant
to Paragraph 3 of Executive Order N-29-20 issued by the Governor of California
on March 17, 2020.
2.CALL TO ORDER
The meeting was called to order at 5:00 p.m.
3.PLEDGE OF ALLEGIANCE
4.ROLL CALL
DIRECTORS PRESENT STAFF PRESENT
Phil Hawkins, President Marc Marcantonio, General Manager
Andrew J. Hall, Vice President Brett R. Barbre, Assistant General Manager
Brooke Jones John DeCriscio, Operations Manager
J. Wayne Miller, PhD (Joined at 5:15 p.m.)Delia Lugo, Finance Manager
Al Nederhood Rosanne Weston, Engineering Manager
Annie Alexander, Executive Asst/Board Secretary
ALSO PRESENT
Andrew Gagen, General Counsel, Kidman Gagen Law LLP
5.PUBLIC COMMENTS
Board Secretary Alexander confirmed that no written public comments had been
received for this meeting. No members of the public expressed an interest to
provide comment at this time.
Page 6 of 163
Minutes of the YLWD Board of Directors Special Meeting Held April 9, 2020 at 5:00 p.m.2
2020-XXX
6.CLOSED SESSION
The Board entered Closed Session at 5:05 p.m. on a separate call. All Directors
were present. Also present was General Manager Marcantonio, Assistant
General Manager Barbre, Operations Manager DeCriscio, Engineering Manager
Weston, and General Counsel Gagen.
6.1.Conference with Legal Counsel – Anticipated Litigation
Significant Exposure to Litigation Pursuant to Paragraph (2) of Subdivision
(d) of Section 54956.9 of the California Government Code
Number of Potential Cases:One
The Board returned from Closed Session at 6:25 p.m. General Counsel Gagen
announced that the Board took no reportable action during Closed Session.
7.DISCUSSION ITEMS
7.1.Bid Protest Submitted by Calgon Carbon Corporation for Pre-Purchase of
Pre-filters, Vessels and Resin, and Temporary Installation of Treatment
Facility at Well No. 20 (J2020-05)
Cary Sullivan, legal counsel for Calgon Carbon, commented on the bid
documents and process for this project and points included in Calgon’s
statement of protest.
Nora Stockhausen, VP of Drinking Water Solutions at Calgon Carbon,
commented on Calgon’s bid proposal for the project and the District’s bid
evaluation criteria.
Adam Redding, PhD, Technical Director of Drinking Water Solutions at
Calgon Carbon, commented on Calgon’s resin guarantee.
Joseph Sweeney, legal counsel for AqueoUS Vets, commented on the
District’s bid evaluation criteria, weight and scoring.
Rob Craw, VP of Business Development for AqueoUS Vets, commented
on Calgon’s bid protest, Addendum 2 of the bid documents, and the bid
evaluation criteria.
President Hawkins opened the meeting to public comment. None were
given.
Page 7 of 163
Minutes of the YLWD Board of Directors Special Meeting Held April 9, 2020 at 5:00 p.m.3
2020-XXX
President Hawkins thanked the presenters from Calgon and AqueoUS
Vets and explained that staff would be reviewing all materials and a
decision regarding the bids and bid protest would be made as soon as
possible.
8.ADJOURNMENT
8.1.The meeting ended at 6:55 p.m.
Annie Alexander
Board Secretary
Page 8 of 163
ITEM NO. 8.2.
AGENDA REPORT
MEETING DATE:April 28, 2020
TO:Board of Directors
FROM:Brett R. Barbre, Assistant General Manager
STAFF CONTACTS:Annie Alexander, Executive Assistant/Board Secretary
SUBJECT:Minutes of the Board of Directors Special and Regular Meetings
Held April 14, 2020
RECOMMENDATION:
That the Board of Directors approve the minutes as presented.
ATTACHMENTS:
1.Draft Meeting Minutes (Special)
2.Draft Meeting Minutes (Regular)
Page 9 of 163
Minutes of the YLWD Board of Directors Special Meeting Held April 14, 2020 at 5:30 p.m.1
2020-XXX
MINUTES OF THE
YORBA LINDA WATER DISTRICT
BOARD OF DIRECTORS SPECIAL MEETING
(TELECONFERENCE)
Tuesday, April 14, 2020, 5:30 p.m.
1717 E Miraloma Ave, Placentia CA 92870
1.SPECIAL NOTICE
As noted on the agenda, this meeting was facilitated via teleconference pursuant
to Paragraph 3 of Executive Order N-29-20 issued by the Governor of California
on March 17, 2020.
2.CALL TO ORDER
The meeting was called to order at 5:31 p.m.
3.ROLL CALL
DIRECTORS PRESENT STAFF PRESENT
Phil Hawkins, President Brett R. Barbre, Assistant General Manager
Andrew J. Hall, Vice President John DeCriscio, Operations Manager
Brooke Jones Rosanne Weston, Engineering Manager
J. Wayne Miller, PhD Annie Alexander, Executive Asst/Board Secretary
Al Nederhood
ALSO PRESENT
Andrew Gagen, General Counsel, Kidman Gagen Law LLP
4.PUBLIC COMMENTS
Board Secretary Alexander confirmed that no written public comments had been
received for this meeting and that there were no members of the public on the
call desiring to comment.
5.CLOSED SESSION
The Board entered Closed Session at 5:32 p.m. on a separate call. All Directors
were present. Also present was Assistant General Manager Barbre, Engineering
Manager Weston, Operations Manager DeCriscio, and General Counsel Gagen.
Page 10 of 163
Minutes of the YLWD Board of Directors Special Meeting Held April 14, 2020 at 5:30 p.m.2
2020-XXX
5.1.Conference with Legal Counsel – Anticipated Litigation
Significant Exposure to Litigation Pursuant to Paragraph (2) of Subdivision
(d) of Section 54956.9 of the California Government Code
Number of Potential Cases:One
5.2.Conference with Legal Counsel – Anticipated Litigation
Initiation of Litigation Pursuant to Paragraph (4) of Subdivision (d) of
Section 54956.9 of the California Government Code
Number of Potential Cases:One
Assistant General Manager Barbre disconnected from the call prior to discussion
of the following item.
5.3.Conference with Labor Negotiators
Pursuant to Section 54957.6 of the California Government Code
Agency Designated Representative:Andrew Gagen, General Counsel
Unrepresented Employee:General Manager
The Board returned from Closed Session at 6:30 p.m.
At the beginning of the Regular Meeting that followed, General Counsel Gagen
announced that the Board took no reportable action during Closed Session.
5.ADJOURNMENT
5.1.The meeting ended at 6:34 p.m.
Annie Alexander
Board Secretary
Page 11 of 163
Minutes of the YLWD Board of Directors Regular Meeting Held April 14, 2020 at 6:30 p.m.1
2020-XXX
MINUTES OF THE
YORBA LINDA WATER DISTRICT
BOARD OF DIRECTORS REGULAR MEETING
(TELECONFERENCE)
Tuesday, April 14, 2020, 6:30 p.m.
1717 E Miraloma Ave, Placentia CA 92870
1.SPECIAL NOTICE
As noted on the agenda, this meeting was facilitated via teleconference pursuant
to Paragraph 3 of Executive Order N-29-20 issued by the Governor of California
on March 17, 2020.
2.CALL TO ORDER
The meeting was called to order at 6:30 p.m.
At the request of President Hawkins, Director Nederhood provided an invocation.
3.PLEDGE OF ALLEGIANCE
4.ROLL CALL
DIRECTORS PRESENT STAFF PRESENT
Phil Hawkins, President Brett R. Barbre, Assistant General Manager
Andrew J. Hall, Vice President John DeCriscio, Operations Manager
Brooke Jones Gina Knight, Human Resources and Risk Manager
J. Wayne Miller, PhD Delia Lugo, Finance Manager
Al Nederhood Pasquale Talarico, Director of Public Affairs
Rosanne Weston, Engineering Manager
Annie Alexander, Executive Asst/Board Secretary
Kaden Young, Sr Management Analyst
ALSO PRESENT
Andrew Gagen, General Counsel, Kidman Gagen Law LLP
General Counsel Gagen announced that the Board took no reportable action in
Closed Session during the preceding Special Meeting.
5.ADDITIONS/DELETIONS TO THE AGENDA
None.
Page 12 of 163
Minutes of the YLWD Board of Directors Regular Meeting Held April 14, 2020 at 6:30 p.m.2
2020-XXX
6.INTRODUCTIONS AND PRESENTATIONS
6.1.Elected Official Liaison Reports
Brett R. Barbre, in his capacity as Director for the Metropolitan Water
District of Southern California (MWD), reported on MWD’s recently
adopted 2-year budget and litigation initiated against the State.
6.2.Federal and State Legislative Update
Director of Public Affairs Talarico reported on the Governor Newsom’s
press conference regarding the State’s response to the coronavirus
(COVID-19) pandemic.
7.PUBLIC COMMENTS
Board Secretary Alexander confirmed that no written public comments had been
received for this meeting. No members of the public expressed an interest to
provide comment at this time.
8.CONSENT CALENDAR
Director Jones requested to remove Item No. 8.6 from the Consent Calendar for
separate action.
Director Hall made a motion, seconded by Director Nederhood, to approve the
remainder of the Consent Calendar. Motion carried 5-0-0-0 on a roll call vote.
8.1.Minutes of the Board of Directors Special Meeting Held March 5, 2020
Recommendation: That the Board of Directors approve the minutes as
presented.
8.2.Minutes of the Board of Directors Special and Regular Meetings Held
March 10, 2020
Recommendation: That the Board of Directors approve the minutes as
presented.
8.3.Minutes of the Board of Directors Special and Regular Meetings Held
March 24, 2020
Recommendation: That the Board of Directors approve the minutes as
presented.
Page 13 of 163
Minutes of the YLWD Board of Directors Regular Meeting Held April 14, 2020 at 6:30 p.m.3
2020-XXX
8.4.Payments of Bills, Refunds, and Wire Transfers
Recommendation: That the Board of Directors ratify and authorize
disbursements in the amount of $1,588,430.90.
8.5.Terms and Conditions for Sewer Service with EI-Yorba Linda, LLC for
Tentative Tract Map 17784, Job No. 201947S
Recommendation: That the Board of Directors approve the Terms and
Conditions for Sewer Service with EI-Yorba Linda, LLC for Tentative Tract
Map 17784, Job No. 201947S.
ITEMS REMOVED FROM THE CONSENT CALENDAR FOR SEPARATE ACTION
8.6.Task Order for Wastewater Master Plan
Staff explained that the District’s Wastewater Master Plan was outdated
and needed to include the east portion of the collection system that was
previously acquired from the City of Yorba Linda.
Director Jones made a motion, seconded by Director Hall to approve a
Task Order for the Wastewater Master Plan to Psomas under the
Professional Services Agreement for On-Call Professional Engineering
Services awarded on January 14, 2020. Motion carried 5-0-0-0 on a roll
call vote.
ELECTED OFFICIAL LIAISON REPORTS CONTINUED
Mayor Pro Tem Gene Hernandez commented on the City of Yorba Linda’s
COVID-19 mitigation efforts.
9.ACTION CALENDAR
9.1.PFAS Treatment Facilities and Program Agreement
General Counsel Gagen reviewed the purpose of the agreement and
major sections and provisions contained within. Mr. Gagen explained that
it was unknown if the indemnification clauses in the agreement could
potentially impact the groundwater producers’ insurance policies with
ACWA-JPIA. He noted that one of the producers was looking into this
matter and it may be prudent for the Board to consider deferring action on
this item until a determination has been made.
Consideration of this item was deferred to the next regular meeting.
Page 14 of 163
Minutes of the YLWD Board of Directors Regular Meeting Held April 14, 2020 at 6:30 p.m.4
2020-XXX
10.DISCUSSION ITEMS
10.1.Treatment of Groundwater Supplies to Remove Per- and Polyfluoroalkyl
Substances (PFAS)
Staff reported that the bids for installation of a temporary PFAS
groundwater treatment plant at one of the District’s wells had been
cancelled. As OCWD will only partially reimburse the District for
temporary treatment, staff is looking into installing two permanent
treatment plants at Wells 20 and 21. Staff believes a proposal for this
project could be ready for the Board’s consideration at a special meeting
to be scheduled the following week.
10.2.Status of Engineering Activities
Staff briefed the Board on the status of various capital improvement
projects.
11.REPORTS, INFORMATION ITEMS, AND COMMENTS
11.1.Directors' Reports
The Directors noted their attendance at the listed meetings and events.
11.2.Assistant General Manager's Report
Assistant General Manager Barbre reported on some recent tours of the
District’s facilities and the receipt of an assessment ballot for street lighting
and landscaping maintenance at one of YLWD’s properties. He also
noted that staff would review the impact of Fitch Ratings’ new water and
sewer rating criteria at the next regular meeting.
11.3.General Counsel’s Report
None.
11.4.Future Agenda Items and Staff Tasks
None.
Page 15 of 163
Minutes of the YLWD Board of Directors Regular Meeting Held April 14, 2020 at 6:30 p.m.5
2020-XXX
12.COMMITTEE REPORTS
12.1.Interagency Committee with MWDOC and OCWD
(Hawkins/Nederhood)
Next meeting is scheduled Thursday, May 28, 2020 at 4:00 p.m.
12.2.Joint Agency Committee with City of Yorba Linda
(Hawkins/Jones)
Next meeting is yet to be scheduled.
12.3.Joint Agency Committee with City of Placentia
(Jones/Hawkins)
Next meeting is scheduled Wednesday, April 29, 2020 at 3:00 p.m.
13.BOARD OF DIRECTORS ACTIVITY CALENDAR
13.1.Meetings from April 15 – May 31, 2020
The Board made no changes to the activity calendar.
14.ADJOURNMENT
14.1.The meeting was adjourned at 7:57 p.m.
Annie Alexander
Board Secretary
Page 16 of 163
ITEM NO. 8.3.
AGENDA REPORT
MEETING DATE:April 28, 2020
TO:Board of Directors
FROM:Brett R. Barbre, Assistant General Manager
STAFF CONTACTS:Delia Lugo, Finance Manager
Paige Appel, Accounting Assistant II
SUBJECT:Payments of Bills, Refunds, and Wire Transfers
RECOMMENDATION:
That the Board of Directors ratify and authorize disbursements in the amount of
$2,125,113.32.
BACKGROUND:
Section 31302 of the California Water Code says the District shall pay demands made against
it when they have been approved by the Board of Directors. Pursuant to law, staff is hereby
submitting the list of disbursements for Board of Directors’ approval.
The items on this disbursement list include: a wire of $1,133,295.22 to MWDOC for February
2020 water purchases; a check of $128,465.92 to ACWA/JPIA for May 2020 medical and
dental premiums; a check of $101,023.86 to Cedro Construction Inc for waterline
improvements at Camino Verde and Mickel Job #2018-03. The balance of $193,902.48 are
routine invoices.
The Accounts Payable check register total is $1,556,687.48, Payroll No. 7 total is
$278,629.72, and Payroll No. 8 is $289,796.12; where disbursements for this agenda report
total is $2,125,113.32. A summary of the disbursements is attached.
ATTACHMENTS:
1.CapSheet 04-28-20
2.Check Register 04-28-20
3.Credit Card - 04-28-20
Page 17 of 163
Summary of Disbursements
April 28, 2020
CHECK NUMBERS:
04/28/20 Computer Checks 76015 - 76099 $ 423,392.26
$ 423,392.26
WIRES:
W041520A Municipal Water District $ 1,133,295.22
$ 1,133,295.22
TOTAL OF CHECKS & WIRES $ 1,556,687.48
PAYROLL NO. 7:
Direct Deposits $ 170,489.87
Third Party Checks 7352—7357 $ 21,718.18
Payroll Taxes $ 43,948.34
EFT – CalPERS Payroll #7 $ 42,473.33
$ 278,629.72
PAYROLL NO. 8:
Direct Deposits $ 176,179.02
Third Party Checks 7358—7366 $ 24,963.07
Payroll Taxes $ 46,346.86
EFT – CalPERS Payroll #8 $ 42,307.17
$ 289,796.12
TOTAL OF PAYROLLS $ 568,425.84
----------------------------------------------------------------------------------------------------------------------
DISBURSEMENT TOTAL: $ 2,125,113.32
==================================================================
APPROVED BY THE BOARD OF DIRECTORS MINUTE ORDER AT BOARD
MEETING OF APRIL 28, 2020
==================================================================.
Page 18 of 163
Check No.Date Vendor Name Amount Description
76015 04/28/2020 GRACE HONG 114.91 CUSTOMER REFUND
76016 04/28/2020 LISA NGUYEN 98.98 CUSTOMER REFUND
76017 04/28/2020 ROSS MORROW 18.19 CUSTOMER REFUND
76018 04/28/2020 CHONGZHI NI 161.39 CUSTOMER REFUND
76019 04/28/2020 ONE SOURCE EQUIPMENT RENTALS 271.48 CUSTOMER REFUND
76020 04/28/2020 ALEX BALDERAS 44.39 CUSTOMER REFUND
76021 04/28/2020 NICOLE BLAIS 102.67 CUSTOMER REFUND
76022 04/28/2020 AMY SOWARDS 158.49 CUSTOMER REFUND
76023 04/28/2020 NATIVE LINUM 505.03 CUSTOMER REFUND
76024 04/28/2020 ACWA/JPIA 128,465.92 MEDICAL & DENTAL PREMIUMS - MAY 2020
76025 04/28/2020 ACWA/JPIA 25,393.42 WORKERS COMPENSATION - JANUARY-MARCH 2020
76026 04/28/2020 Al Nederhood 25.53 MILEAGE REIMBURSEMENT ISDOC AD HOC-NEDERHOOD, A
76027 04/28/2020 Applied Best Practices 370.50 PROFESSIONAL SERVICES - CDAR
76028 04/28/2020 Aqua-Metric Sales Co. 22,849.25 OPERATIONS WORK MATERIAL - METERS
76029 04/28/2020 Aramark 755.51 UNIFORM SERVICES
76030 04/28/2020 AT & T - Calnet3 228.63 ATT CALNET 3
76031 04/28/2020 BENNETT-BOWEN & LIGHTHOUSE INC 470.32 PARTS FOR UNIT#228
76032 04/28/2020 Big Ben Inc. 19,424.84 J19-37 HIGHLAND PRESSURE STATION
76033 04/28/2020 BrightView Tree Care Services Inc. 3,189.37 LANDSCAPE SERVICE
76034 04/28/2020 Brooke Jones 54.86 MILEAGE REIMBURSEMENT MWDOC & WACO-JONES, B
76035 04/28/2020 CalCard US Bank 10,186.81 CREDIT CARD TRANSACTIONS - MARCH 2020
76036 04/28/2020 CDW Government, Inc 219.50 IT HARDWARE SUPPLIES
76037 04/28/2020 Cedro Construction Inc 101,023.86 J18-03 CAMINO VERDE & MICKEL WATERLINE
76038 04/28/2020 City Of Placentia 3,179.67 SEWER FEES COLLECTION - MARCH 2020
76039 04/28/2020 Delta Wye Electric, Inc. 3,841.00 ELECTRICAL WORK-GARDENIA STATION
76040 04/28/2020 E. H. Wachs Company 524.11 PARTS FOR UNIT#180
76041 04/28/2020 Enthalpy Analytical, Inc. 1,975.00 WATER QUALITY LAB WORK
76042 04/28/2020 George Chevrolet 29,010.62 NEW VEHICLE-2020 SILVERADO
76043 04/28/2020 Grainger 199.02 SAFETY EQUIPMENT
76044 04/28/2020 Infosend Inc. 4,842.87 BILLING & POSTAGE CUSTOMER BILL - MARCH 2020
76045 04/28/2020 Jorge Lopez 55.00 TI RENEWAL CERTIFICATION REIMBURSEMENT - LOPEZ
76046 04/28/2020 Josh Mardrid 354.50 WATER DISTRICT 3 CERTIFICATION REIMBURSEMENT-MARDRID
76047 04/28/2020 KB Design 603.40 YLWD PROMOTIONAL ITEMS
76048 04/28/2020 Konica Minolta Business 1,357.29 COPIER LEASE C258 & C558
76076 04/28/2020 CB Technical 3,210.00 CONSULTING WORK FOR CITYWORK CONFIGURATION - IT DEPARTMENT
76077 04/28/2020 Mc Fadden-Dale Hardware 59.71 MECHANIC SHOP EQUIPMENT & SUPPLIES
76078 04/28/2020 Mc Master-Carr Supply Co. 1,745.67 PRODUCTION PARTS
76079 04/28/2020 Municipal Water District 580.00 WATER POLICY DINNER-8 ATTENDED
76080 04/28/2020 NatPay Online Business Solutions 25.84 DOCULIVERY - MARCH 2020
76081 04/28/2020 Nickey Kard Lock Inc 3,635.55 FUEL 3/16-3/31/20
76082 04/28/2020 Nicole Dalton 190.00 D3 CERTIFICATION REIMBURSEMENT -DALTON
76083 04/28/2020 Pete's Road Service Inc 102.50 VEHICLE MAINTENANCE FOR UNIT# 161
76084 04/28/2020 Plumbers Depot Inc. 311.30 OPERATIONS - SEWER TOOLS
76085 04/28/2020 Quinn Company 2,560.99 PARTS FOR WELLS #1,5,7
76086 04/28/2020 ROBERT SMITH 225.00 PROPERTY DAMAGE SETTLEMENT
76087 04/28/2020 Rose Paving LLC 15,047.50 OPERATIONS - CONCRETE REPAIR & SERVICE
76088 04/28/2020 Safety-Kleen Systems Inc 1,325.67 HAZARDOUS MATERIAL DISPOSAL
76089 04/28/2020 Security Solutions 9,800.00 SECURITY WORK
76090 04/28/2020 Shred Confidential, Inc. 402.68 SHRED SERVICE
76091 04/28/2020 Sunstate Equipment Co 3,418.45 J19-13 RENTAL EQUIPMENT
76092 04/28/2020 TED DENGES 574.55 PROPERTY DAMAGE SETTLEMENT
76093 04/28/2020 Underground Service Alert 368.35 NEW TICKET CHARGES & CA STATE FEE
76094 04/28/2020 United Industries 427.61 J20-13S SAFETY EQUIPMENT
76095 04/28/2020 United Rentals 781.03 J19-13 SCADA CAPITAL PROJECT
76096 04/28/2020 Utility Systems, Science & Software, Inc. 17,649.00 J19-13 SCADA CAPITAL PROJECT
76097 04/28/2020 United Water Works, Inc. 377.57 OPERATIONS WORK MATERIAL
76098 04/28/2020 Westside Building Material 296.75 WAREHOUSE MATERIAL
76099 04/28/2020 Office Solutions 200.21 OFFICE SUPPLIES
W041520A 04/15/2020 Municipal Water District 1,133,295.22 WATER DELIVERIES - FEBRUARY 2020
1,556,687.48
For Checks Dated: 04/14/2020 thru 04/28/2020
Yorba Linda Water District
Check Register
Page 19 of 163
04/02/2020 PAYROLL #7 - EMPLOYEE DIRECT DEPOSIT 170,489.87
04/02/2020 PAYROLL #7 - PAYROLL TAX PAYMENT 43,948.34
04/02/2020 PAYROLL #7 - CALPERS & TASC 42,473.33
7352 04/02/2020 Colonial Life & Accident 112.13
7353 04/02/2020 Lincoln Financial Group 5,681.66
7354 04/02/2020 Nationwide Retirement Solutions 14,833.28
7355 04/02/2020 California State Disbursement Unit 366.92
7356 04/02/2020 California State Disbursement Unit 384.92
7357 04/02/2020 US Department of Education AWG 339.27
278,629.72
04/16/2020 PAYROLL #8 - EMPLOYEE DIRECT DEPOSIT 176,179.02
04/16/2020 PAYROLL #8 - PAYROLL TAX PAYMENT 46,346.86
04/16/2020 PAYROLL #8 - CALPERS & TASC 42,307.17
7358 04/16/2020 Colonial Life & Accident 112.13
7359 04/16/2020 Lincoln Financial Group 5,689.73
7360 04/16/2020 Nationwide Retirement Solutions 14,818.01
7361 04/16/2020 California State Disbursement Unit 366.92
7362 04/16/2020 California State Disbursement Unit 384.92
7363 04/16/2020 Allstate 1,380.07
7364 04/16/2020 Midland Life Insurance 200.00
7365 04/16/2020 Reliance Plan Insurance 66.61
7366 04/16/2020 Ameritas 1,944.68
289,796.12
Payroll Checks #7
Payroll Checks #8
Page 20 of 163
Vendor Name Amount Description
Veriato Inc.420.00 MAINTENANCE RENEWAL & VERIATO 360 CLIENT LICENSES
ONLINE Information Services, Inc.539.12 ONLINE UTILITY EXCHANGE & COLLECTION - FEBRUARY 2020
Verizon Wireless 3,643.80 VERIZON WIRELESS - 1/21-2/20
Time Warner Cable 2,444.99 INTERNET & DISTRICT TV SERVICES
Verizon Wireless 3,138.90 VERIZON WIRELESS - 2/21-3/20
10,186.81
28-Apr-20
Cal Card Credit Card
U S Bank
Page 21 of 163
ITEM NO. 8.4.
AGENDA REPORT
MEETING DATE:April 28, 2020
TO:Board of Directors
FROM:Brett R. Barbre, Assistant General Manager
STAFF CONTACTS:Delia Lugo, Finance Manager
Kelly McCann, Senior Accountant
SUBJECT:Budget to Actual Reports for the Month Ending March 31, 2020
RECOMMENDATION:
That the Board of Directors receive and file the Budget to Actual Reports for the Month Ending
March 31, 2020.
DISCUSSION:
For the month-ending March 31, 2020, staff is presenting Budget to Actual Reports for the
District as a whole, as well as the individual water and sewer funds.
Cumulative Volumetric Water Revenue, as reported through the month ending March 31,
2020, reflects an average increase of 6.55% as compared to the prior year for the same
reporting period. Residential customer connections have the highest increase in consumption
sales of 6.94% as compared to reported results from the prior year.
Total Variable Costs results, as reported through the month ending March 31, 2020, reflect a
15.61% increase when compared to prior year for the same reporting period. The increase in
costs is predominantly reflective of switching sources over to 100% import water, as well as an
increase in total water demand which as reported, is 8.21% above that of prior year.
STRATEGIC PLAN INITIATIVES:
G2 3B – Regularly assess net position and steps to meet strategic goals.
ATTACHMENTS:
1.Financial Reports and Graphs March 2020
Page 22 of 163
FY20 Annual
Budget
YTD Actuals thru
March 2020
YTD % of
Budget
Water Revenue (Residential)16,548,758$ 11,286,294$ 68.20%
Water Revenue (Commercial & Fire Det.)1,872,073 1,303,112 69.61%
Water Revenue (Landscape/Irrigation)3,917,982 2,911,434 74.31%
Service Charges 10,988,263 8,206,711 74.69%
Other Operating Revenue 902,996 676,037 74.87%
Total Operating Revenue 34,230,072 24,383,588 71.23%
Revenue (Non-Operating):
Interest 698,777 395,070 56.54%
Property Taxes 1,820,471 1,240,434 68.14%
Other Non-Operating Revenue 608,430 473,328 77.79%
Total Non-Operating Revenue 3,127,678 2,108,832 67.42%
Total Revenue 37,357,750$ 26,492,420$ 70.92%
Expenses (Operating):
Variable Water Costs (G.W., Import & Power)
Water-Related Costs 12,485,582$ 9,269,425$ 74.24%
Fixed Costs 1,179,009 946,906 80.31%
Power-Related Costs 1,446,219 1,263,979 87.40%
Variable Water Costs Related Expenses Total 15,110,810 11,480,310 75.97%
Salary Related Expenses 10,753,255 6,853,946 63.74%
Reduction for Capital Project Labor (225,000) (152,891) 67.95%
Salary Related Expenses Total 10,528,255 6,701,055 63.65%
Supplies & Services
Communications 228,183 139,096 60.96%
Contractual Services 496,717 300,427 60.48%
Data Processing 324,069 189,739 58.55%
Dues & Memberships 78,862 75,190 95.34%
Fees & Permits 290,271 241,093 83.06%
Insurance 304,468 214,757 70.54%
Materials 948,195 722,187 76.16%
District Activities, Emp Recognition 43,371 28,611 65.97%
Maintenance 565,165 382,609 67.70%
Non-Capital Equipment 200,778 112,187 55.88%
Office Expense 33,950 29,196 86.00%
Professional Services 585,971 618,572 105.56%
Training 78,301 30,856 39.41%
Travel & Conferences 126,278 52,907 41.90%
Uncollectible Accounts 4,185 3,557 85.00%
Utilities 179,258 153,038 85.37%
Vehicle Expenses 335,600 290,987 86.71%
Supplies & Services Sub-Total 4,823,620 3,585,009 74.32%
Total Operating Expenses 30,462,685 21,766,374 71.45%
Expenses (Non-Operating)
Other Expense 13,520 130,321 963.91%
Total Non-Operating Expenses 13,520 130,321 963.91%
Total Expenses 30,476,205$ 21,896,695$ 71.85%
Net Revenues 6,881,545 4,595,725 66.78%
Less: Debt Service (Principal & Interest)2,726,956 2,726,660 99.99%
Less: Committed Capital Expenditures (PayGo)3,174,425 925,877 29.17%
Less: PARS Contribution - Net Pension/OPEB 1,700,000 - 0.00%
Transfer to/(from) Reserves (719,836) 943,188 131.03%
Net Total -$ -$
Yorba Linda Water District
Water Enterprise
FY20 ProForma - Use of Funds
March 2020
Page 23 of 163
Yorba Linda Water District
Summary Financial Report
Water & Sewer Funds
For Period Ending March 31, 2020
Annual YTD March YTD YTD Actual Prior Year Prior Year YTD Actual YTD Actual
Budget Budget Actual Actual (Under) Over Mar Actual Actual (thru vs vs
FY20 FY20 FY20 FY20 YTD Budget FY19 Mar 2019)PY Actual $PY Actual %
Revenue (Operating):
Water Revenue (Residential)16,548,758$ 12,107,071$ 1,027,315$ 11,286,294$ (820,777)$ 579,867$ 10,553,975$ 732,319$ 6.94%
Water Revenue (Commercial & Fire Det.)1,872,073 1,369,609 120,853 1,303,112 (66,497)88,114 1,299,310 3,802 0.29%
Water Revenue (Landscape/Irrigation)3,917,982 2,866,396 228,096 2,911,434 45,038 26,351 2,694,904 216,530 8.03%
Water Revenue (Service Charge)10,988,263 8,241,197 922,956 8,206,711 (34,486)838,578 7,528,103 678,608 9.01%
Sewer Charge Revenue 2,421,665 1,816,249 200,223 1,789,810 (26,440)180,932 1,648,110 141,699 8.60%
Locke Ranch Assessments 324,173 187,242 22,327 212,907 25,665 17,353 190,220 22,687 0.00%
Other Operating Revenue 964,708 723,531 52,931 740,436 16,905 54,104 757,743 (17,307)-2.28%
Total Operating Revenue:37,037,622 27,311,295 2,574,701 26,450,704 (860,592)1,785,299 24,672,365 1,778,338 7.21%
Revenue (Non-Operating):
Interest 812,306 609,229 18,790 463,479 (145,750)39,934 522,872 (59,393)-11.36%
Property Tax 1,820,471 1,152,176 132,492 1,240,434 88,258 117,866 1,185,314 55,120 0.00%
Other Non-Operating Revenue 632,909 474,683 (236,798) 478,367 3,684 148,370 690,232 (211,864)-30.69%
Total Non-Operating Revenue:3,265,685 2,236,088 (85,516) 2,182,280 (53,808)306,170 2,398,418 (216,138)-9.01%
Total Revenue 40,303,307 29,547,383 2,489,185 28,632,984 (914,399)2,091,469 27,070,783 1,562,201 5.77%
Expenses (Operating):
Variable Water Costs (G.W., Import & Power)15,110,810 11,055,069 1,231,436 11,480,310 425,241 590,007 9,930,011 1,550,299 15.61%
Salary Related Expenses 11,664,922 7,480,478 731,332 7,399,189 (81,289)736,589 7,166,900 232,289 3.24%
Supplies & Services 5,449,301 4,011,468 343,123 3,824,261 (187,207)383,272 3,226,377 597,884 18.53%
Total Operating Expenses 32,225,033 22,547,015 2,305,891 22,703,760 156,745 1,709,869 20,323,288 2,380,472 11.71%
Expenses (Non-Operating):
Interest on Long Term Debt 1,303,967 977,975 107,685 976,995 (980) 111,601 1,015,812 (38,817) -3.82%
Other Expense 13,520 13,520 (40,214) 163,179 149,659 (671) 986,613 (823,434) -83.46%
Total Non-Operating Expenses:1,317,488 991,495 67,471 1,140,174 148,679 110,930 2,002,425 (862,251) -43.06%
Total Expenses 33,542,521 23,538,510 2,373,362 23,843,934 305,423 1,820,798 22,325,713 1,518,221 6.80%
Net Position Before Capital Contributions 6,760,787 6,008,873 115,823 4,789,050 (1,219,823)270,671 4,745,070 43,979 0.93%
Capital Contributions (Non-Cash - - 402 149,784 149,784 - 38,556 111,228 0.00%
Transaction GASB 34 Compliant)
Net Position Before Depreciation 6,760,787 6,008,873 116,225 4,938,834 (1,070,039)270,671 4,783,627 155,207 3.24%
Depreciation & Amortization 7,720,659 5,790,494 648,758 5,828,880 38,386 607,846 5,508,399 320,480 5.82%
Total Net Position ($959,872)$218,379 (532,533) (890,046) ($1,108,424)($337,175)($724,773)($165,273)-22.80%
(295,000) (221,250) (28,445) (179,084) 42,166 (18,475) (268,466) 89,382 -33.29%
(With March 31, 2019 for comparison purposes)
Page 24 of 163
Annual YTD Mar YTD YTD Actual Prior Year Prior YTD YTD Actual YTD - CUR
Budget Budget Actual Actual (Under)Over Mar Actual Actual (thru vs vs
FY20 FY20 FY20 FY20 YTD Budget FY19 Mar 2019) PY Actual $PY Actual %
Revenue (Operating):
Water Revenue (Residential)16,548,758$ $12,107,071 1,027,315$ 11,286,294$ (820,777)$ 579,867$ 10,553,975$ 732,319$ 6.94%
Water Revenue (Commercial & Fire Det.)1,872,073 1,369,609 120,853 1,303,112 (66,497) 88,114 1,299,310 3,802 0.29%
Water Revenue (Landscape/Irrigation)3,917,982 2,866,396 228,096 2,911,434 45,038 26,351 2,694,904 216,530 8.03%
Water Revenue (Service Charge)10,988,263 8,241,197 922,956 8,206,711 (34,487) 838,578 7,528,103 678,608 9.01%
Other Operating Revenue 902,996 677,247 50,373 676,037 (1,210) 51,706 707,391 (31,354) -4.43%
Total Operating Revenue:34,230,072 25,261,520 2,349,593 24,383,588 (877,932) 1,584,616 22,783,683 1,599,905 7.02%
Revenue (Non-Operating):
Interest 698,777 524,083 15,382 395,070 (129,013) 37,533 446,675 (51,605) -11.55%
Property Tax 1,820,471 1,152,176 132,492 1,240,434 88,257 117,866 1,185,314 55,120 0.00%
Other Non-Operating Revenue 608,430 456,323 (207,941) 473,328 17,006 142,938 660,374 (187,046) -28.32%
Total Non-Operating Revenue:3,127,678 2,132,581 (60,067) 2,108,832 (23,750) 298,337 2,292,363 (183,531) -8.01%
Total Revenue 37,357,750 27,394,101 2,289,526 26,492,420 (901,682) 1,882,953 25,076,046 1,416,374 5.65%
Expenses (Operating):
Variable Water Costs (G.W., Import & Power)15,110,810 11,055,069 1,231,436 11,480,310 425,241 590,007 9,930,011 1,550,299 15.61%
Salary Related Expenses 10,528,255 6,728,003 659,372 6,701,055 (26,948) 662,221 6,514,890 186,165 2.86%
Supplies & Services:
Communications 228,183 163,637 9,344 139,096 (24,541) 6,697 115,245 23,851 20.70%
Contractual Services 496,717 329,038 40,583 300,427 (28,611) 36,627 274,401 26,026 9.48%
Data Processing 324,069 213,052 27,308 189,739 (23,312) 13,068 226,142 (36,403) -16.10%
Dues & Memberships 78,862 59,147 2,138 75,190 16,044 4,128 73,333 1,857 2.53%
Fees & Permits 290,271 253,203 17,435 241,093 (12,110) 9,363 198,639 42,454 21.37%
Board Election - - - - - 52,742 (52,742) -100.00%
Insurance 304,468 217,851 22,427 214,757 (3,094) 22,996 205,282 9,476 4.62%
Materials 948,195 711,146 59,499 722,187 11,041 68,765 650,631 71,556 11.00%
District Activities, Emp Recognition 43,371 32,528 6,618 28,611 (3,918) 903 24,918 3,693 14.82%
Maintenance 565,165 423,874 1,487 382,609 (41,264) 43,537 304,459 78,151 25.67%
Non-Capital Equipment 200,778 130,584 7,210 112,187 (18,397) 10,108 82,699 29,488 35.66%
Office Expense 33,950 25,463 2,811 29,196 3,734 3,892 28,247 949 3.36%
Professional Services 585,971 585,971 71,546 618,572 32,601 55,050 274,190 344,381 125.60%
Training 78,301 41,225 2,142 30,856 (10,369) 3,279 28,663 2,193 7.65%
Travel & Conferences 126,278 66,208 3,114 52,907 (13,301) 10,110 57,625 (4,718) -8.19%
Uncollectible Accounts 4,185 3,138 (61) 3,557 418 1,380 4,122 (566) -13.73%
Utilities 179,258 134,443 12,944 153,038 18,595 15,776 126,447 26,591 21.03%
Vehicle Equipment 335,600 251,700 20,927 290,987 39,287 31,171 200,438 90,550 45.18%
Supplies & Services Sub-Total 4,823,620 3,642,208 307,472 3,585,009 (57,199) 336,850 2,928,223 656,786 22.43%
Total Operating Expenses 30,462,685 21,425,279 2,198,280 21,766,374 341,094 1,589,078 19,373,124 2,393,249 12.35%
Expenses (Non-Operating):
Interest on Long Term Debt 1,303,967 977,975 107,685 976,995 (980) 111,601 1,015,812 (38,817) -3.82%
Other Expense 13,520 13,520 (40,214) 130,321 116,801 (671) 977,238 (846,917) -86.66%
Total Non-Operating Expenses:1,317,487 991,495 67,471 1,107,316 115,821 110,930 1,993,050 (885,734) -44.44%
Total Expenses 31,780,172 22,416,775 2,265,751 22,873,690 456,915 1,700,008 21,366,174 1,507,516 7.06%
Net Position Before Capital Contributions 5,577,578 4,977,326 23,775 3,618,730 (1,358,597) 182,945 3,709,872 (91,142) -2.46%
Capital Contributions (Non-Cash Transaction -- - - 81,810 81,810 - 34,500 47,310 137.13%
GASB 34 Compliant)
Net Position Before Depreciation 5,577,578 4,977,326 23,775 3,700,540 (1,276,787) 182,945 3,744,372 (43,832) -1.17%
Depreciation & Amortization 6,289,903 4,717,427 527,982 4,751,747 34,320 492,994 4,477,243 274,505 6.13%
Total Net Position (712,325)$ 259,899$ (504,207) (1,051,207) (1,311,107)$ (310,049)$ (732,871)$ (318,336)$ -43.44%
Capital - Direct Labor (225,000) (168,750)(26,969) (152,891) 15,859 (14,652) (212,141) 59,250 -27.93%
Yorba Linda Water District
Water Fund
For Period Ending March 31, 2020
(With March 31, 2019 for comparison purposes)
Page 25 of 163
$22,066,074
$23,656,742
$22,824,554
$26,488,866
$25,076,046
$26,492,420
5.65%
$19,406,526
$17,537,866
$19,049,229
$21,256,559 $21,366,174 $22,873,690
7.06%
$-
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
Mar. 2015 Mar. 2016 Mar. 2017 Mar. 2018 Mar. 2019 Mar. 2020
Water Revenues & Expenses -March
(excludes Depreciation, Special Items, and Contributed Capital )
Total Revenue Total Expenses
Page 26 of 163
Annual YTD Mar YTD YTD Actual Prior Year Prior Year YTD Actual YTD - CUR
Budget Budget Actual Actual (Under)Over Mar Actual Actual (thru vs vs
FY20 FY20 FY20 FY20 YTD Budget FY19 Mar 2019)PY Actual $PY Actual %
Revenue (Operating):
Sewer Charge Revenue 2,421,665$ 1,816,249$ 200,223$ 1,789,810$ (26,438)$ 180,932$ 1,648,110$ 141,700$ 8.60%
Locke Ranch Assessments 324,173 187,242 22,327 212,907 25,665 17,353 190,220 22,687 11.93%
Other Operating Revenue 61,712 46,284 2,558 64,399 18,115 2,398 50,352 14,047 27.90%
Total Operating Revenue:2,807,550 2,049,775 225,108 2,067,116 17,341 200,683 1,888,682 178,435 9.45%
Revenue (Non-Operating):
Interest 113,528 85,146 3,408 68,408 (16,738)2,401 76,197 (7,789)-10.22%
Other Non-Operating Revenue 24,480 18,360 (28,857) 5,039 (13,322)5,432 29,858 (24,820)-83.13%
Total Non-Operating Revenue:138,008 103,506 (25,449) 73,447 (30,060)7,833 106,055 (32,609) -30.75%
Total Revenue 2,945,558 2,153,281 199,659 2,140,563$ (12,718)208,516 1,994,737 145,826 7.31%
Expenses (Operating):
Salary Related Expenses 1,136,668 752,475 71,960 698,135 (54,340)74,368 652,010 46,125 7.07%
Supplies & Services:
Communications 13,412 10,059 703 6,562 (3,497)504 5,908 654 11.07%
Contractual Services 30,764 23,073 2,933 19,925 (3,149)2,578 17,007 2,918 17.16%
Data Processing 21,382 16,037 2,011 10,232 (5,805)953 14,166 (3,934)-27.77%
Dues & Memberships 5,928 4,446 161 5,659 1,213 311 5,520 139 2.53%
Fees & Permits 15,509 11,632 1,559 13,472 1,841 660 8,549 4,924 57.60%
Board Election - - - - - 3,970 (3,970)-100.00%
Insurance 22,917 17,188 1,688 20,148 2,960 1,731 15,381 4,767 30.99%
Materials 65,206 33,905 4,079 12,134 (21,771)898 33,663 (21,529)-63.95%
District Activities, Emp Recognition 3,264 2,448 498 2,154 (294)68 1,807 347 19.18%
Maintenance 171,135 88,351 978 36,741 (51,610)27,480 75,553 (38,812)-51.37%
Non-Capital Equipment 39,542 29,657 4,748 17,411 (12,246)4,359 18,262 (852)-4.66%
Office Expense 2,555 1,916 212 2,148 231 252 1,918 229 11.96%
Professional Services 156,229 72,172 10,279 36,646 (35,526)2,965 33,683 2,963 8.80%
Training 8,569 6,426 322 7,103 677 486 16,512 (9,409)-56.98%
Travel & Conferences 14,362 10,772 234 5,217 (5,555)527 5,403 (186)-3.45%
Uncollectible Accounts 315 236 (46) 312 76 126 404 (92)-22.76%
Utilities 13,493 10,119 974 11,261 1,142 1,187 9,882 1,379 13.96%
Vehicle Equipment 41,100 30,825 4,316 32,129 1,305 1,337 30,566 1,563 5.11%
Supplies & Services Sub-Total 625,681 369,260 35,649 239,254 (130,007) 46,422 298,154 (58,900) -19.75%
Total Operating Expenses 1,762,349 1,121,735 107,609 937,389 (184,346) 120,790 950,164 (12,775) -1.34%
Expenses (Non-Operating):
Other Expense - - - 32,858 32,858 9,375 23,484 250.51%
Total Non-Operating Expenses:- - 32,858 32,858 - 9,375 23,484 0.00%
Total Expenses 1,762,349 1,121,735 107,609 970,247 (151,488) 120,790 959,538 10,709 1.12%
Net Position Before Capital Contributions 1,183,209 1,031,546 92,050 1,170,316 138,770 87,726 1,035,198 135,117 13.05%
Capital Contributions (Non-Cash Transaction -- - 402 67,974 67,974 - 4,056 63,918 1575.89%
GASB 34 Compliant)
Net Position Before Depreciation 1,183,209 1,031,546 92,452 1,238,290 206,744 87,726 1,039,254 199,035 19.15%
Depreciation & Amortization 1,430,756 1,073,067 120,776 1,077,134 4,067 114,852 1,031,156 45,978 4.46%
Total Net Position (247,547) (41,521) (28,324) 161,156 202,677 (27,126) 8,098 153,058 1890.00%
Capital - Direct Labor (70,000)(52,500) (1,476) (26,193)26,307 (3,823) (56,325)30,132 -53.50%
Yorba Linda Water District
Sewer Fund
For Period Ending March 31, 2020
(With March 31, 2019 for comparison purposes)
Page 27 of 163
$1,387,587
$1,470,828
$1,713,008
$1,803,775
$1,994,737
$2,140,563
7.31%
$895,037 $911,799
$1,041,596
$1,099,961
$959,538 $970,247
1.12%
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
Mar. 2015 Mar. 2016 Mar. 2017 Mar. 2018 Mar. 2019 Mar. 2020
Sewer Revenues & Expenses -March
(excludes Depreciation, Special Items, and Contributed Capital)
Total Revenue Total Expenses
Page 28 of 163
$7,397,164 $7,625,864 $7,499,092 $7,528,103 8,206,711
$1,284,279 $1,329,104 $1,454,074 $1,299,310
1,303,112
$1,972,995
$2,358,928 $3,087,755 $2,694,904
2,911,434
$9,262,061
$9,687,059
$11,766,324
$10,553,976
$11,286,293
$19,916,499
$21,000,955
$23,807,245
$22,076,293
$23,707,550
7.39% increase
compared to FY19
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
FY16 FY17 FY18 FY19 FY20
Water Revenue Comparison by Fiscal Year
Water Revenue (Service Charge) Water Revenue (Commercial & Fire Det.) Water Revenue (Landscape/Irrigation) Water Revenue (Residential)Total
Page 29 of 163
-
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
1,000,000
FY18 FY19 FY20 FY18 FY19 FY20 FY18 FY19 FY20 FY18 FY19 FY20 FY18 FY19 FY20 FY17 FY18 FY19 FY20
OCTOBER NOVEMBER DECEMBER JANUARY FEBRUARY MARCH
59,881 58,311
66,613
58,343
53,077
49,341
49,277
29,976 29,994
42,840 44,271
41,614
48,163
27,314
38,605
38,942
39,778
27,776
34,499
138,015
66,613
179,230
147,368
137,653
128,481
100,928
59,372 52,049
88,221
49,880
42,105
92,152
14,160
76,617
36,200
70,377
10,653
75,439
CONSUMPTION BY UNITS CCF
Residential Commercial Landscape
Page 30 of 163
1,310,853
1,388,016
1,284,700
1,135,165
981,755
1,069,354
494,671
494,190
886,166
1,460,113 1,505,340
1,358,893
1,340,186
1,143,948
1,518,953
939,601 1,019,271
788,116
1,671,801
1,729,514
1,512,043
1,307,477
981,384 1,019,234
657,883
460,667
590,007
1,660,561
1,492,928
1,435,706
1,361,053
1,100,471 1,058,481
772,447
1,367,226
1,231,436
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
2,000,000
Jul Aug Sept Oct Nov Dec Jan Feb Mar
Variable Costs Analysis
FY17 Var Costs FY18 Var Costs FY19 Var Costs FY20 Var Costs
Page 31 of 163
ITEM NO. 8.5.
AGENDA REPORT
MEETING DATE:April 28, 2020
TO:Board of Directors
FROM:Brett R. Barbre, Assistant General Manager
STAFF CONTACTS:Delia Lugo, Finance Manager
Kelly McCann, Senior Accountant
SUBJECT:Cash and Investment Report for Period Ending March 31, 2020
RECOMMENDATION:
That the Board of Directors receive and file the Cash and Investment Report for Period Ending
March 31, 2020.
SUMMARY:
Government Code Section 530607, et. seq., requires the person delegated to invest funds to
make monthly report of investments to the legislative body.
BACKGROUND:
The Cash & Investment Portfolio Report presents the market value and percent yield for all
District investments by institution. The Cash & Investment Summary Report includes budget
and actual interest and average term portfolio information as well as market value broken out
by reserve categories. The Fair Value Measurement Report categorizes investments with the
fair value hierarchy established by generally accepted accounting principles. The Unrestricted
Reserves and Days in Cash Graph presents Water Unrestricted Reserve Balances and Days
in Cash at a particular point in time for the last five years.
The average portfolio yield for the month ending March 31, 2020 is 1.63%.
The District's Total Cash and Investment balance at March 31, 2020 resulted in an overall
increase in the investment balance from the previous month is approximately $523,851. A
larger balance change includes an increase in the Water Operating Fund by $867,681 and
Sewer Operating Fund by $178,581, primarily due to a positive net effect between operating
revenues and expenses through the reporting month of the fiscal year. Sewer Capital Project
Reserve decreased by $244,736 to cover the cost of pay-go capital purchases. The PARS
Page 32 of 163
restricted fund decreased by $269,544 due to losses resulting from volatile market conditions.
STRATEGIC PLAN INITIATIVES:
G2 4C - Manage cash flow to maximize investment income.
ATTACHMENTS:
1.Investment Reports & Graphs March 2020
Page 33 of 163
Market %Date of Percent
Value Par of Total Institution Maturity Yield
Checking Account:
994,820$ 994,820$ Wells Fargo Bank
994,820$ 994,820$ 2.59%Total 0.00%
Money Market Accounts:
83$ 83$ US Bank (Revenue Bonds)0.10%
3,777,747 3,777,747 US Bank (Money Market)0.30%
1,798,827 1,798,827 Public Agency Retirement Svcs. (PARS)
5,576,657$ 5,576,657$ 14.53%Total 0.30%
Certificates of Deposits:
250,003 249,000 Comenity Cap Bk Salt Lake City 06/30/21 1.64%
248,268 248,000 EnerBank USA Salt Lake City 08/26/20 1.30%
179,113 180,000 HSBC BK USA, NA MC Clean CTF 08/31/21 2.24%
249,071 248,000 Wells Fargo Bank NA Sioux Falls D 08/31/21 1.59%
251,147 247,000 PrivateBank & Tr Chicago Ill CTF 03/30/22 2.16%
247,795 245,000 Goldman Sachs Bank 06/28/21 2.18%
247,795 245,000 Morgan Stanley Private Bank 06/28/21 2.18%
249,454 245,000 Capital One Bank USA 06/27/22 2.16%
249,454 245,000 Capital One Bank NA 06/27/22 2.16%
249,724 245,000 Ally Bank 06/27/22 2.21%
249,724 245,000 Sallie Mae Bank 06/27/22 2.21%
250,571 245,000 Synchrony 05/17/22 2.40%
251,255 245,000 Morgan Stanley Bank NA 06/13/22 2.49%
3,173,375$ 3,132,000$ 8.27%Total 2.07%
Corporate Notes:
500,085$ 500,000 Wells Fargo Co.03/04/21 2.50%
501,195$ 500,000 JP Morgan Chase Co.03/01/21 2.54%
1,001,280$ 1,000,000$ 2.61%Total 2.52%
Pooled Investment Accounts:
27,624,850$ 27,624,850$ Local Agency Investment Fund 1.79%
27,624,850$ 27,624,850$ 71.99%1.79%
38,370,982$ 38,328,327$ 100%Total Investments 1.63%
Per Government Code requirements, the Investment Report is in compliance with the Yorba
Linda Water District's Investment Policy, and there are adequate funds available to meet
budgeted and actual expenditures for the next six months.
3/31/20
Yorba Linda Water District
Cash & Investment Portfolio Report
March 31, 2020
________________________________
Kelly McCann, Senior Accountant
Page 34 of 163
Below is a chart summarizing the yields as well as terms and maturities for the month of March 2020:
Average # of
Month Portfolio Days to
of 2019 Yield Maturity
March 1.63%61
Below are charts comparing operating fund interest for current and prior fiscal years.
Actual Interest 3/31/2019 3/31/2020
Monthly - March 47,588$ 18,790$
Year-to-Date 530,526$ 463,479$
Budget 2018/2019 2019/2020
Interest Budget, March YTD 268,500$ 609,230$
Interest Budget, Annual 358,000$ 812,306$
Interest earned on investments is recorded in the fund that owns the investment.
The distribution of investments in the portfolio both in dollars and as a percentage of the total portfolio by funds
is as follows:
The table below displays the District's Cash and Investment balance of $37.57 million which is allocated between the established
reserve funds, Wells Fargo Checking Account, and restricted funds held at U.S. Bank for the Bond payment and PARS for
the pension/OPEB payments. The number of Days in Cash are 354 for the Un-Restricted Water Reserve balance and 1,177 for the
Un-Restricted Sewer Reserve balances, as of March 31, 2020.
FY20 Reserve Cash and
Requirements Investments
February 2020 % Alloc March 2020 % Alloc "Target Available for
Fund Description Balance 2/29/2020 Balance 3/31/2020 Levels"CY Obligations
Water Operating Reserve 11,180,163$ 31.88%11,586,589$ 32.57%12,427,055$ (840,466)$
Water Emergency Reserve 7,249,272 20.67%7,245,219 20.36%7,115,108 130,111
Water Capital Project Reserve 6,483,857 18.49%6,473,814 18.20%7,314,221 (840,407)
Rate Stabilization Reserve 4,174,941 11.90%4,180,269 11.75%4,093,400 86,869
Un-Restricted Water Reserve Balance 29,088,234 29,485,891 30,949,784 (1,463,893)
Conservation Reserve 104,533 0.30%104,533 0.29%- 104,533
Employee Liability Reserve 305,431 0.87%305,431 0.86%400,000 (94,569)
Restricted Reserve Balance 409,964 409,964 400,000 9,964
Sewer Operating Reserve 1,984,109 5.66%2,333,184 6.56%1,335,465 997,719
Sewer Emergency Reserve 1,939,966 5.53%1,940,604 5.45%1,914,347 26,257
Sewer Capital Project Reserve 1,652,345 4.71%1,407,609 3.96%1,909,045 (501,436)
Un-Restricted Sewer Reserve Balance 5,576,421 5,681,397 5,158,857 522,540
Total Reserve Balances 35,074,619$ 100.00%35,577,252$ 100.00%36,508,641$ (931,389)$
Water Operating 413,161 874,417
Sewer Operating 290,897 120,403
704,058 994,820
Rev. Bond 2012A & 2017A-Principal & Interest 83 83
Public Agency Retirement Svc. -PARS (Restricted)2,068,371 1,798,827
Total Cash and Investments 37,847,131$ 38,370,982$
Cash & Investment Summary Report
Cash & Investment Summary Comparison Between Current and Previous Month
Wells Fargo Bank Checking
US Bank Held (Restricted)
Page 35 of 163
Checking Account:994,820$ 2.59%
Money Market Accounts:5,576,657$ 14.53%
Certificates of Deposit:3,173,375$ 8.27%
Corporate Notes:1,001,280$ 2.61%
Pooled Investment Accounts:27,624,850$ 71.99%
Total 38,370,982$ 100.00%
Checking Account:
2.59%
Money Market Accounts:
14.53%
Certificates of Deposit:
8.27%
Corporate Notes:
2.61%
Pooled Investment Accounts:
71.99%
INVESTMENT BALANCES (AS OF 3 -31-2020)
Checking Account:Money Market Accounts:Certificates of Deposit:Corporate Notes:Pooled Investment Accounts:
Page 36 of 163
Yorba Linda Water District
Fair Value Measurement Report
March 31, 2020
Quoted Observable Unobservable
Prices Inputs Inputs
Investments Level 1 Level 2 Level 3 Total
Local Agency Investment Fund - 27,624,850 - 27,624,850
Corporate Notes 1,001,280 1,001,280
Negotiable Certificates of Deposit - 3,173,375 - 3,173,375
Total Investments -$ 31,799,505$ -$ 31,799,505$
Page 37 of 163
Transaction
Date Transaction Description
Water Operating
Pension
Water Operating
OPEB
Sewer Operating
Pension
Sewer Operating
OPEB Account Total
Beginning Balance as of 7/1/19 1,235,837.20 526,669.64 135,806.94 62,230.97 1,960,544.75
7/31/2019 Investment Gain/(Loss)6,734.69 2,716.09 339.13 320.93 1,970,655.59
7/31/2019 Management Fees (272.06)(109.72)(13.70)(12.97) 1,970,247.14
7/31/2019 Investment Gain/(Loss) - Adjustment (361.18)361.18 1,970,247.14
7/31/2019 Management Fees - Adjustment 14.59 (14.59)1,970,247.14
8/31/2009 Investment Gain/(Loss)(5,050.10)(2,151.57)(553.40)(254.23) 1,962,237.84
8/31/2019 Management Fees (258.81)(110.27)(28.36)(13.03) 1,961,827.37
9/30/2019 Investment Gain/(Loss)9,114.79 3,884.40 1,001.64 458.98 1,976,287.18
9/30/2019 Management Fees (257.63)(109.80)(28.31)(12.97)1,975,878.47
10/31/2019 Investment Gain/(Loss)14,236.16 6,066.94 1,564.44 716.87 1,998,462.88
10/31/2019 Management Fees (259.48)(110.58)(28.51)(13.07) 1,998,051.24
11/30/2019 Investment Gain/(Loss)20,875.28 8,896.31 2,294.02 1,051.18 2,031,168.03
11/30/2019 Management Fees (607.78)(259.01)(66.79)(30.61) 2,030,203.84
12/31/2019 Investment Gain/(Loss)21,409.30 9,123.89 2,352.71 1,078.07 2,064,167.81
12/31/2019 Management Fees (962.97)(410.40)(105.82)(48.49) 2,062,640.13
1/31/2020 Investment Gain/(Loss)4,243.88 1,808.60 466.37 213.70 2,069,372.68
1/31/2020 Management Fees (631.28) (269.02) (69.37) (31.79) 2,068,371.22
2/29/2020 Investment Gain/(Loss)(42,572.34) (18,142.83) (4,678.36) (2,143.74) 2,000,833.95
2/29/2020 Management Fees (1,008.44) (429.78) (110.82) (50.78) 1,999,234.13
3/31/2020 Investment Gain/(Loss)(125,690.52) (53,564.85) (13,812.37) (6,329.19) 1,799,837.20
3/31/2020 Management Fees (636.87) (271.43) (69.99) (32.07) 1,798,826.84
Account Balance by Account Type 1,133,896.43 483,226.61 124,606.04 57,097.76 1,798,826.84$
63%27%7%3%100%
Pension OPEB Total
Initial Contribution as of 12/28/2017 247,599.00$ - 247,599.00
Additional Contribution 6/26/19 1,105,248.00$ 587,339.00 1,692,587.00
Total Contributions =1,940,186.00
Total Gain (or Loss) from Inception (87,993.76)$ (44,688.84) (132,682.60)
Total Management Fees from Inception (6,350.77)$ (2,325.79) (8,676.56)
Balance as of 3-31-19 = 1,258,502.47$ 540,324.37$ 1,798,826.84$
PARS (Public Agency Retirement Services) Funding Reconciliation
Page 38 of 163
$30,659,591
$25,968,169
$25,968,169
$28,567,231
$29,485,891
417
367 369 364 354
60
110
160
210
260
310
360
410
460
$20,000
$5,020,000
$10,020,000
$15,020,000
$20,020,000
$25,020,000
$30,020,000
$35,020,000
Mar. 2016 Mar. 2017 Mar. 2018 Mar. 2019 Mar. 2019
Unrestricted Reserves & Days in Cash (Water)
Unrestricted Reserves (Water)Days in Cash (Water)
Page 39 of 163
ITEM NO. 8.6.
AGENDA REPORT
MEETING DATE:April 28, 2020
TO:Board of Directors
FROM:Brett R. Barbre, Assistant General Manager
STAFF CONTACTS:Rosanne Weston, PMP, Engineering Manager
Danielle Logsdon, PE, Senior Engineer
SUBJECT:Notice of Completion for the Camino Verde and Mickel Waterline
Improvement Project
RECOMMENDATION:
That the Board of Directors authorize staff to file the Notice of Completion for the Camino
Verde and Mickel Waterline Improvement Project, Job No. J2018-03.
SUMMARY:
Construction is complete on the Camino Verde and Mickel Waterline Improvement Project.
Submitted for consideration is a request for authorization to file the Notice of Completion for
the project.
FISCAL IMPACT:
Budgeted: $600,000
Cost Estimate: $600,000
Funding Source: Pay-Go
Account No:
Job No: 2018-03
BACKGROUND:
Construction is complete on the Camino Verde and Mickel Waterline Improvement Project.
The project included approximately 1,470 linear feet of 8-inch diameter PVC pipe, 20 linear
feet of 10-inch diameter PVC pipe, 30 linear feet of 6-inch diameter PVC pipe, fire hydrants,
water services, meter relocations, abandonment of pipe and valves, and all appurtenant work
to complete in place.
All work has been completed in accordance with the contract documents and to the
Page 40 of 163
satisfaction of District staff. Staff requests authorization to file and proceed with the
recordation of the Notice of Completion.
PRIOR RELEVANT BOARD ACTION:
This project was awarded by the Board on June 25, 2019. A no-cost change order was
approved by the Board on March 10, 2019.
STRATEGIC PLAN INITIATIVE:
G1 4A - Address infrastructure needs by updating/implementing the Asset Management Plan;
G1 6B - Maintain distribution system and its capability to provide 100% groundwater and/or
import water to the entire service area.
Page 41 of 163
ITEM NO. 8.7.
AGENDA REPORT
MEETING DATE:April 28, 2020
TO:Board of Directors
FROM:Brett R. Barbre, Assistant General Manager
STAFF CONTACTS:Rosanne Weston, Engineering Manager
Ariel Bacani, Associate Engineer
SUBJECT:Notice of Completion for the 2019 Sewer Main CIPP Rehabilitation
Project
RECOMMENDATION:
That the Board of Directors authorize staff to file the Notice of Completion for the 2019 Sewer
Main CIPP Rehabilitation Project, Job No. J2019-39S.
SUMMARY:
Construction is complete on the 2019 Sewer Main CIPP Rehabilitation Project. Submitted for
consideration is a request for authorization to file the Notice of Completion for the project.
FISCAL IMPACT:
Budgeted: $350,000
Contractor's Bid Amount: $271,740.40
Final Contractor Cost: $254,577.36
Funding Source: Capital
Account No:
Job No: 2019-39S
BACKGROUND:
Construction is complete on the 2019 Sewer Main CIPP Rehabilitation Project. The project
included rehabilitation of 4,571 feet of sanitary sewer mains using cured-in-place-pipe (CIPP)
technology. The project also included the rehabilitation of 15 sewer manholes.
All work has been completed in accordance with the contract documents and to the
satisfaction of District staff. The project was completed on schedule and under budget. Staff
requests authorization to file and proceed with the recordation of the Notice of Completion.
Page 42 of 163
PRIOR RELEVANT BOARD ACTION:
This project was awarded by the Board on November 12, 2019.
STRATEGIC PLAN INITIATIVE:
G1 4A - Address infrastructure needs by updating/implementing the Asset Management Plan.
Page 43 of 163
ITEM NO. 9.1.
AGENDA REPORT
MEETING DATE:April 28, 2020
TO:Board of Directors
FROM:Brett R. Barbre, Assistant General Manager
STAFF CONTACTS:Delia Lugo, Finance Manager
SUBJECT:Approving Issuance of Negotiable Promissory Notes for the
Purpose of Financing Capital Projects
RECOMMENDATION:
That the Board of Directors adopt Resolution No. 2020-XX Approving the Issuance of
Negotiable Promissory Notes for the Purpose of Financing Capital Projects and Approving the
Execution and Delivery of Certain Documents in Connection Therewith and Certain Other
Matters.
BACKGROUND:
The District has determined that it is in its best interest to enter into a Revolving Credit
Agreement (the "Credit Agreement"), by and between Yorba Linda Water District and Bank of
America, N.A. for the purpose of financing the costs of acquiring, constructing and installing
certain public facilities and improvements related to its water system. The Revolving
Commitment on the Credit Agreement's closing date of May 12, 2020 shall be $20,000,000,
and may not exceed $20,000,000 at any one time over its three (3) year term. Per the
agreement, the District has discretion to choose among various interest rates and interest
periods when drawing upon the line. Staff believes that the interest rates offered by Bank of
America, N.A. reflect competitive market rates. All resulting Notes will be payable from all
available District funds, including net revenues of the District's water system on a subordinate
basis to existing debt obligations of the District. The Credit Agreement includes important
covenants, such as the terms under which the District can issue additional subordinate debt
and the obligation to fix and prescribe water rates and charges in amounts sufficient to
generate net revenues remaining after payment of Senior Debt that covers 110% of
subordinate debt service.
PRIOR RELEVANT BOARD ACTION:
On March 10, 2020 the Board of Directors authorized staff to award a contract for a
Page 44 of 163
$20,000,000 Revolving Line of Credit to Opus Bank, to accept their listed Terms and
Conditions, and to pursue negotiation of loan documents with Opus Bank's counsel and
Stradling as the District's Bond Counsel. On March 18, 2020 the District received written
notification that Opus Bank had been acquired by Pacific Premier Bank, and that they would
not be able to fulfill the negotiated agreement pertaining to the line of credit. As a result, at the
March 24, 2020 Regular BOD Meeting, AGM Barbre notified the Board of Directors of the
issue with the revolving line of credit and that staff, with Fieldman Rolapp's assistance, was in
the process of discussing options with Bank of America, N.A.. Bank of America had provided
favorable terms in response to the District's RFP and as such, the District and its financing
team proceeded with negotiating the necessary legal documents related to the provision of a
revolving line of credit for a three year term.
ATTACHMENTS:
1.Resolution
2.Credit Agreement
Page 45 of 163
Resolution No. 2020-XX Approving the Issuance of Negotiable Promissory Notes 1 of 3
RESOLUTION NO. 2020-XX
RESOLUTION OF THE BOARD OF DIRECTORS
OF THE YORBA LINDA WATER DISTRICT
APPROVING THE ISSUANCE OF NEGOTIABLE PROMISSORY NOTES
FOR THE PURPOSE OF FINANCING CAPITAL PROJECTS AND
APPROVING THE EXECUTION AND DELIVERY OF CERTAIN DOCUMENTS IN
CONNECTION THEREWITH AND CERTAIN OTHER MATTERS
WHEREAS,the Yorba Linda Water District (the “District”) is a county water district that
is duly organized and existing under and pursuant to Division 12 of the
California Water Code (Section 30000 et seq.) (the “Act”); and
WHEREAS, the District desires to finance the costs of acquiring, constructing and
installing certain public facilities and improvements related to its water
system (collectively, the “Project”); and
WHEREAS,the District has received proposals from a number of banks with respect to
the financing of the Project, and has evaluated such proposals together with
its municipal advisor; and
WHEREAS,the District has determined that it is in the best interest of the District to issue
promissory notes having a maximum maturity not in excess of five years
and in an amount less than 1% of the assessed valuation of property in the
District from time to time under the authority provided by Water Code §
31304 (the “Notes”), to enter into a related Revolving Credit Agreement
(the “Credit Agreement”), by and between the District and Bank of America,
N.A. (the “Bank”), and to approve certain other documents, to provide for
the financing of the Project; and
WHEREAS,the Notes will be payable from all available District funds, including net
revenues of the District’s water system on a subordinate basis to existing
debt obligations of the District, to the extent set forth in the Notes and the
Credit Agreement; and
WHEREAS,the Credit Agreement is in the best interest of the District and the health,
safety and welfare of its residents, is of benefit to the District and complies
with all requirements of the Act and California law related thereto, including
with respect to the principal amount, term and interest rate thereof.
NOW, THEREFORE, the Board of Directors of the Yorba Linda Water District hereby
finds, determines, declares and resolves as follows:
SECTION 1.The foregoing recitals are true and correct.
SECTION 2.The form of the Notes, which is attached as Exhibit B to the Credit
Agreement, to be issued from time to time, each to be dated the date of
issuance, execution and delivery thereof, payable to the order of the Bank,
Page 46 of 163
Resolution No. 2020-XX Approving the Issuance of Negotiable Promissory Notes 2 of 3
is hereby approved and ordered. The President of the Board, the
Secretary, the General Manager (including for this purpose any duly
designated Interim General Manager or acting General Manager), the
Assistant General Manager and the Finance Manager (collectively, the
“Authorized Officers”) are authorized and directed for and on behalf of the
District to execute and deliver such Notes, in substantially the form
presented at this meeting, with only such revisions thereto as may be
required or approved by the District’s General Counsel or Stradling Yocca
Carlson & Rauth, as Bond Counsel (“Bond Counsel”), which will be
conclusively evidenced by the execution and delivery of such Notes;
provided that: (i) each Note shall mature on or before May 12, 2023; (ii) the
total principal amount of the Notes outstanding at any one time shall not
exceed the lesser of $20,000,000 or 1% of the total assessed valuation of
the taxable property in the District; and (iii) the interest rate on each Note
shall be a variable rate which shall not exceed the amount described in the
Credit Agreement (except in an event of default or taxability, each as set
forth in the Credit Agreement), and which in no event shall exceed the
maximum interest rate payable by law.
SECTION 3.The Notes constitute general obligations of the District payable from all
legally available District funds. The District also hereby pledges Revenues
(as such term is defined in the Installment Purchase Agreement, dated as
of May 1, 2017 (the “IPA”), by and between the District and the Yorba Linda
Water District Financing Authority), to secure the payment of the principal
of and interest on the Notes, on a subordinate basis to Bonds and Contracts
(as such terms are defined in the IPA), all in accordance with the Credit
Agreement.
SECTION 4.Each Note shall be subject to call and redemption prior to maturity as set
forth therein.
SECTION 5.The Credit Agreement is hereby approved substantially in the form on file
with the Secretary of the Board. The Authorized Officers are hereby
authorized and directed to execute and deliver such Credit Agreement with
such changes, insertions and omissions as may be recommended by
General Counsel or Bond Counsel and approved by the officer executing
the same, said execution being conclusive evidence of such approval.
SECTION 6.The proceeds of the Notes shall be applied to finance the Project.
SECTION 7.The Authorized Officers or any other proper officer of the District, acting
singly, be and each of them hereby is authorized and directed to execute
and deliver any and all documents and instruments and to do and cause to
be done any and all acts and things necessary or proper for carrying out the
transactions contemplated by the Notes, the Credit Agreement and this
resolution. In the event that the President of the Board is unavailable to
Page 47 of 163
Resolution No. 2020-XX Approving the Issuance of Negotiable Promissory Notes 3 of 3
sign any of the agreements that are described herein, any other member of
the Board may sign such agreement. Without limiting the foregoing, the
Authorized Officers may make periodic draws of available funds under the
Credit Agreement by issuing Notes at such time or times, in whole or in part,
as in such officer’s judgment are reasonably necessary or appropriate to
provide funds to pay on a timely basis costs related to the Project.
SECTION 8.This resolution shall take effect immediately.
PASSED AND ADOPTED this 28th day of April, 2020 by the following called vote:
AYES:
NOES:
ABSTAIN:
ABSENT:
Phil Hawkins, President
Yorba Linda Water District
ATTEST:
Annie Alexander, Board Secretary
Yorba Linda Water District
Reviewed as to form by General Counsel:
Andrew B. Gagen, Esq.
Kidman Gagen Law LLP
Page 48 of 163
CHAPMAN DRAFT DATED APRIL 21, 2020
106ba6730c.docx
4321295
REVOLVING CREDIT AGREEMENT
dated May 12, 2020
between
YORBA LINDA WATER DISTRICT
and
BANK OF AMERICA, N.A.
Page 49 of 163
-i-
TABLE OF CONTENTS
SECTION HEADING PAGE
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS .......................................................1
Section 1.01.Defined Terms .......................................................................................1
Section 1.02.Other Interpretive Provisions ...............................................................19
Section 1.03.Accounting Terms................................................................................19
Section 1.04.Rounding ..............................................................................................20
Section 1.05.Times of Day........................................................................................20
Section 1.06.UCC Terms ..........................................................................................20
ARTICLE II THE REVOLVING COMMITMENT BORROWINGS ...........................................20
Section 2.01.Revolving Loans ..................................................................................20
Section 2.02.Borrowings and Conversions of Revolving Loans ..............................21
Section 2.03.Prepayments .........................................................................................22
Section 2.04.Termination or Reduction of Revolving Commitment ........................23
Section 2.05.Repayment of Revolving Loans...........................................................23
Section 2.06.Interest and Default Rate .....................................................................24
Section 2.07.Fees ......................................................................................................24
Section 2.08.Computation of Interest and Fees ........................................................25
Section 2.09.Evidence of Debt..................................................................................25
Section 2.10.Payments ..............................................................................................25
Section 2.11.Extension of Commitment Termination Date ......................................25
Section 2.12.Maximum Interest Rate........................................................................26
Section 2.13.Taxability .............................................................................................26
ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY .............................................26
Section 3.01.Taxes ....................................................................................................26
Section 3.02.Increased Costs; Reserves on Loans ....................................................27
Section 3.03.Illegality ...............................................................................................28
Section 3.04.Inability to Determine Rates ................................................................28
Section 3.05.Compensation for Losses .....................................................................29
Section 3.06.Survival ................................................................................................30
ARTICLE IV CONDITIONS PRECEDENT TO BORROWINGS ................................................30
Section 4.01.Conditions of Initial Borrowing; Authority; Enforceability ................30
Section 4.02.Conditions to All Borrowings ..............................................................32
ARTICLE V REPRESENTATIONS AND WARRANTIES........................................................32
Section 5.01.Existence and Power; Due Authorization ............................................32
Section 5.02.Valid and Binding Obligations ............................................................33
Section 5.03.Noncontravention; Compliance with Law ...........................................33
Section 5.04.Pending Litigation and Other Proceedings ..........................................33
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Section 5.05.Financial Statements ............................................................................34
Section 5.06.No Defaults ..........................................................................................34
Section 5.07.Correct Information .............................................................................34
Section 5.08.Margin Stock........................................................................................35
Section 5.09.Tax-Exempt Status ...............................................................................35
Section 5.10.Usury ....................................................................................................35
Section 5.11.Security ................................................................................................35
Section 5.12.No Immunity ........................................................................................35
Section 5.13.USA PATRIOT Act .............................................................................35
Section 5.14.Pledge of Legally Available Funds ......................................................36
Section 5.15. OFAC ...................................................................................................36
Section 5.16.Title to Assets ......................................................................................36
Section 5.17.Insurance ..............................................................................................36
Section 5.18. Environmental Matters.........................................................................36
Section 5.19.Taxes ....................................................................................................36
Section 5.20. No Public Vote or Referendum; Pending Legislation and Decisions ..37
Section 5.21.Incorporation by Reference..................................................................37
Section 5.22.Solvency ...............................................................................................37
Section 5.23.No Existing Right to Accelerate ..........................................................37
Section 5.24.Swap Contracts ....................................................................................37
Section 5.25.Official Signatures ...............................................................................37
Section 5.26.Water System .......................................................................................38
Section 5.27.Investment Company ...........................................................................38
ARTICLE VI COVENANTS ................................................................................................38
Section 6.01.Existence, Etc .......................................................................................38
Section 6.02.Payment of Obligations........................................................................38
Section 6.03.Compliance with Laws ........................................................................38
Section 6.04.Reports .................................................................................................38
Section 6.05.Covenant to Budget; Payment of the Loan ..........................................39
Section 6.06.Use of Proceeds....................................................................................39
Section 6.07.Immunity from Jurisdiction .................................................................39
Section 6.08.Maintenance of Tax-Exempt Status of Interest ...................................40
Section 6.09.Amendments to Related Documents ....................................................40
Section 6.10.Federal Reserve Board Regulations .....................................................40
Section 6.11.Maintenance of Properties ...................................................................40
Section 6.12.Insurance ..............................................................................................40
Section 6.13.Maintenance of Books and Records ....................................................40
Section 6.14. Access to Books and Records ..............................................................40
Section 6.15.Other Agreements ................................................................................41
Section 6.16.Liens .....................................................................................................41
Section 6.17. Investment Policy.................................................................................41
Section 6.18. Limitation on Additional Debt .............................................................41
Section 6.19. Fundamental Changes ..........................................................................42
Section 6.20.Swap Contracts ....................................................................................42
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Section 6.21.Underlying Rating................................................................................43
Section 6.22.Related Documents ..............................................................................43
Section 6.23. Rate Covenants ....................................................................................43
Section 6.24.Environmental Laws ............................................................................43
Section 6.25.Collection of Rates and Charges ..........................................................44
Section 6.26. Use of Lender’s Name .........................................................................44
Section 6.27.Disclosure to Participants ....................................................................44
Section 6.28. Compliance With Documents ..............................................................44
Section 6.29.Maintenance of Wastewater System ....................................................45
Section 6.30.Eminent Domain ..................................................................................45
Section 6.31.Competing Utility ................................................................................45
ARTICLE VII DEFAULTS ...................................................................................................46
Section 7.01.Events of Default .................................................................................46
Section 7.02.Consequences of an Event of Default ..................................................48
Section 7.03.Remedies Cumulative; Solely for the Benefit of Lender .....................48
Section 7.04.Waivers or Omissions ..........................................................................49
Section 7.05.Discontinuance of Proceedings ............................................................49
ARTICLE VIII MISCELLANEOUS ........................................................................................49
Section 8.01.Amendments, Etc .................................................................................49
Section 8.02.Notices; Effectiveness; Electronic Communication ............................49
Section 8.03.No Waiver; Cumulative Remedies; Enforcement................................50
Section 8.04.Costs and Expenses; Damage Waiver..................................................51
Section 8.05.Payments Set Aside..............................................................................52
Section 8.06.Successors and Assigns; Participations ...............................................52
Section 8.07.Treatment of Certain Information; Confidentiality..............................53
Section 8.08.Right of Setoff......................................................................................54
Section 8.09.Counterparts; Integration; Effectiveness..............................................54
Section 8.10.Survival of Representations and Warranties ........................................54
Section 8.11.Severability ..........................................................................................55
Section 8.12.Governing Law; Jurisdiction; Etc........................................................55
Section 8.13.Waiver of Jury Trial .............................................................................56
Section 8.14.No Advisory or Fiduciary Relationship ...............................................56
Section 8.15.Electronic Execution of Certain Documents........................................57
Section 8.16.USA Patriot Act ...................................................................................57
Section 8.17.Time of the Essence .............................................................................57
Section 8.19.Further Assurances...............................................................................57
Section 8.19.EMMA Postings ..................................................................................58
Section 8.20.US QFC Stay Rules .............................................................................58
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SCHEDULE 8.02 —Lending Office, Certain Addresses for Notices
EXHIBIT A —Form of Revolving Loan Notice
EXHIBIT B —Form of Note
EXHIBIT C —Form of Compliance Certificate
EXHIBIT D —Form of Notice of Prepayment
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REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT (as amended, modified or supplemented from time
to time, this “Agreement”) is dated May 12, 2020, between YORBA LINDA WATER DISTRICT, a
county water district duly organized and existing under and by virtue of the laws of the State of
California (the “Borrower”), and BANK OF AMERICA, N.A. (the “Lender”).
PRELIMINARY STATEMENTS
WHEREAS, the Borrower is a county water district that is duly organized and validly
existing under the laws of the State of California and authorized to transact business and exercise
powers under and pursuant to the provisions of the County Water District Law (Division 12 of the
Water Code of the State of California) (the “Water Code”);
WHEREAS, pursuant to Section 31304 of the Water Code, the Borrower may issue
negotiable promissory notes payable at a future time or times in order to obtain funds or property
for any lawful purpose of the Borrower;
WHEREAS, the Borrower wishes to obtain loans from the Lender hereunder and the Lender
is willing, upon the terms and subject to the conditions set forth below, to provide such loans to
the Borrower (a) for all lawfully available purposes and (b) to pay costs of issuance in connection
with this Agreement;
WHEREAS, all obligations of the Borrower to repay the Lender for Borrowings (as defined
herein) made by the Lender under the Revolving Commitment (as defined herein) and to pay all
other amounts payable to the Lender arising under or pursuant to this Agreement or the Note to be
issued to the Lender hereunder are created under and will be evidenced by this Agreement and the
Note and will, on a subordinate basis to existing Bonds and Contracts (each as hereinafter defined)
of the Borrower, be secured and payable from a pledge of and lien on Revenues (as hereinafter
defined) and will also constitute general obligations of the Borrower payable from all legally
available Borrower funds, all in accordance with the terms and conditions hereof, of the Resolution
and the Note; and
NOW, THEREFORE, in consideration of the foregoing recitals and other consideration, the
receipt and sufficiency of which is hereby acknowledged, and to induce the Lender to extend to
the Borrower the Revolving Commitment, the Borrower and the Lender hereby agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01.Defined Terms. As used in this Agreement, the following terms shall have
the meanings set forth below:
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“Affiliate” means, with respect to any Person, any Person that directly or indirectly through
one or more intermediaries, controls, or is controlled by, or is under common control with, such
first Person. A Person shall be deemed to control another Person for the purposes of this definition
if such first Person possesses, directly or indirectly, the power to direct, or cause the direction of,
the management and policies of the second Person, whether through the ownership of voting
securities, common directors, trustees or officers, by contract or otherwise.
“Agreement” has the meaning set forth in the introductory paragraph hereto.
“Applicable Factor” means eighty percent (80%).
“Applicable Margin” means a rate per annum associated with the Level corresponding to
the lowest long-term unenhanced debt rating(s) assigned by any of Moody’s, Fitch or S&P to any
Senior Indebtedness (each, a “Rating”), as specified below:
In the event of split Ratings (i.e., one of the Rating Agencies’ Rating is at a different Level than
the Rating of another Rating Agency), the Applicable Margin shall be based upon the Level in
which the lowest Rating(s) appears (for the avoidance of doubt, Level 7 is the lowest Level, and
Level 1 is the highest Level for purposes of the above pricing grid); provided the Borrower
acknowledges that any decision to increase the Applicable Margin shall be in the Lender’s sole
discretion. Any change in the Applicable Margin resulting from a change in a Rating shall be and
become effective upon election by the Lender but no sooner than the date that the change in such
Rating is published by such Rating Agency. References to Ratings above are references to rating
categories as presently determined by the Rating Agencies and in the event of adoption of any new
or changed rating system, the ratings from the Rating Agency in question referred to above shall
be deemed to refer to the rating category under the new rating system that most closely
approximates the applicable rating category as currently in effect. The Borrower acknowledges
that as of the Closing Date the Applicable Margin is that specified above for Level 1. In the event
that any Rating is withdrawn or otherwise unavailable from any Rating Agency for credit-related
reasons, the Applicable Margin then in effect shall be increased by an additional one hundred fifty
(150) basis points (1.50%) from the Applicable Margin otherwise in effect until such rating is
restored.
LEVEL
MOODY’S
RATING S&P RATING
FITCH
RATING
APPLICABLE
MARGIN
Level 1 Aa3 or above AA- or
above
AA- or
above
0.41%
Level 2 A1 A+A+0.56%
Level 3 A2 A A2 0.61%
Level 4 A3 A1 A3 0.66%
Level 5 Baa1 BBB+BBB+0.81%
Level 6 Baa2 BBB BBB 0.96%
Level 7 Baa3 or
below
BBB- or
below
BBB- or
below
Default Rate
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“Approving Opinion” means an opinion delivered by Bond Counsel to the effect that such
action (i) is permitted by this Agreement and (ii) will not adversely affect the exclusion of interest
on any Revolving Loan from gross income of the Lender or any Participant for purposes of federal
income taxation.
“Audited Financial Statements” means the audited consolidated balance sheet of the
Borrower for the Fiscal Year ended June 30, 2019, and the related consolidated statements of
income or operations and cash flows for such Fiscal Year of the Borrower, including the notes
thereto.
“Authorized Representative” when used with reference to the Borrower shall mean the
President of the Board of Directors, the Secretary, the General Manager (including for this purpose
any duly designated Interim General Manager or acting General Manager) and the Finance
Manager thereof or other officer designated by the Board of Directors of the Borrower.
“Availability Period” means the period from and including the Closing Date to the
Commitment Termination Date.
“Available Commitment” means, on any date, an initial amount equal to $20,000,000 and
thereafter such initial amount adjusted from time to time as follows: (a) downward in an amount
equal to any Revolving Loan made to the Borrower under the Revolving Commitment; (b) upward
in an amount equal to the principal amount of any Revolving Loan made to the Borrower under
the Revolving Commitment that is repaid, prepaid or cancelled, as applicable, in the manner
provided herein; (c) downward in an amount equal to any reduction thereof effected pursuant to
Section 2.04 hereof; and (d) downward to zero upon the expiration or termination of the Available
Commitment in accordance with the terms hereof; provided, that, after giving effect to any of the
foregoing adjustments the Available Commitment shall never exceed $20,000,000 at any one time.
“Bank Agreement” means any credit agreement, liquidity agreement, standby bond
purchase agreement, reimbursement agreement, direct purchase agreement (such as a continuing
covenant agreement or supplemental bondholder’s agreement), bond purchase agreement, or other
agreement or instrument (or any amendment, supplement or other modification thereof) under
which, directly or indirectly, any Person or Persons undertake(s) to make payment of or provide
funds to make payment of, or to purchase or provide credit enhancement for bonds, notes or other
obligations of the Borrower.
“Bond Counsel” means Stradling Yocca Carlson & Rauth, or any other firm of attorneys
nationally recognized on the subject of tax-exempt municipal finance selected by the Borrower.
“Bonds” has the meaning set forth in the IPA.
“Borrower” has the meaning set forth in the introductory paragraph hereto.
“Borrowing” means (i) from the Closing Date through the LIBOR Termination Date, a
borrowing of Fixed Rate Revolving Loans or Floating Rate Revolving Loans, as applicable, from
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the Lender pursuant to Section 2.01 hereof and (ii) on the LIBOR Termination Date and at all
times thereafter, a borrowing of SIFMA Loans.
“Business Day” means a day which is not (a) a Saturday, Sunday or legal holiday on which
banking institutions in New York, New York or the state where the principal corporate office of
the Borrower is located are authorized by law to close, (b) a day on which the New York Stock
Exchange or the Federal Reserve Bank is closed or (c) a day on which the principal office of the
Lender is closed.
“Change in Law” means the occurrence, after the Closing Date, of any of the following:
(a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law,
rule, regulation or treaty or in the administration, interpretation, implementation or application
thereof by any Governmental Authority or (c) the making or issuance of any request, rule,
guideline or directive (whether or not having the force of law) by any Governmental Authority;
provided that notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street
Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder
or issued in connection therewith and (ii) all requests, rules, guidelines or directives promulgated
by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any
successor or similar authority) or the United States or foreign regulatory authorities, in each case
pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date
enacted, adopted or issued (other than any rule thereunder that has been adopted and fully
implemented prior to the Closing Date).
“Closing Date” means May 12, 2020, subject to the satisfaction or waiver by the Lender
of the conditions precedent set forth in Article IV hereof.
“Code” means the Internal Revenue Code of 1986, as amended, and, where appropriate
any statutory predecessor or any successor thereto.
“Commitment Fee” has the meaning set forth in Section 2.07(a) hereof.
“Commitment Fee Rate” means a rate per annum associated with the Level corresponding
to the lowest long-term unenhanced debt rating(s) assigned by any of Moody’s, Fitch or S&P to
any Senior Indebtedness (each, a “Rating”), as specified below:
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LEVEL
MOODY’S
RATING S&P RATING
FITCH
RATING
COMMITMENT
FEE RATE IF
AVAILABLE
COMMITMENT
< 60%
UTILIZED
COMMITMENT
FEE RATE IF
AVAILABLE
COMMITMENT
> 60%
UTILIZED
Level 1 Aa3 or above AA- or
above
AA- or
above
0.20%0.00%
Level 2 A1 A+A+0.35%0.00%
Level 3 A2 A A2 0.40%0.00%
Level 4 A3 A1 A3 0.45%0.00%
Level 5 Baa1 BBB+BBB+0.60%0.00%
Level 6 Baa2 BBB BBB 0.75%0.00%
Level 7 Baa3 or
below
BBB- or
below
BBB- or
below
Default Rate Default Rate
In determining the applicable Commitment Fee Rate based on the percentage of usage of the
Available Commitment, (i) for any downgrade to the Rating that occurs during the period from
and including the Closing Date to but excluding the first anniversary of the Closing Date, the
percentage of usage shall be determined based on the percentage of usage on the date of such
downgrade and (ii) for any downgrade to the Rating that occurs at any time after the first
anniversary of the Closing Date, the percentage of usage shall be determined based on the daily
average amount of Revolving Loans outstanding during the most recently completed four fiscal
quarters. In the event of split Ratings (i.e., one of the Rating Agencies’ Rating is at a different
Level than the Rating of another Rating Agency), the Commitment Fee Rate shall be based upon
the Level in which the lowest Rating(s) appears (for the avoidance of doubt, Level 7 is the lowest
Level, and Level 1 is the highest Level for purposes of the above pricing grid); provided the
Borrower acknowledges that any decision to increase the Commitment Fee Rate shall be in the
Lender’s sole discretion. Any change in the Commitment Fee Rate resulting from a change in a
Rating shall be and become effective upon election by the Lender but no sooner than the date that
the change in such Rating is published by such Rating Agency. References to Ratings above are
references to rating categories as presently determined by the Rating Agencies and in the event of
adoption of any new or changed rating system, the ratings from the Rating Agency in question
referred to above shall be deemed to refer to the rating category under the new rating system that
most closely approximates the applicable rating category as currently in effect. The Borrower
acknowledges that as of the Closing Date the Commitment Fee Rate is that specified above for
Level 1. In the event that any Rating is withdrawn or otherwise unavailable from any Rating
Agency for credit-related reasons, the Commitment Fee Rate then in effect shall be increased by
an additional one hundred fifty (150) basis points (1.50%) from the Commitment Fee Rate
otherwise in effect until such rating is restored (but in no event shall the Commitment Fee Rate
ever be less than 20 basis points (0.20%) when the Available Commitment is equal to or less than
sixty percent (60%) utilized).
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“Commitment Termination Date” means the earlier of (i) May 12, 2023, or such later date
as may be established pursuant to 2.11 hereof; and (ii) the date the Revolving Commitment is
reduced to zero pursuant to Section 2.03 or 7.02 hereof.
“Confidential Information” means any sensitive or confidential information regarding the
Borrower, the Lender or any Affiliate of the Lender including, without limitation, address and
account information, e-mail addresses, telephone numbers, facsimile numbers, names and
signatures of officers, employees and signatories.
“Contracts” has the meaning set forth in the IPA.
“Debt” of any Person means at any date, without duplication, (a) all obligations of such
Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures,
notes, loan agreements or other similar instruments, (c) all obligations of such Person to pay the
deferred purchase price of property or services (other than trade accounts payable arising in the
ordinary course of business and not past due for more than 60 days after the date on which such
trade account was created), (d) all obligations of such Person as lessee under capital leases, (e) all
Debt of others secured by a lien on any asset of such Person, whether or not such Debt is assumed
by such Person, (f) all Guarantees by such Person of Debt of other Persons, (g) the maximum
amount of all direct or contingent obligations of such Person arising under letters of credit
(including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and
similar instruments and (h) all obligations of such Person under any Swap Contract.
“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all other
liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium,
rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the
United States or other applicable jurisdictions from time to time in effect.
“Debt Service” has the meaning set forth in the IPA.
“Default” means any event or condition that constitutes an Event of Default or that, with
the giving of any notice, the passage of time, or both, would be an Event of Default.
“Default Rate” means, for any day, a rate of interest per annum equal to the greatest of: (i)
the Prime Rate in effect on such day plus five percent (5.00%), (ii) the Federal Funds Rate in effect
on such day plus six percent (6.00%), (iii) ten percent (10.00%); and (iv) (A) prior to the LIBOR
Termination Date, the LIBOR Rate (Floating) plus six percent (6.00%) and (B) on and after the
LIBOR Termination Date, the SIFMA Index Rate plus six percent (6.00%); provided, however,
that in no event shall the Default Rate exceed the applicable Maximum Interest Rate then in effect.
“Designated Jurisdiction” means any country or territory to the extent that such country
or territory itself is the subject of any Sanction.
“Determination of Taxability” means and shall be deemed to have occurred on the first to
occur of the following:
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(i)on the date when the Borrower files any statement, supplemental statement
or other tax schedule, return or document which discloses that an Event of Taxability has
occurred;
(ii)on the date when the Lender notifies the Borrower that it has received a
written opinion by a nationally recognized firm of attorneys of substantial expertise on the
subject of tax-exempt municipal finance to the effect that an Event of Taxability shall have
occurred unless, within one hundred eighty (180) days after receipt by the Borrower of
such notification from the Lender, the Borrower shall deliver to the Lender, a ruling or
determination letter issued to or on behalf of the Borrower by the Commissioner of the IRS
or the Director of Tax-Exempt Bonds of the Tax-Exempt and Government Entities
Division of the IRS (or any other government official exercising the same or a substantially
similar function from time to time) to the effect that, after taking into consideration such
facts as form the basis for the opinion that an Event of Taxability has occurred, an Event
of Taxability has not occurred;
(iii)on the date when the Borrower shall be advised in writing by the
Commissioner of the IRS or the Director of Tax-Exempt Bonds of the Tax-Exempt and
Government Entities Division of the IRS (or any other government official exercising the
same or a substantially similar function from time to time, including an employee
subordinate to one of these officers who has been authorized to provide such advice) that,
based upon filings of the Borrower, or upon any review or audit of the Borrower or upon
any other ground whatsoever, an Event of Taxability shall have occurred; or
(iv)on the date when the Borrower shall receive notice from the Lender that the
IRS (or any other government official or agency exercising the same or a substantially
similar function from time to time) has assessed as includable in the gross income of the
Lender or any Participants the interest on any Revolving Loan due to the occurrence of an
Event of Taxability;
provided, however, no Determination of Taxability shall occur under subparagraph (iii) or (iv)
hereunder unless the Borrower has been afforded the reasonable opportunity, at its expense, to
contest any such assessment, and, further, no Determination of Taxability shall occur until such
contest, if made, has been finally determined; provided further, however, that upon demand from
the Lender, the Borrower shall promptly reimburse the Lender for any payments, including any
taxes, interest, penalties or other charges, the Lender shall be obligated to make as a result of the
Determination of Taxability.
“Dollar” and “$” mean lawful money of the United States.
“EMMA” means Electronic Municipal Market Access as provided by the Municipal
Securities Rulemaking Board.
“Environmental Laws” means any and all Federal, state, local, and foreign statutes, laws,
regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises,
licenses, agreements or governmental restrictions relating to pollution and the protection of the
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-8-
environment or the release of any materials into the environment, including those related to
hazardous substances or wastes, air emissions and discharges to waste or public systems.
“Environmental Liability” means any liability, contingent or otherwise (including any
liability for damages, costs of environmental investigation and remediation, costs of administrative
oversight, fines, natural resource damages, penalties or indemnities), of the Borrower directly or
indirectly resulting from or based upon (a) any actual or alleged violation of any Environmental
Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any
Hazardous Materials, (c) any actual or alleged exposure to any Hazardous Materials, (d) the
Release or threatened Release of any Hazardous Materials or (e) any contract, agreement or other
consensual arrangement pursuant to which liability is assumed or imposed with respect to any of
the foregoing.
“ERISA” means the Employee Retirement Income Security Act of 1974.
“ERISA Affiliate” means any trade or business (whether or not incorporated) under
common control with the Borrower within the meaning of Section 414(b) or (c) of the Code (and
Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the
Code).
“Event of Default” with respect to this Agreement has the meaning set forth in Section 7.01
of this Agreement and, with respect to any Related Document, has the meaning assigned therein.
“Event of Taxability” means a (i) change in Law or fact or the interpretation thereof, or the
occurrence or existence of any fact, event or circumstance (including, without limitation, the taking
of any action by the Borrower, or the failure to take any action by the Borrower, or the making by
the Borrower of any misrepresentation herein or in any certificate required to be given in
connection with this Agreement) which has the effect of causing interest paid or payable on any
Revolving Loan to become includable, in whole or in part, in the gross income of the Lender or
any Participant for federal income tax purposes or (ii) the entry of any decree or judgment by a
court of competent jurisdiction, or the taking of any official action by the IRS or the Department
of the Treasury, which decree, judgment or action shall be final under applicable procedural law,
in either case, which has the effect of causing interest paid or payable on any Revolving Loan to
become includable, in whole or in part, in the gross income of the Lender or any Participant for
federal income tax purposes with respect to any Revolving Loan.
“Excess Interest” has the meaning specified in Section 2.12 hereof.
“Federal Funds Rate” means, for any day, the rate per annum equal to the weighted
average of the rates on overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers on such day, as published by the Federal Reserve Bank
of New York on the Business Day next succeeding such day; provided that (a) if such day is not a
Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day, and (b) if no
such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such
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day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%)
charged to the Lender on such day on such transactions as determined by the Lender.
“Fiscal Year” means the twelve-month period from July 1 through the following June 30.
“Fitch” means Fitch, Inc., and any successor rating agency.
“Fixed Rate” means an annualized fixed rate, for the applicable Interest Period (rounded
upward to the fourth decimal place) that is equal to the sum of: (i) the product of (x) the Applicable
Factor and (y) the LIBOR Rate (Fixed) for the applicable Interest Period, and (ii) the Applicable
Margin; provided, however, that immediately and upon the occurrence of an Event of Default (and
without any notice given with respect thereto) and during the continuation of such Event of
Default, “Fixed Rate” shall mean the Default Rate.
“Fixed Rate Revolving Loan” means any Revolving Loan bearing interest at a fixed per
annum rate of interest equal to the Fixed Rate.
“Floating Rate” means a variable rate of interest equal to the sum of: (i) the product of (x)
the Applicable Factor and (y) the LIBOR Rate (Floating) and (ii) the Applicable Margin; provided,
however, that immediately and upon the occurrence of an Event of Default (and without any notice
given with respect thereto) and during the continuation of such Event of Default, “Floating Rate”
shall mean the Default Rate. Interest shall be adjusted concurrently with any change in the Floating
Rate.
“Floating Rate Revolving Loan” means any Revolving Loan bearing interest at a variable
per annum rate of interest equal to the Floating Rate.
“FRB” means the Board of Governors of the Federal Reserve System of the United States,
together with any successors thereof.
“Generally Accepted Accounting Principles” or “GAAP” means generally accepted
accounting principles in effect from time to time in the United States and applicable to entities
such as the Borrower, including, without limitation, those principles set forth in the statements and
pronouncement of the Government Accounting Standards Board.
“Governmental Approval” means an authorization, consent, approval, license, or
exemption of, registration or filing with, or report to any Governmental Authority.
“Governmental Authority” means the government of the United States or any other nation,
or of any political subdivision thereof, whether state or local, and any agency, authority,
instrumentality, regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to
government (including any supra-national bodies such as the European Union or the European
Central Bank).
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“Guarantee” means, as to any Person, (a) any obligation, contingent or otherwise, of such
Person guaranteeing or having the economic effect of guaranteeing any Debt or other obligation
payable or performable by another Person (the “primary obligor”) in any manner, whether directly
or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay
(or advance or supply funds for the purchase or payment of) such Debt or other obligation, (ii) to
purchase or lease property, securities or services for the purpose of assuring the obligee in respect
of such Debt or other obligation of the payment or performance of such Debt or other obligation,
(iii) to maintain working capital, equity capital or any other financial statement condition or
liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Debt or other obligation, or (iv) entered into for the purpose of assuring in any other
manner the obligee in respect of such Debt or other obligation of the payment or performance
thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) any
Lien on any assets of such Person securing any Debt or other obligation of any other Person,
whether or not such Debt or other obligation is assumed by such Person (or any right, contingent
or otherwise, of any holder of such Debt to obtain any such Lien). The amount of any Guarantee
shall be deemed to be an amount equal to the stated or determinable amount of the related primary
obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof as determined by
the guaranteeing Person in good faith. The term “Guarantee” as a verb has a corresponding
meaning.
“Hazardous Materials” means all explosive or radioactive substances or wastes and all
hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum
distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas,
infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to
any Environmental Law.
“Indebtedness” means all obligations for money borrowed, obligations for the payment of
money which is treated as debt for accounting purposes or any other obligations for payment of
principal and interest with respect to money borrowed, including guaranties of obligations which,
were such to be an obligation of the Borrower, would be Indebtedness, incurred or assumed by the
Borrower and secured by the Revenues, but excluding Operating and Maintenance Costs and Non-
Operating and Maintenance Costs.
“Indemnitees” has the meaning specified in Section 8.04(b) hereof.
“Indenture” means that certain Indenture of Trust, dated as of August 1, 2012, by and
between the Borrower and the Trustee.
“Information” has the meaning specified in Section 8.07 hereof.
“Interest Payment Date” means, as to any Revolving Loan, the first (1st) Business Day of
each month.
“Interest Period” means as to each Fixed Rate Revolving Loan, the period commencing
on the date such Fixed Rate Revolving Loan is disbursed or converted to or continued as a Fixed
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Rate Revolving Loan and ending on the date one (1), three (3) or six (6) months thereafter as
selected by the Borrower in its Loan Notice; provided that:
(a)the Interest Period shall commence on the date of advance of or conversion
to any Fixed Rate Revolving Loan and, in the case of immediately successive Interest
Periods, each successive Interest Period shall commence on the date on which the
immediately preceding Interest Period expires;
(b)if any Interest Period would otherwise expire on a day that is not a Business
Day, such Interest Period shall expire on the next succeeding Business Day; provided, that
if any Interest Period with respect to a Fixed Rate Revolving Loan would otherwise expire
on a day that is not a Business Day but is a day of the month after which no further Business
Day occurs in such month, such Interest Period shall expire on the immediately preceding
Business Day;
(c)any Interest Period with respect to a Fixed Rate Revolving Loan that begins
on the last Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period) shall end on
the last Business Day of the relevant calendar month at the end of such Interest Period; and
(d)no Interest Period shall extend beyond the Commitment Termination Date.
; provided further that the Interest Period for a Floating Rate Revolving Loan shall be the period
from and including an Interest Payment Date to but excluding the immediately succeeding Interest
Payment Date.
“IPA” means that certain Installment Purchase Agreement, dated as of May 1, 2017,
between the Borrower and Yorba Linda Water District Financing Authority, as the same may be
amended, restated, modified or supplemented in accordance with the terms thereof and hereof.
“IRS” means the United States Internal Revenue Service.
“Laws” means, collectively, all international, foreign, Federal, state and local statutes,
treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents
or authorities, including the interpretation or administration thereof by any Governmental
Authority charged with the enforcement, interpretation or administration thereof, and all applicable
administrative orders, directed duties, requests, licenses, authorizations and permits of, and
agreements with, any Governmental Authority, in each case whether or not having the force of
law.
“Lender” has the meaning specified in the introductory paragraph hereto.
“Lending Office” means, the office or offices of the Lender described as such in Schedule
8.02, or such other office or offices as the Lender may from time to time notify the Borrower.
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“LIBOR Rate (Fixed)” means, for any Interest Period with respect to a Fixed Rate
Revolving Loan, a rate per annum equal to the London Interbank Offered Rate, or a comparable
or successor rate which rate is approved by the Lender, as published on the applicable Bloomberg
screen page (or such other commercially available source providing such quotations as may be
designated by the Lender from time to time) at or about 11:00 a.m., London time, two London
Banking Days prior to the commencement of such Interest Period, for Dollar deposits (for delivery
on the first day of such Interest Period); provided that (i) to the extent a comparable or successor
rate is approved by the Lender in connection herewith, the approved rate shall be applied in a
manner consistent with market practice; provided, further that to the extent such market practice
is not administratively feasible for the Lender, such approved rate shall be applied in a manner as
otherwise reasonably determined by the Lender and (ii) if the LIBOR Rate (Fixed) shall be less
than zero, such rate shall be deemed zero for purposes of this Agreement.
“LIBOR Rate (Floating)” means, for any date, the rate per annum equal to the London
Interbank Offered Rate (or a comparable or successor rate which is approved by the Lender), as
published by Bloomberg (or other commercially available source providing quotations of such rate
as selected by the Lender from time to time) at approximately 11:00 a.m. London time two (2)
London Banking Days prior to such date, for U.S. Dollar deposits (for delivery on the first day of
such interest period) with a term of one month; provided that (i) to the extent a comparable or
successor rate is approved by Bank of America, N.A. in connection herewith, the approved rate
shall be applied in a manner consistent with market practice; provided, further that to the extent
such market practice is not administratively feasible for Bank of America, N.A., such approved
rate shall be applied in a manner otherwise reasonably determined by Bank of America, N.A. and
(ii) if LIBOR shall be less than zero, such rate shall be deemed zero for purposes of this Agreement.
“LIBOR Screen Rate” means the LIBOR Rate (Fixed) quote on the applicable screen page
the Lender designates to determine the LIBOR Rate (Fixed) (or such other commercially available
source providing such quotations as may be designated by the Lender from time to time).
“LIBOR Termination Date” means the earliest date on which any of the events set forth in
Section 3.03 or Section 3.04 hereof occurs.
“Lien” means any mortgage, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or
preferential arrangement in the nature of a security interest of any kind or nature whatsoever
(including any conditional sale or other title retention agreement, any easement, right of way or
other encumbrance on title to real property, and any financing lease having substantially the same
economic effect as any of the foregoing).
“Loan Notice” means a notice of (a) a Borrowing, (b) a conversion of Revolving Loans
from one Type to the other or (c) a continuation of Fixed Rate Revolving Loans, pursuant to
Section 2.02(a), which, if in writing, shall be substantially in the form of Exhibit A or such other
form as may be approved by the Lender (including any form on an electronic platform or electronic
transmission system as shall be approved by the Lender), appropriately completed and signed by
an Authorized Representative of the Borrower.
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“London Banking Days” means any day on which dealings in U.S. Dollar deposits are
conducted by and between banks in the London interbank eurodollar market.
“Margin Stock” has the meaning ascribed to such term in Regulation U promulgated by
the FRB, as now and hereafter from time to time in effect.
“Material Adverse Effect” means: (a) a material adverse change in, or a material adverse
effect upon, the operations, business, properties, liabilities (actual or contingent), condition
(financial or otherwise) or prospects of the Borrower; (b) a material impairment of the ability of
the Borrower to perform its obligations under any Related Document to which it is a party; or (c) a
material adverse effect upon the legality, validity, binding effect or enforceability against the
Borrower of any Related Document to which it is a party or the rights, security, interests or
remedies of the Lender hereunder or under any other Related Document.
“Maximum Federal Corporate Tax Rate” means the maximum interest rate of income
taxation imposed on corporations pursuant to Section 11(b) of the Code, as in effect from time to
time (or, if as a result of a change in the Code, the rate of income taxation imposed on corporations
generally shall not be applicable to the Lender, the maximum statutory rate of federal income
taxation which could apply to the Lender). As of the Effective Date, the Maximum Federal
Corporate Tax Rate is 21%.
“Maximum Interest Rate” means the maximum rate of interest on the relevant obligation
permitted by applicable law.
“Moody’s” means Moody’s Investors Service, Inc. and any successor rating agency.
“Multiemployer Plan” means any employee benefit plan of the type described in
Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes or is obligated
to make contributions, or during the preceding five plan years, has made or been obligated to make
contributions.
“Multiple Employer Plan” means a Plan which has two or more contributing sponsors
(including the Borrower or any ERISA Affiliate) at least two of whom are not under common
control, as such a plan is described in Section 4064 of ERISA.
“Net Proceeds” has the meaning set forth in the IPA.
“Net Revenues” has the meaning set forth in the IPA.
“Non-Operating and Maintenance Costs” has the meaning set forth in the IPA.
“Note” means the Note dated the Closing Date, of the Borrower in favor of the Lender
evidencing the Obligations outstanding hereunder and substantially in the form of Exhibit B
hereto.
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“Notice of Loan Prepayment” means a notice of prepayment with respect to a Revolving
Loan, which shall be substantially in the form of Exhibit D or such other form as may be approved
by the Lender (including any form on an electronic platform or electronic transmission system as
shall be approved by the Lender), appropriately completed and signed by an Authorized
Representative.
“Obligations” means the obligations of the Borrower under this Agreement to repay (i) all
Revolving Loans and the Note, together with interest thereon, pursuant to and in accordance with
this Agreement and the Note, (ii) all fees, and (iii) all expenses and charges payable or
reimbursable hereunder to the Lender (including, without limitation, any amounts to reimburse the
Lender for any advances or expenditures by it under any of such documents) and all other payment
obligations of the Borrower to the Lender arising under or in relation to this Agreement or the
other Related Documents, in each, case whether now existing or hereafter arising, due or to become
due, direct or indirect, absolute or contingent, and howsoever evidenced, held or acquired.
“OFAC” means the United States Department of Treasury Office of Foreign Assets
Control.
“Operating and Maintenance Costs” has the meaning set forth in the IPA.
“Outstanding Amount” means with respect to Revolving Loans on any date, the aggregate
outstanding principal amount thereof after giving effect to any borrowings and prepayments or
repayments of Revolving Loans occurring on such date.
“Participant” has the meaning set forth in Section 8.06(a) hereof.
“Patriot Act” has the meaning set forth in Section 5.13(a) hereof.
“Pension Plan” means any employee pension benefit plan (including a Multiple Employer
Plan or a Multiemployer Plan) that is maintained or is contributed to by the Borrower and any
ERISA Affiliate and is either covered by Title IV of ERISA or is subject to the minimum funding
standards under Section 412 of the Code.
“Person” means any natural person, corporation, limited liability company, trust, joint
venture, association, company, partnership, Governmental Authority or other entity.
“Plan” means any employee benefit plan within the meaning of Section 3(3) of ERISA
(including a Pension Plan), maintained for employees of the Borrower or any ERISA Affiliate or
any such Plan to which the Borrower or any ERISA Affiliate is required to contribute on behalf of
any of its employees.
“Prime Rate” means on any day, the rate of interest per annum then most recently
established by the Lender as its “prime rate.” The “prime rate” is a rate set by the Lender based
upon various factors including the Lender’s costs and desired return, general economic conditions
and other factors, and is used as a reference point for pricing some loans, which may be priced at,
above, or below such announced rate. Any change in such rate announced by the Lender shall
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take effect at the opening of business on the day specified in the public announcement of such
change.
“Property” means any interest in any kind of property or asset, whether real, personal or
mixed, or tangible or intangible, whether now owned or hereafter acquired.
“Rating Agencies” means Fitch, Moody’s and S&P.
“Related Documents” means this Agreement, the Note, the Resolution, the Indenture and
any other documents related to any of the foregoing or executed in connection therewith, and any
and all future renewals and extensions or restatements of, or amendments or supplements to, any
of the foregoing permitted hereunder and thereunder.
“Related Parties” means, with respect to any Person, such Person’s Affiliates and the
partners, directors, officers, employees, agents and advisors of such Person and of such Person’s
Affiliates.
“Release” means any release, spill, emission, leaking, dumping, injection, pouring,
deposit, disposal, discharge, dispersal, leaching or migration into the environment (including
ambient air, surface water, groundwater, land surface or subsurface strata) or within any building,
structure, facility or fixture.
“Resolution” means Resolution No. 20-[____] adopted by the Board of Directors of the
Borrower on April 28, 2020, entitled “Resolution of the Board of Directors of the Yorba Linda
Water District Approving the Issuance of Negotiable Promissory Notes for the Purpose of
Financing Capital Projects and Approving the Execution and Delivery of Certain Documents in
Connection Therewith and Certain Other Matters,” as the same may be further supplemented and
amended from time to time, in accordance with the terms thereof and hereof.
“Revenues” has the meaning set forth in the IPA.
“Revolving Commitment” means the Lender’s obligation to make Revolving Loans to the
Borrower pursuant to Section 2.01 hereof. The Revolving Commitment on the Closing Date shall
be $20,000,000.
“Revolving Debt Assumption” means, (a) for purposes of Section 6.18 hereof, $20,000,000
(less any permanent reduction of the Revolving Commitment) and (b) for purposes of Section 6.23
hereof, the average daily amount of Revolving Loans outstanding during the prior Fiscal Year.
The applicable amount of the Revolving Debt Assumption, as set forth in clauses (a) and (b) above,
shall be amortized over twenty-five (25) years at an interest rate per annum equal to the daily
average amount of the Fixed Rate, with an applicable Interest Period of one month, for the twelve
(12) months prior to the time of such calculation; provided that on and after the LIBOR
Termination Date, the applicable amount of the Revolving Debt Assumption, as set forth in clauses
(a) and (b) above, shall be amortized over twenty-five (25) years at an interest rate per annum
equal to the average of the SIFMA Index Rate for tax-exempt variable rate obligations for the
twelve (12) months prior to the time of such calculation.
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“Revolving Loans” has the meaning specified in Section 2.01 hereof and (i) from the
Closing Date until the LIBOR Termination Date shall include Fixed Rate Revolving Loans and
Floating Rate Revolving Loans and (ii) from the LIBOR Termination Date and at all times
thereafter, shall include only SIFMA Loans.
“S&P” means S&P Global Ratings, and any successor rating agency.
“Sanction(s)” means any sanction administered or enforced by the United States
Government (including, without limitation, OFAC), the United Nations Security Council, the
European Union, Her Majesty’s Treasury or other relevant sanctions authority.
“Secured Debt” means any Debt issued or incurred by or on behalf of the Borrower and
secured by or payable from a Lien on Revenues.
“Senior Indebtedness” means Debt of the Borrower secured by Revenues on a basis senior
to the Obligations.
“SIFMA” means the Securities Industry & Financial Markets Association (formerly the
Bond Market Association).
“SIFMA Accrual Period” means Thursday of each calendar week to but not including
Thursday of the immediately succeeding calendar week.
“SIFMA Computation Date” means Wednesday of each week, or if any Wednesday is not
a Business Day, the next succeeding Business Day.
“SIFMA Index” means, for any date computed, the level of the index which is issued
weekly and which is compiled from the weekly interest rate resets of tax‐exempt variable rate
issues included in a database maintained by Municipal Market Data which meet specific criteria
established from time to time by SIFMA and issued on Wednesday of each week, or if any
Wednesday is not a Business Day, the next succeeding Business Day; provided, however, if the
SIFMA Index is no longer published, “SIFMA Index” shall mean the S&P Weekly High Grade
Index; provided further that if the S&P Weekly High Grade Index is no longer published, “SIFMA
Index” shall mean the prevailing rate determined by the Lender for tax-exempt state and local
government bonds meeting criteria determined in good faith by the Lender to be comparable under
the circumstances to the criteria used by SIFMA to determine the SIFMA Index immediately prior
to the date on which SIFMA ceased publication of the SIFMA Index. Notwithstanding any of the
above, if the SIFMA Index shall be less than zero on any given day, such rate shall be deemed to
be zero for purposes of the financing documents.
“SIFMA Index Rate” means a fixed per annum rate of interest established on each SIFMA
Computation Date, for the applicable SIFMA Accrual Period, equal to the sum of (a) the SIFMA
Margin plus (b) the SIFMA Index.; provided, however, that immediately and upon the occurrence
of an Event of Default (and without any notice given with respect thereto) and during the
continuation of such Event of Default, “SIFMA Index Rate” shall mean the Default Rate. Interest
shall be adjusted concurrently with any change in the SIFMA Index Rate.
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“SIFMA Loan” means any Revolving Loan bearing interest at the SIFMA Index Rate.
“SIFMA Margin” means a rate per annum associated with the Level corresponding to the
lowest long-term unenhanced debt rating(s) assigned by any of Moody’s, Fitch or S&P to any
Senior Indebtedness (each, a “Rating”), as specified below:
In the event of split Ratings (i.e., one of the Rating Agencies’ Rating is at a different Level than
the Rating of another Rating Agency), the SIFMA Margin shall be based upon the Level in which
the lowest Rating(s) appears (for the avoidance of doubt, Level 7 is the lowest Level, and Level 1
is the highest Level for purposes of the above pricing grid); provided the Borrower acknowledges
that any decision to increase the SIFMA Margin shall be in the Lender’s sole discretion. Any
change in the SIFMA Margin resulting from a change in a Rating shall be and become effective
upon election by the Lender but no sooner than the date that the change in such Rating is published
by such Rating Agency. References to Ratings above are references to rating categories as
presently determined by the Rating Agencies and in the event of adoption of any new or changed
rating system, the ratings from the Rating Agency in question referred to above shall be deemed
to refer to the rating category under the new rating system that most closely approximates the
applicable rating category as currently in effect. The Borrower acknowledges that as of the Closing
Date the SIFMA Margin is that specified above for Level 1. In the event that any Rating is
withdrawn or otherwise unavailable from any Rating Agency for credit-related reasons, the
SIFMA Margin then in effect shall be increased by an additional one hundred fifty (150) basis
points (1.50%) from the SIFMA Margin otherwise in effect until such rating is restored.
“State” means the State of California.
“Subordinate Debt” means any bonds, notes, leases, installment sale agreements or other
obligations, Debt or indebtedness of the Borrower payable from and secured by a pledge of and
lien upon any of the Revenues on a parity with the lien on Revenues securing the Obligations,
entered into or issued or incurred under and in accordance with Section 6.18, including without
limitation, the Obligations.
LEVEL
MOODY’S
RATING S&P RATING
FITCH
RATING
SIFMA
MARGIN
Level 1 Aa3 or above AA- or
above
AA- or
above
0.48%
Level 2 A1 A+A+0.63%
Level 3 A2 A A2 0.68%
Level 4 A3 A1 A3 0.73%
Level 5 Baa1 BBB+BBB+0.88%
Level 6 Baa2 BBB BBB 1.03%
Level 7 Baa3 or
below
BBB- or
below
BBB- or
below
Default Rate
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“Subordinate Debt Issuing Documents” means, collectively, this Agreement, any
indenture, trust agreement, loan agreement, installment sale agreement, resolution or other
document authorizing or evidencing the issuance or incurrence of any Subordinate Debt.
“Swap Contract” means (a) any and all rate swap transactions, basis swaps, credit
derivative transactions, forward rate transactions, commodity swaps, commodity options, forward
commodity contracts, equity or equity index swaps or options, bond or bond price or bond index
swaps or options or forward bond or forward bond price or forward bond index transactions,
interest rate options, forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap transactions, currency
options, spot contracts, or any other similar transactions or any combination of any of the foregoing
(including any options to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions of any kind, and
the related confirmations, which are subject to the terms and conditions of, or governed by, any
form of master agreement published by the International Swaps and Derivatives Association, Inc.,
any International Foreign Exchange Master Agreement, or any other master agreement (any such
master agreement, together with any related schedules, a “Master Agreement”), including any
such obligations or liabilities under any Master Agreement.
“Taxable Factor” means for each day that the Taxable Fixed Rate and the Taxable Floating
Rate, as applicable, is determined, the quotient of (i) one divided by (ii) one minus the Maximum
Federal Corporate Tax Rate in effect as of such day, rounded upward to the nearest second decimal
place.
“Taxable Fixed Rate” means an annualized fixed rate of interest, for the applicable Interest
Period, (rounded upward to the fourth decimal place) that is equal to the product of: (i) Fixed Rate
for the applicable Interest Period and (ii) the Taxable Factor; provided, however, that immediately
and upon the occurrence of an Event of Default (and without any notice given with respect thereto)
and during the continuation of such Event of Default, “Taxable Fixed Rate” shall mean the Default
Rate.
“Taxable Floating Rate” means a fully floating rate of interest (rounded upward to the
fourth decimal place) that is equal to the product of: (i) the Floating Rate and (ii) the Taxable
Factor; provided, however, that immediately and upon the occurrence of an Event of Default (and
without any notice given with respect thereto) and during the continuation of such Event of
Default, “Taxable Floating Rate” shall mean the Default Rate.
“Total Outstandings” means the aggregate Outstanding Amount of all Revolving Loans.
“Trustee” means U.S. Bank National Association, acting in its capacity as Trustee under
and pursuant to the Indenture, and its successors and assigns.
“Type” means, with respect to a Revolving Loan, its character as a Floating Rate
Revolving Loan or a Fixed Rate Revolving Loan.
“United States” and “U.S.” mean the United States of America.
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“Water Service” has the meaning set forth in the IPA.
“Water System” has the meaning set forth in the IPA.
“written” or “in writing” means any form of written communication or a communication
by means of telex, telecopier device or electronic mail.
Section 1.02.Other Interpretive Provisions. With reference to this Agreement, the Note
and the Resolution, unless otherwise specified herein or in the Note or the Resolution:
(a)The definitions of terms herein shall apply equally to the singular and plural forms of
the terms defined. Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be
deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to
have the same meaning and effect as the word “shall.” Unless the context requires otherwise, (i)
any definition of or reference to any agreement, instrument or other document shall be construed
as referring to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such amendments, supplements
or modifications set forth herein or in the Note or the Resolution), (ii) any reference herein to any
Person shall be construed to include such Person’s successors and assigns, (iii) the words “hereto,”
“herein,” “hereof” and “hereunder,” and words of similar import when used in this Agreement,
the Note or the Resolution, shall be construed to refer to such document in its entirety and not to
any particular provision thereof, (iv) all references in this Agreement, the Note or the Resolution
to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections
of, and Exhibits and Schedules to, this Agreement, the Note or the Resolution in which such
references appear, (v) any reference to any law shall include all statutory and regulatory provisions
consolidating, amending, replacing or interpreting such law and any reference to any law or
regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified
or supplemented from time to time, and (vi) the words “asset” and “property” shall be construed
to have the same meaning and effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights.
(b)In the computation of periods of time from a specified date to a later specified date,
the word “from” means “from and including;” the words “to” and “until” each mean “to but
excluding;” and the word “through” means “to and including.”
(c)Section headings herein and in the Note and the Resolution are included for
convenience of reference only and shall not affect the interpretation of this Agreement, the Note
or the Resolution.
Section 1.03.Accounting Terms.
(a)Generally. All accounting terms not specifically or completely defined herein shall
be construed in conformity with, and all financial data (including financial ratios and other
financial calculations) required to be submitted pursuant to this Agreement shall be prepared in
conformity with, GAAP applied on a consistent basis, as in effect from time to time, applied in a
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manner consistent with that used in preparing the Audited Financial Statements, except as
otherwise specifically prescribed herein.
(b)Changes in GAAP. If at any time any change in GAAP would affect the computation
of any financial ratio or requirement set forth in any Related Document, and either the Borrower
or the Lender shall so request, the Lender and the Borrower shall negotiate in good faith to amend
such ratio or requirement to preserve, to the extent possible and permitted by GAAP, the original
intent thereof in light of such change in GAAP; provided that, until so amended, (A) such ratio or
requirement shall continue to be computed in accordance with GAAP prior to such change therein
and (B) the Borrower shall provide to the Lender financial statements and other documents
required under this Agreement or as reasonably requested hereunder setting forth a reconciliation
between calculations of such ratio or requirement made before and after giving effect to such
change in GAAP.
Section 1.04.Rounding. Any financial ratios required to be maintained by the Borrower
pursuant to this Agreement shall be calculated by dividing the appropriate component by the other
component, carrying the result to one place more than the number of places by which such ratio is
expressed herein and rounding the result up or down to the nearest number (with a rounding-up if
there is no nearest number).
Section 1.05.Times of Day. Unless otherwise specified, all references herein to times of
day shall be references to Eastern time (daylight or standard, as applicable).
Section 1.06.UCC Terms. Terms defined in the UCC in effect on the Closing Date and
not otherwise defined herein shall, unless the context otherwise indicates, have the meanings
provided by those definitions. Subject to the foregoing, the term “UCC” refers, as of any date of
determination, to the UCC then in effect.
ARTICLE II
THE REVOLVING COMMITMENT AND BORROWINGS
Section 2.01.Revolving Loans. Subject to the terms and conditions set forth herein, the
Lender agrees to make loans (individually, a “Revolving Loan” and collectively, the “Revolving
Loans”) to the Borrower from time to time, on any Business Day during the Availability Period,
in an aggregate amount not to exceed at any time the Available Commitment; provided, however,
that after giving effect to any Borrowing, the Total Outstandings shall not exceed the Revolving
Commitment, subject to any reductions thereof pursuant to the terms hereof. Subject to the other
terms and conditions hereof, the Borrower may borrow under this Section 2.01, prepay under
Section 2.03, and reborrow under this Section 2.01. The Borrower may elect that any Revolving
Loan be either a Fixed Rate Revolving Loan or a Floating Rate Revolving Loan pursuant to the
Available Commitment. A Fixed Rate Revolving Loan will bear interest at the Fixed Rate. A
Floating Rate Revolving Loan will bear interest at the Floating Rate. For any Borrowings on or
after the LIBOR Termination Date, the Borrower may no longer elect Fixed Rate Revolving Loans
or Floating Rate Revolving Loans and all subsequent Borrowings shall be in the form of SIFMA
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Loans. SIFMA Loans will bear interest at the SIFMA Index Rate. Any Revolving Loan that has
been converted into a SIFMA Loan may not be converted back to any other Type of Loan, and at
no point shall there be any Fixed Rate Revolving Loans or Floating Revolving Loans outstanding
at the same time as any SIFMA Loans are outstanding. Further, following the LIBOR Termination
Date, all outstanding and subsequent Borrowings shall be in the form of SIFMA Loans.
Section 2.02.Borrowings, Conversions and Continuations of Revolving Loans. (a) Each
Borrowing, each conversion of Revolving Loans from one Type to the other, and each continuation
of Fixed Rate Revolving Loans shall be made upon the Borrower’s irrevocable notice to the
Lender, which may be given by (A) telephone or (B) a Loan Notice; provided that any telephonic
notice must be confirmed immediately by delivery to the Lender of a Loan Notice. Each such
notice must be received by the Lender not later than 11:00 a.m. (i) two (2) Business Days prior to
the requested date of any Borrowing of, conversion to or continuation of Fixed Rate Revolving
Loans, or of any conversion of Fixed Rate Revolving Loans to Floating Rate Revolving Loans, or
any Borrowings of SIFMA Loans and (ii) on the requested date of any Borrowing of Floating Rate
Revolving Loans or conversion to Floating Rate Revolving Loans. Each Borrowing of, conversion
to or continuation of Fixed Rate Revolving Loans shall be, unless otherwise agreed by the Lender,1
in a principal amount of $300,000 or a whole multiple of $100,000 in excess thereof. Each
Borrowing of or conversion to a Floating Rate Revolving Loan shall be, unless otherwise agreed
by the Lender, in a principal amount of $300,000 or a whole multiple of $100,000 in excess thereof.
Each Borrowing of SIFMA Loans shall be, unless otherwise agreed by the Lender, in a principal
amount of $300,000 or a whole multiple of $100,000 in excess thereof. Each Loan Notice (whether
telephonic or written) shall specify (i) whether the Borrower is requesting a Borrowing, a
conversion or a continuation, as the case may be (ii) the requested date of the Borrowing,
conversion or continuation, as the case may be (which shall be a Business Day), (iii) the principal
amount of the Revolving Loans to be borrowed, converted or continued, (iv) the Type of Revolving
Loan to be borrowed or to which existing Revolving Loans are to be converted, (v) whether the
interest rate will be the Floating Rate or the Fixed Rate and (vi) if applicable, the duration of the
Interest Period. If the Borrower fails to specify the Type of Revolving Loan in a Loan Notice, to
specify the interest rate applicable to such Revolving Loan or to give a timely notice requesting a
conversion or continuation, then the applicable Revolving Loans shall be made as, or converted
to, Floating Rate Revolving Loans bearing interest at the Floating Rate. If the Borrower requests
a Borrowing of, conversion to, or continuation of Fixed Rate Revolving Loans in any such Loan
Notice, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period
of one (1) month. The Borrower may request up to two (2) Borrowings during any calendar month.
(b)Following receipt of a Loan Notice, upon satisfaction of the applicable conditions set
forth in Section 4.02 hereof (and, if such Borrowing is the initial Borrowing, Section 4.01 hereof),
the Lender shall make the requested funds available to the Borrower either by (i) crediting the
account of the Borrower on the books of the Lender with the amount of such funds or (ii) wire
transfer of such funds, in each case in accordance with instructions provided to (and reasonably
acceptable to) the Lender by the Borrower.
1 The Lender is agreeable to an initial advance of less than $300,000.
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(c)Except as otherwise provided herein, a Fixed Rate Revolving Loan may be continued
or converted only on the last day of an Interest Period for such Fixed Rate Revolving Loan. During
the existence of a Default or Event of Default, no Revolving Loans may be requested as, converted
to or continued as Fixed Rate Revolving Loans without the consent of the Lender, and the Lender
may demand that any or all of the then outstanding Fixed Rate Revolving Loans be converted
immediately to Floating Rate Revolving Loans and the Borrower agrees to pay all amounts due
under Section 3.05 hereof in accordance with the terms thereof due to any such conversion upon
receipt of invoice of such charges.
(d)The Lender shall promptly notify the Borrower of the interest rate applicable to any
Interest Period for Fixed Rate Revolving Loans upon determination of such interest rate and the
date on which such Interest Period ends.
(e)After giving effect to all Borrowings, all conversions of Revolving Loans from one
Type to the other, and all continuations of Revolving Loans as the same Type, there shall not be
more than three (3) Interest Periods in effect with respect to Revolving Loans.
(f)SIFMA Loans may be continued only on the last day of a SIFMA Accrual Period for
such SIFMA Loan. Upon request, the Lender shall promptly notify the Borrower of the interest
rate applicable to any SIFMA Accrual Period for SIFMA Loans upon determination of such
interest rate and the date on which such SIFMA Accrual Period ends.
Section 2.03.Prepayments.
(a)Optional. The Borrower may, upon notice to the Lender pursuant to delivery to the
Lender of a Notice of Loan Prepayment, at any time or from time to time voluntarily prepay
Revolving Loans in whole or in part without premium or penalty subject to Section 3.05 hereof;
provided that, unless otherwise agreed by the Lender (i) for any Revolving Loans, such notice
must be received by the Lender not later than 11:00 a.m. ten (10) Business Days prior to any date
of prepayment of any Revolving Loans and (ii) any prepayment of any Revolving Loans shall be
in a principal amount of $250,000 or a whole multiple of $50,000 in excess thereof. Each such
notice shall specify the date and amount of such prepayment and which Revolving Loans are to be
prepaid and, if Fixed Rate Revolving Loans are to be prepaid, the Interest Period(s) of such Fixed
Rate Revolving Loans. If such notice is given by the Borrower, the Borrower shall make such
prepayment and the payment amount specified in such notice shall be due and payable on the date
specified therein. Any prepayment of principal shall be accompanied by all accrued interest on
the amount prepaid, together with any additional amounts required pursuant to Section 3.05 hereof.
(b)Mandatory.
(i)Revolving Outstandings. If for any reason the Total Outstandings at any
time exceed the Revolving Commitment at such time, the Borrower shall immediately
prepay Revolving Loans (together with all accrued but unpaid interest thereon).
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(ii)Application of Other Payments. Prepayments under the Revolving
Commitment made pursuant to this Section 2.03(b) shall be applied to the outstanding
Revolving Loans.
Within the parameters of the applications set forth above, prepayments pursuant to this
Section 2.03(b) shall be applied first to Floating Rate Revolving Loans and then to Fixed Rate
Revolving Loans in direct order of their Interest Period maturities. All prepayments under this
Section 2.03(b) shall be subject to Section 3.05 hereof, but otherwise without premium or penalty,
and shall be accompanied by interest on the principal amount prepaid through the date of
prepayment.
(c)SIFMA Rate Loans. Notwithstanding anything to the contrary contained in this
Agreement, SIFMA Loans may only be prepaid on the last day of a SIFMA Accrual Period.
Section 2.04.Termination or Reduction of Revolving Commitment.
(a)Optional. Subject to Section 2.04(b) below, the Borrower may, upon notice to the
Lender, terminate the Revolving Commitment, or from time to time permanently reduce the
Revolving Commitment; provided that (i) any such notice shall be received by the Lender not later
than 11:00 a.m. ten (10) Business Days prior to the date of termination or reduction, (ii) any such
partial reduction shall be in an aggregate amount of $1,000,000 or any whole multiple of
$1,000,000 in excess thereof and (iii) the Borrower shall not terminate or reduce the Revolving
Commitment if, after giving effect thereto and to any concurrent prepayments hereunder, the Total
Outstandings would exceed the Revolving Commitment.
(b)Termination Fee. In the event that the Borrower terminates the Revolving
Commitment prior to the one (1) year anniversary of the Closing Date, the Borrower hereby agrees
to pay to the Lender a Termination Fee in connection with the termination or permanent reduction
of the Revolving Commitment by the Borrower as set forth in this paragraph in an amount equal
to the product of (A) the amount of Commitment Fees to be charged on the Available Commitment
amount from the Closing Date to the first anniversary of the Closing Date (as described in Section
2.07(a) hereof), less (B) the Commitment Fees paid up to and including the date of such
termination or reduction (the “Termination Fee”), payable on the date the Available Commitment
is terminated or replaced; provided, however, that no Termination Fee shall be charged under this
Section (i) if the short-term ratings of the Lender are downgraded below “P-2”, “A-2” and “F-2”
by Moody’s, S&P and Fitch, respectively, or (ii) in the event that the Lender imposes increased
costs or charges pursuant to Section 3.02 hereof.
(c)Payment of Fees. All fees in respect of the Revolving Commitment accrued until the
effective date of any termination of the Revolving Commitment shall be paid on the effective date
of such termination.
Section 2.05.Repayment of Revolving Loans. The Borrower shall repay to the Lender on
the Commitment Termination Date the aggregate principal amount of Revolving Loans
outstanding on such date.
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Section 2.06.Interest and Default Rate. (a) Interest. Subject to the provisions of
subsection (b) below, (i) each Fixed Rate Revolving Loan shall bear interest on the outstanding
principal amount thereof for each Interest Period at a rate per annum equal to the Fixed Rate for
such Interest Period, (ii) each Floating Rate Revolving Loan shall bear interest on the outstanding
principal amount thereof from the applicable borrowing date at a rate per annum equal to the
Floating Rate and (iii) each SIFMA Loan shall bear interest on the outstanding principal amount
thereof for each SIFMA Accrual Period at a rate per annum equal to the SIFMA Index Rate for
such SIFMA Accrual Period.
(b)Default Rate. (i) While any Event of Default exists, the Borrower shall pay interest
on all outstanding Obligations hereunder (including, without limitation, all Revolving Loans) at a
fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent
permitted by applicable Laws.
(ii)Accrued and unpaid interest on past due amounts (including interest on past due
interest) shall be due and payable upon demand.
(c)Interest Payments. Interest on each Revolving Loan shall be due and payable in
arrears on each Interest Payment Date applicable thereto and at such other times as may be
specified herein. Interest hereunder shall be due and payable in accordance with the terms hereof
before and after judgment, and before and after the commencement of any proceeding under any
Debtor Relief Law.
Section 2.07.Fees.
(a)Commitment Fee. The Borrower shall pay to the Lender a commitment fee equal to
the product of (i) the Commitment Fee Rate and (ii) the actual daily amount by which the
Revolving Commitment exceeds the Outstanding Amount of Revolving Loans (the “Commitment
Fee”). The Commitment Fee shall accrue at all times during the Availability Period, including at
any time during which one or more of the conditions in Article IV is not met, and shall be due and
payable monthly in arrears on the first Business Day of each month, commencing with the first
such date to occur after the Closing Date and the Commitment Termination Date. The
Commitment Fee shall be calculated monthly in arrears, and if there is any change in the
Commitment Fee Rate during any month, the actual daily amount shall be computed and multiplied
by the Commitment Fee Rate separately for each period during such month that such Commitment
Fee Rate was in effect.
(b)Amendment and Waiver Fees. The Borrower hereby agrees to pay to the Lender, on
the date of each amendment to this Agreement or any other Related Document (other than the
Indenture), or execution of any standard waiver or consent relating thereto, a non-refundable fee
equal to $3,500, plus, in each case, the reasonable fees and expenses of counsel to the Lender in
an amount to be agreed upon by the parties prior to the commencement of such action. Such fees
shall be fully earned when paid and shall not be refundable for any reason whatsoever.
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(c)Other Fees. The Borrower shall pay to the Lender such fees as shall have been
separately agreed upon in writing in the amounts and at the times so specified. Such fees shall be
fully earned when paid and shall not be refundable for any reason whatsoever.
Section 2.08.Computation of Interest and Fees. All computations of fees and interest shall
be made on the basis of a year of three hundred sixty (360) days, and actual days elapsed. Interest
shall accrue on each Revolving Loan for the day on which such Revolving Loan is made, and shall
not accrue on a Revolving Loan, or any portion thereof, for the day on which the Revolving Loan
or such portion is paid, provided that any Revolving Loan that is repaid on the same day on which
it is made shall, subject to Section 2.09, bear interest for one day. Each determination by the
Lender of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent
manifest error.
Section 2.09.Evidence of Debt. The Borrowings made by the Lender shall be evidenced
by one or more accounts or records maintained by the Lender in the ordinary course of business.
The accounts or records maintained by the Lender shall be conclusive absent manifest error of the
amount of the Borrowings made by the Lender to the Borrower and the interest and payments
thereon. Any failure to so record or any error in doing so shall not, however, limit or otherwise
affect the obligation of the Borrower hereunder to pay any amount owing with respect to the
Obligations. The Revolving Loans shall be evidenced by the Note to be issued on the Closing
Date, initially registered in the name of, and payable to, the Lender and otherwise duly completed.
The Lender may attach schedules to the Note and endorse thereon the date, amount and maturity
of the Revolving Loans and payments with respect thereto.
Section 2.10.Payments.
(a)General. All payments to be made by the Borrower shall be made in Dollars and
immediately available funds by debit to a deposit account, as described in this Agreement or as
authorized by the Borrower and without condition or deduction for any counterclaim, defense,
recoupment or setoff. If any payment to be made by the Borrower shall come due on a day other
than a Business Day, payment shall be made on the next following Business Day, and such
extension of time shall be reflected in computing interest or fees, as the case may be. For payments
not made by direct debit, payments will be made to the Lender at the Lending Office not later than
2:00 p.m. on the date specified herein. All payments received by the Lender after 2:00 p.m. shall
be deemed received on the next succeeding Business Day and any applicable interest or fee shall
continue to accrue.
(b)Payments by the Borrower. For any payment under this Agreement made by debit to
a deposit account, the Borrower will maintain sufficient immediately available funds in the deposit
account to cover each debit. If there are insufficient immediately available funds in the deposit
account on the date the Lender enters any such debit authorized by this Agreement, the Lender
may reverse the debit.
Section 2.11.Extension of Commitment Termination Date. At least ninety (90) days and
no more than one hundred twenty (120) days prior to the Commitment Termination Date, the
Borrower may make a request to the Lender, upon written notice, to extend the Commitment
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Termination Date. Not more than thirty (30) days from the date on which the Lender shall have
received any such notice from the Borrower pursuant to the preceding sentence, the Lender shall
notify the Borrower of the initial consent or nonconsent of the Lender to such extension request,
which consent shall be given at the sole and absolute discretion of the Lender. The consent of the
Lender, if granted, shall be conditioned upon the preparation, execution and delivery of
documentation in form and substance satisfactory to the Lender which may include, but not be
limited to, the delivery of an Approving Opinion. Failure of the Lender to respond to a request for
extension of the Commitment Termination Date shall constitute denial of such extension.
Section 2.12. Maximum Interest Rate. If the rate of interest payable hereunder shall exceed
the Maximum Interest Rate for any period for which interest is payable, then, to the extent
permitted by law, (a) interest at the Maximum Interest Rate shall be due and payable with respect
to such interest period, and (b) interest at the rate equal to the difference between (i) the rate of
interest calculated in accordance with the terms hereof and (ii) the Maximum Interest Rate (the
“Excess Interest”), shall be deferred until such date as the rate of interest calculated in accordance
with the terms hereof ceases to exceed the Maximum Interest Rate, at which time the Borrower
shall pay to the Lender, with respect to amounts then payable to the Lender that are required to
accrue interest hereunder, such portion of the deferred Excess Interest as will cause the rate of
interest then paid to the Lender to equal the Maximum Interest Rate, which payments of deferred
Excess Interest shall continue to apply to such unpaid amounts hereunder until the earlier of (i) the
date of payment in full of all Obligations (other than Excess Interest which has not been recaptured)
and on which this Agreement is no longer in effect, and (ii) the date on which all deferred Excess
Interest is fully paid to the Lender. Notwithstanding the foregoing, on the date on which no
Obligation remains unpaid, to the extent permitted by law, the Borrower shall pay to Lender a fee
equal to any accrued and unpaid Excess Interest.
Section 2.13.Taxability. In the event a Determination of Taxability occurs, (i) the
Borrower hereby agrees to pay to the Lender or any Participant on demand therefor any interest,
penalties or charges owed by the Lender or the Participant, as applicable, as a result of interest on
any Revolving Loans becoming includable in the gross income of the Lender or such Participant,
as applicable, together with any and all reasonable attorneys’ fees, court costs, or other
out-of-pocket costs incurred by the Lender or such Participant, as applicable, in connection
therewith and pursuant to Section 3.05 hereof, (ii) any Fixed Rate Revolving Loans affected
thereby shall automatically bear interest at the Taxable Fixed Rate and (iii) any Floating Rate
Revolving Loans affected thereby shall automatically bear interest at the Taxable Floating Rate.
The obligations of the Borrower under this Section 2.13 shall survive the termination of the
Revolving Commitment and this Agreement.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
Section 3.01.Taxes. If any payments to the Lender under this Agreement are made from
outside the United States, the Borrower will not deduct any foreign taxes from any payments it
makes to the Lender. If any such taxes are imposed on any payments made by the Borrower
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(including payments under this paragraph), the Borrower will pay the taxes and will also pay to
the Lender, at the time interest is paid, any additional amount which the Lender specifies as
necessary to preserve the after-tax yield the Lender would have received if such taxes had not been
imposed. The Borrower will confirm that it has paid the taxes by giving the Lender official tax
receipts (or notarized copies) within thirty (30) days after the due date.
Section 3.02.Increased Costs; Reserves on Loans.
(a)Increased Costs Generally. If any Change in Law shall:
(i)impose, modify or deem applicable any reserve, liquidity ratio, special
deposit, compulsory loan, insurance charge or similar requirement against assets of,
deposits with or for the account of, or credit extended or participated in by, the Lender
(except any reserve requirement contemplated by Section 3.02(d) below);
(ii)subject the Lender to any taxes on its loans, loan principal, letters of credit,
commitments, or other obligations, or its deposits, reserves, other liabilities or capital
attributable thereto; or
(iii)impose on the Lender or the London interbank market any other condition,
cost or expense affecting this Agreement or Revolving Loans made by the Lender;
and the result of any of the foregoing shall be to increase the cost to the Lender of making or
maintaining any Revolving Loan (or of maintaining its obligation to make any such Revolving
Loan), or to reduce the amount of any sum received or receivable by the Lender hereunder
(whether of principal, interest or any other amount) then, upon request of the Lender, the Borrower
will pay to the Lender, such additional amount or amounts as will compensate the Lender, for such
additional costs incurred or reduction suffered.
(b)Capital Requirements. If the Lender determines that any Change in Law affecting
the Lender or the Lending Office or the Lender’s holding company, if any, regarding capital or
liquidity requirements has or would have the effect of reducing the rate of return on the Lender’s
capital or on the capital of the Lender’s holding company, if any, as a consequence of this
Agreement, the Revolving Commitment or the Revolving Loans made by the Lender, to a level
below that which the Lender or the Lender’s holding company could have achieved but for such
Change in Law (taking into consideration the Lender’s policies and the policies of the Lender’s
holding company with respect to capital adequacy), then from time to time the Borrower will pay
to the Lender, as the case may be, such additional amount or amounts as will compensate Lender
or the Lender’s holding company for any such reduction suffered.
(c)A certificate of the Lender setting forth the amount or amounts necessary to
compensate the Lender or its holding company, as the case may be, as specified in subsection (a)
or (b) of this Section and delivered to the Borrower shall be conclusive absent manifest error. The
Borrower shall pay the Lender the amount shown as due on any such certificate within thirty (30)
days after receipt thereof.
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(d)Reserves on Revolving Loans. The Borrower shall pay to the Lender, (i) as long as
the Lender shall be required to maintain reserves with respect to liabilities or assets consisting of
or including eurocurrency funds or deposits (currently known as “Eurocurrency liabilities”),
additional interest on the unpaid principal amount of each Revolving Loan equal to the actual costs
of such reserves allocated to such Revolving Loan by the Lender (as determined by the Lender in
good faith, which determination shall be conclusive), and (ii) as long as the Lender shall be
required to comply with any reserve ratio requirement or analogous requirement of any central
banking or financial regulatory authority imposed in respect of the maintenance of the Revolving
Commitment or the funding of the Revolving Loans, such additional costs (expressed as a
percentage per annum and rounded upwards, if necessary, to the nearest five decimal places) equal
to the actual costs allocated to such Revolving Commitment or the Revolving Loans made by the
Lender (as determined by the Lender in good faith, which determination shall be conclusive),
which in each case shall be due and payable on each date on which interest is payable on such
Revolving Loan, provided the Borrower shall have received at least ten (10) days’ prior notice of
such additional interest or costs from the Lender. If the Lender fails to give notice thirty (30) days
prior to the relevant Interest Payment Date, such additional interest shall be due and payable thirty
(30) days from receipt of such notice.
(e)Delay in Requests. Failure or delay on the part of the Lender to demand compensation
pursuant to the foregoing provisions of this Section 3.02 shall not constitute a waiver of the
Lender’s right to demand such compensation.
Section 3.03.Illegality. If the Lender determines that any Law has made it unlawful, or
that any Governmental Authority has asserted that it is unlawful, for the Lender or its Lending
Office to make, maintain or fund any Borrowing whose interest is determined by reference to the
LIBOR Rate (Fixed) or LIBOR Rate (Floating), as applicable, or to determine or charge interest
rates based upon the LIBOR Rate (Fixed) or LIBOR Rate (Floating), as applicable, or any
Governmental Authority has imposed material restrictions on the authority of the Lender to
purchase or sell, or to take deposits of, Dollars in the London interbank market in the case of
LIBOR Rate (Fixed) or LIBOR Rate (Floating), as applicable, then, on notice thereof by the Lender
to the Borrower, any obligation of the Lender to make the Fixed Rate Revolving Loans and/or
Floating Rate Revolving Loans, as applicable, shall be suspended. Upon receipt of such notice,
the Borrower shall, upon demand from the Lender, if Fixed Rate Revolving Loans or Floating Rate
Revolving Loans, as applicable, are deemed unlawful, prepay all such affected Revolving Loans
immediately or shall convert all affected Revolving Loans to SIFMA Loans. Once any Revolving
Loan has been converted into a SIFMA Loan it cannot be converted back to a Floating Rate
Revolving Loan or Fixed Rate Revolving Loan. Upon any such prepayment, the Borrower shall
also pay accrued interest on the amount so prepaid. Any Revolving Loan that has been converted
into a SIFMA Loan may not be converted back to any other Type of Loan, and at no point shall
there be any Fixed Rate Revolving Loans or Floating Revolving Loans outstanding at the same
time as any SIFMA Loans are outstanding. Further, following the LIBOR Termination Date, all
outstanding and subsequent Borrowings shall be in the form of SIFMA Loans.
Section 3.04.Inability to Determine Rates. If the Lender determines that for any reason in
connection with any request for a Revolving Loan that (i) Dollar deposits are not being offered to
banks in the London interbank eurodollar market for the applicable amount of such Revolving
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Loan, in the case of Floating Rate Revolving Loans, or for the applicable amount or Interest Period
in the case of Fixed Rate Revolving Loans, (ii) adequate and reasonable means do not exist for
determining the LIBOR Rate (Fixed) or LIBOR Rate (Floating) for any given day with respect to
a proposed Revolving Loan or in connection with an existing or Revolving Loan, including,
without limitation, because the LIBOR Screen Rate is not available or published on a current basis
and such circumstances are unlikely to be temporary, (iii) the LIBOR Rate (Fixed) or LIBOR Rate
(Floating) for any given day with respect to a proposed Revolving Loan does not adequately and
fairly reflect the cost to the Lender of funding the Revolving Loan or (iv) the administrator of the
LIBOR Screen Rate or a Governmental Authority having or purporting to have jurisdiction over
the Lender has made a public statement identifying a specific date after which the LIBOR Rate
(Fixed), LIBOR Rate (Floating) or the LIBOR Screen Rate shall no longer be made available, or
used for determining the interest rate of loans in Dollars, provided that, if at the time of such
statement, there is no successor administrator that is satisfactory to the Lender, that will continue
to provide the LIBOR Rate (Fixed) or LIBOR Rate (Floating) after such specific date, the Lender
will promptly so notify the Borrower. Thereafter, the obligation of the Lender to make or maintain
Revolving Loans shall be suspended. Upon receipt of such notice, the Borrower may prepay all
Revolving Loans immediately or shall convert all Revolving Loans to SIFMA Loans. Once any
Revolving Loan has been converted into a SIFMA Loan it cannot be converted back to a Floating
Rate Revolving Loan or Fixed Rate Revolving Loan. Any Revolving Loan that has been converted
into a SIFMA Loan may not be converted back to any other Type of Loan, and at no point shall
there be any Fixed Rate Revolving Loans or Floating Revolving Loans outstanding at the same
time as any SIFMA Loans are outstanding. Further, following the LIBOR Termination Date, all
outstanding and subsequent Borrowings shall be in the form of SIFMA Loans.
Section 3.05.Compensation for Losses. Upon demand of the Lender from time to time,
the Borrower shall promptly compensate the Lender for and hold the Lender harmless from any
loss, cost or expense incurred by it as a result of:
(a)any continuation, conversion, payment or prepayment of any Fixed Rate
Revolving Loan, the interest on which is determined by reference to the LIBOR Rate
(Fixed), on a day other than the last day of the Interest Period for such Revolving Loan
(whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise);
(b)any failure by the Borrower (for a reason other than the failure of the Lender
to make a Revolving Loan) to prepay, borrow, continue or convert any Fixed Rate
Revolving Loan on the date or in the amount notified by the Borrower;
including any loss of anticipated profits and any loss or expense arising from the liquidation or
reemployment of funds obtained by it to maintain such Fixed Rate Revolving Loan or from fees
payable to terminate the deposits from which such funds were obtained. The Borrower shall also
pay any customary administrative fees charged by the Lender in connection with the foregoing.
For purposes of calculating amounts payable by the Borrower to the Lender under this
Section 3.05, the Lender shall be deemed to have funded each Fixed Rate Revolving Loan made
by it at the Fixed Rate for such Revolving Loan by a matching deposit or other borrowing in the
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London interbank eurodollar market for a comparable amount and for a comparable period,
whether or not such Fixed Rate Revolving Loan was in fact so funded.
Section 3.06.Survival. All of the Borrower’s obligations under this Article III shall survive
termination of the Revolving Commitment and repayment of all other Obligations hereunder.
ARTICLE IV
CONDITIONS PRECEDENT TO BORROWINGS
Section 4.01.Conditions of Initial Borrowing; Authority; Enforceability. This Agreement
shall become binding on the parties hereto upon the satisfaction of the following conditions
precedent (all Related Documents and other documents to be delivered to the Lender pursuant to
this Section 4.01 shall be subject to prior approval as to form and substance by the Lender, with
delivery by the Lender of its signature page to this Agreement evidencing such Person’s
acknowledgement that the conditions set forth in this Section 4.01 have been satisfied, unless
otherwise waived in writing):
(a)The Lender’s receipt of the following, each of which shall be originals or
telecopies (followed promptly by originals) unless otherwise specified, each properly
executed by an Authorized Representative of the Borrower, each dated the Closing Date
(or, in the case of certificates of governmental officials, a recent date before the Closing
Date) and each in form and substance satisfactory to the Lender:
(i)executed original counterparts of this Agreement, the original Note
and certified copies of all of the other Related Documents;
(ii)the Lender shall have received the following opinions, dated the
Closing Date and addressed to the Lender or on which the Lender is otherwise
expressly authorized to rely;
(A)from counsel to the Borrower, opinions as to the due
authorization, execution, delivery and enforceability of the Related
Documents (other than the Indenture) to which the Borrower is a party, and
such other customary matters as the Lender may reasonably request;
(B)from counsel to the Borrower, opinions to the effect that the
pledge of Revenues constitutes a valid pledge and such other customary
matters as the Lender may reasonable request; and
(C)from Bond Counsel, opinions to the effect that the interest
on any Revolving Loan when issued and/or incurred in accordance with this
Agreement will be excludable from gross income for federal income tax
purposes.
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(iii)a certificate signed by an Authorized Representative of the
Borrower certifying (A) that the conditions specified in Sections 4.02(a) and (b)
have been satisfied, (B) that there has been no event or circumstance since June 30,
2019, that has had or could be reasonably expected to have, either individually or
in the aggregate, a Material Adverse Effect and (C) that the Borrower is in
compliance with the covenants contained in Article VI hereof;
(iv)recent evidence that the unenhanced long-term rating assigned to
Senior Indebtedness is at least [“___”] by Fitch and [“___”] by S&P, respectively;
(v)evidence of due authorization, execution and delivery by the parties
thereto of the Related Documents (other than the Indenture), which Related
Documents shall be in form and substance satisfactory to the Lender and its special
counsel;
(vi)true and correct copies of all Governmental Approvals necessary for
the Borrower to enter into this Agreement and the Note and the transactions
contemplated by this Agreement;
(vii)a certificate of an Authorized Representative of the Borrower
certifying the name, title, office and true signatures of the officers of the Borrower
authorized to sign this Agreement and the Note;
(viii)a copy of the Borrower’s investment policy, guidelines and
permitted investments, each in form and substance satisfactory to the Lender;
[(ix)certified copies of all Contracts, each in form and substance
satisfactory to the Lender;] and
(x)the Lender shall have received a copy of the IRS Form 8038G filed
in connection with all Revolving Loans, in form and substance satisfactory to the
Lender;
(xi)the Lender shall have received the Audited Financial Statements of
the Borrower for the Fiscal Year ended June 30, 2019, accompanied by a copy of
the most recent operating budget of the Borrower; and
(xii)such other documents, certificates and opinions as the Lender or its
special counsel may reasonably request.
For purposes of determining compliance with the conditions specified in this Section 4.01,
the Lender that has signed this Agreement shall be deemed to have consented to, approved or
accepted or to be satisfied with, each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lender.
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Section 4.02.Conditions to All Borrowings. The obligation of the Lender to honor any
Loan Notice is subject to the following conditions precedent:
(a)The representations and warranties of the Borrower contained in Article V
hereof or in the Resolution, or which are contained in any document furnished at any time
under or in connection herewith or therewith, shall be true and correct on and as of the date
of such Borrowing, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they shall be true and correct as of such
earlier date, and except that for purposes of this Section 4.02, the representations and
warranties contained in Section 5.05 shall be deemed to refer to the most recent statements
furnished pursuant to Section 6.04(a).
(b)No Default or Event of Default shall exist, or would result from such
proposed Borrowing or from the application of the proceeds thereof.
(c)The Lender shall have received a Loan Notice in accordance with the
requirements hereof.
(d)After giving effect to any Revolving Loan, the aggregate principal amount
of all Revolving Loans outstanding hereunder shall not exceed the Available Commitment.
(e) Such Borrowing shall not violate any order, judgment or decree of any court
or authority of competent jurisdiction or any provision of law as then in effect.
(f)The Lender shall not have received notice (either verbal or written) from
the Borrower, or Bond Counsel that any opinion delivered pursuant to Section 4.01(a)(ii)
hereof may no longer be relied upon.
(g)The Lender shall have received, in form and substance satisfactory to it,
such other assurances, certificates, documents or consents related to the foregoing as the
Lender reasonably may require.
Each Loan Notice submitted by the Borrower shall be deemed to be a representation and warranty
that the conditions specified in Sections 4.02(a) and (b) have been satisfied on and as of the date
of the applicable Borrowing.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower makes the following representations and warranties to the Lender:
Section 5.01.Existence and Power; Due Authorization. The Borrower (i) is a political
subdivision of the State of California, duly organized and existing under and pursuant to the Water
Code, and (ii) has the full legal right, power and authority to (A) control and regulate its properties
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and to carry on its business as now being and hereafter proposed to be conducted, (B) execute and
deliver this Agreement and the Related Documents, (C) perform all its obligations and liabilities
under this Agreement and the other Related Documents in accordance with their respective terms,
(D) receive proceeds of Revolving Loans, and otherwise incur Debt in accordance with this
Agreement, pay the principal and interest on the Note, all other outstanding bonds and notes of the
Borrower and all of its Obligations hereunder (including, without limitation, the obligation to repay
all Revolving Loans, to pay all interest thereon, and to pay all fees and other amounts payable
hereunder). All Governmental Approvals necessary for the Borrower to enter into this Agreement,
the other Related Documents and to perform the transactions contemplated hereby and thereby and
to conduct its business activities and own its property have been obtained and remain in full force
and effect and are subject to no further administrative or judicial review. No other Governmental
Approval or other action by, and no notice to or filing with, any Governmental Authority is
required for the due execution, delivery and performance by the Borrower of this Agreement or
the due execution, delivery or performance by the Borrower of the Related Documents.
Section 5.02.Valid and Binding Obligations. This Agreement has been duly executed and
delivered by one or more duly authorized officers of the Borrower, and each of this Agreement
and the Notes, when executed and delivered by the Borrower will be, a legal, valid and binding
obligation of the Borrower enforceable in accordance with its terms, except as such enforceability
may be limited by (a) the effect of any applicable bankruptcy, insolvency, reorganization,
moratorium or similar law affecting creditors’ rights generally, and (b) general principles of equity
(regardless of whether such enforceability is considered in a proceeding in equity or at law). Any
Note issued pursuant to this Agreement will be duly issued, executed and delivered in conformity
with the Water Code.
Section 5.03.Noncontravention; Compliance with Law. The execution, delivery and
performance of this Agreement and each of the other Related Documents in accordance with their
respective terms do not and will not (i) contravene the Borrower’s authorizing legislation,
(ii) require any consent or approval of any creditor of the Borrower, (iii) violate any Laws
(including, without limitation, Regulations T, U or X of the FRB, or any successor regulations),
or (iv) conflict with, result in a breach of or constitute a default under any contract to which the
Borrower is a party or by which it or any of its Property may be bound.
Section 5.04.Pending Litigation and Other Proceedings. There is no action, suit or
proceeding pending in any court, any other governmental authority with jurisdiction over the
Borrower or any arbitration in which service of process has been completed against the Borrower
or, to the knowledge of the Borrower, any other action, suit or proceeding pending or threatened
in any court, any other governmental authority with jurisdiction over the Borrower or any
arbitrator, in either case against the Borrower or any of its properties or revenues, or any of the
Related Documents to which it is a party, which if determined adversely to the Borrower would
adversely affect the rights, security, interests or remedies of the Lender hereunder or under any of
the other Related Documents or which is reasonably likely to result in a Material Adverse Effect,
except any action, suit or proceeding which has been brought prior to the Closing Date as to which
the Lender has received an opinion of counsel satisfactory to the Lender, in form and substance
satisfactory to the Lender and the Lender’s legal counsel, to the effect that such action, suit or
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proceeding is without substantial merit. To the knowledge of the Borrower, there is no action
pending or threatened, which questions the validity of the Water Code.
Section 5.05.Financial Statements. The audited financial statements of the Borrower as
of June 30, 2019, and the related consolidated statement of activities and changes in net assets and
the consolidated statement of cash flows for the Fiscal Year then ended, and accompanying notes
thereto, which financial statements, accompanied by the audit report of a nationally recognized
independent public accountants, heretofore furnished to the Lender, which are consistent in all
material respects with the audited financial statements of the Borrower for the Fiscal Year ended
June 30, 2019, fairly present the financial condition of the Borrower in all material respects as of
such dates and the results of its operations for the periods then ended in conformity with GAAP.
Since June 30, 2019, there has been no material adverse change in the financial condition or
operations of the Borrower that could reasonably be expected to result in a Material Adverse
Effect.
Section 5.06.No Defaults. No default by the Borrower has occurred and is continuing in
the payment of the principal of or premium, if any, or interest on any Debt. No bankruptcy,
insolvency or other similar proceedings pertaining to the Borrower or any agency or
instrumentality of the Borrower are pending or presently contemplated. No Default or Event of
Default has occurred and is continuing hereunder. The Borrower is not presently in default
under any material agreement to which it is a party which could reasonably be expected to have
a Material Adverse Effect. The Borrower is not in violation of any material term of the authorizing
legislation applicable to the Borrower or any material term of any bond indenture or agreement to
which it is a party or by which any of its Property is bound which could reasonably be expected to
result in a Material Adverse Effect.
Section 5.07.Correct Information. All information, reports and other papers and data with
respect to the Borrower furnished by the Borrower to the Lender were, at the time the same were
so furnished, correct in all material respects. Any financial, budget and other projections furnished
by the Borrower to the Lender were prepared in good faith on the basis of the assumptions stated
therein, which assumptions were fair and reasonable in light of conditions existing at the time of
delivery of such financial, budget or other projections, and represented, and as of the date of this
representation, represent (subject to the updating or supplementation of any such financial, budget
or other projections by any additional information provided to the Lender in writing, the
representations contained in this Agreement being limited to financial, budget or other projections
as so updated or supplemented), in the judgment of the Borrower, a reasonable, good faith estimate
of the information purported to be set forth, it being understood that uncertainty is inherent in any
projections and that no assurance can be given that the results set forth in the projections will
actually be obtained. No fact is known to the Borrower that materially and adversely affects or in
the future may (as far as it can reasonably foresee) materially and adversely affect the security for
the Revolving Loans, or the ability of the Borrower to repay when due the Obligations, that has
not been set forth in the financial statements and other documents referred to in this Section 5.07
or in such information, reports, papers and data or otherwise disclosed in writing to the Lender.
The documents furnished and statements made by the Borrower in connection with the negotiation,
preparation or execution of this Agreement and the Related Documents do not contain untrue
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statements of material facts or omit to state material facts necessary to make the statements
contained therein, in light of the circumstances under which they were made, not misleading.
Section 5.08.Margin Stock. The Borrower is not engaged in the business of extending
credit for the purpose of purchasing or carrying Margin Stock, and no part of the proceeds of any
of the Revolving Loans will be used to purchase or carry any such Margin Stock or extend credit
to others for the purpose of purchasing or carrying any such Margin Stock.
Section 5.09.Tax-Exempt Status. The Borrower has not taken any action or omitted to take
any action, and has no actual knowledge of any action taken or omitted to be taken by any other
Person, which action, if taken or omitted, would adversely affect the exclusion of interest on any
of the Revolving Loans from gross income for federal income tax purposes.
Section 5.10.Usury. None of the Related Documents provide for any payments that would
violate any applicable law regarding permissible maximum rates of interest.
Section 5.11.Security. The Note is secured by all legally available funds of the Borrower
and constitutes a general obligation of the Borrower payable from all legally available funds of the
Borrower. The Borrower also hereby pledges Revenues to secure the payment and principal of
and interest on the Note, on a subordinate basis to Bonds and Contracts.
Section 5.12.No Immunity. Under existing law, the Borrower is not entitled to raise the
defense of sovereign immunity in connection with any legal proceeding to enforce or collect upon
this Agreement or the other Related Documents including the payment of the principal of and
interest on any of the Revolving Loans or the payment of any other Obligations; provided that the
Borrower is entitled to raise the defense of sovereign immunity in connection with actions based
on torts.
Section 5.13.USA PATRIOT Act. (a) The Lender is subject to the requirements of the
Patriot Act (as hereinafter defined) and hereby notifies the Borrower that pursuant to the
requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Patriot Act”), the Lender required to obtain, verify and record information that
identifies the Borrower, which information includes the name and address of the Borrower and
other information that will allow the Lender to identify the Borrower in accordance with the Patriot
Act.
(b)The Borrower shall (i) ensure that neither it nor any of its officers and
directors is or will be listed on the Specially Designated Nationals and Blocked Person List
or other similar lists maintained by the Office of Foreign Assets Control (“OFAC”) or the
Department of the Treasury or included in any Executive Order that prohibits or limits the
Lender from providing any funding or extending any credit to the Borrower or from
otherwise conducting business with the Borrower and (ii) ensure that the proceeds of any
advance or extension of credit hereunder will not be used to violate any of the foreign asset
control regulations of OFAC or any enabling statute or Executive Order relating thereto.
The Borrower shall provide documentary and other evidence of its identity as may be
requested by the Lender at any time to enable the Lender to verify the Borrower’s identity
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or to comply with any applicable law or regulation, including, without limitation, Section
326 of the Patriot Act.
Section 5.14.Pledge of Legally Available Funds. In consideration of the issuance of the
making of Revolving Loans by the Lender and other good and valuable consideration, the receipt
of which is acknowledged, and in order to secure the Obligations, the Borrower does hereby pledge
to the Lender and its successors and assigns, and grant a security interest in all of the Borrower’s
legally available funds.
Section 5.15. OFAC. Neither the Borrower, nor, to the knowledge of the Borrower, any
Related Party, (a) is currently the subject of any Sanctions, (b) is located, organized or residing in
any Designated Jurisdiction, or (c) is or has been (within the previous five (5) years) engaged in
any transaction with any Person who is now or was then the subject of Sanctions or who is located,
organized or residing in any Designated Jurisdiction. To the best knowledge of the Borrower, after
due inquiry, the proceeds from the Revolving Loans or the transaction contemplated by this
Agreement have not been used, directly or indirectly, to lend, contribute, provide or otherwise be
made available to fund any activity or business in any Designated Jurisdiction or to fund any
activity or business of any Person located, organized or residing in any Designated Jurisdiction or
who is the subject of any Sanctions, or in any other manner that will result in any violation by any
Person (including the Lender) of Sanctions.
Section 5.16.Title to Assets. The Borrower has good and marketable title to its assets
except where the failure to have good and marketable title to any of its assets would not have a
Material Adverse Effect. No assets of the Borrower are subject to any Lien other than Liens
permitted by the Resolution.
Section 5.17.Insurance. The Borrower currently maintains a system of self-insurance or
insurance coverage with insurance companies believed by the Borrower to be capable of
performing their obligations under the respective insurance policies issued by such insurance
companies to the Borrower (as determined in its reasonable discretion) and in full compliance with
Section 6.10 of the IPA and Section 6.12 hereof.
Section 5.18. Environmental Matters. Except as disclosed to the Lender in writing prior to
the Closing Date, the operations of the Borrower are in material compliance with all of the
requirements of applicable Environmental Laws and are not the subject of any governmental
investigation evaluating whether any remedial action is needed to respond to a release of any toxic
or hazardous waste or substance into the environment, where a failure to comply with any such
requirement or the need for any such remedial action could reasonably be expected to result in a
Material Adverse Effect.
Section 5.19.Taxes. The Borrower has filed or caused to be filed, if any, all material tax
returns required by law to be filed and has paid or caused to be paid all material taxes, assessments
and other governmental charges levied upon or in respect of any of its properties, assets or
franchises, other than taxes the validity or amount of which are being contested in good faith by
the Borrower by appropriate proceedings and for which the Borrower shall have set aside on its
books adequate reserves in accordance with GAAP.
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Section 5.20. No Public Vote or Referendum; Pending Legislation and Decisions. To the
best knowledge of the Borrower, there is no public vote or referendum pending, proposed or
concluded, the results of which could in any way adversely affect the transactions contemplated
by the Loan Documents, or the validity or enforceability of the Loan Documents. There is no
amendment, or to the knowledge of the Borrower, proposed amendment to the Constitution of the
State or any State law or any administrative interpretation of the Constitution of the State or any
State law, or any legislation that has passed either house of the legislature of the State, or any
judicial decision interpreting any of the foregoing, the effect of which could reasonably be
expected to result in a Material Adverse Effect.
Section 5.21.Incorporation by Reference. The representations and warranties of the
Borrower contained in the other Related Documents to which the Borrower is a party, together
with the related definitions of terms contained therein, are hereby incorporated by reference in this
Agreement as if each and every such representation and warranty and definition were set forth
herein in its entirety, and the representations and warranties made by the Borrower in such Sections
are hereby made for the benefit of the Lender. No amendment to or waiver of such representations
and warranties or definitions made pursuant to the relevant Related Document or incorporated by
reference shall be effective to amend such representations and warranties and definitions as
incorporated by reference herein without the prior written consent of the Lender.
Section 5.22.Solvency. The Borrower is solvent and able to pay its debts as they become
due.
Section 5.23.No Existing Right to Accelerate. No Person, including, without limitation,
any credit facility provider or liquidity provider, either of which provides credit enhancement or
liquidity support to any Subordinate Debt of the Borrower, or any holder of Subordinate Debt of
the Borrower, has a right under any resolution, indenture, or supplemental indenture relating to
any such Subordinate Debt of the Borrower or under any other document or agreement relating to
any Subordinate Debt of the Borrower, to cause an acceleration of such Subordinate Debt, or to
otherwise declare the principal of and interest on any such Subordinate Debt to be immediately
due and payable, prior to its maturity.
Section 5.24.Swap Contracts. The Borrower has not entered into any Swap Contract
relating to Debt (a) wherein any termination payment thereunder is senior to or on a parity with
the payment of any Revolving Loans or the other Obligations or (b) which requires the Borrower
to post cash collateral to secure its obligations thereunder.
Section 5.25.Official Signatures. The Authorized Representative, on behalf of the
Borrower, has full power and authority to execute, deliver and perform under each of the Related
Documents. Any agreement, certificate or request signed by or on behalf of any Authorized
Representative and delivered to the Lender shall be deemed a representation and warranty by the
Borrower to the Lender as to the truth, accuracy and completeness of the statements made by the
Borrower therein.
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Section 5.26.Water System. The Borrower has maintained the Water System in good
working order and repair, and there have been no changes to and no event has occurred which has
had, or may result in, a Material Adverse Effect.
Section 5.27.Investment Company. The Borrower is not an “investment company” or a
company “controlled” by an “investment company,” as such terms are defined in the Investment
Company Act of 1940, as amended.
ARTICLE VI
COVENANTS
The Borrower covenants and agrees, until the full and final payment and satisfaction of all
of the Obligations, unless the Lender shall otherwise consent in writing, that:
Section 6.01.Existence, Etc. The Borrower (a) shall maintain its existence as a county
water district duly and validly existing under the laws of the State and (b) shall not liquidate or
dissolve, or sell or lease or otherwise transfer or dispose of all or any substantial part of its property,
assets or business, or combine, merge or consolidate with or into any other entity.
Section 6.02.Payment of Obligations. The Borrower shall pay (a) all Debt of the Borrower
in accordance with the terms thereof and (b) all taxes assessments (general or special) and
governmental charges of any kind whatsoever, as and when the same respectively come due, that
may be at any time lawfully assessed or levied against or with respect to the Borrower, in each
case, unless the failure to do so could not reasonably be expected to have a Material Adverse
Effect.
Section 6.03.Compliance with Laws. The Borrower shall comply with all Laws applicable
to it and its Property, except where non-compliance could not reasonably be expected to result in
a Material Adverse Effect.
Section 6.04.Reports. The Borrower shall furnish to the Lender in form and detail
satisfactory to the Lender:
(a)Annual Report. As soon as available, and in any event within two hundred
seventy (270) days after the end of the Fiscal Year, the annual audited financial statements
of the Borrower together with (1) the opinion of the Borrower’s independent accountants
and (2) a Compliance Certificate in the form of Exhibit C hereto signed by an Authorized
Representative (x) stating that no Event of Default or Default has occurred, or if such Event
of Default or Default has occurred, specifying the nature of such Event of Default or
Default, the period of its existence, the nature and status thereof and any remedial steps
taken or proposed to correct such Event of Default or Default and (y) demonstrating
compliance with the [financial covenants set forth in Section 6.18 and 6.23 hereof]. The
Borrower will be deemed to have complied with the requirement to provide its annual
audited financial statements together with the opinion of the Borrower’s independent
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accountants to the extent such information has been duly posted within such time period
on the Borrower’s website ([_______________]) or on EMMA.
(b)Notice of Default or Event of Default. (i) Promptly upon obtaining
knowledge of any Default or Event of Default, or notice thereof, and in any event within
five (5) days thereafter, a certificate signed by an Authorized Representative specifying in
reasonable detail the nature and period of existence thereof and what action the Borrower
has taken or proposes to take with respect thereto; (ii) promptly following a written request
of the Lender, a certificate of an Authorized Representative as to the existence or absence,
as the case may be, of a Default or an Event of Default under this Agreement; and (iii)
promptly upon obtaining knowledge of any “default” or “event of default” as defined under
any material agreement to which the Borrower is a party, notice specifying in reasonable
detail the nature and period of existence thereof and what action the Borrower has taken or
proposes to take with respect thereto.
(c)Litigation. As promptly as practicable, written notice to the Lender of all
actions, suits or proceedings pending or threatened against the Borrower in court or before
any arbitrator of any kind or before any governmental authority which could reasonably be
expected to result in a Material Adverse Effect.
(d)Budget. As soon as available, and in any event within thirty (30) days
following the commencement of each Fiscal Year, the operating budget of the Borrower
for the new Fiscal Year.
(e)Other Information. Such other information regarding the business affairs,
financial condition and/or operations of the Borrower as the Lender may from time to time
reasonably request.
Section 6.05.Covenant to Budget; Payment of the Revolving Loan. The Borrower
covenants and agrees to include in its annual budget, by amendment, if necessary, amounts
sufficient to pay the principal of and interest on the Revolving Loans when due. Such covenant
and agreement on the part of the Borrower to budget such amounts shall be cumulative to the
extent not paid, and shall continue until legally available funds in amounts sufficient to make all
such required payments shall have been budgeted and actually paid.
Section 6.06.Use of Proceeds. The Borrower will use the proceeds of the Revolving Loans
to pay for capital projects of the Water System. For the avoidance of doubt, the Borrower will not
use any portion of the proceeds of the Revolving Loans for the purpose of carrying or purchasing
any Margin Stock.
Section 6.07.Immunity from Jurisdiction. To the fullest extent permitted by law, the
Borrower will not assert any immunity it may have as a public entity under the laws of the State
from lawsuits with respect to this Agreement or any other Related Document. To the extent the
Borrower hereafter may acquire under any applicable law any rights to immunity from legal
proceedings on a ground of sovereignty, the Borrower hereby waives and agrees not to claim, to
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the extent permitted by law, such rights to immunity for itself in respect of its obligations arising
under or related to this Agreement or any other Related Document.
Section 6.08.Maintenance of Tax-Exempt Status of Interest. The Borrower shall not take
any action or omit to take any action which, if taken or omitted, would adversely affect the
tax-exempt status of the interest on the Revolving Loans.
Section 6.09.Amendments to Related Documents. The Borrower will not amend or
modify, or permit to be amended or modified any of the Related Documents (other than the
Indenture) without the prior written consent of the Lender.
Section 6.10.Federal Reserve Board Regulations. The Borrower shall not use any portion
of the Revolving Loans or the Note which evidences the Revolving Loans for the purpose of
carrying or purchasing any Margin Stock and shall not incur any Debt which is to be reduced,
retired or purchased by the Borrower out of such proceeds.
Section 6.11.Maintenance of Properties. The Borrower shall, in all material respects,
maintain, preserve and keep its Property in good repair, working order and condition (ordinary
wear and tear excepted), except to the extent that the failure to do so could reasonably be expected
to result in a Material Adverse Effect.
Section 6.12.Insurance. The Borrower shall maintain insurance with reputable insurance
companies or associations believed by the Borrower at the time of purchase of such insurance to
be financially sound and in such amounts and covering such risks as are usually carried by
organizations engaged in the same or a similar business and similarly situated, which insurance
may provide for customary deductibles from coverage. The Borrower shall upon request of the
Lender furnish a certificate setting forth in summary form the nature and extent of the insurance
maintained pursuant to this Section 6.12.
Section 6.13.Maintenance of Books and Records. The Borrower will keep proper books
of record and account in which full, true and correct entries in accordance with GAAP. All
financial data (including financial ratios and other financial calculations) required to be submitted
pursuant to this Agreement shall be prepared in conformity with GAAP applied on a consistent
basis, as in effect from time to time, applied in a manner consistent with that used in preparing the
financial statements, except as otherwise specifically prescribed herein. Except as provided in the
immediately preceding sentence, in preparing any financial data or statements contemplated or
referred to in this Agreement, the Borrower shall not vary or modify the accounting methods or
principles from the accounting standards employed in the preparation of its audited financial
statements described in Section 5.05 hereof.
Section 6.14. Access to Books and Records. The Borrower will permit any Person
designated by the Lender (at the expense of the Lender, unless and until a Default or Event of
Default has occurred, at which time such expenses shall be borne by the Borrower) to visit any of
the offices of the Borrower to examine the books and financial records (except books and financial
records the examination of which by the Lender is prohibited by law or by attorney or client
privilege), including minutes of meetings of any relevant governmental committees or agencies,
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and make copies thereof or extracts therefrom, and to discuss the affairs, finances and accounts of
the Borrower with their principal officers, employees and independent public accountants, all at
such reasonable times and as often as the Lender may reasonably request.
Section 6.15.Other Agreements. (a) In the event that the Borrower shall, directly or
indirectly, enter into or otherwise consent to any Bank Agreement which such Bank Agreement
provides such Person with different or more restrictive covenants, different or additional events of
default and/or greater rights and remedies than are provided to the Lender in this Agreement, the
Borrower shall provide the Lender with a copy of each such Bank Agreement and such different
or more restrictive covenants, different or additional events of default and/or greater rights and
remedies shall automatically be deemed to be incorporated into this Agreement and the Lender
shall have the benefits of such different or more restrictive covenants, different or additional events
of default and/or greater rights and remedies as if specifically set forth herein until the expiration
or other termination of the Bank Agreement containing such more restrictive covenants, different
or additional events of default and/or greater rights and remedies. The Borrower shall promptly
enter into an amendment to this Agreement to include different or more restrictive covenants,
different or additional events of default and/or greater rights and remedies; provided that the
Lender shall have and maintain the benefit of such different or more restrictive covenants, different
or additional events of default and/or greater rights and remedies even if the Borrower fails to
provide such amendment.
(b)No Acceleration of Other Obligations. The Borrower will not, without the prior
written consent of the Lender, enter into, or otherwise consent to, any indenture, resolution,
ordinance, credit agreement, standby bond purchase agreement, liquidity agreement, direct bond
purchase agreement or other similar agreement or instrument (or any amendment, supplement or
modification thereto), which agreement or instrument includes, or otherwise grants to any Person
as a remedy upon the occurrence of an event of default, the right to accelerate the payment of the
principal of or interest on any Subordinate Debt of the Borrower or to otherwise declare the
principal of or interest on any such Subordinate Debt to be immediately due and payable prior to
its maturity or cause such Subordinate Debt to be paid pursuant to a mandatory tender, mandatory
redemption or otherwise on any date other than a regularly scheduled payment date.
Section 6.16.Liens. The Borrower shall not, directly or indirectly, incur, create or permit
to exist any Lien on all or any part of the security provided by the Resolution that is senior to or
on a parity with the Lien securing the Revolving Loans and the other Obligations, other than
(a) Liens created under and in accordance with the terms of the Resolution; (b) the Liens created
for the benefit of the Revolving Loans and the other Obligations and other Secured Debt that has
heretofore or may hereafter be issued; and (c) Liens which could not reasonably be expected to
materially adversely affect the interests, rights, remedies or security of the Lender under this
Agreement and the other Related Documents.
Section 6.17. Investment Policy. The Borrower shall comply with its investment policy in
effect from time to time.
Section 6.18. Limitation on Additional Debt. The Borrower may at any time enter into
any additional Subordinate Debt in accordance herewith provided that:
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(a)The Net Revenues remaining after payment of Debt Service on Contracts and
Bonds for any consecutive twelve calendar month period during the eighteen calendar month
period preceding the date of adoption by the Board of Directors of the Borrower of the resolution
authorizing the issuance of such Subordinate Debt, as evidenced by a special report prepared by
an Independent Certified Public Accountant or Independent Financial Consultant (as such terms
are defined in the IPA) on file with the Borrower, shall have produced a sum equal to at least one
hundred ten percent (110%) of the debt service on all Subordinate Debt for such twelve month
period; and
(b)The Net Revenues remaining after payment of Debt Service on Bonds and
Contracts for any consecutive twelve calendar month period during the eighteen calendar month
period preceding the date of adoption by the Board of Directors of the Borrower of the resolution
authorizing the issuance of such Subordinate Debt, including adjustments to give effect as of the
first day of such twelve month period to increases or decreases in rates and charges for the Water
Service approved and in effect as of the date of calculation, as evidenced by a special report
prepared by an Independent Certified Public Accountant or Independent Financial Consultant on
file with the Borrower, shall have produced a sum equal to at least one hundred ten percent (110%)
of the debt service on all Subordinate Debt for such twelve month period, plus the debt service
which would have accrued on any Subordinate Debt issued since the end of such twelve month
period, assuming that such Subordinate Debt had been issued at the beginning of such twelve
month period, plus the debt service on all proposed additional Subordinate Debt which would have
accrued had such proposed additional Subordinate Debt been issued at the beginning of such
twelve month period.
Notwithstanding the foregoing, Subordinate Debt issued to prepay or redeem outstanding
Subordinate Debt may be delivered without satisfying the conditions set forth above if debt service
on Subordinate Debt in each Fiscal Year after the Fiscal Year in which such Subordinate Debt is
issued is not greater than debt service would have been in each such Fiscal Year prior to the
issuance of such Subordinate Debt.
For purposes of the foregoing, debt service on Subordinate Debt (other than the Revolving Debt
Assumption) for any period during which such debt service has not actually been paid shall be
calculated in accordance with the definition of “Debt Service” in the IPA. For purposes of the
foregoing, debt service on the Note shall be calculated in accordance with the Revolving Debt
Assumption for any period during which such debt service has not actually been paid.
Section 6.19. Fundamental Changes. The Borrower shall not merge, dissolve, liquidate,
consolidate with or into another Person, or dispose of (whether in one transaction or in a series of
transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to or
in favor of any Person without prior Lender consent.
Section 6.20.Swap Contracts. Without the prior written consent of the Lender, the
Borrower will not enter into any Swap Contract relating to Debt (a) wherein any termination
payments thereunder are senior to or on parity with the payment of the Revolving Loans or the
other Obligations or (b) which requires the Borrower to post cash collateral to secure its obligations
thereunder.
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Section 6.21.Underlying Rating. At any time that the Yorba Linda Water District
Financing Authority Revenue Bonds, Series 2017A (the “Revenue Bonds”) are outstanding and
not fully defeased, the Borrower shall maintain a long-term unenhanced rating on such Revenue
Bonds from at least one Rating Agency. The Borrower covenants and agrees that it shall not at
any time withdraw any long-term unenhanced rating on such Revenue Bonds from any of Fitch,
Moody’s or S&P if the effect of such withdrawal would be to cure a Default or an Event of Default
under this Agreement.
Section 6.22.Related Documents. The Borrower will not amend or modify, or permit to
be amended or modified in any manner whatsoever any Related Document in a manner which
would materially adversely affect the Borrower’s ability to repay Debt that is secured by Revenues
or which adversely affects the security for the Obligations or the other Obligations or the
Borrower’s ability to repay when due the Obligations or the interests, security, rights or remedies
of the Lender without the prior written consent of the Lender; provided, however, that the consent
of the Lender is not required with respect to amendments or supplements to the Resolution and the
Indenture entered into solely to support the issuance of additional Debt payable from or secured
by Revenues and issued strictly in accordance with the terms of this Agreement and the other
Related Documents.
Section 6.23. Rate Covenants. (a) The Borrower will fix and prescribe, at the
commencement of each such Fiscal Year, rates and charges for the Water Service which are
reasonably expected, at the commencement of such Fiscal Year, to be at least sufficient to yield
during such Fiscal Year Net Revenues remaining after payment of Debt Service on Contracts and
Bonds equal to one hundred ten percent (110%) of debt service on all Subordinate Debt for such
Fiscal Year.
(b)The Borrower may make, or permit to be made, adjustments from time to
time in such rates, fees and charges and may make, or permit to be made, such classification thereof
as it deems necessary, but may not reduce or permit to be reduced such rates, fees and charges
below those then in effect, unless the Revenues from such reduced rates, fees and charges will at
all times be sufficient to meet the foregoing requirements.
For purposes of the foregoing, debt service on Subordinate Debt (other than the Revolving Debt
Assumption) for any period during which such debt service has not actually been paid shall be
calculated in accordance with the definition of “Debt Service” in the IPA. For purposes of the
foregoing, debt service on the Revolving Debt Assumption for any period during which such debt
service has not actually been paid shall be calculated in accordance with such definition.
Section 6.24.Environmental Laws. The Borrower shall comply with all applicable
Environmental Laws and cure any defect (or cause other Persons to cure any such defect) to the
extent necessary to bring such real property owned, leased, occupied or operated by the Borrower
back into compliance with Environmental Laws and to comply with any cleanup orders issued by
a Governmental Authority having jurisdiction thereover to the extent that any failure to do so,
individually or in the aggregate, could reasonably be expected to result in a Material Adverse
Effect. The Borrower shall at all times use commercially reasonable efforts to render or maintain
any real property owned, leased, occupied or operated by the Borrower safe and fit for its intended
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uses. The Borrower shall also immediately notify the Lender of any actual or alleged material
failure to so comply with or perform, or any material breach, violation or default under any
Environmental Law.
Section 6.25.Collection of Rates and Charges. The Borrower will have in effect at all
times by-laws, rules and regulations requiring each customer to pay the rates and charges
applicable to the Water Service to such land and providing for the billing thereof and for a due
date and a delinquency date for each bill. In each case where such bill remains unpaid in whole or
in part after it becomes delinquent, the Borrower may discontinue such service from the Water
System, and such service shall not thereafter be recommenced except in accordance with Borrower
by-laws or rules, regulations and State Law governing such situations of delinquency.
Section 6.26. Use of Lender’s Name. The Borrower shall not include any information
concerning the Lender in any offering document that is not supplied in writing, or otherwise
approved, by the Lender expressly for inclusion therein.
Section 6.27.Disclosure to Participants. The Borrower shall permit the Lender to disclose
the financial information received by it pursuant to this Agreement to each Participant of the
Lender, subject to confidentiality restrictions and use restrictions customary for financial
institutions.
Section 6.28. Compliance With Documents. The Borrower agrees that it will perform and
comply with each and every covenant and agreement required to be performed or observed by it
in the Resolution and each of the other Related Documents to which it is a party, which provisions,
as well as related defined terms contained therein, are hereby incorporated by reference herein
with the same effect as if each and every such provision were set forth herein in its entirety all of
which shall be deemed to be made for the benefit of the Lender and shall be enforceable against
the Borrower. To the extent that any such incorporated provision permits the Borrower or any
other party to waive compliance with such provision or requires that a document, opinion or other
instrument or any event or condition be acceptable or satisfactory to the Borrower or any other
party, for purposes of this Agreement, such provision shall be complied with unless it is
specifically waived by the Lender in writing and such document, opinion or other instrument and
such event or condition shall be acceptable or satisfactory only if it is acceptable or satisfactory to
the Lender which shall only be evidenced by the written approval by the Lender of the same.
Except as permitted by Section 6.22 hereof, no termination or amendment to such covenants and
agreements or defined terms or release of the Borrower with respect thereto made pursuant to the
Resolution or any of the other Related Documents to which the Borrower is a party, shall be
effective to terminate or amend such covenants and agreements and defined terms or release the
Borrower with respect thereto in each case as incorporated by reference herein without the prior
written consent of the Lender. Notwithstanding any termination or expiration of the Resolution or
any such other Related Document to which the Borrower is a party, the Borrower shall continue
to observe the covenants therein contained for the benefit of the Lender until the termination of
this Agreement and the payment in full of the Revolving Loans and the other Obligations. All
such incorporated covenants shall be in addition to the express covenants contained herein and
shall not be limited by the express covenants contained herein nor shall such incorporated
covenants be a limitation on the express covenants contained herein.
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Section 6.29.Maintenance of Water System. The Borrower shall at all times operate or
cause to be operated the Water System properly and in an efficient and economical manner, and
shall maintain, preserve, reconstruct and keep the same or cause the same to be so maintained,
preserved, reconstructed and kept, with the appurtenances and every part and parcel thereof, in
good repair, working order and condition, and shall from time to time make, or cause to be made,
all necessary and proper repairs, replacements and renewals so that at all times the operation of
the Water System may be properly and advantageously conducted. The Borrower shall pay (a) all
indebtedness and obligations of the Borrower in accordance with the terms thereof and (b) all
assessments or other governmental charges as the same respectively become due, all taxes,
assessments (general or special) and governmental charges of any kind whatsoever that may be at
any time lawfully assessed or levied against or with respect to the Water System or Net Revenues
or any interest thereon and promptly discharge or cause to be discharged all liens, encumbrances
and charges on such property and assets.
Section 6.30.Eminent Domain. If all or any part of the Water System shall be taken by
eminent domain proceedings, the Net Proceeds thereof shall be applied as follows: (a) if (i) the
Borrower certifies (x) the estimated loss of Net Revenues, if any suffered or to be suffered by the
Borrower by reason of such eminent domain proceedings, (y) a general description of the
additions, betterments, extensions or improvements to the Water System proposed to be acquired
by the Borrower from any Net Proceeds, and (z) an estimate of the additional annual Net Revenues
to be derived from such additions, betterments, extensions or improvements, and (ii) on the basis
of such certificate, determines that the estimated additional annual Net Revenues will sufficiently
offset the estimated loss of annual Net Revenues resulting from such eminent domain proceedings
so that the ability of the Borrower to meet its obligations hereunder will not be substantially
impaired (which determination shall be final and conclusive); then the Borrower shall promptly
proceed with the acquisition of such additions, betterments, extensions or improvements
substantially in accordance with such certification and such Net Proceeds shall be applied for the
payment of the costs of such acquisition, and any balance of such Net Proceeds not required by
the Borrower for such purpose shall be applied to pay the Senior Indebtedness on a pro rata basis
in the manner provided in the [Contracts] and then to pay the Obligations and the other
Subordinate Debt on a pro rata basis in the manner provided herein and in the Subordinate Debt
Issuing Documents. If the foregoing conditions are not met, then such Net Proceeds shall be
applied to pay the Senior Indebtedness on a pro rata basis in the manner provided in the
[Contracts] and then to pay the Obligations and the other Subordinate Debt on a pro rata basis in
the manner provided herein and in the Subordinate Debt Issuing Documents.
6.31.Competing Utility. The Borrower shall not acquire, construct, operate or
maintain, and shall not, within the scope of its lawful powers, permit any other private or public
corporation, political subdivision, authority or agency, or any person whomsoever to acquire,
construct, operate or maintain any competing system or utility in an area presently served by the
Water System.
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ARTICLE VII
DEFAULTS
Section 7.01.Events of Default. The occurrence of any of the following events (whatever
the reason for such event and whether voluntary, involuntary, or effected by operation of Law)
shall be an “Event of Default” hereunder, unless waived in writing by Lender:
(a)the Borrower shall fail to pay the principal of or interest on the Revolving
Loans when due;
(b)the Borrower shall fail to pay any Obligation (other than the obligation to
pay the principal of or interest on the Revolving Loans) and such failure shall continue for
three (3) Business Days;
(c)any representation or warranty made by or on behalf of the Borrower in this
Agreement or in any other Related Document or in any certificate or statement delivered
hereunder or thereunder shall be incorrect or untrue in any material respect when made or
deemed to have been made or delivered;
(d)the Borrower shall default in the due performance or observance of any of
the covenants set forth in Sections 6.01, 6.04, 6.05, 6.06, 6.07, 6.08, 6.12, 6.14, 6.15, 6.16,
6.17, 6.18, 6.19, 6.20, 6.21, 6.22, 6.23, 6.24, 6.25, 6.26, 6.28, 6.29, 6.30 and 6.31 hereof;
(e)the Borrower shall default in the due performance or observance of any
other term, covenant or agreement contained in this Agreement or any other Related
Document and such default shall remain unremedied for a period of thirty (30) days after
the occurrence thereof;
(f)the Borrower shall (i) have entered involuntarily against it an order for relief
under the United States Bankruptcy Code, as amended, (ii) become insolvent or shall not
pay, or be unable to pay, or admit in writing its inability to pay, its debts generally as they
become due, (iii) make an assignment for the benefit of creditors, (iv) apply for, seek,
consent to, or acquiesce in, the appointment of a receiver, custodian, trustee, examiner,
liquidator or similar official for it or any substantial part of its Property, (v) institute any
proceeding seeking to have entered against it an order for relief under the United States
Bankruptcy Code, as amended, to adjudicate it insolvent, or seeking dissolution, winding
up, liquidation, reorganization, arrangement, marshalling of assets, adjustment or
composition of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors or fail to file an answer or other pleading denying the
material allegations of any such proceeding filed against it, (vi) take any corporate action
in furtherance of any matter described in parts (i) through (v) above, or (vii) fail to contest
in good faith any appointment or proceeding described in Section 7.01(g) of this
Agreement;
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(g)a custodian, receiver, trustee, examiner, liquidator or similar official shall
be appointed for the Borrower or any substantial part of its Property, or a proceeding
described in Section 7.01(f)(v) shall be instituted against the Borrower and such proceeding
continues undischarged or any such proceeding continues undismissed or unstayed for a
period of thirty (30) or more days;
(h)a debt moratorium is imposed on the repayment when due and payable of
the principal of or interest on any Debt of the Borrower by the Borrower or any
Governmental Authority with appropriate jurisdiction;
(i)any material provision of this Agreement or any other Related Document
shall at any time for any reason cease to be valid and binding on the Borrower, as a result
of any legislative or administrative action by a Governmental Authority with competent
jurisdiction or shall be declared in a final non-appealable judgment by any court with
competent jurisdiction to be null and void, invalid, or unenforceable, or the validity or
enforceability thereof shall be publicly contested by the Borrower;
(j)dissolution or termination of the existence of the Borrower;
(k)the Borrower shall (i) default on the payment of the principal of or interest
on any Secured Debt, beyond the period of grace, if any, provided in the instrument or
agreement under which such Secured Debt was created or incurred; or (ii) default in the
observance or performance of any agreement or condition relating to any Secured Debt or
contained in any instrument or agreement evidencing, securing or relating thereto, or any
other default, event of default or similar event shall occur or condition exist, the effect of
which default, event of default or similar event or condition is to permit (determined
without regard to whether any notice is required) any such Secured Debt to become
immediately due and payable in full as the result of the acceleration, mandatory redemption
or mandatory tender of such Secured Debt;
(l)any final, unappealable judgment or judgments, writ or writs or warrant or
warrants of attachment, or any similar process or processes, which are not covered in full
by insurance, with written acknowledgement of such coverage having been provided by
the provider of such insurance coverage to the Lender, in an aggregate amount not less than
$5,000,000 shall be entered or filed against the Borrower or against any of its Property and
remain unpaid, unvacated, unbonded or unstayed for a period of sixty (60) days;
(m)any “event of default” under any Related Document (as defined respectively
therein) shall have occurred; or
(n)the rating (without regard to credit enhancement) assigned to any of the
long-term general obligation Debt of the Borrower by Moody’s, Fitch or S&P shall be
withdrawn, suspended or fall below “Baa2” by Moody’s, “BBB” by Fitch or “BBB” by
S&P (in each case to the extent such Rating Agency then maintains a rating on the
long-term general obligation Debt of the Borrower), unless such Rating Agency states, in
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the case of a withdrawal or suspension, that such withdrawal or suspension is for reasons
that are not credit-related.
Section 7.02.Consequences of an Event of Default. If an Event of Default specified in
Section 7.01 hereof shall occur and be continuing, the Lender may take one or more of the
following actions at any time and from time to time (regardless of whether the actions are taken at
the same or different times):
(a)by written notice to the Borrower, declare the termination of the Revolving
Commitment to make advances under the Revolving Loans hereunder;
(b)either personally or by attorney or agent without bringing any action or
proceeding, or by a receiver to be appointed by a court in any appropriate action or
proceeding, take whatever action at law or in equity may appear necessary or desirable to
collect the amounts due and payable under the Related Documents (other than the
Indenture) or to enforce performance or observance of any obligation, agreement or
covenant of the Borrower under the Related Documents (other than the Indenture), whether
for specific performance of any agreement or covenant of the Borrower or in aid of the
execution of any power granted to the Lender in the Related Documents (other than the
Indenture);
(c)cure any Default, Event of Default or event of nonperformance hereunder
or under any Related Document; provided, however, that the Lender shall have no
obligation to effect such a cure; and
(d)exercise, or cause to be exercised, any and all remedies as it may have under
the Related Documents and as otherwise available at law and at equity.
provided, however, that upon the occurrence of an actual or deemed entry of an order for relief
with respect to the Borrower under the Bankruptcy Code of the United States or in the event any
Senior Indebtedness is declared immediately due and payable (whether upon the acceleration,
mandatory redemption, mandatory tender or otherwise), the obligation of the Lender to make
Revolving Loans shall automatically terminate, the unpaid principal amount of all outstanding
Revolving Loans and all interest and other amounts as aforesaid shall automatically become due
and payable, in each case without further act of the Lender.
Section 7.03.Remedies Cumulative; Solely for the Benefit of Lender. To the extent
permitted by, and subject to the mandatory requirements of, applicable Law, each and every right,
power and remedy herein specifically given to the Lender in the Related Documents shall be
cumulative, concurrent and nonexclusive and shall be in addition to every other right, power and
remedy herein specifically given or now or hereafter existing at law, in equity or by statute, and
each and every right, power and remedy (whether specifically herein given or otherwise existing)
may be exercised from time to time and as often and in such order as may be deemed expedient
by the Lender, and the exercise or the beginning of the exercise of any power or remedy shall not
be construed to be a waiver of the right to exercise at the same time or thereafter any other right,
power or remedy.
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The rights and remedies of the Lender specified herein are for the sole and exclusive
benefit, use and protection of the Lender, and the Lender is entitled, but shall have no duty or
obligation to the Borrower or any other Person or otherwise, to exercise or to refrain from
exercising any right or remedy reserved to the Lender hereunder or under any of the other Related
Documents.
Section 7.04.Waivers or Omissions. No delay or omission by the Lender in the exercise
of any right, remedy or power or in the pursuit of any remedy shall impair any such right remedy
or power or be construed to be a waiver of any default on the part of the Lender or to be
acquiescence therein. No express or implied waiver by the Lender of any Event of Default shall
in any way be a waiver of any future or subsequent Event of Default.
Section 7.05.Discontinuance of Proceedings. In case the Lender shall proceed to invoke
any right, remedy or recourse permitted hereunder or under the Related Documents and shall
thereafter elect to discontinue or abandon the same for any reason, the Lender shall have the
unqualified right so to do and, in such event, the Borrower and the Lender shall be restored to their
former positions with respect to the Obligations, the Related Documents and otherwise, and the
rights, remedies, recourse and powers of the Lender hereunder shall continue as if the same had
never been invoked.
ARTICLE VIII
MISCELLANEOUS
Section 8.01.Amendments, Etc. No amendment or waiver of any provision of this
Agreement or the Note, and no consent to any departure by the Borrower therefrom, shall be
effective unless in writing signed by the Lender and the Borrower and each such waiver or consent
shall be effective only in the specific instance and for the specific purpose for which given.
Section 8.02.Notices; Effectiveness; Electronic Communication.
(a)Notices Generally. Except in the case of notices and other communications expressly
permitted to be given by telephone (and except as provided in subsection (b) below), all notices
and other communications provided for herein shall be in writing and shall be delivered by hand
or overnight courier service, mailed by certified or registered mail or sent by fax transmission or
e-mail transmission as follows, and all notices and other communications expressly permitted
hereunder to be given by telephone shall be made to the applicable telephone number, to the
address, fax number, e-mail address or telephone number specified for the Borrower or the Lender
on Schedule 8.02.
Notices and other communications sent by hand or overnight courier service, or mailed by
certified or registered mail, shall be deemed to have been given when received; notices and other
communications sent by fax transmission shall be deemed to have been given when sent (except
that, if not given during normal business hours for the recipient, shall be deemed to have been
given at the opening of business on the next Business Day for the recipient). Notices and other
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communications delivered through electronic communications to the extent provided in subsection
(b) below shall be effective as provided in such subsection (b).
(b)Electronic Communications. Notices and other communications to the Lender
hereunder may be delivered or furnished by electronic communication (including e-mail, FPML
messaging and Internet or intranet websites) pursuant to procedures approved by the Lender. The
Lender or the Borrower may each, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to procedures approved
by it, provided that approval of such procedures may be limited to particular notices or
communications.
Unless the Lender otherwise prescribes, (i) notices and other communications sent to an e-
mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the
intended recipient (such as by the “return receipt requested” function, as available, return e-mail
or other written acknowledgement), and (ii) notices and other communications posted to an
Internet or intranet website shall be deemed received by the intended recipient upon the sender’s
receipt of an acknowledgement by the intended recipient (such as by the “return receipt requested”
function, as available, return email address or other written acknowledgement) indicating that such
notice or communication is available and identifying the website address therefor; provided that,
for both clauses (i) and (ii), if such notice, email or other communication is not sent during the
normal business hours of the recipient, such notice, email or communication shall be deemed to
have been sent at the opening of business on the next Business Day for the recipient.
(c)Change of Address, Etc. Each of the Borrower and the Lender may change its
address, fax number or telephone number or e-mail address for notices and other communications
hereunder by notice to the other parties hereto.
(d)Reliance by Lender. The Lender shall be entitled to rely and act upon any notices
(including, without limitation, telephonic or electronic notices, Loan Notices and Notices of Loan
Prepayment) purportedly given by or on behalf of the Borrower even if (i) such notices were not
made in a manner specified herein, were incomplete or were not preceded or followed by any other
form of notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied
from any confirmation thereof. The Borrower shall indemnify the Lender and the Related Parties
of each of them from all losses, costs, expenses and liabilities resulting from the reliance by such
Person on each notice purportedly given by or on behalf of the Borrower. All telephonic notices
to and other telephonic communications with the Lender may be recorded by the Lender, and each
of the parties hereto hereby consents to such recording.
Section 8.03.No Waiver; Cumulative Remedies; Enforcement. No failure by the Lender to
exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege
hereunder or under any other Related Document shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder or under any other
Related Document preclude any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege. The rights, remedies, powers and privileges herein provided, and
provided under each other Related Document, are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law.
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Section 8.04.Costs and Expenses; Damage Waiver.
(a)Costs and Expenses. The Borrower shall pay (i) all reasonable out-of-pocket
expenses incurred by the Lender and its Affiliates (including the reasonable fees, charges and
disbursements of counsel for the Lender), in connection with the preparation, negotiation,
execution, delivery and administration of this Agreement and the other Related Documents or any
amendments, modifications or waivers of the provisions hereof or thereof (whether or not the
transactions contemplated hereby or thereby shall be consummated), and (ii) all out-of-pocket
expenses incurred by the Lender (including the fees, charges and disbursements of any counsel for
the Lender), and shall pay all fees and time charges for attorneys who may be employees of the
Lender, in connection with the enforcement or protection of its rights (A) in connection with this
Agreement and the other Related Documents, including its rights under this Section, or (B) in
connection with Revolving Loans issued hereunder, including all such out-of-pocket expenses
incurred during any workout, restructuring or negotiations in respect of such Revolving Loans.
(b)Indemnification by the Borrower. The Borrower shall indemnify the Lender and each
Related Party (each such Person being called an “Indemnitee”) against, and hold each Indemnitee
harmless from, any and all losses, claims, damages, liabilities and related expenses (including the
fees, charges and disbursements of any counsel for any Indemnitee), and shall indemnify and hold
harmless each Indemnitee from all fees and time charges and disbursements for attorneys who may
be employees of any Indemnitee, incurred by any Indemnitee or asserted against any Indemnitee
by any Person (including the Borrower) arising out of, in connection with, or as a result of (i) the
execution or delivery of this Agreement, any other Related Document or any agreement or
instrument contemplated hereby or thereby, the performance by the parties hereto of their
respective obligations hereunder or thereunder or the consummation of the transactions
contemplated hereby or thereby, or the administration of this Agreement and the other Related
Documents (including in respect of any matters addressed in Section 3.01 hereof), (ii) any
Revolving Loan or the use or proposed use of the proceeds therefrom (including any refusal by the
Lender to honor a demand for payment under a Letter of Credit if the documents presented in
connection with such demand do not strictly comply with the terms of such Letter of Credit),
(iii) any actual or alleged presence or release of Hazardous Materials on or from any property
owned or operated by the Borrower, or any Environmental Liability related in any way to the
Borrower, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating
to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a
third party; provided that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee or (y) result from a claim brought by the
Borrower against an Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder
or under any other Related Document, if the Borrower has obtained a final and nonappealable
judgment in its favor on such claim as determined by a court of competent jurisdiction.
(c)Waiver of Consequential Damages, Etc. To the fullest extent permitted by applicable
Law, the Borrower shall not assert, and hereby waives, and acknowledges that no other Person
shall have, any claim against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages) arising out of, in
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connection with, or as a result of, this Agreement, any other Related Document or any agreement
or instrument contemplated hereby, the transactions contemplated hereby or thereby, any
Revolving Loan or the use of the proceeds thereof. No Indemnitee referred to in subsection (b)
above shall be liable for any damages arising from the use by unintended recipients of any
information or other materials distributed to such unintended recipients by such Indemnitee
through telecommunications, electronic or other information transmission systems in connection
with this Agreement or the other Related Documents or the transactions contemplated hereby or
thereby.
(d)Payments. All amounts due under this Section shall be payable not later than ten (10)
Business Days after demand therefor.
(e)Survival. The agreements in this Section and the indemnity provisions of
Section 8.02(d) hereof shall survive the termination of the Revolving Commitment and the
repayment, satisfaction or discharge of all the other Obligations.
Section 8.05.Payments Set Aside. To the extent that any payment by or on behalf of the
Borrower is made to the Lender, or the Lender exercises its right of setoff, and such payment or
the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent
or preferential, set aside or required (including pursuant to any settlement entered into by the
Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with
any proceeding under any Debtor Relief Law or otherwise, then to the extent of such recovery, the
obligation or part thereof originally intended to be satisfied shall be revived and continued in full
force and effect as if such payment had not been made or such setoff had not occurred.
Section 8.06.Successors and Assigns; Participations. (a) This Agreement is binding on
the Borrower’s and the Lender’s successors and assignees. The Borrower agrees that it may not
assign this Agreement without the Lender’s prior consent. The Lender may sell participations in
or assign the Revolving Loans, and may exchange information about the Borrower (including,
without limitation, any information regarding any hazardous substances) with actual or potential
participants or assignees (“Participants”). If a participation is sold or the Revolving Loans are
assigned, the purchaser will have the right of set-off against the Borrower; provided, however, that
(i) no such participation by any such Participant shall in any way affect the obligations of the
Lender hereunder; (ii) the Lender shall provide the Borrower with written notice of such
participation five (5) Business Days before the effectiveness thereof if such Participant shall have
any of the rights of set-off against the Borrower; and (iii) the Borrower shall be required to deal
only with the Lender, with respect to any matters under this Agreement and the other Related
Documents and no such Participant shall be entitled to enforce any provision hereunder against
the Borrower. The Borrower agrees that each Participant shall be entitled to the benefits of
Sections 3.01, 3.02 and 8.04 hereof to the same extent as if it were a Lender hereunder; provided,
however, that a Participant shall not be entitled to receive any greater payment under Sections 3.01
and 3.02 hereof than the Lender would have been entitled to receive with respect to the
participation sold to such participant, unless the sale of the participation to such Participant is made
with the Borrower’s prior written consent.
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(b)Certain Pledges. In addition to the rights of the Lender set forth above, the Lender
may at any time pledge or assign a security interest in all or any portion of its rights or interests
under this Agreement (including under its Note, if any) to secure obligations of the Lender or an
Affiliate of the Lender, including any pledge or assignment to secure obligations to a Federal
Reserve Bank or to any state or local governmental entity or with respect to public deposits;
provided that no such pledge or assignment shall release the Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for the Lender as a party hereto.
Section 8.07.Treatment of Certain Information; Confidentiality
(a)Treatment of Certain Information. The Lender agrees to maintain the confidentiality
of the Information (as defined below), except that Information may be disclosed (i) to its Affiliates
and to its Related Parties (it being understood that the Persons to whom such disclosure is made
will be informed of the confidential nature of such Information and instructed to keep such
Information confidential), (ii) to the extent required or requested by any regulatory authority
purporting to have jurisdiction over such Person or its Related Parties (including any self-
regulatory authority, such as the National Association of Insurance Commissioners), (iii) to the
extent required by applicable Laws or regulations or by any subpoena or similar legal process,
(iv) to any other party hereto, (v) in connection with the exercise of any remedies hereunder or
under any other Related Document or any action or proceeding relating to this Agreement or any
other Related Document or the enforcement of rights hereunder or thereunder, (vi) subject to an
agreement containing provisions substantially the same as those of this Section, to (A) any
assignee of or participant in, or any prospective assignee of or participant in, any of its rights and
obligations under this Agreement or (B) any actual or prospective party (or its Related Parties) to
any swap, derivative or other transaction under which payments are to be made by reference to the
Borrower and its obligations, this Agreement or payments hereunder, (vii) on a confidential basis
to any rating agency in connection with rating the Borrower or the credit facilities provided
hereunder, (viii) with the consent of the Borrower or to the extent such Information (1) becomes
publicly available other than as a result of a breach of this Section or (2) becomes available to the
Lender or any of its Affiliates on a nonconfidential basis from a source other than the Borrower.
For purposes of this Section, “Information” means all information received from the Borrower
relating to the Borrower or any of its businesses, other than any such information that is available
to the Lender on a nonconfidential basis prior to disclosure by the Borrower, provided that, in the
case of information received from the Borrower after the date hereof, such information is clearly
identified at the time of delivery as confidential. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own confidential
information.
(b)Press Releases. The Borrower agrees that it will not in the future issue any press
releases or other public disclosure using the name of the Lender or its Affiliates or referring to this
Agreement without the prior written consent of the Lender, unless (and only to the extent that) the
Borrower is required to do so under law and then, in any event the Borrower will consult with such
Person before issuing such press release or other public disclosure.
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(c)Customary Advertising Material. The Borrower consents to the publication by the
Lender of customary advertising material relating to the transactions contemplated hereby using
the name, product photographs, logo or trademark of the Borrower.
Section 8.08.Right of Setoff. If an Event of Default shall have occurred and be continuing,
the Lender and each of its Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by applicable Law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final, in whatever currency) at any time held and other
obligations (in whatever currency) at any time owing by the Lender or any such Affiliate to or for
the credit or the account of the Borrower against any and all of the obligations of the Borrower
now or hereafter existing under this Agreement or any other Related Document to the Lender or
its Affiliates, irrespective of whether or not the Lender or Affiliate shall have made any demand
under this Agreement or any other Related Document and although such obligations of the
Borrower may be contingent or unmatured, secured or unsecured, or are owed to a branch, office
or Affiliate of the Lender different from the branch, office or Affiliate holding such deposit or
obligated on such indebtedness. The rights of the Lender and its Affiliates under this Section are
in addition to other rights and remedies (including other rights of setoff) that the Lender or its
Affiliates may have. The Lender agrees to notify the Borrower promptly after any such setoff and
application, provided that the failure to give such notice shall not affect the validity of such setoff
and application.
Section 8.09.Counterparts; Integration; Effectiveness. This Agreement and each of the
other Related Documents may be executed in counterparts (and by different parties hereto in
different counterparts), each of which shall constitute an original, but all of which when taken
together shall constitute a single contract. This Agreement, the other Related Documents, and any
separate letter agreements with respect to fees payable to the Lender, constitute the entire contract
among the parties relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter hereof. Except as
provided in Section 4.01 hereof, this Agreement shall become effective when it shall have been
executed by the Lender and when the Lender shall have received counterparts hereof that, when
taken together, bear the signatures of each of the other parties hereto. Delivery of an executed
counterpart of a signature page of this Agreement or any other Related Document, or any certificate
delivered thereunder, by fax transmission or e-mail transmission (e.g. “pdf” or “tif”) shall be
effective as delivery of a manually executed counterpart of this Agreement or such other Related
Document or certificate. Without limiting the foregoing, to the extent a manually executed
counterpart is not specifically required to be delivered under the terms of any Related Document,
upon the request of any party, such fax transmission or e-mail transmission shall be promptly
followed by such manually executed counterpart.
Section 8.10.Survival of Representations and Warranties. All representations and
warranties made hereunder and in any other Related Document or other document delivered
pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and
delivery hereof and thereof. Such representations and warranties have been or will be relied upon
by the Lender, regardless of any investigation made by the Lender or on its behalf and
notwithstanding that the Lender may have had notice or knowledge of any Default or Event of
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Default at the time of any Borrowing, and shall continue in full force until the Commitment
Termination Date.
Section 8.11.Severability. If any provision of this Agreement or the other Related
Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and
enforceability of the remaining provisions of this Agreement and the other Related Documents
shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith
negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable
provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 8.12.Governing Law; Jurisdiction Etc.
(a)GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA WITHOUT GIVING EFFECT TO
CONFLICTS OF LAWS PROVISIONS.
(b)SUBMISSION TO JURISDICTION. THE BORROWER IRREVOCABLY AND UNCONDITIONALLY
AGREES THAT IT WILL NOT COMMENCE ANY ACTION, LITIGATION OR PROCEEDING OF ANY KIND OR
DESCRIPTION, WHETHER IN LAW OR EQUITY, WHETHER IN CONTRACT OR IN TORT OR OTHERWISE,
AGAINST THE LENDER OR ANY RELATED PARTY IN ANY WAY RELATING TO THIS AGREEMENT OR ANY
OTHER RELATED DOCUMENT OR THE TRANSACTIONS RELATING HERETO OR THERETO, IN ANY FORUM
OTHER THAN THE COURTS OF THE STATE OF CALIFORNIA [SITTING IN ORANGE COUNTY] AND OF
THE UNITED STATES DISTRICT COURT OF THE [CENTRAL DISTRICT OF CALIFORNIA, SOUTHERN
DIVISION], AND ANY APPELLATE COURT FROM ANY THEREOF, AND EACH OF THE PARTIES HERETO
IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE JURISDICTION OF SUCH COURTS AND
AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION, LITIGATION OR PROCEEDING MAY BE
HEARD AND DETERMINED IN SUCH CALIFORNIA STATE COURT OR, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES
THAT A FINAL JUDGMENT IN ANY SUCH ACTION, LITIGATION OR PROCEEDING SHALL BE CONCLUSIVE
AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER
MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER RELATED DOCUMENT
SHALL AFFECT ANY RIGHT THAT THE LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER RELATED DOCUMENT AGAINST THE
BORROWER OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.
(c)WAIVER OF VENUE. THE BORROWER IRREVOCABLY AND UNCONDITIONALLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER RELATED DOCUMENT IN ANY COURT REFERRED TO
IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT
FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.
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(d)SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF
PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 8.02. NOTHING IN THIS AGREEMENT
WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY APPLICABLE LAW.
Section 8.13.Waiver of Jury Trial. (A) EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR ANY OTHER RELATED DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY
HERETO (I) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT
OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (II) ACKNOWLEDGES THAT IT AND
THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER
RELATED DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION.
(B)IF ANY ACTION OR PROCEEDING IS FILED IN A COURT OF THE STATE OF
CALIFORNIA BY OR AGAINST ANY PARTY HERETO IN CONNECTION WITH ANY OF THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT OR ANY OTHER RELATED DOCUMENT, (A) THE COURT SHALL,
AND IS HEREBY DIRECTED TO, MAKE A GENERAL REFERENCE PURSUANT TO CALIFORNIA CODE OF
CIVIL PROCEDURE SECTION 638 TO A REFEREE (WHO SHALL BE A SINGLE ACTIVE OR RETIRED JUDGE)
TO HEAR AND DETERMINE ALL OF THE ISSUES IN SUCH ACTION OR PROCEEDING (WHETHER OF FACT
OR OF LAW) AND TO REPORT A STATEMENT OF DECISION, PROVIDED THAT AT THE OPTION OF ANY
PARTY TO SUCH PROCEEDING, ANY SUCH ISSUES PERTAINING TO A “PROVISIONAL REMEDY” AS
DEFINED IN CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 1281.8 SHALL BE HEARD AND
DETERMINED BY THE COURT, AND (B) WITHOUT LIMITING THE GENERALITY OF SECTION 8.04, THE
PARTY FILING THE ACTION SHALL BE SOLELY RESPONSIBLE TO PAY ALL FEES AND EXPENSES OF ANY
REFEREE APPOINTED IN SUCH ACTION OR PROCEEDING.
Section 8.14.No Advisory or Fiduciary Relationship. In connection with all aspects of
each transaction contemplated hereby (including in connection with any amendment, waiver or
other modification hereof, the Note or the Resolution), the Borrower acknowledges and agrees,
and acknowledges its Affiliates’ understanding, that: (a) (i) the services regarding this Agreement
provided by the Lender and any Affiliate thereof are arm’s-length commercial transactions
between the Borrower, on the one hand, and the Lender and its Affiliates, on the other hand, (ii) the
Borrower has consulted its own legal, accounting, regulatory and tax advisors to the extent it has
deemed appropriate, and (iii) the Borrower is capable of evaluating, and understands and accepts,
the terms, risks and conditions of the transactions contemplated hereby and by the Note and the
Resolution; (b) (i) the Lender and its Affiliates each is and has been acting solely as a principal
and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not
be acting as an advisor (municipal, financial or otherwise), agent or fiduciary, for the Borrower,
or any other Person and (ii) neither the Lender nor any of its Affiliates has any obligation to the
Borrower with respect to the transactions contemplated hereby except those obligations expressly
set forth herein, in the Note and in the Resolution; and (c) the Lender and its Affiliates may be
engaged in a broad range of transactions that involve interests that differ from those of the
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Borrower, and neither the Lender nor any of its Affiliates has any obligation to disclose any of
such interests to the Borrower. To the fullest extent permitted by law, the Borrower hereby waives
and releases any claims that it may have against the Lender or any of its Affiliates with respect to
any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any
transactions contemplated hereby.
Section 8.15.Electronic Execution of Certain Documents. The words “delivery,”
“execute,” “execution,” “signed,” “signature,” and words of like import in any Related Document
or any other document executed in connection herewith shall be deemed to include electronic
signatures, the electronic matching of assignment terms and contract formations on electronic
platforms approved by the Lender, or the keeping of records in electronic form, each of which
shall be of the same legal effect, validity or enforceability as a manually executed signature,
physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be, to
the extent and as provided for in any applicable Law, including the Federal Electronic Signatures
in Global and National Commerce Act, the New York State Electronic Signatures and Records
Act, or any other similar state laws based on the Uniform Electronic Transactions Act.
Section 8.16.USA Patriot Act. The Lender hereby notifies the Borrower that pursuant to
the requirements of the Patriot Act, it is required to obtain, verify and record information that
identifies the Borrower, which information includes the name and address of the Borrower and
other information that will allow the Lender to identify the Borrower in accordance with the Patriot
Act. The Borrower agrees to, promptly following a request by the Lender, provide all such other
documentation and information that the Lender requests in order to comply with its ongoing
obligations under applicable “know your customer” and anti-money laundering rules and
regulations, including the Patriot Act.
Section 8.17.Time of the Essence. Time is of the essence of the Related Documents and
the Resolution.
Section 8.18.Further Assurances. From time to time upon the request of either party
hereto, the other shall promptly and duly execute, acknowledge and deliver any and all such further
instruments and documents as the requesting party may in its reasonable discretion deem necessary
or desirable to confirm this Agreement, and the other Related Documents, to carry out the purpose
and intent hereof and thereof or to enable the requesting party to enforce any of its rights hereunder
or thereunder. At any time, and from time to time, upon request by the Lender, the Borrower will,
at the Borrower’s expense, correct any defect, error or omission which may be discovered in the
form or content of any of the Related Documents. Upon any failure by the Borrower to do so, the
Lender may make, execute and record any and all such instruments, certificates and other
documents for and in the name of the Borrower, all at the sole expense of the Borrower, and the
Borrower hereby appoints the Lender the agent and attorney-in-fact of the Borrower to do so, this
appointment being coupled with an interest and being irrevocable. Without limitation of the
foregoing, the Borrower irrevocably authorizes the Lender at any time and from time to time to
file any initial financing statements, amendments thereto and continuation statements deemed
necessary or desirable by the Lender to establish or maintain the validity, perfection and priority
of the security interests granted in the Resolution, and the Borrower ratifies any such filings made
by the Lender prior to the date hereof. In addition, at any time, and from time to time, upon request
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by the Lender, the Borrower will, at the Borrower’s expense, provide any and all further
instruments, certificates and other documents as may, in the opinion of the Lender, be necessary
or desirable in order to verify the Borrower’s identity and background in a manner satisfactory to
the Lender.
Section 8.19.EMMA Postings. In the event the Borrower files with EMMA, this
Agreement or any description of the materials thereof or notice of any agreement to any covenants,
events of default, remedies, priority rights or other similar terms, either voluntarily or as required
pursuant to a continuing disclosure agreement or Rule 15c2-12 promulgated pursuant to the
Securities and Exchange Act of 1934, as amended (the “Rule”) (each such posting, an “EMMA
Posting”), the Borrower shall (i) provide the Lender with a copy of each EMMA Posting prior to
submitting or posting on EMMA and (ii) shall not file or permit the filing of any EMMA Posting
that includes Confidential Information. The Borrower acknowledges and agrees that although the
Lender may request review, edits or redactions of such materials prior to filing, the Lender is not
responsible for the Borrower’s or any other entity’s (including, but not limited to, any broker-
dealer’s) compliance or noncompliance (or any claims, losses or liabilities arising therefrom) with
any continuing disclosure agreement or any applicable securities or other laws, including, but not
limited to, those relating to the Rule.
Section 8.20.US QFC Stay Rules.
(a)Recognition of U.S. Resolution Regimes. In the event that any party that is a Covered
Entity becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer of
this Agreement (and any interest and obligation in or under this Agreement and any property
securing this Agreement) from such Covered Entity will be effective to the same extent as the
transfer would be effective under the U.S. Special Resolution Regime if this Agreement (and any
such interest, obligation and property) were governed by the laws of the United States or a state of
the United States. In the event that any party that is a Covered Entity or a BHC Act Affiliate of
such party becomes subject to a proceeding under a U.S. Special Resolution Regime, Default
Rights against such party with respect to this Agreement are permitted to be exercised to no greater
extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if
this Agreement were governed by the laws of the United States or a state of the United States. The
requirements of this paragraph (a) apply notwithstanding the provisions of paragraph (b).
(b)Limitation on the Exercise of Certain Rights Related to Affiliate Insolvency
Proceedings. Notwithstanding anything to the contrary in this Agreement or any related
agreement, but subject to the requirements of paragraph (a), no party to this Agreement shall be
permitted to exercise any Default Right against a party that is a Covered Entity with respect to this
Agreement that is related, directly or indirectly, to a BHC Act Affiliate of such Covered Entity
becoming subject to Insolvency Proceedings, except to the extent the exercise of such Default
Right would be permitted under 12 C.F.R. § 252.84, 12 C.F.R. § 47.5, or 12 C.F.R. § 382.4, as
applicable. After a BHC Act Affiliate of a party that is a Covered Entity has become subject to
Insolvency Proceedings, any party that seeks to exercise a Default Right against such Covered
Entity with respect to this Agreement shall have the burden of proof, by clear and convincing
evidence, that the exercise of such Default Right is permitted hereunder.
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“BHC Act Affiliate” of a party means an “affiliate” (as such term is defined under, and interpreted
in accordance with, 12 U.S.C. 1841(k)) of such party.
“Covered Entity” means any of the following:
(a) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. §
252.82(b);
(b) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. §
47.3(b); or
(c) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. §
382.2(b).
“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance
with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.
“Insolvency Proceeding” means a receivership, insolvency, liquidation, resolution, or similar
proceeding.
“U.S. Special Resolution Regime” means each of (i) the Federal Deposit Insurance Act and the
regulations promulgated thereunder and (ii) Title II of the Dodd-Frank Wall Street Reform and
Consumer Protection Act and the regulations promulgated thereunder.
[SIGNATURE PAGES TO FOLLOW]
Page 112 of 163
[Signature Page to Revolving Credit Agreement]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed
as of the date first above written.
YORBA LINDA WATER DISTRICT
By:____________________________________
Name:______________________________
Title:_______________________________
BANK OF AMERICA, N.A.
By:____________________________________
Name:______________________________
Title:_______________________________
Page 113 of 163
SCHEDULE 8.02
LENDER’S LENDING OFFICE,
CERTAIN ADDRESSES FOR NOTICES
BORROWER:
Yorba Linda Water District
[1717 East Miraloma Avenue
Yorba Linda, CA 92870
Attention:General Manager]
Telephone:_______________________
Telecopy:_______________________
BANK OF AMERICA, N.A., AS LENDER:
Bank of America, N.A.
2600 W. Big Beaver Road
Troy, MI 48084-3323
Attention:Susan Molnar
Telephone:(248) 631-0531
Telecopy:(312) 453-6092
Email:susan.molnar@bofa.com
with a copy to:
Attention:Scott Nash
Telephone:(415) 436-4379
Email:scott.t.nash@bofa.com
Page 114 of 163
EXHIBIT A
FORM OF LOAN NOTICE
Date: ___________, 202_
To:Bank of America, N.A.
2600 W. Big Beaver Road
Troy, MI 48084-3323
Attention:Susan Molnar
Telephone:(248) 631-0531
Fax:(312) 453-6092
Email:susan.molnar@bofa.com
with a copy to:
Attention:Scott Nash
Telephone:(415) 436-4379
Email:scott.t.nash@bofa.com
Ladies and Gentlemen:
Reference is made to that certain Revolving Credit Agreement, dated May 12, 2020 (as
amended, restated, extended, supplemented or otherwise modified in writing from time to time,
the “Agreement;” the terms defined therein being used herein as therein defined), between Yorba
Linda Water District (the “Borrower”), and Bank of America, N.A. (the “Lender”).
The undersigned hereby requests:
A Borrowing of Revolving Loans
A conversion or continuation of Revolving Loans
1.On ______________ (a Business Day).
2.In the amount of $______________.
3.Comprised of:
[Fixed Rate Revolving Loans]
[Floating Rate Revolving Loans]
[SIFMA Loans (only available on or after the LIBOR Termination Date)]2
2 Once any Revolving Loan has been converted into a SIFMA Loan, all subsequent Borrowings or conversions
shall be in the form of SIFMA Loans.
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A-2
4.For Fixed Rate Revolving Loans only:
with an Interest Period of [1] [3] [6] months.
5.For conversions of Revolving Loans only:
Type of Revolving Loan being converted from: _________________
Type of Revolving Loan being converted to: _________________
6.To the account designated by the Bank.
The Borrowing requested herein complies with the proviso to the first sentence of
Section 2.01 of the Agreement.
The Borrower hereby represents and warrants that the conditions specified in Section 4.02
of the Agreement shall be satisfied on and as of the date of the Borrowing.
Delivery of an executed counterpart of a signature page of this notice by fax transmission
or other electronic mail transmission (e.g., “pdf” or “tif”) shall be effective as delivery of a
manually executed counterpart of this notice.
YORBA LINDA WATER DISTRICT
By:____________________________________
Name:______________________________
Title:_______________________________
Page 116 of 163
EXHIBIT B
FORM OF NOTE
Not to exceed $20,000,000 May 12, 2020
FOR VALUE RECEIVED, the undersigned YORBA LINDA WATER DISTRICT (the “Borrower”),
hereby promises to pay to BANK OF AMERICA, N.A. or registered assigns (the “Lender”), in
accordance with the provisions of the Agreement (as hereinafter defined), the principal outstanding
amount of each Revolving Loan from time to time made by the Lender to the Borrower under that
certain Revolving Credit Agreement, dated May 12, 2020 (as amended, restated, extended,
supplemented or otherwise modified in writing from time to time, the “Agreement;” the terms
defined therein being used herein as therein defined), between the Borrower and the Lender, in
accordance with the terms of the Agreement.
The Borrower promises to pay interest on the unpaid principal amount of each Revolving
Loan from the date of such Revolving Loan until such principal amount is paid in full, at such
interest rates and at such times as provided in the Agreement. All payments of principal and
interest shall be made to the Lender in Dollars in immediately available funds at the Lender’s
Lending Office. If any amount is not paid in full when due hereunder, such unpaid amount shall
bear interest, to be paid upon demand, from the due date thereof until the date of actual payment
(and before as well as after judgment) computed at the per annum rate set forth in the Agreement.
This Note is the Note referred to in the Agreement, is entitled to the benefits thereof and
may be prepaid in whole or in part subject to the terms and conditions provided therein. Upon the
occurrence and continuation of one or more of the Events of Default specified in the Agreement,
all amounts then remaining unpaid on this Note shall become, or may be declared to be,
immediately due and payable all as provided in the Agreement. The Revolving Loans made by
the Lender shall be evidenced by one or more loan accounts or records maintained by the Lender
in the ordinary course of business. The Lender may also attach schedules to this Note and endorse
thereon the date, amount and maturity of its Revolving Loans and payments with respect thereto.
The Borrower, for itself, its successors and assigns, hereby waives diligence, presentment,
protest and demand and notice of protest, demand, dishonor and non-payment of this Note.
This Note is secured by all legally available funds of the Borrower and constitutes a general
obligation of the Borrower payable from all legally available funds of the Borrower. The Borrower
also hereby pledges Revenues to secure the payment and principal of and interest on the Note, on
a subordinate basis to Bonds and Contracts, all as described in the Agreement.
Page 117 of 163
B-2
Delivery of an executed counterpart of a signature page of this Note by fax transmission or
other electronic mail transmission (e.g., “pdf” or “tif”) shall be effective as delivery of a manually
executed counterpart of this Note.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK [WITHOUT GIVING EFFECT TO CONFLICTS OF LAWS PROVISIONS
(OTHER THAN NEW YORK GENERAL OBLIGATIONS LAWS 5-1401 AND 5-1402); PROVIDED THAT
THE AUTHORITY OF THE BORROWER TO EXECUTE THIS NOTE AND THE OBLIGATIONS OF
BORROWER HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE].
YORBA LINDA WATER DISTRICT
By:____________________________________
Name:______________________________
Title:_______________________________
Page 118 of 163
B-3
REVOLVING LOANS
AND PAYMENTS WITH RESPECT THERETO3
DATE
AMOUNT OF
LOAN MADE
AMOUNT OF
PRINCIPAL PAID THIS
DATE
OUTSTANDING
PRINCIPAL BALANCE
THIS DATE
NOTATION
MADE BY
___________________________________________________
___________________________________________________
___________________________________________________
___________________________________________________
___________________________________________________
___________________________________________________
___________________________________________________
___________________________________________________
___________________________________________________
___________________________________________________
___________________________________________________
___________________________________________________
___________________________________________________
___________________________________________________
___________________________________________________
___________________________________________________
___________________________________________________
___________________________________________________
3 This payment schedule is to be maintained electronically by the Bank, in form and substance similar to the
table set forth on this page.
Page 119 of 163
EXHIBIT C
FORM OF COMPLIANCE CERTIFICATE
This Compliance Certificate (this “Certificate”) is furnished to Bank of America, N.A.
(the “Lender”) pursuant to that certain Credit Agreement dated May 12, 2020 (the “Agreement”),
between Yorba Linda Water District (the “Borrower”) and the Lender. Unless otherwise defined
herein, the terms used in this Certificate shall have the meanings assigned thereto in the
Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1.I am the duly appointed [General Manager] [Finance Manager] of the
Borrower;
2.I have reviewed the terms of the Agreement and I have made, or have caused
to be made under my supervision, a detailed review of the transactions and conditions of
the Borrower during the accounting period covered by the attached financial statements;
and
3.The examinations described in paragraph 2 did not disclose, and I have no
knowledge of, the existence of any condition or the occurrence of any event which
constitutes a Default or Event of Default during or at the end of the accounting period
covered by the attached financial statements or as of the date of this Certificate, except as
set forth below.
Described below are the exceptions, if any, to paragraph 3 by listing, in detail, the nature
of the condition or event, the period during which it has existed and the action which the Borrower
has taken, is taking, or proposes to take with respect to each such condition or event:
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
The foregoing certifications and the financial statements delivered with this Certificate in
support hereof, are made and delivered this _________ day of _______________, 202__.
YORBA LINDA WATER DISTRICT
By
Name:______________________________
Title:_______________________________
Page 120 of 163
EXHIBIT D
FORM OF NOTICE OF LOAN PREPAYMENT
Date: [___________, _____]
TO:Bank of America, N.A., as lender (the “Lender”)
Attention: Susan Molnar and Scott Nash
RE:Revolving Credit Agreement, dated May 12, 2020, by and between Yorba Linda Water
District (the “Borrower”) and the Lender (as amended, modified, extended, restated,
replaced, or supplemented from time to time, the “Credit Agreement”; capitalized terms
used herein and not otherwise defined shall have the meanings set forth in the Credit
Agreement)
DATE:[Date]
The Borrower hereby notifies the Lender that on _____________4 pursuant to the terms of
Section 2.03 (Prepayments) of the Credit Agreement, the Borrower intends to prepay/repay the
following Revolving Loans as more specifically set forth below, with payments to be made
pursuant to the wire payment instructions to be provided by the Bank:
Optional prepayment of [Fixed Rate Revolving Loans][Floating Rate Revolving
Loans][SIFMA Loans] in the following amount(s):
Fixed Rate Revolving Loans: $________5
Floating Rate Revolving Loans: $________6
SIFMA Loans: $________7
4 Specify date of such prepayment.
5 Any prepayment of Fixed Rate Revolving Loans shall be in a principal amount of $250,000 or a whole
multiple of $50,000 in excess thereof (or if less, the entire principal amount thereof outstanding).
6 Any prepayment of a Floating Rate Revolving Loan shall be in a principal amount of $250,000 or a whole
multiple of $50,000 in excess thereof (or if less, the entire principal amount thereof outstanding).
7 Any prepayment of a SIFMA Loan shall be in a principal amount of $250,000 or a whole multiple of $50,000
in excess thereof (or if less, the entire principal amount thereof outstanding).
Page 121 of 163
D-2
Delivery of an executed counterpart of a signature page of this notice by fax transmission
or other electronic mail transmission (e.g. “pdf” or “tif”) shall be effective as delivery of a
manually executed counterpart of this notice.
YORBA LINDA WATER DISTRICT
By:____________________________________
Name:______________________________
Title:_______________________________
Page 122 of 163
ITEM NO. 9.2.
AGENDA REPORT
MEETING DATE:April 28, 2020
TO:Board of Directors
FROM:Brett R. Barbre, Assistant General Manager
STAFF CONTACTS:Rosanne Weston, Engineering Manager
SUBJECT:PFAS Treatment Facilities and Program Agreement
RECOMMENDATION:
That the Board of Directors authorize the General Manager and General Counsel to execute,
in its substantial form, the PFAS Treatment Facilities and Program Agreement among the
Orange County Water District (OCWD), Yorba Linda Water District, and other Groundwater
Producers.
SUMMARY:
Together with other Groundwater Producers, the District negotiated the PFAS Treatment
Facilities and Program Agreement with OCWD (Agreement). With funding from OCWD, the
program (Program) memorialized in this Agreement will enable the District to design,
construct, and operate treatment facilities to treat perfluorooctanoic acid (PFOA) and
perfluorooctane sulfonate (PFOS), two types of per- and polyfluoroalkyl substances (PFAS).
Once these treatment facilities are in operation, the District will be able to utilize its eleven (11)
groundwater wells for drinking water and reduce its reliance on imported water, which is
significantly more expensive than groundwater.
BACKGROUND:
OCWD and certain member Producers in the Orange County Basin intend to facilitate
treatment of Basin groundwater impacted by PFAS (not just PFOS and PFOA). OCWD will
coordinate and fund planning, design, and construction costs of treatment facilities for PFOS
and PFOA in the Basin subject to the provisions of this Agreement. OCWD will also fund a
portion of the operation and maintenance costs of these facilities.
In exchange for OCWD's management of, and funding for, this Program, each Producer will,
among other obligations, (1) indemnify OCWD from any claims or damages that may be
asserted by a third party arising out of the District’s negligent performance or implementation
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of this Agreement , and (2) release OCWD from any liability related to PFAS (not just PFOS
and PFOA) in the Basin before, during or after treatment.
ATTACHMENTS:
1.Agreement
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PFAS TREATMENT FACILITIES AND PROGRAM AGREEMENT
This PFAS TREATMENT FACILITIES AND PROGRAM AGREEMENT (the
“Agreement”) is effective on the date identified in Section 10.17 (“Effective Date”) of the
Agreement, and is between the ORANGE COUNTY WATER DISTRICT, a special governmental
district organized and existing pursuant to the Orange County Water District Act, Chapter 924,
Statutes of 1933, as amended (“OCWD”) on the one hand, and the Cities of Anaheim, Fullerton,
Garden Grove, Orange, Santa Ana and Tustin; and the East Orange County Water District, Irvine
Ranch Water District, Serrano Water District, Yorba Linda Water District, and Golden State Water
Company (each a “Producer,” and collectively “Producers”1) on the other. OCWD and the
Producers are each a “Party” and collectively “Parties” to this Agreement.
A. OCWD manages the Orange County Groundwater Basin (“Basin”) in northern and
central Orange County in order to support a variety of beneficial uses, including potable and non-
potable water supply. Much of the potable water supply currently used within northern and central
Orange County is pumped groundwater for use by persons and Producers within OCWD’s service
area. Section 2, subdivision 6(j.) of the Orange County Water District Act (“OCWD Act”)
authorizes OCWD to “transport, reclaim, purify, treat, inject, extract, or otherwise manage and
control water for the beneficial use of persons or property within the district and to improve and
protect the quality of the groundwater supplies within the district.” Inasmuch as Orange County
is located in a semi-arid area, it is essential that all reasonable efforts be put forth by OCWD, in
cooperation with the Producers, to protect the quality and quantity of groundwater supplies within
OCWD’s boundaries.
B. A group of man-made substances known as per- and polyfluoroalkyl substances
(“PFAS”) has been used in numerous consumer and industrial products since the 1940s. Recent
testing in the Basin has revealed that as of the Effective Date, at least eleven producers and at least
71 groundwater wells that are sources of drinking water in the Basin are impacted by PFAS.
C. Producers are governmental agencies (or a regulated public utility) that operate
public water systems for the purpose of delivering potable water. They obtain a portion of their
water supply by pumping groundwater from Water Producing Facilities within the Basin.
D. In July 2018, the State of California Division of Drinking Water (“DDW”)
established a Response Level (“RL”) of 70 parts per trillion (“ppt”) for perfluorooctanoic acid
(“PFOA”) and 70 ppt perfluorooctane sulfonate (“PFOS”), two types of PFAS. In February 2020,
DDW established revised RLs of 10 parts ppt for PFOA and 40 ppt for PFOS. Assembly Bill 756,
codified at Health and Safety Code Section 116378, and effective January 1, 2020, requires that
community water systems, including Producers, either notify their customers of PFAS detections
1 “Producers” means the listed public agencies (and a regulated public utility) identified herein,
and groundwater pumpers later added per Section 10.16, that extract groundwater from the Basin
via “Water Producing Facilities” (as that term is defined in Section 24 of the OCWD Act), and
who are adversely impacted by PFAS in one or more Water Producing Facility/Facilities they own
or operate.
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exceeding RLs or remove from service drinking water sources with PFAS exceeding RLs.2 The
revised RLs are perceived as a de facto regulation by some Producers.
E. In November 2019, the State of California Office of Environmental Health Hazard
Assessment began the process of developing drinking water Public Health Goals (“PHGs”) for
PFOA and PFOS, the first step in the regulatory process leading to DDW setting enforceable
Maximum Contaminant Levels (“MCLs”). As of the Effective Date, DDW projected establishing
MCLs for PFOA and PFOS by the Fall of 2023, with PHGs projected to be established by the
Summer of 2021.
F. PFAS compounds create a unique groundwater contamination issue that impacts
many Producers. Without any action, PFAS impacted groundwater may migrate affecting other
Water Producing Facilities and larger portions of the Basin.
G. The Parties desire that the Basin continue to provide a groundwater supply of
suitable quality to allow for the continuation of all existing and potential beneficial uses, and that
is in compliance with all state and federal standards and relevant advisory levels. Quick and
effective actions by OCWD, in concert with Producers, are needed to remove, treat and control
PFAS down to established regulatory limits while also removing them to prevent their
contamination of other portions of the Basin.
H. The Parties recognize the necessity and commit to a high level of coordination to
expeditiously design, construct and operate PFAS treatment systems (“Treatment Systems”) to
remove PFAS from the Basin where PFAS is detected in Water Producing Facilities.
I. Until Treatment Systems are constructed, the impacted Producers will be
purchasing greater amounts of more expensive imported water, and water in the Basin containing
PFAS will not be treated so as to prevent its spread to other portions of the Basin.
J. As a result of DDW issuing revised RLs for PFOA and PFOS, and anticipated
issuance of RLs and state or federal MCLs for other PFAS, Producers have lost, or are anticipated
to lose upon finalization of the RLs and/or MCLs for one or more PFAS, pumping capacity in one
or more Water Producing Facilities due to the presence of PFAS. Given the magnitude of the
PFAS problem within the Basin, and OCWD’s desire to improve and protect the quality of the
groundwater supplies within the District so that groundwater from the Basin may be beneficially
used, OCWD has developed, and is implementing through this Agreement and other actions, a
new program that will allow OCWD to purify and treat groundwater containing PFAS by
substantially funding, contracting and cooperating with Producers to develop, construct, operate,
and maintain Treatment Systems such that water quality within the OCWD will be purified and
improved (“Program”), and such that Producers can continue to beneficially use groundwater
from the Basin after treatment for drinking water purposes. Producers desire to participate in the
Program.
2 DDW’s February 2020 guidance directs community water systems to test for PFAS using EPA
Method 537.1 and notes that DDW defines PFAS “as those analytes included in EPA Method
537.1.”
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K. OCWD has the authority to “construct, purchase, lease, or otherwise acquire, and
to operate and maintain necessary waterworks and other works, machinery, [and] facilities ...
useful or necessary to … protect the quality of the common water supplies of [OCWD] and
purposes incidental thereto.”3 OCWD may also perform groundwater cleanup, abatement, or
remedial work in cooperation with any other governmental agency, and may initiate cost recovery
actions against persons responsible for causing contamination of the Basin, and for its costs in
cleaning up or containing contamination or pollution of the Basin.4 OCWD is also authorized
under Section 2(6)(l.) of the OCWD Act to protect and improve water quality within the Basin by
entering into contracts with Producers to produce more groundwater from the Basin, while taking
less water from alternative non-tributary sources, where OCWD determines that such increased
production of groundwater will result in removal of contaminants or pollutants from the Basin that
otherwise would not be removed. Specifically, OCWD has authority, “for the common benefit of
the district and for the purpose of managing the groundwater basin and managing, replenishing,
regulating, and protecting the groundwater supplies within the district” to enter into an agreement
with Producers to increase the production of groundwater in lieu of water from an alternative non-
tributary source for the purpose of removing contaminants or pollutants from the Basin. OCWD
may also “pay from district funds that portion of the cost of the groundwater production as will
encourage the production for beneficial use of polluted or contaminated groundwater, as long as
that pollution or contamination is impairing the quality of the water supplies within the district and
the quality of the water supplies within the district will be improved by that production.”
L. OCWD has determined that certain portions of the Basin in the vicinity of
Producers’ Water Producing Facilities are polluted by PFAS, and that entering into this Agreement
with Producers will encourage beneficial use of groundwater polluted by PFAS that would
otherwise not be used while improving the quality of water supplies within the District.
M. OCWD and the Producers mutually desire to enter into this Agreement pursuant to
the OCWD Act to document the Program responsibilities of the Parties in the construction and
operation of PFAS Treatment Systems, systems that the Parties will use to treat PFAS pollution
and contamination, thereby improving the quality of groundwater supplies within OCWD.
The Parties therefore agree as follows:
1. The Recitals above are deemed true and correct and are hereby incorporated in this
Agreement as though fully set forth herein. The Parties agree that the actions that will be taken
pursuant to this Agreement are reasonable and necessary to accomplish the goals and objectives
of the OCWD Act.
2. PURPOSE.
2.1 Facilitation of Basin-wide Treatment. OCWD and the Producers intend to
facilitate treatment of Basin groundwater impacted by PFAS. OCWD will coordinate and fund
planning and treatment pilot studies and design efforts, and fund the construction costs of PFAS
3 OCWD Act, Section 2, Subd. 5.
4 OCWD Act, Section 8.
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Treatment Systems in the Basin subject to the provisions of this Agreement. OCWD will also
fund a portion of the operation and maintenance costs of those facilities.
2.2 PFAS Compounds and Reopener. The Parties recognize the necessity of
and commit to a high level of coordination to expeditiously design, construct and operate PFAS
Treatment Systems to remove PFAS from the Basin where PFAS is detected in a Producer’s
(existing or anticipated) Water Producing Facilities at or above 80% of an applicable RL or MCL.
The Parties acknowledge that additional compounds within the PFAS family may become
regulated during the term of this Agreement. To the extent the Treatment Systems developed
under this Agreement requires modification to treat PFAS that becomes regulated after the
Effective Date, the Parties will, where necessary and mutually agreed upon, amend this Agreement
to provide for treatment of additional compounds in the PFAS family.
3. PLANNING.
3.1 Planning Study. OCWD has retained a consultant to prepare a “Planning
Study” to evaluate the Producers’ water systems, any of their Water Producing Facilities impacted
by PFAS (“Impacted Wells”), and potential locations for construction of PFAS Treatment
Systems for Impacted Wells. OCWD shall cause the consultant to actively consult with Producers
in connection with preparation of the Planning Study. OCWD shall cause the consultant to provide
a final Planning Study report to OCWD and Producers concurrently.
3.2 Pilot Study. OCWD shall perform a PFAS treatment “Pilot Study” to
evaluate different treatment technologies to remove PFAS from groundwater.
3.3 Treatment Systems. OCWD shall use the results of the Planning Study and
the Pilot Study to reasonably determine the type and final design of the Treatment Systems to treat
PFAS contamination in the groundwater produced by Impacted Wells to levels below the RL or
MCL. Development of the final design of Treatment Systems will consider 30-year lifecycle costs,
including but not limited to Treatment System footprint and physical setting, relative land values,
the proximity to existing water infrastructure and energy sources, operational costs and limitations,
and any PFAS treatment studies conducted by Producers. The Treatment Systems will be designed
for a 30-year useful life. If OCWD and a Producer mutually agree, a Treatment System that can
remove PFAS contamination down to non-detect concentrations, depending upon site specific
circumstances, may be designed and constructed.
3.4 Enhancements/Additions to Treatment System. If Producer desires to
construct additions or enhancements to the PFAS Treatment System beyond what OCWD
determines is the appropriate Treatment System, then OCWD will reasonably estimate the cost of
those additions or enhancements (including planning costs, design costs, capital costs and
operation and maintenance [“O&M”] costs) with assistance and input from Producer(s). For
OCWD-Built facilities (defined below), OCWD shall include the additions or enhancements in the
design and construction of the treatment facilities upon OCWD determination of feasibility of
efficiently operating the Treatment Systems with the requested additions or enhancements.
Producer shall reimburse OCWD for all costs associated with the OCWD-Built addition or
enhancement constructed by OCWD. For Producer Built Treatment Systems that contain additions
or enhancements beyond what OCWD determines to be an appropriate Treatment System,
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Producers shall have no right of reimbursement from OCWD for Producers’ costs attributable to
such additions or enhancements.
3.5 Producer Assistance. Producers shall support and assist OCWD in
connection with the Planning Study, Pilot Study, and development of what constitutes an
appropriate Treatment System design. “Support and assist,” as used in this Agreement means
timely providing reasonable staff time and available data/technical information where requested
by OCWD to ensure OCWD has sufficient information to timely complete its obligations under
this Agreement.
3.6 Untested Water Producing Facilities. OCWD reserves the discretion to
delay the design and to not construct Treatment Facilities at Water Producing Facilities that have
not been individually tested for PFAS, or which have not demonstrated consistent exceedance of
an applicable PFAS RL or MCL.
4. DESIGN AND CONSTRUCTION OF PFAS TREATMENT FACILITIES.
4.1 Funding. OCWD shall fund the reasonable cost to design and construct the
Treatment System, except for necessary real property and entitlements for siting the Treatment
System as described in Section 4.4. OCWD’s funding obligations apply both to OCWD-Built or
Producer-Built Treatment Systems, as defined below. OCWD’s funding obligations include
planning, design, and construction of the Treatment Systems whether OCWD-Built or Producer-
Built.
4.2 OCWD Construction or Reimbursement. The Producer shall elect either:
A. to have the Treatment System designed and built by OCWD
(“OCWD-Built”); or
B. to be reimbursed for having the Treatment System designed and
built by the Producer (“Producer-Built”).
4.3 CEQA. In connection with the proposed Treatment System for Impacted
Wells, the Parties shall work together to determine the best plan for and the lead agency for the
purpose of complying with the California Environmental Quality Act (“CEQA”). Where a
Producer serves as lead agency for a CEQA project, OCWD shall serve as a Responsible Agency
and approve the portions of the CEQA project that OCWD will carry out. OCWD shall fund
CEQA expenses incurred in connection with the Treatment System whether it is a Lead Agency
or a Responsible Agency. Upon a Producer’s request, OCWD shall prepare necessary CEQA
documents for the Treatment System. OCWD shall fund any reasonable CEQA mitigation cost
excluding land acquisition expenses.
4.4 Property Acquisition, Entitlements.
A. Land and Rights of Way. Each Producer shall secure at its expense
any land and/or right of way necessary to construct the Treatment System(s).
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B. Entitlements. Each Producer shall obtain at its expense all land use
entitlements necessary to construct the Treatment System(s).
C. Property Conditions for OCWD-Built Treatment System. If a
Producer chooses an OCWD-Built Treatment System, then OCWD will have no obligation to
design or construct the Treatment System until a Producer has demonstrated it has obtained lands
and land use entitlements sufficient to permit construction of the Treatment System. OCWD may
begin final design work for facilities where land use entitlements are in the process of being
obtained. If a Producer is unable to obtain the necessary entitlements within twelve months after
the completion of the preliminary design for an Impacted Well, then Producer shall reimburse
OCWD for reasonable design costs associated with that location unless the twelve month deadline
is extended by mutual agreement of the Parties.
4.5 OCWD-Built Facilities. The provisions of this Section 4.5 apply to PFAS
treatment facilities that a Producer elects to have OCWD design and build.
A. Design. OCWD will consult with and seek input from the Producer
on the design and construction of the Treatment System, including the need for any extended
manufacturer’s warranties on Treatment System components. Producer shall support and assist
OCWD in hiring design consultants and designing the Treatment System, but OCWD will have
the reasonable authority and discretion in determining the Treatment System final design. The
level of treatment selected by OCWD must allow the Producer to treat regulated PFAS to comply
with RLs or MCLs, unless special circumstances dictate an alternative approach. Additions or
enhancements to the Treatment System are subject to section 3.4.
B. Property Rights. A Producer shall provide OCWD with temporary
property rights over any site necessary for construction, staging, and laydown for the Treatment
System project. These temporary property rights will be in the form of a license or temporary
construction easement, or other property right sufficient to provide for OCWD’s control of the site
during construction.
C. Advertising and Award of Construction Contracts. OCWD shall
advertise, where required by the OCWD Act, and award construction contracts for construction of
the Treatment System. A Producer shall support and assist OCWD in these efforts, and shall
expeditiously provide any documents necessary for construction at no charge to OCWD.
D. Administration and Inspection. OCWD will administer the
necessary contracts to construct the Treatment System, including reviewing and responding to
contractor requests for information or requests for clarification, reviewing and approving shop
drawings, and filing a Notice of Completion. OCWD shall provide all construction and inspection
for the Treatment System.
E. Transfer of Treatment System. Upon filing the Notice of
Completion for the Treatment System, OCWD will transfer the constructed and operating
Treatment System to the Producer with an appropriate legal instrument and a quitclaim of any
property rights obtained under Section 4.4. OCWD shall provide the Producer with copies of all
applicable O&M manuals and record drawings for the Treatment System in OCWD’s possession.
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Upon the Producer’s receipt of the legal instrument and quitclaim of property rights, Producer shall
be solely responsible for ensuring the proper operation, maintenance and repair of the Treatment
System. The Parties may arrange for extended warranties on any component of the Treatment
System, which additional cost may be paid for by the Producer, and which extended warranty will
be transferred to the Producer together with the transfer documents.
F. Warranty, Post-Construction Remedies. OCWD will make
construction warranty repairs and modifications not attributable to the negligence or willful
misconduct of Producer for one year after the date of filing of the Treatment System Notice of
Completion. The Parties will also, to the extent they deem prudent, jointly pursue any statutory
construction defect remedies against third-party designers and contractors.
G. DDW Permit Assistance. OCWD will support and assist the
Producer with technical information in modifying the Producer’s DDW operating permit to
account for and authorize the new Treatment System as part of the Producer’s public water system.
4.6 Construction by Producer. The provisions of this Section 4.6 apply to PFAS
treatment facilities that a Producer elects to design and build.
A. OCWD Approval of Design. The Producer shall prepare and submit
to OCWD for approval a conceptual design for the Treatment System. OCWD shall review and
approve the design in writing within 30 days, which approval will not be unreasonably withheld.
Once conceptual design for a Producer’s proposed Treatment System is approved by OCWD, the
Producer will coordinate with OCWD in the planning and final design of the Treatment System.
The Producer shall then prepare and submit the final design to OCWD for approval. OCWD shall
participate in the Producer’s project meetings as necessary to obtain OCWD’s final approval of
the Treatment System in an expeditious manner so as not to delay the Producer’s design and
construction of the Treatment System. OCWD shall review and approve the final design, if
deemed reasonable and effective, in writing, within 30 days. Such approval will not be
unreasonably delayed or withheld, though OCWD shall have the right to place reasonable
conditions on the final design approval.
B. Construction. Upon OCWD’s approval of the final design, the
Producer shall advertise, award, and ensure timely completion of all necessary contracts to
construct the Treatment System. The Producer shall notify OCWD upon the award of the
construction contract and upon recording the Notice of Completion.
5. OPERATIONS, MAINTENANCE AND REPLACEMENT.
5.1 30-Year Term. Each Producer shall operate, maintain, and repair a
Treatment System, and any related Impacted Well, for the earlier of:
A. 30 years following the filing of the Notice of Completion; or
B. Until water produced from the Impacted Wells meets RLs or MCLs
for PFAS.
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5.2 Operating Standards. OCWD recognizes in the normal course of operating
a water system, the Treatment System and Impacted Wells may need to be turned off for routine
maintenance, seasonal demands, emergencies, accommodating in-lieu imported water deliveries,
and major repairs. Each Producer agrees to operate the Treatment System in a manner consistent
with industry standards and take actions in the same manner as a reasonably prudent water system
operator, with the understanding that the Treatment System funded by OCWD is intended to be
regularly used for daily treatment of groundwater as long as PFAS exceeds an RL or MCL in the
Basin in the vicinity of the well. The Parties understand and agree that Treatment Systems
constructed or funded by OCWD are not intended to be used as “stand by” treatment systems.
5.3 Compliance, Permits, Testing, Reporting. Each Producer shall obtain and
comply with any and all regulatory permits, permissions or approvals necessary to operate and
maintain the Treatment System. Producer shall operate and maintain the Treatment System in
accordance with state and federal regulatory requirements, prevailing industry standards, good
housekeeping practices, and equipment manufacturer recommendations and requirements.
Producer shall perform required water quality testing and reporting to verify the successful
operation of the Treatment System to comply with regulatory requirements. If a Producer fails to
timely perform testing and/or reporting in the future, then OCWD may in its reasonable discretion
assume responsibility from a Producer for required water quality testing and/or reporting and that
Producer shall timely pay OCWD all reasonable and necessary costs for that testing and reporting
or such costs shall be deducted from OCWD’s reimbursement payments to the Producer per
Section 5.4.
5.4 Post-Completion Inspection; Cost Recoupment.
A. OCWD will periodically inspect the Treatment System after the
filing of the Notice of Completion, to review the adequacy of Producer O&M activities. Producer
shall provide access to the Treatment System after receiving reasonable notice from OCWD.
B. To the extent OCWD finds that Producer is not adequately operating
and maintaining the Treatment System in accordance with industry standards and the
manufacturer’s directions, OCWD will, in the following order:
(1) meet with the Producer in attempt to resolve the inadequate
operation or maintenance;
(2) formally notify the Producer of its obligation to properly
maintain and operate the treatment system and give the
Producer up to 120 days to remedy any OCWD finding of
inadequate maintenance and/or improper operational
protocols;
(3) after 120 days, suspend O&M payments described in
Section 6.2 until such time as the Producer demonstrates to
OCWD that it is properly operating and maintaining the
treatment system;
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(4) no sooner than 270 days from the initial formal notice,
terminate this Agreement and seek to recoup, where
applicable, the cost of constructing the Treatment System
and/or other applicable damages.5
6. FINANCIAL.
6.1 Capital Costs—Payment and Reimbursement.
A. OCWD-Built Facilities—Upfront Payment. For OCWD-Built
Treatment System, OCWD will pay as up-front costs all planning, design, construction, and start-
up costs as described above, except for the costs for property rights, land use entitlements,
additions or enhancements, or as otherwise described in this Agreement.
B. Producer-Built Facilities—Reimbursement. OCWD shall
reimburse the Producer for all of the Producer’s reasonable expenses for the planning, design,
construction, and start-up of Treatment System on a monthly basis. OCWD shall pay
reimbursements to the Producer within 30 days of receiving adequate documentation from the
Producer.
C. Prior Expenditures. Within 60 days after the Effective Date, OCWD
will reimburse the Producer for any previous reasonable and authorized expenses incurred by the
Producer prior to the Effective Date in evaluating or developing the design for or constructing the
Treatment System for the Producer’s Impacted Wells.
(1) Authorized expenses include, but may not be limited to:
(1) design type costs, consultants and contractor; (2) pre-purchase of equipment and media for
Treatment System; (3) equipment installed to temporarily treat for PFAS compounds which can
be repurposed by the Producer into the Producer’s final Treatment System; (4) permitting cost;
and (5) CEQA type expenses. These same expenses incurred by Producer going forward are also
eligible for reimbursement. Design, engineering, or evaluative type expenses incurred by a
Producer that may be eligible for reimbursement, as reasonably determined by OCWD in its sole
discretion (with input from the Producer) could include: (1) outside consultant costs and studies
incurred by the Producer and related to the development and design of the Treatment System;
(2) equipment installed to temporarily treat for PFAS compounds which can be repurposed by
OCWD into a final treatment system; (3) permitting cost; and (4) CEQA type expenses.
5 Any action by OCWD to recoup its, or the Producer’s, OCWD funded costs for construction
of the PFAS treatment system would be prorated based upon the length of time the treatment
facilities has been in operation, and by any percentage of third-party cost recovery OCWD has
obtained. For example, a breach by Producer in year twenty-five (25) of the thirty (30) year term
of this Agreement would result in OCWD recouping significantly less than if the breach occurred
in year five since twenty five years of useful life of the facility would have occurred, and would
be further offset by any third-party cost recovery obtained by OCWD during that time.
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(2) Unauthorized expenses for reimbursement shall include:
(1) the Producer’s staff time; (2) direct or indirect overhead type expenses for staff; and (3) costs
not primarily attributable to Treatment System design, construction and O&M.
6.2 O&M Reimbursement.
A. Reimbursement Rate. OCWD shall reimburse each Producer for
50% of allowable O&M costs, up to $75/acre-foot of water treated by the Treatment System.
B. O&M Unit Cost. Each Producer shall annually calculate the O&M
unit cost of the Treatment System on a July 1st to June 30th fiscal year basis and submit this
information by October 1st of the following fiscal year to OCWD for review and reimbursement.
The unit cost shall be calculated by dividing all appropriate and allowable O&M expenses by the
Treatment System total water treated. The annual submittal by the Producer shall include all
documentation and backup information necessary to support the unit cost calculation. Each
Producer shall provide any reasonable information requested by OCWD in verifying the
Producer’s unit cost or other expenses for which the Producer seeks reimbursement per this
Agreement. After execution of the agreement, at the request of the Producer after the Treatment
System(s) are fully operational, OCWD will make a six month progress payment by January 30th
of each fiscal year based upon no more than 50% of the estimated eligible total O&M cost OCWD
would normally reimburse at the end of the fiscal year as determined by OCWD with input from
the Producer.
C. Reimbursable/Allowable Costs. Allowable O&M costs are the costs
to the Producer necessarily incurred for the regular operation and maintenance of the Treatment
System, as reasonably determined by OCWD after good faith consultation with Producer.
Allowable O&M cost shall consider the specific site issues of each Treatment System. Examples
of allowable O&M costs may include, but are not limited to:
(1) periodically replacing carbon, resin, or other adsorption
media;
(2) necessary power and chemical cost to operate the Treatment
System;
(3) routine maintenance of the Treatment System;
(4) periodic repair and replacement type cost items;
(5) cost of additional staff time to operate the Treatment System;
(6) required water quality sampling and testing for compliance
monitoring;
(7) determining and implementing compliance with new or
revised PFAS regulations;
(8) additional pumping cost caused by the Treatment System;
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(9) disposal of waste materials generated by the Treatment
System, including landfill costs and incineration, and costs
of hazardous waste disposal (if applicable);
(10) sewerage costs associated with maintenance/backwash of
the Treatment System; and
(11) such other reasonable maintenance costs as are necessary to
ensure the Treatment System continues to operate properly
consistent with its design.
D. Non-reimbursable costs include:
(1) existing Producer staff time costs not attributable to the
PFAS Treatment Facilities;
(2) direct or indirect overhead type expenses for staff; and
(3) cost resulting from a Producer’s inadequate operation and
maintenance of the Treatment System.
E. Reimbursement Rate Adjustment. The $75/acre foot rate will be
automatically adjusted annually each July 1 (beginning July 1, 2021) by the percentage differential
based on the last two annual indices set forth in the Bureau of Labor Statistics Consumer Price
Index for All Urban Consumers - Los Angeles-Long Beach-Anaheim. The maximum O&M
reimbursement rate may be increased by OCWD if there are unforeseen, unique or specific
circumstances of the Treatment System that, through no fault of a Producer, result in a higher cost
of treatment at a Producer’s treatment system, including increased costs attributable to new
statutes, regulations or regulatory interpretations.
F. Submittals; Reimbursement Timing. OCWD shall reimburse each
Producer its allowable O&M costs incurred by a Producer within 60 days of receiving the
Producer’s annual O&M unit cost calculation and supporting information as described in
Section 6.2.B. via direct payment.
G. Treatment Media. OCWD may solicit and enter into a future
contract with the appropriate activated carbon, resin, and/or other adsorption media manufacturers
to obtain a lower price for this material than could be obtained by the individual Producer. Unless
a Producer opts out in writing of this Section within 30 days of the Effective Date, Producer will
support and participate in OCWD efforts to obtain a lower cost for activated carbon and/or resin.
6.3 Grants.
A. OCWD-Sought. OCWD may seek federal, state, or other grant
funding to offset costs of the PFAS program contemplated by this Agreement. Each Producer
shall support and assist OCWD, as may be reasonably requested by OCWD, to obtain any grants
that may be used by OCWD to fund construction and/or future O&M of Treatment Systems. Grant
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funds received by OCWD will be used to fund OCWD’s costs of planning, design and construction
of Treatment systems, unless otherwise required by the terms of that grant.
B. Producer Support to OCWD-Sought Grants. Each Producer shall
support and assist OCWD in preparing any annual reports or documents necessary for OCWD to
comply with grants received for the PFAS program. Subject to the requirements of this
Section 6.3, no provisions in this Agreement will prevent a Producer from applying for grants or
loans, from any source, for PFAS treatment projects in its service territory.
C. Producer-Sought Funding. A Producer may also seek third-party
funding for Treatment System-related expenses. Any outside development and design type grants
or funding initiated and received by a Producer will be utilized to offset OCWD’s PFAS design or
construction costs for the Producer. If a Producer receives any grants or other third-party funding
for operational expenses of the Treatment System, that Producer shall share those proceeds with
OCWD in proportion to the percentage of O&M funded by OCWD if allowed by the grant or other
third-party funding instrument.
6.4 Records Retention, Audit. The Parties shall keep and maintain all records,
accounts and reports relating to this Agreement for a period of at least ten years after the date of a
final judgment or final settlement resolving any and all litigation related to PFAS cost recovery
initiated per Section 7.4 of this Agreement. The Parties will have access to these records at any
time during normal business hours upon 10 calendar days’ notice. At its cost, any Party may audit
the books, records and accounts of the Party relating to its performance of this Agreement, and the
audited Party shall provide reasonable cooperation to the auditing Party in this regard.
7. RISK ALLOCATION.
7.1 Insurance.
A. Construction Activities. In the hiring of consultants and contractors
to design and build the Treatment System, the hiring or contracting Party will have the other Party
(OCWD, if Producer-Built, or the designing/building Producer, if OCWD-Built) included as an
additional indemnitee and additional insured on the same basis and with the same limits in all
contracts. The hiring Party will use the higher of the two Parties’ standard limits for the purpose
of coverage requirements. For example, in connection with an OCWD-Built Treatment System,
OCWD shall have Producer named as an additional indemnitee and an additional insured in all
consulting and construction contracts related to the Producer’s Treatment System(s). In
connection with a Producer-Built Treatment System, Producer shall have OCWD named as an
additional indemnitee and an additional insured in all consulting and construction contracts. The
hiring or contracting Party shall provide the other Party with proof of insurance, including
additional insured endorsements.
B. Parties’ Coverage. Each Producer shall take out and maintain in
effect at all times during the term of this Agreement comprehensive general liability insurance in
an amount not less than $2 million per occurrence, for bodily injury, death and property damage
associated with the operation and maintenance of the Treatment Facilities and Impacted Wells,
naming OCWD as an additional insured under such policy. An endorsement evidencing this
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insurance coverage shall be furnished to OCWD prior to OCWD or Producer commencing
construction on a Treatment System. If the Producer is, or becomes, partially or fully self-insured
for its public liabilities, a letter executed by the Producer’s Chief Executive stating the Producer’s
self-insured status and acknowledging its responsibility to indemnify OCWD as required in this
Agreement, may be furnished in lieu of the insurance endorsement otherwise required herein. The
Producer shall provide written notice to OCWD of any change in the Producer’s insured or self-
insured status within 30 days of the date of such change.
7.2 Indemnity.
A. By Producer:
(1) Each Producer shall defend, indemnify and hold OCWD,
harmless from and against any and all actions, suits, claims, demands, judgments, attorney’s fees,
costs, damages to person or property, losses, penalties, obligations, expenses or liabilities
(collectively, “Claims”) that may be asserted or claimed by any third party arising out of the
negligent or reckless performance or implementation of this Agreement by Producer except for
Claims arising out of or relating to the design or construction of a Treatment System where OCWD
designed or constructed the Treatment System.
(2) Producer shall indemnify, defend and hold OCWD harmless
from any liability, or regulatory enforcement attributable, in whole or in part, to Producer’s failure
to properly operate and maintain the Treatment System and Impacted Wells.
B. By OCWD:
(1) OCWD shall defend, indemnify and hold each Producer
harmless from and against any and all Claims that may be asserted or claimed by any third party
arising out of the negligent or reckless performance or implementation of this Agreement by
OCWD, except for Claims arising out of or relating to the design or construction of a Treatment
System where the Producer designed or constructed the Treatment System.
7.3 Release and Hold Harmless.
A. Producers’ Release of OCWD.
(1) Producers, and each of them, hereby release OCWD, its
officers, directors, employees, agents and representatives, from any and all liability, known or
unknown, arising out of, or otherwise attributable to the discovery and/or presence of PFAS in the
Santa Ana River, the Basin, Producers’ Water Producing Facilities, and Producers’ potable or non-
potable water system, before, during or after treatment. Such release shall include, but is not
limited to, claims or litigation initiated by third parties against a Producer or OCWD, and any other
legal, administrative, or regulatory actions associated with OCWD’s performance of its obligations
under this Agreement (unless attributable to OCWD’s sole active negligence or willful misconduct
during such performance).
B. OCWD’s Release of Producers.
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(1) OCWD hereby releases each Producer, their officers,
directors, employees, agents and representatives, from any and all liability, known or unknown,
arising out of, or otherwise attributable to the discovery and/or presence of PFAS in the Santa Ana
River, the Basin, Producers’ Water Producing Facilities, and each Producers’ potable or non-
potable water system, before, during or after treatment. Such release shall include, but is not
limited to, claims or litigation initiated by third parties against a Producer or OCWD, and any other
legal, administrative, or regulatory actions associated with a Producer’s performance of obligations
under this Agreement (unless attributable to a Producer’s sole active negligence or willful
misconduct during such performance).
(2) This release by OCWD does not pertain in circumstances
where liability results, or is alleged to result, from the failure of a Producer to properly operate and
maintain the Treatment System constructed per this Agreement.
C. Producer’s Release of other Producers.
(1) Each Producer hereby releases and shall hold the other
Producers harmless from liability associated with the presence of PFAS in the Basin.
(2) However, this release by each Producer does not pertain to
circumstances where liability results, or is alleged to result, from the failure of the other
Producer(s) to properly operate and maintain the Treatment System(s) constructed per this
Agreement.
D. No Admission of Liability. Nothing contained herein shall be
deemed an admission of liability by any Party to this Agreement.
7.4 Legal Cost Recovery Efforts.
A. OCWD anticipates commencing litigation against responsible
parties, including chemical manufacturers of PFAS, in order to recover costs from persons
responsible for placing PFAS into the stream of commerce and/or the environment where it could
make its way into the Basin (“Damages”). The Producers shall support, coordinate, assist and
comply with all reasonable OCWD requests regarding OCWD’s cost recovery litigation related to
pursuit of Damages associated with PFAS.
B. OCWD will request each Producer that has sustained Damages to
determine if intends to jointly retain counsel (“Shared Litigation Counsel”) with OCWD in
litigation to recover Damages. Producers who join as co-plaintiffs are “Participating Producers”
in OCWD’s cost recovery efforts.
C. OCWD and Participating Producers will establish a Steering
Committee and Executive Committee to direct Shared Litigation Counsel and make litigation
decisions.
D. OCWD and Participating Producers will enter into an appropriate
joint prosecution/common interest agreement to hire Shared Litigation Counsel and establish
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confidentiality and privilege concerning communications and work product of the Steering
Committee and Executive Committee.
E. OCWD and Participating Producer agree that any Damages obtained
in the PFAS litigation will be pooled and distributed to OCWD and Participating Producers
proportionally to their respective claimed damages, such that each Participating Producer and
OCWD will recover the same percentage of their overall claimed damages in the manner shown
on Exhibit A.
F. Participating Producers can decide at any time to discontinue
participation in the litigation initiated by OCWD, but agree, if applicable, to pay to Shared
Litigation Counsel, in accordance with any retainer agreement negotiated with Shared Litigation
Counsel, for the withdrawing Producers share of Shared Litigation Counsel’s reasonable attorneys’
fees and cost incurred prior to the date of withdrawal (if any). Further, per the terms of any retainer
agreement with Shared Litigation Counsel, the Participating Producers agree to maintain as
confidential, and where applicable, to return, any communications and work product obtained via
the litigation.
G. OCWD believes that it is in the best interest of OCWD and
Producers impacted by PFAS to jointly initiate litigation as co-plaintiffs with Shared Litigation
Counsel. However, if a Producer decides to pursue or initiate separate PFAS litigation (“Separate
Litigation”), Producer shall notify OCWD of such intent thirty (30) days prior to formally filing
the Separate Litigation. Producer in the Separate Litigation must comply with the following:
(1) The Producer shall give OCWD the opportunity to review and
comment on Separate Litigation documents (e.g., pleadings) prior to any Separate Litigation filing.
(2) No PFAS related cost incurred by OCWD, or likely to be
incurred by OCWD, and related to the Producers treatment system(s) (construction and/or O&M),
will be asserted in a Producer’s Separate Litigation.
(3) In order to prevent duplicative claims for the same damages in
separate lawsuits, assertion of which without OCWD’s consent shall constitute a violation of this
Agreement, OCWD must approve any PFAS related cost a Producer is seeking to recover prior to
its assertion in Separate Litigation. However, OCWD shall not unreasonably withhold such
approval, and shall consult in good faith with counsel for a Producer that wishes to initiate Separate
Litigation in order to seek ways to accommodate the interests of both Parties, prior to disapproving
any cost.
(4) A Producer shall closely coordinate its separate legal action with
OCWD, and, where requested in good faith by OCWD, support the positions taken by OCWD
related to PFAS in court and in political, community and business forums.
(5) A Producer shall not assert claims against OCWD in any
litigation related to PFAS, or otherwise knowingly take positions that could result in OCWD or
other Producers incurring liability related to PFAS as a result of the position asserted by the
Producer in the Separate Litigation.
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8. EXPIRATION AND TERMINATION. This Agreement expires 30 years from
the Effective Date. A Producer may terminate this Agreement upon providing 90 days written
notice to OCWD. However, if a Producer terminates this Agreement prior to the 30 year date of
expiration, the Producer shall reimburse OCWD for all of OCWD’s unrecovered costs in
constructing the Treatment System using the methodology described in footnote 5, plus any other
reasonable expenses incurred by OCWD as a result of the early termination.
9. NOTICE. Any notice, instrument, payment or document required to be given or
delivered under this Agreement shall be given or delivered by personal delivery or by depositing
the same in a United States Mail depository, first class postage prepaid, and addressed as set forth
in Exhibit B. Notice under this Agreement may also be provided to such other address as any
Party may direct in writing to the other. Service of any instrument or document given by mail will
be deemed complete upon receipt if delivered personally, or forty eight (48) hours after deposit of
such instrument or document in a United States mail depository, first class postage prepaid, and
addressed as set forth above.
10. MISCELLANEOUS.
10.1 Further Assurances. The Parties shall execute and deliver any documents
and cooperate in performing any acts necessary to further the intent of this Agreement.
10.2 Time is of the Essence. Time is of the essence in performing all obligations
under this Agreement.
10.3 Counterparts. This Agreement may be executed in multiple counterparts,
each of which is an original. All signatures taken together will be considered as one and the same
agreement.
10.4 Force Majeure. Upon written notice by a Party, the respective duties and
obligations of the Parties will be suspended for the time period that performance by the Party is
prevented or substantially impeded by workforce strikes; riots; fire; flood; federal, state or county
regulatory action; pandemics, war; or terrorism.
10.5 Dispute Resolution. If a dispute arises between the Parties in connection
with this Agreement, the Parties shall engage in a mediation before a third-party neutral.
10.6 Successors and Assigns. All of the terms, conditions and provisions of this
Agreement inure to the benefit of and will be binding upon OCWD, the Producer, and their
respective successors and assigns.
10.7 No Implied Waivers. If any term, condition or provision of this Agreement
is breached by either Party and thereafter waived by the other Party, that waiver will be limited to
the specific breach so waived, and will not be deemed either to be a continual waiver or to waive
any other breach under this Agreement.
10.8 No Obligation to Third Parties. The approval, execution and performance
of this Agreement does not confer any rights upon any person or entity other than OCWD and the
Producers. There are no third-party beneficiaries to this Agreement. Each Producer’s obligations
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under this Agreement are to OCWD only, unless otherwise specifically stated herein
(e.g., requirement to release or provide notice to other Producers).
10.9 Nature of Relationship. This Agreement does not create, and will not be
construed or deemed to create, any agency, partnership, joint venture, landlord-tenant or other
relationship between OCWD and any Producer except as specified in this Agreement.
10.10 Integration, Construction and Amendment. This Agreement represents the
entire understanding of OCWD and each Producer as to the design and construction of PFAS
treatment facilities for the Impacted Wells. No prior oral or written understanding will be of any
force or effect with respect to those matters covered by this Agreement. This Agreement will be
construed as if drafted by both OCWD and each Producer.
10.11 Modification, Variance and Most Favored Nation Provisions. Unless
specifically authorized herein, this Agreement may not be modified, altered or amended unless in
writing signed by authorized representatives of both OCWD and all Producers, except that OCWD
and any individual Producer may enter into a Producer-specific “Variance” that will be applicable
only with respect to OCWD and that specific Producer. Except for where site-specific
circumstances require unique considerations, OCWD shall interpret and administer this
Agreement in a similar manner with each Producer. At least 30 days prior to approving any
proposed Variance, OCWD will provide written notice of the proposed Variance to the other
Producers and provide each with an opportunity to opt in to the same terms of that Variance. Upon
approval of any Variance, OCWD shall provide a fully-executed version of the Variance to each
Producer that has opted in under the Variance.
10.12 Severability. Each provision of this Agreement is severable from the whole.
If any provision of this Agreement is found contrary to law, the remainder of this Agreement will
continue in full force.
10.13 Authority.
A. Producer hereby agrees that funding provided by OCWD per this
Agreement is in furtherance of OCWD’s purpose of treating/purifying water in the Basin to
facilitate beneficial use of locally produced groundwater water in order to increase production of
groundwater containing PFAS from the Basin—to levels typical prior to setting of RLs for PFAS,
and that Producer’s production of water from the Basin is in lieu of Producer taking water from an
alternative non-tributary source, thereby furthering OCWD’s efforts to remove or eliminate PFAS
contaminants from the Basin.
B. By entering into this Agreement, each Party represents that it, and
to the best of its understanding the other Parties to this Agreement, have proper legal authority to
enter into this Agreement and to fund the work described herein. Each person executing this
Agreement on behalf of a Party warrants that they are: (1) duly authorized to execute and deliver
this Agreement on behalf of that Party, (2) by executing this Agreement, that Party is formally
bound to the provisions of this Agreement, and (3) entering into this Agreement does not violate
any provision of any other Agreement to which that Party is bound. No individual signing this
Agreement shall have individual liability under this Agreement. As a condition of entering this
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Agreement, all Parties expressly waive any future challenge to the legal authority of the other
Parties to enter into this Agreement, or to the authority of any other Party to fund the programs
described in this Agreement.
10.14 Construction and Amendment. The terms of this Agreement will be
construed in accordance with the plain meaning of the language used and will not be construed for
or against any Party by reason of the authorship of this Agreement or any other rule of construction
which might otherwise apply. The headings of sections and paragraphs of this Agreement are for
convenience or reference only and will not be construed to limit or extend the meaning of the
terms, covenants and conditions of this Agreement. This Agreement may only be amended by the
mutual consent of the Parties by an instrument in writing.
10.15 No Admissions. Nothing in this Agreement may be deemed an admission.
Moreover, no language that may have previously been circulated in prior drafts of this Agreement,
but subsequently removed at the request of a Producer, shall be used by either Party as evidence,
or in any other manner, in litigation currently pending in Los Angeles Superior Court between
OCWD and the City of Anaheim, Yorba Linda Water District, Golden State Water Company,
Mesa Water District, and East Orange County Water District on the one hand, and Irvine Ranch
Water District (IRWD) on the other, Case No. BS168278 [Lead Case] Case No. BS175192
[Consolidated Case] (the “Litigation”), as such Litigation may be amended from time to time.
10.16 Additional Parties. Notwithstanding any other provision of this Agreement,
OCWD is authorized to allow other groundwater pumpers in the Basin adversely impacted by
PFAS, but not named in this Agreement, to become Parties to and execute this Agreement without
obtaining the concurrence of the other Parties to this Agreement or otherwise modifying this
Agreement (except to add an additional signature block).
10.17 Effective Date and Binding Effect. The date OCWD executes this
Agreement shall be the Effective Date of this Agreement. Each Party executing the Agreement
thereafter shall be bound by, and benefit from, the terms of this Agreement on the date that Party
executes the Agreement, notwithstanding that other Parties have not yet executed the Agreement.
No Party shall be bound by this Agreement until such Party has executed this Agreement, nor shall
any Party that has executed this Agreement owe any contractual duty to any Party that has not yet
executed this Agreement until such other Party executes this Agreement. The timelines referenced
in Sections 6.1(C) and 6.2 (G) of this Agreement shall begin to run on the date a Producer executes
this Agreement if such date is after the Effective Date.
10.18 Electronic Signatures. Any Party may execute this Agreement using an
“electronic signature,” as that term is defined in California Civil Code Section 1633.2, or a “digital
signature,” as defined by California Government Code Section 16.5. An electronic or digital
signature will have full legal effect and enforceability. Nothing in this Agreement requires any
Party to use or accept the submission of any subsequent or related document containing an
electronic or digital signature where written notice is otherwise required by this Agreement.
[SIGNATURES FOLLOW]
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APPROVED AS TO FORM:
RUTAN & TUCKER, LLP
By:
Jeremy N. Jungreis
General Counsel, OCWD
ORANGE COUNTY WATER DISTRICT
By:
Vicente Sarmiento, President
By:
Michael R. Markus, General Manager
APPROVED AS TO FORM:
By:
City Attorney
CITY OF ANAHEIM
By:
APPROVED AS TO FORM:
By:
City Attorney
CITY OF FULLERTON
By:
APPROVED AS TO FORM:
By:
City Attorney
CITY OF GARDEN GROVE
By:
APPROVED AS TO FORM:
By:
City Attorney
CITY OF ORANGE
By:
[SIGNATURES CONTINUED]
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APPROVED AS TO FORM:
WOODRUFF, SPRADLIN & SMART,
APC
By:
David E. Kendig
City Attorney, City of Tustin
CITY OF TUSTIN
By:
Dr. Allan Bernstein, Mayor
ATTEST:
Daisy Gomez
Clerk of the Council
APPROVED AS TO FORM
SONIA R. CARVALHO, City Attorney
By:
John M. Funk
Assistant City Attorney
CITY OF SANTA ANA
By:
Kristine Ridge
City Manager
RECOMMENDED FOR APPROVAL
Nabil Saba
Acting Executive Director
Public Works Agency
APPROVED AS TO FORM:
ATKINSON, ANDELSON, LOYA, RUUD
& ROMO
By:
Jeffrey A. Hoskinson
EAST ORANGE COUNTY WATER
DISTRICT
By:
Lisa Ohlund, General Manager
[SIGNATURES CONTINUED]
Page 144 of 163
2629/022499-0087
14979764.1 a04/17/20 -21-
APPROVED AS TO FORM:
HANSON BRIDGETT, LLP
By:
Claire H. Collins
IRVINE RANCH WATER DISTRICT
By:
Paul A. Cook, General Manager
APPROVED AS TO FORM:
By:
S. Wayne Rosenbaum
SERRANO WATER DISTRICT
By:
Jerry A. Vilander
APPROVED AS TO FORM:
By:
Andrew B. Gagen
YORBA LINDA WATER DISTRICT
By:
APPROVED AS TO FORM:
By:
GOLDEN STATE WATER COMPANY
By:
Page 145 of 163
2629/022499-0087
14979764.1 a04/17/20
Exhibit A
Allocation of Recovery
Example of proportionally dividing damages assuming litigation, after paying Shared Litigation
Counsel, results in a total damage pool of 75% of all damages ($630M) claimed by all Participating
Producers (total claims of $839M). The column to the far right reflects each co-plaintiff’s
hypothetical recovery.
(Total Amount Claimed in Litigation by each co-plaintiff x .75)
(Dollar amounts shown are for illustrative purposes only and are not related to actual PFAS cost
that may be incurred or damages recovered. The numbers used herein are strictly hypothetical)
Page 146 of 163
2629/022499-0087
14979764.1 a04/17/20
Exhibit B
Notice Addresses
Orange County Water District
P.O. Box 8300
18700 Ward Street
Fountain Valley, CA 92708
Attn: General Manager
Mike Markus
City of Anaheim
201 S. Anaheim Blvd., Suite 1101
Anaheim, CA 92805
Attn: Assistant General Manager of Water Services
Michael Moore
City of Fullerton
303 W. Commonwealth Ave.
Fullerton, CA 92843
Attn: Public Works Director
Meg McWade
City of Garden Grove
13802 Newhope Street
Garden Grove CA, 92843
Attn: Public Works Director
Bill Murray
City of Orange
P.O. Box 449
Orange, CA 92856
Attn: Public Works Director
Joe DeFrancesco
City of Tustin
P.O. Box 466
Tustin, CA 92781
Attn: Water Resources Manager
Mike Grisso
Page 147 of 163
2629/022499-0087
14979764.1 a04/17/20 -2-
City of Santa Ana
220 S. Daisy, Bldg. A
Santa Ana, CA 92703
Attn: Water Resources Manager
Nabil Saba
East Orange County Water District
185 N. McPherson Road
Orange, CA 92869-3720
Attn: General Manager
Lisa Ohlund
Irvine Ranch Water District
15600 Sand Canyon Avenue
Irvine, CA 92618
Attn: General Manager
Paul Cook
Serrano Water District
18021 Lincoln Street
Villa Park, CA 92861-6446
Attn: General Manager
Jerry Vilander
Yorba Linda Water District
P.O. Box 309
Yorba Linda, CA 92885-0309
Attn: General Manager
Brett Barbre
Golden State Water Company
1920 W. Corporate Way
Anaheim CA 92801
Attn: District Manager
Ken Vecchiarelli
Page 148 of 163
ITEM NO. 9.3.
AGENDA REPORT
MEETING DATE:April 28, 2020
TO:Board of Directors
FROM:Brett R. Barbre, Assistant General Manager
STAFF CONTACTS:Annie Alexander, Executive Asst/Board Secretary
SUBJECT:Amending Schedule for Regular Board of Directors Meetings
RECOMMENDATION:
That the Board of Directors adopt Resolution No. 2020-XX amending Section 10.1 (A) of the
Board of Directors' Policies and Procedures Manual regarding the schedule for regular
meetings.
BACKGROUND:
Currently the Board of Directors' regular meetings are held the 2nd and 4th Tuesday of each
month at 6:30 p.m. Staff was asked to prepare an amendment to this schedule to modify the
4th Tuesday regular meetings to workshop meetings the same day beginning at 8:30 a.m. If
the Board determined the workshop wasn't needed, the meeting would be cancelled. Staff
has prepared a resolution for the Board's consideration to amend Section 10.1. (A) of the
Board of Directors Policies and Procedures Manual to reflect this change.
ATTACHMENTS:
1.Resolution
Page 149 of 163
Resolution No. 2020-XX Amending Schedule for Regular Meetings 1 of 2
RESOLUTION NO. 2020-XX
RESOLUTION OF THE BOARD OF DIRECTORS
OF THE YORBA LINDA WATER DISTRICT
AMENDING SCHEDULE FOR REGULAR MEETINGS
WHEREAS,the Board of Directors of the Yorba Linda Water District previously
adopted a Policies and Procedures Manual (Manual) by Resolution No.
18-06; and
WHEREAS,Section 10.1 (A) of this manual sets forth the schedule for Regular
Meetings; and
WHEREAS,the Board of Directors’ desires to modify this schedule.
NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Yorba Linda
Water District as follows:
SECTION 1.That Section 10.1 (A) of the Board of Directors Policies and Procedures
Manual adopted by Resolution No. 18-06 be amended effective
immediately to read as follows:
All regular meetings of the Board shall be held the second Tuesday of
each month commencing at 6:30 p.m. A workshop meeting shall be held
the fourth Tuesday of each month commencing at 8:30 a.m. unless
deemed unnecessary by the President or a majority of the Board. Closed
Sessions scheduled to occur on the same day as a regular meeting may
be noticed separately as a special meeting. Any member of the Board
may make a motion to complete any item under discussion during
meetings lasting more than four hours from the time of commencement.
All remaining items on the agenda which have not been acted upon shall
be continued to the next regular meeting or as specified by the Board.
Page 150 of 163
Resolution No. 2020-XX Amending Schedule for Regular Meetings 2 of 2
PASSED AND ADOPTED this 28th day of April 2020 by the following called vote:
AYES:
NOES:
ABSTAIN:
ABSENT:
Phil Hawkins, President
Yorba Linda Water District
ATTEST:
Annie Alexander, Board Secretary
Yorba Linda Water District
Reviewed as to form by General Counsel:
Andrew B. Gagen, Esq.
Kidman Gagen Law LLP
Page 151 of 163
ITEM NO. 9.4.
AGENDA REPORT
MEETING DATE:April 28, 2020
TO:Board of Directors
FROM:Brett R. Barbre, Assistant General Manager
STAFF CONTACTS:Annie Alexander, Executive Asst/Board Secretary
SUBJECT:Nominations for OC LAFCO Regular Special District Member Seat
RECOMMENDATION:
That the Board of Directors consider nominating candidate(s) for election to OC LAFCO's
Regular Special District Member Seat and designate two Directors to serve as the primary and
alternate voting representatives in the associated election.
BACKGROUND:
The nomination period for the OC LAFCO regular Special District Member seat which term
expires June 30, 2020 is now open. The Board has the option of nominating a candidate.
Should the Board desire to do so, the attached form must be completed and returned no later
than May 8, 2020 at 3:00 p.m. To date, the District has not received any requests for support
of candidacy.
Additionally, the appointment process is conducted by mailed ballot and the Board needs to
designate two Directors to serve as the District's primary and alternate voting representatives.
The attached declaration form must be returned by the same date and time as the nomination
form.
ATTACHMENTS:
1.Nomination and Declaration Forms
Page 152 of 163
Local Agency Formation Commission
Orange County
2677 North Main Street, Suite 1050, Santa Ana, CA 92705
(714) 640-5100 FAX (714) 640-5139
http://www.oclafco.org
REGULAR MEMBERS
CHAIR
Cheryl Brothers
City Member
VICE CHAIR
Douglass Davert
Special District Member
IMMEDIATE PAST CHAIR
Derek J. McGregor
Public Member
Lisa Bartlett
County Member
Dr. Allan Bernstein
City Member
James Fisler
Special District Member
Donald P. Wagner
County Member
ALTERNATES
Wendy Bucknum
City Member
Kathryn Freshley
Special District Member
Lou Penrose
Public Member
Michelle Steel
County Member
STAFF
Carolyn Emery
Executive Officer
March 24, 2020
TO: Independent Special District Presiding Officer
c/o Clerk of the District
FROM: Carolyn Emery, Executive Officer
SUBJECT: Appointment Process and Nomination Period for the
Orange County LAFCO Regular Special District
Member Seat
The nomination period for the Orange County LAFCO (OC LAFCO)
Regular Special District Member seat is now open. The OC LAFCO
Executive Officer will accept nominations for the regular special
district seat from March 24 through May 8, 2020. The current term for
the seat expires June 30, 2020.
The appointment process for the OC LAFCO special district seat is
governed by Government Code Section 56332 and the Independent
Special District Selection Committee Bylaws. In accordance with the
statute and the Committee’s Bylaws, the appointment process is
conducted by mailed ballot and attached to this notification are the
following:
A. The “Declaration of Qualification to Vote” for designating the
authorized regular voting member and the alternate voting member
of your district, for this appointment process. This form must be
returned to OC LAFCO no later than 3:00 PM on Friday, May 8, 2020.
Please note that if OC LAFCO does not receive the form by that date,
your district will be ineligible to vote.
B. The “2020 Nomination Form” for submitting a candidate’s name for
the Regular Special District seat. If your district is nominating a
candidate for the OC LAFCO Regular Special District Member seat,
the form must be filled out completely and returned to OC LAFCO
no later than 3:00 PM on Friday, May 8, 2020. Candidate resumes or
other supplemental information may be attached to the nomination
form and these materials will be distributed with the ballots.
Page 153 of 163
Appointment Process and Nomination Period - OC LAFCO Regular Special District Member Seat
March 24, 2020
Page 2 of 3
The Declaration and nomination form may be returned to OC LAFCO at any of the
following:
Email: ccarter-benjamin@oclafco.org
Mail: Orange County LAFCO
2677 North Main Street,
Suite 1050
Santa Ana, CA 92705
Attn: Cheryl Carter-Benjamin, Commission Clerk
FAX: (714) 640-5139
Attn: Cheryl Carter-Benjamin, Commission Clerk
For your reference, a timeline of key dates for the appointment process is shown below:
Please note, that Orange County LAFCO extends our wishes of good health and safety
to your agency and ask that if the extraordinary circumstances of Coronavirus
(COVID-19) may impact your agency’s ability to respond or participate in this process
in accordance with the prescribed timeline above, please contact me directly at (714)
640-5100 or by email at cemery@oclafco.org.
Appointment Process Schedule
for OC LAFCO Regular Special District Seat Expiring June 30, 2020
DATE EVENT
March 24, 2020
OC LAFCO Executive Officer emails nomination form and
Declaration of Qualification to Vote to each independent special
district presiding officer (c/o the clerk of the district) and general
manager.
May 8, 2020
(by 3:00 PM)
Submission of a nomination (if applicable) and Declaration of
Qualification to Vote are due to OC LAFCO by 3:00 p.m.*
May 18, 2020 Ballot is emailed to each special district presiding officer or
designee (c/o the clerk of the district).
June 22, 2020
(by 3:00 PM) Ballots are due to OC LAFCO by 3:00 p.m.
June 29, 2020 OC LAFCO staff (or designee) tabulates ballots and announces
results.
July 8, 2020 Oath of office administered at the Commission Regular Meeting.
*Pursuant to Government Code Section 56332(f)(2), at the end of the nominating period,
if only one candidate is nominated for the vacant seat, that candidate shall be deemed
appointed.
Page 154 of 163
Appointment Process and Nomination Period - OC LAFCO Regular Special District Member Seat
March 24, 2020
Page 3 of 3
Other questions may be directed to our Commission Clerk Cheryl Carter-Benjamin at
(714) 640-5100 or by email at ccarter-benjamin@oclafco.org.
Sincerely,
Carolyn Emery
Executive Officer
Attachments:
A. Declaration of Qualification to Vote
B. 2020 Nomination Form – Regular Special District Member
cc: Special District General Managers
Page 155 of 163
DECLARATION OF QUALIFICATION TO VOTE
To the Presiding Officer Phil Hawkins
c/o Clerk of the District
Annie Alexander (aalexander@ylwd.com)
Yorba Linda Water District
1717 E. Miraloma Avenue
Placentia, CA 92870-6785
I, ___________________________________,* hereby attest that
_____________________________**has been authorized by the Board of
_____________________________________to vote in the Orange County Special
District Selection Committee election as the regular voting member.
The Board also designated _________________________ **as the alternate
voting member.
Name and Title*: _____________________________________
Signature*: ________________________________
Date: __________________________
*Declaration MUST be signed by either Board President or Board Secretary
** Must be a member of the Board
Completed forms must be received by OC LAFCO by 3 PM, Friday, May 8, 2020.
Forms must be delivered to OC LAFCO by:
(1) Email at: ccarter-benjamin@oclafco.org, or
(2) Mail at: Orange County LAFCO
2677 North Main Street, Suite 1050
Santa Ana, CA 92705
Attn: Cheryl Carter-Benjamin, or
(3) FAX at: (714) 640-5139, Attn: Cheryl Carter-Benjamin
Page 156 of 163
2020 NOMINATION FORM
Candidates for the Orange County Local Agency Formation Commission (OC LAFCO)
CANDIDATE INFORMATION FOR REGULAR SPECIAL DISTRICT MEMBER:
NAME: _____________________________________________________________
TITLE: ______________________________________________________________
DISTRICT: ______________________________________________________________
❑ Check box if resume or statement of qualifications is attached.
SPECIAL DISTRICT SELECTION COMMITTEE MEMBER SUBMITTING NOMI NATION
(Must be the presiding officer or a designated alternate board member.)
NAME: ___________________________________ DATE: _____________________
SIGNATURE:
TITLE:
DISTRICT:
A resume or other supplemental information about the candidate may be included and will be
distributed with the ballots. Completed nomination form and supplemental information may be
returned to OC LAFCO by:
1.Email at: ccarter-benjamin@oclafco.org, or
2.Mail at: Orange County LAFCO
2677 North Main Street, Suite 1050
Santa Ana, CA 92705
Attn: Cheryl Carter-Benjamin, or
3.Fax at: (714) 640-5139, Attn: Cheryl Carter-Benjamin
All forms and supplemental information must be received by OC LAFCO by 3:00 p.m. on Friday,
May 8, 2020. Nomination forms or candidate information received after that deadline will not be
considered.
Page 157 of 163
ITEM NO. 10.1.
AGENDA REPORT
MEETING DATE:April 28, 2020
TO:Board of Directors
FROM:Brett R. Barbre, Assistant General Manager
STAFF CONTACTS:Delia Lugo, Finance Manager
Kaden Young, Senior Management Analyst
SUBJECT:Review of Projected Expenses to Budget for Fiscal Year 2020
RECOMMENDATION:
That the Board of Directors review the projected Budget to Actuals for FY20 and provide feedback to
staff in preparation for a mid-year review/adjustment of the FY20 & FY21 biennial budget.
SUMMARY:
With all the uncertainties that agencies are experiencing and working through in these
unprecedented times, staff has worked together in projecting the year end results as they
pertain to FY20 for review by the Board of Directors. A summary of FY20 Budget to Actual
projected results include:
Revenue shortfalls
Increased water related expenses
Savings in Salary and Related Expenses
Supplies & Services projections
BACKGROUND:
At the May 28, 2019 regular BOD meeting, staff provided Financial Summaries based on the analysis
of available data and historical trends and averages. Included in the Financial Summaries budget
document was a BOD approved 9% adjustment to the monthly Water Service Charge with effective
dates of July 1, 2020 and July 1, 2021.
PRIOR RELEVANT BOARD ACTION:
The District’s current biennial budget for FY20 and FY21 was approved by the Board of Director (BOD)
at the May 28, 2019 regular BOD meeting.
Page 158 of 163
ATTACHMENTS:
1.FYE20 Budget to Actuals Projection
Page 159 of 163
FY20
BUDGET
FYE20
WATER
FYE20
SEWER
FYE20
FORECAST
DELTA
$
DELTA
%
Revenue (Operating):
Water Revenue (Residential)16,548,758$ 13,275,874$ 999,259$ 14,275,134$ (2,273,624)$ ‐14%
Water Revenue (Commercial)1,872,073$ 1,647,619$ 124,014$ 1,771,634$ (100,440)$ ‐5%
Water Revenue (Landscape/Irrigation)3,917,982$ 3,153,065$ 237,327$ 3,390,392$ (527,590)$ ‐13%
Water Service Charges 10,988,263$ 10,204,621$ 768,090$ 10,972,711$ (15,552)$ 0%
Sewer Charge Revenue 2,421,665$ 2,219,734$ 167,077$ 2,386,810$ (34,854)$ ‐1%
Sewer Parcel Assessments 324,173$ 294,910$ 22,198$ 317,107$ (7,065)$ ‐2%
Other Operating Revenue 964,708$ 793,837$ 59,751$ 853,588$ (111,120)$ ‐12%
Total Operating Revenue 37,037,621$ 31,589,660$ 2,377,716$ 33,967,377$ (3,070,244)$ ‐8%
Revenue (Non‐Operating):
Interest 812,306$ 532,405$ 40,073$ 572,478$ (239,828)$ ‐30%
Property Tax 1,820,471$ 1,794,373$ 135,060$ 1,929,434$ 108,962$ 6%
Other Non‐Operating Revenue 632,910$ 505,248$ 38,029$ 543,277$ (89,632)$ ‐14%
Total Non‐Operating Revenue 3,265,687$ 2,832,026$ 213,163$ 3,045,189$ (220,498)$ ‐7%
40,303,307$ 34,421,686$ 2,590,880$ 37,012,566$ (3,290,742)$ ‐8%
Expenses (Operating):
Variable Costs
Water‐Related Costs 12,485,582$ 13,311,181$ 1,001,917$ 14,313,097$ 1,827,515$ 15%
Fixed Costs 1,179,009$ 1,096,479$ 82,531$ 1,179,009$ ‐$ 0%
Power‐Related Costs 1,446,219$ 1,369,657$ 103,092$ 1,472,749$ 26,530$ 2%
Total Variable Water Costs Related Expenses 15,110,810$ 15,777,316$ 1,187,540$ 16,964,856$ 1,854,046$ 12%
Salary Related Expenses 11,959,922$ 9,636,337$ 725,316$ 10,361,653$ (1,598,269)$ ‐13%
Reduction for Capital Project Labor (295,000)$ (193,855)$ (14,591)$ (208,446)$ 86,554$ ‐29%
Total Salary Related Expenses 11,664,922$ 9,442,482$ 710,724$ 10,153,207$ (1,511,716)$ ‐13%
Supplies & Services
Communications 241,595$ 220,364$ 16,587$ 236,950$ (4,645)$ ‐2%
Contractual Services 527,481$ 437,768$ 28,639$ 466,407$ (61,074)$ ‐12%
Data Processing 345,450$ 269,014$ 17,238$ 286,252$ (59,198)$ ‐17%
Dues & Memberships 84,790$ 86,221$ 6,490$ 92,711$ 7,921$ 9%
Fees & Permits 305,780$ 319,101$ 20,715$ 339,816$ 34,036$ 11%
Board Election ‐$ ‐$ ‐$ ‐$ ‐$ 0%
Insurance 327,385$ 280,097$ 21,083$ 301,180$ (26,205)$ ‐8%
Materials 1,013,400$ 957,957$ 20,500$ 978,457$ (34,943)$ ‐3%
District Activities 46,635$ 44,351$ 3,338$ 47,689$ 1,054$ 2%
Maintenance 736,300$ 593,169$ 158,593$ 751,762$ 15,462$ 2%
Non‐Capital Equipment 210,320$ 156,260$ 38,876$ 195,136$ (15,184)$ ‐7%
Office Expense 36,505$ 39,620$ 2,982$ 42,602$ 6,097$ 17%
Professional Services 742,200$ 847,485$ 133,237$ 980,722$ 238,522$ 32%
Training 86,870$ 47,612$ 8,630$ 56,242$ (30,628)$ ‐35%
Travel & Conferences 140,640$ 76,124$ 8,603$ 84,727$ (55,913)$ ‐40%
Uncollectible Accounts 4,500$ 4,239$ 319$ 4,558$ 58$ 1%
Utilities 192,750$ 207,380$ 15,609$ 222,989$ 30,239$ 16%
Vehicle Expenses 376,700$ 323,806$ 68,575$ 392,381$ 15,681$ 4%
Total Supplies & Services 5,419,301$ 5,096,940$ 383,641$ 5,480,581$ 61,280$ 1%
Total Operating Expenses 32,195,034$ 30,316,738$ 2,281,905$ 32,598,643$ 403,610$ 1%
Expense (Non‐Operating)
Interest Expenses 1,303,967$ 1,212,689$ 91,278$ 1,303,967$ ‐$ 0%
Other Expenses 13,520$ 12,574$ 946$ 13,520$ ‐$ 0%
Total Non‐Operating Expenses 1,317,487$ 1,225,262$ 92,224$ 1,317,487$ ‐$ 0%
33,512,520$ 31,542,001$ 2,374,129$ 33,916,130$ 403,610$ 1%
Net Income Before Capital Contributions and Special Item(s)6,790,787$ 2,879,685$ 216,751$ 3,096,436$ (3,694,351)$ ‐54%
Special Item(s)‐$ ‐$ ‐$ ‐$ 0%
Capital Contributions ‐$ ‐$ ‐$ ‐$ 0%
Net Income Before Depreciation 6,790,787$ 2,879,685$ 216,751$ 3,096,436$ (3,694,351)$ ‐54%
Depreciation 7,720,659$ 5,849,610$ 440,293$ 6,289,903$ (1,430,756)$ ‐19%
(929,872)$ (2,969,924)$ (223,543)$ (3,193,467)$ (2,263,596)$ 243%
TOTAL EXPENSES
TOTAL REVENUE
INCOME (LOSS)
FYE20 Budget to Actuals Projection
Page 160 of 163
ITEM NO. 11.1.
AGENDA REPORT
MEETING DATE:April 28, 2020
TO:Board of Directors
FROM:Brett R. Barbre, Assistant General Manager
STAFF CONTACTS:Annie Alexander, Executive Asst/Board Secretary
SUBJECT:Directors' Reports
The Directors will report on their attendance at the following events:
1.MWDOC Board - April 15, 2020 (Nederhood/Miller)
2.OCWD Board - April 15, 2020 (Jones)
3.WACO Planning Committee - April 21, 2020
4.SAWPA Commission - April 21, 2020
5.YL City Council - April 21, 2020
6.MWDOC/Joint Planning Committee - April 22, 2020
7.OCSD Board - April 22, 2020 (Jones)
Page 161 of 163
ITEM NO. 13.1.
AGENDA REPORT
MEETING DATE:April 28, 2020
TO:Board of Directors
FROM:Brett R. Barbre, Assistant General Manager
STAFF CONTACTS:Annie Alexander, Executive Asst/Board Secretary
SUBJECT:Meetings from April 29 - June 30, 2020
ATTACHMENTS:
1.BOD - Activities Calendar
Page 162 of 163
Board of Directors Activity Calendar
Event Date Time Attendees
April
Joint Committee Meeting with City of Placentia Wed, Apr 29 3:00 PM Hawkins/Hall
YL Planning Commission Wed, Apr 29 6:30 PM Hawkins (As Needed)
May
WACO Fri, May 1 7:30 AM
ISDOC Executive Committee Tue, May 5 7:30 AM Nederhood
SAWPA Commission Tue, May 5 9:30 AM
YL City Council Tue, May 5 6:30 PM Hall
MWDOC Board Wed, May 6 8:30 AM Nederhood/Miller
OCSD Operations Committee Wed, May 6 5:00 PM Jones
OCWD Board Wed, May 6 5:30 PM Jones
Board of Directors Regular Meeting Tue, May 12 6:30 PM
OC LAFCO Wed, May 13 8:15 AM
YL Planning Commission Wed, May 13 6:30 PM Hawkins (As Needed)
WACO Planning Committee Tue, May 19 7:30 AM
TENTATIVE - Board of Directors Workshop Meeting Tue, May 19 8:30 AM
SAWPA Commission Tue, May 19 9:30 AM
YL City Council Tue, May 19 6:30 PM Miller
MWDOC Board Wed, May 20 8:30 AM Nederhood/Miller
OCWD Board Wed, May 20 5:30 PM Jones
Board of Directors Regular Meeting Tue, May 26 8:30 AM
OCSD Board Wed, May 27 6:00 PM Jones
YL Planning Commission Wed, May 27 6:30 PM Hawkins (As Needed)
Interagency Committee Meeting with MWDOC and OCWD Thu, May 28 4:00 PM Hawkins/Nederhood
June
ISDOC Executive Committee Tue, Jun 2 7:30 AM Nederhood
SAWPA Commission Tue, Jun 2 9:30 AM
YL City Council Tue, Jun 2 6:30 PM Nederhood
MWDOC Board Wed, Jun 3 8:30 AM Nederhood/Miller
OCSD Operations Committee Wed, Jun 3 5:00 PM Jones
OCWD Board Wed, Jun 3 5:30 PM Jones
WACO Fri, Jun 5 7:30 AM
Board of Directors Regular Meeting Tue, Jun 9 6:30 PM
OC LAFCO Wed, Jun 10 8:15 AM
YL Planning Commission Wed, Jun 10 6:30 PM Hawkins (As Needed)
TENTATIVE - Board of Directors Workshop Meeting Thu, Jun 11 8:30 AM
WACO Planning Committee Tue, Jun 16 7:30 AM
SAWPA Commission Tue, Jun 16 9:30 AM
YL City Council Tue, Jun 16 6:30 PM Jones
MWDOC Board Wed, Jun 17 8:30 AM Nederhood/Miller
OCWD Board Wed, Jun 17 5:30 PM Jones
Board of Directors Regular Meeting Tue, Jun 23 6:30 PM
OCSD Board Wed, Jun 24 6:00 PM Jones
YL Planning Commission Wed, Jun 24 6:30 PM Hawkins (As Needed)
As of April 22, 2020
Page 163 of 163
BACKUP MATERIALS DISTRIBUTED LESS THAN 72 HOURS PRIOR TO THE MEETING
FY20
BUDGET
FYE20
WATER
FYE20
SEWER
FYE20
FORECAST
DELTA
$
DELTA
%
Revenue (Operating):
Water Revenue (Residential)16,548,758$ 14,275,134$ 14,275,134$ (2,273,624)$ -14%
Water Revenue (Commercial)1,872,073$ 1,771,634$ 1,771,634$ (100,440)$ -5%
Water Revenue (Landscape/Irrigation)3,917,982$ 3,390,392$ 3,390,392$ (527,590)$ -13%
Water Service Charges 10,988,263$ 10,972,711$ 10,972,711$ (15,552)$ 0%
Sewer Charge Revenue 2,421,665$ 2,386,810$ 2,386,810$ (34,854)$ -1%
Sewer Parcel Assessments 324,173$ 317,107$ 317,107$ (7,065)$ -2%
Other Operating Revenue 964,708$ 793,837$ 59,751$ 853,588$ (111,120)$ -12%
Total Operating Revenue 37,037,621$ 31,203,708$ 2,763,669$ 33,967,377$ (3,070,244)$ -8%
Revenue (Non-Operating):
Interest 812,306$ 480,070$ 92,408$ 572,478$ (239,828)$ -30%
Property Tax 1,820,471$ 1,929,434$ 1,929,434$ 108,962$ 6%
Other Non-Operating Revenue 632,910$ 535,266$ 8,011$ 543,277$ (89,633)$ -14%
Total Non-Operating Revenue 3,265,687$ 2,944,770$ 100,419$ 3,045,189$ (220,498)$ -7%
40,303,307$ 34,148,478$ 2,864,088$ 37,012,566$ (3,290,742)$ -8%
Expenses (Operating):
Variable Costs
Water-Related Costs 12,485,582$ 14,313,097$ 14,313,097$ 1,827,515$ 15%
Fixed Costs 1,179,009$ 1,179,009$ 1,179,009$ -$ 0%
Power-Related Costs 1,446,219$ 1,472,749$ 1,472,749$ 26,530$ 2%
Total Variable Water Costs Related Expenses 15,110,810$ 16,964,856$ 16,964,856$ 1,854,046$ 12%
Salary Related Expenses 11,664,922$ 9,118,982$ 1,034,205$ 10,153,187$ (1,511,735)$ -13%
Reduction for Capital Project Labor
Total Salary Related Expenses 11,664,922$ 9,118,982$ 1,034,205$ 10,153,187$ (1,511,735)$ -13%
Supplies & Services
Communications 241,595$ 220,364$ 16,587$ 236,950$ (4,645)$ -2%
Contractual Services 527,481$ 437,768$ 28,639$ 466,407$ (61,074)$ -12%
Data Processing 345,450$ 269,014$ 17,238$ 286,252$ (59,198)$ -17%
Dues & Memberships 84,790$ 86,221$ 6,490$ 92,711$ 7,921$ 9%
Fees & Permits 305,780$ 319,101$ 20,715$ 339,816$ 34,036$ 11%
Board Election -$ -$ -$ -$ -$ 0%
Insurance 327,385$ 280,097$ 21,083$ 301,180$ (26,205)$ -8%
Materials 1,013,400$ 957,957$ 20,500$ 978,457$ (34,943)$ -3%
District Activities 46,635$ 44,351$ 3,338$ 47,689$ 1,054$ 2%
Maintenance 736,300$ 593,169$ 158,593$ 751,762$ 15,462$ 2%
Non-Capital Equipment 210,320$ 156,260$ 38,876$ 195,136$ (15,184)$ -7%
Office Expense 36,505$ 39,620$ 2,982$ 42,602$ 6,097$ 17%
Professional Services 742,200$ 847,485$ 133,237$ 980,722$ 238,522$ 32%
Training 86,870$ 47,612$ 8,630$ 56,242$ (30,628)$ -35%
Travel & Conferences 140,640$ 76,124$ 8,603$ 84,727$ (55,913)$ -40%
Uncollectible Accounts 4,500$ 4,239$ 319$ 4,558$ 58$ 1%
Utilities 192,750$ 207,380$ 15,609$ 222,989$ 30,239$ 16%
Vehicle Expenses 376,700$ 323,806$ 68,575$ 392,381$ 15,681$ 4%
Total Supplies & Services 5,419,301$ 4,910,566$ 570,014$ 5,480,581$ 61,280$ 1%
Total Operating Expenses 32,195,033$ 30,994,404$ 1,604,220$ 32,598,624$ 403,590$ 1%
Expense (Non-Operating)
Interest Expenses 1,303,967$ 1,303,967$ 1,303,967$ 0$ 0%
Other Expenses 13,520$ 117,994$ 32,859$ 150,853$ 137,333$ 1016%
Total Non-Operating Expenses 1,317,487$ 1,421,961$ 32,859$ 1,454,820$ 137,334$ 10%
33,512,520$ 32,416,365$ 1,637,079$ 34,053,444$ 540,924$ 2%
Net Income Before Capital Contributions and Special Item(s)6,790,788$ 1,732,113$ 1,227,009$ 2,959,122$ (3,831,666)$ -56%
Special Item(s)
Capital Contributions
Net Income Before Depreciation 6,790,788$ 1,732,113$ 1,227,009$ 2,959,122$ (3,831,666)$ -56%
Depreciation 7,720,659$ 6,335,693$ 1,439,462$ 7,775,155$ 54,496$ 1%
(929,871)$ (4,603,580)$ (212,453)$ (4,816,033)$ (3,886,162)$
TOTAL EXPENSES
TOTAL REVENUE
INCOME (LOSS)
REVISED ITEM NO. 10.1.
MATERIALS SUBMITTED BY: Delia Lugo and Kaden Young
MEETING DATE: April 28, 2020
ITEM NO. 11.2.
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Yorba Linda
Water District
Assistant General Manager's Report
April 28, 2020
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Item 11 .2 — AGM Report — April 28, 2020
MATERIALS SUBMITTED BY: Brett R. Barbre
MEETING DATE: April 28, 2020
ITEM NO. 11.2.
CN
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'Item 1 : Property Tax Distribution - April 2020
Aprli' l 2020
Distribution from April Collection
$ 1 � 851 � 751 (97 %)
Item 11 .2 — AGM Report —April 28, 2020
MATERIALS SUBMITTED BY: Brett R. Barbre
MEETING DATE: April 28, 2020
ITEM NO. 11.2.
WOW
Item 1 : Propqrty Tax Distribution - Historic
Fiscal Year Budget Actual Variance
2007/08 $1 ,292,600 $1 ,359,049 $66,449
2008/09 $1 ,305,050 $1 ,381 ,219 $76,169
2009/10 $1 ,316,000 $1 ,369,119 $53,119
2010/11 $1 ,308,828 $1 ,362,799 $53,971
2011/12 $1 ,427,438 $1 ,479,290 $51 ,852
2012/13 $174047182 $1 ,541 ,105 $136,923
2013/14 $17465,469 $1 ,595,776 $130,307
2014/15 $17484,642 $1 ,690,103 $205,461
2015/16 $1 ,596,500 $1 ,795,198 $1987698
2016/17 $1 ,648,400 $1 ,903,237 $2547837
2017/18 $1 ,698,400 $2,016,686 $3187286
2018/19 $271237249 $271737334 $50,085
2019/20 $271447644 $212491360 $1041716
Item 11 .2 — AGM Report —April ril 28, 2020
P P
MATERIALS SUBMITTED BY: Brett R. Barbre
MEETING DATE: April 28, 2020
ITEM NO. 11.2.
k7710 4
Item 2: Current Delinquent •
Late Payments_
Payment Due Residential Commercial Total Past Due # Customers
January 2020 $77.31 $0.00 $77.31 2 RES
February 2020 $2,220.53 $192.42 $2,412.95 55 RES----5 COMM
March 2020 $53,373.19 $10,918.72 $64,291.91 782 RES----45 COMM
April 2020 $75,464.33 $52,086.89 $127,551.22 962 RES----168 COMM
Current Total Outstanding Bill Amounts - $194,333.39 or 2,019 customers
Total Residential - $131,135.36 or 1,801 residential customers
Total Commercial - $63,198.03 or 218 commercial customers
NOTE: - Last month prior to S13998; Fir - first shut-offs under SB998 - May 4, 2020
Governor's order to suspend all shutoffs - March 4, 2020
All data as of April 28, 2020
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Item 11 .2 - AGM Report - April 28, 2020
MATERIALS SUBMITTED BY: Brett R. Barbre
MEETING DATE: April 28, 2020
ITEM NO. 11.2.
Item 2: Current Delinquent & Late Payments
Billing and Payment/Collection Process
Cycle 1 Billing — 7,700
Pay on-time (27 days) — 7,159 (541 remaining)
Pay after Past Due Penalty assessed (29 days) — 393 (148 remaining)
-----SB 998 INTERRUPTS COLLECTION CYCLE-----
Pay after Yellow Tag (7 days prior to shut-off date) — 118 (30 remaining)
Pay after "Stop the Shut-off" Calls (1 day prior to shut-off) — 24 (6 remaining)
Water shut-offs —
93% pay on-time; 98% pay after Past Due Penalty assessed
Item 11 .2 - AGM Report - April 28, 2020 -
MATERIALS SUBMITTED BY: Brett R. Barbre
MEETING DATE: April 28, 2020
ITEM NO. 11.2.
! ' of i •
f"Item 3: Online Bill
Payments
Customers : ~25, 300
Category Old System Invoice Cloud %
Registered 13,151 121400 94%
Auto-Pay 6,977 71457 106%
Paperless Billing 7,033 8,103 115%
Current Bill Message
Due to rising concerns surrounding the COVID-19 virus, YLWD asks that
customers, rather than visiting us in person, utilize our online bill pay service, pay
by text, after-hours bill pay or call us @714-701-3000 Monday - Thursday 7a.m.-
6 p.m. to pay their bills. For more info, visit www.vlwd.com.
Item 11 .2 — AGM Report —April 28, 2020
MATERIALS SUBMITTED BY: Brett R. Barbre
MEETING DATE: April 28, 2020
ITEM NO. 11.2.
Pk
• rte•• r-
reM"""3: Online Bill Payments - Messaging
Yorba Linda Water District ... Yorba Linda Water District ...
March 20..Oji 0 MaPCh 113 [1
Pay your water hill without leaving your home,visit our websEte Due to rising concerns surrounding the COVID-19 virus,YLWD will be
www.ylwd.com or call 744-701-3000,Monday-Thursday from 7 AM- shutting access to our lobby beginning tomorrow.YLWD asks that
6 PIN customers,rather than visiting us in person,utilize our online bill pay
service,pay by text or after-hours bill pay to pay their bills.Visit
www.ylwd.com or call us at 714-701-3000.
YORBA LINDA WATER DISTRICT
ONLINE LOBBY CLOSED TO PUBLIC
EFFECTiYE TUESDAY,MAGCH IT
24/7
FOR CUSTOMER ASSISTANCE,
Y LW D. •M EMAIL 1HFDEYLwD.GOM OR
GALL 714-741-!
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Fk67.i MaW)AY- TH UPSDAT.i AM
WAYS TO
PAY
BILLY
714-701 -3000
Monday-Thursday
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Item 11 .2 — AGM Report —April 28, 2020 V
MATERIALS SUBMITTED BY: Brett R. Barbre
MEETING DATE: April 28, 2020
ITEM NO. 11.2.
Pk
Item 3: Online Bill Payments - Messaging
1% mlr A ON L I 14E
24/7
Pay
by TeX1
mobile Payments
ReminderqR= WAYS TO
Bill
Pay by Phone A
Notifications
tMonday. . . .
Quickly it
proudlyTjursdzyWe
io protect CbStnnldr3 arltl employees tmrn the sproatl oP GDV4D-
1 s•YLWD has temporary closed puteic access to nur lotlby.we
erlCnufage custnmars r0 utilize nur new enllancso onime bill pay
AMERICAN ssrytce to pay their it w0
YLWO bill,pPease Visww.ytw .cern1.
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Our cuatbmex service team win be available tnmugh emelt
llnio mylwtl.com}or phone(714.704.390x1 Monday-Thursday
I cc • from 7 Am-r3 PM.
For all Water emmgannlas,plsasa call 714.791.3009_
Paying Your YLWD Bill Just Got Easier sin Payment Vibns
•(}dime
•sy Phone via Caedll•Card
By Text
drop-sox
Avid-Pay
sy Mail
Vlsll nur bill paywht onions page for mora verinnamn,
htrpsJ/ytwa.comlcvscomer•serulca•'blll•payrnant-options.
Item 11 .2 — AGM Report —April ril 28 202 - - `�
po p 0
MATERIALS SUBMITTED BY: Brett R. Barbre
MEETING DATE: April 28, 2020
ITEM NO. 11.2.
WOW
Item 4: Fairmont -
Financial
Fairmont Booster Pump Station — Primary Construction
Service Vendor Budget Change Orders Total
Design MWH/Stantec $549,584.00 $147,109.00 $696,693.00
Hydraulic Model & Planning Carollo $102,883.00 $0.00 $102,883.00
Construction Pacific Hydrotech $6,911,100.00 $407,628.30 $7,318,728.30
TOTALS $7,563,567.00 $5545737.30 $8,118,304.30
NON-BUDGETED ITEMS
Geotech Engineering Hushmand $0.00 $0.00 $86,671.50
Capitalized Interest $0.00 $0.00 $279,141.55
Misc. (Legal, Lee & Ro, AMEX, etc.) $0.00 $0.00 $77,100.47
Internal Labor $0.00 $0.00 $417,948.36
Developer Contribution Toll Brothers -$128,341.18
TOTAL $732,520.70
Grand Total : $8,850,825.00
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may. ■_3 - — "� 'tet R _�,►ear
Item 11 .2 —AGM Report —April 28, 2020
MATERIALS SUBMITTED BY: Brett R. Barbre
MEETING DATE: April 28, 2020
ITEM NO. 11.2.
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- FinancialItem 4: Fairmont
Fairmont Booster Pump Station - External Improvements
Service Vendor Amount
Hardscape/Landscape Vincor Construction $77,858.80
Design Stantec $77388.00
Parking Area/Paving Sanders Paving $9,510.20
Hardscape/Landscape Misc. $7,245.36
Internal Labor YLWD $3,720.28
TOTAL $105,722.64
Toll Brothers Contribution -$54,924.82
Grand Total $50,797.82
Item 11 .2 — AGM Report — April 28, 2020 —
e-raw
MATERIALS SUBMITTED BY: Brett R. Barbre
MEETING DATE: April 28, 2020
ITEM NO. 11.2.
WOW
,. � ..f •� # � I � of sItem 4: Fairmont -`�a• �-.
Financial
Fairmont Booster Pump Station — Stantec Claim
Item Vendor Amount
Claim Amount Paid Stantec $66,040.40
Internal Labor Costs YLWD -$111108.97
Legal Services Kidman Gagen -$715.00
Materials - PRS Solenoid Delta Wye -$488.00
Professional Services Tetra Tech -$4,950.00
Chemical Metering Skid Muniquip -$18,245.65
Professional - replace metering skid Cortech Engineering -$4,360.00
RESERVED - pumps $26,172.78
Item 11 .2 — AGM Report — April 28, 2020
MATERIALS SUBMITTED BY: Brett R. Barbre
MEETING DATE: April 28, 2020
ITEM NO. 11.2.
Item 4: Fairmont Summary
Fairmont Booster Pump Station — Design & Construction: $8,850,825.00
Fairmont Booster Pump Station — Landscape/Hardscape: $50,797.82
GRAND TOTAL : $8,9013622m82
Developer Contribution : $ 183 , 266
Stantec Settlement: $66 , 040 .40
_ 1
Item 11 .2 -AGM Report -April 28, 2020 - Y
MATERIALS SUBMITTED BY: Brett R. Barbre
MEETING DATE: April 28, 2020
ITEM NO. 11.2.
WOW
Item 4: Fairmont - Lessons Learned
• Building footprint size reduced to save money so not enough
space to include EOC backup location within new building.
• More soils testing should have been performed.
• Control Systems consultant should have been utilized in lieu of
involvement of former YLWD IT staff.
• QA/QC engineering consultant should have been hired to conduct
reviews of plans and specifications on project.
• Operations Staff should have been included in planning, design
and review process.
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Item 11 .2 —AGM Report —April 28, 2020
MATERIALS SUBMITTED BY: Brett R. Barbre
MEETING DATE: April 28, 2020
ITEM NO. 11.2.
Item 4: Fairmont — Stantec Claim Settlement
• We cut Stantec's authorized scope of work budget by
$36)508.47
• We negotiated a cash settlement of $66,040.40 for
damages.
• The cash settlement paid for all claim related expenses
for: legal counsel , Yl_WD labor, independent engineering .
consultant review, and repairs/restoration of equipment.
• We had an additional $26k leftover to apply to
landscaping costs.
Item 11 .2 —AGM Report —April 28, 2020
MATERIALS SUBMITTED BY: Brett R. Barbre
MEETING DATE: April 28, 2020
ITEM NO. 11.2.
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Item 11 .2 — AGM Report —April 28, 2020
MATERIALS SUBMITTED BY: Brett R. Barbre
MEETING DATE: April 28, 2020
ITEM NO. 11.2.
Pk *All e
Yorba Linda
Water District
. . .. ..............
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Item 11 .2 —AGM Report — April 28, 2020
MATERIALS SUBMITTED BY: Brett R. Barbre
MEETING DATE: April 28, 2020