Title
a. Consider financing options for the Monterey County Water Resources Agency Interlake Tunnel Project;
b. Re-affirm authority for the County Administrative Officer to execute the Reimbursement and Funding Agreement between the County of Monterey and the Monterey County Water Resources Agency for Preliminary Engineering and Design, Water Rights Analysis, and Initial Program Management for the Inter Lake Tunnel Project dependent on direction provided regarding financing options; and
c. Approve & authorize a transfer of $500,000 in appropriations from General Fund Contingencies (001-1050-8034) to Contributions- Other Agencies (001-1050-8029) dependent on direction provided regarding financing options to provide for reimbursements related to the Funding Agreement. (4/5 vote required.) (ADDED VIA ADDENDUM)
Report
RECOMMENDATION:
It is recommended that the Board of Supervisors:
a. Consider financing options for the Monterey County Water Resources Agency Interlake Tunnel Project;
b. Re-affirm authority for the County Administrative Officer to execute the Reimbursement and Funding Agreement between the County of Monterey and the Monterey County Water Resources Agency for Preliminary Engineering and Design, Water Rights Analysis, and Initial Program Management for the Inter Lake Tunnel Project dependent on direction provided regarding financing options; and
c. Approve & authorize a transfer of $500,000 in appropriations from General Fund Contingencies (001-1050-8034) to Contributions- Other Agencies (001-1050-8029) dependent on direction provided regarding financing options to provide for reimbursements related to the Funding Agreement. (4/5 vote required.)
SUMMARY:
On June 3, 2014, the Board of Supervisors of the County of Monterey authorized negotiation and execution of a funding agreement between Monterey County and the Monterey County Water Resources Agency for an amount not to exceed $500,000 for program management, engineering and environmental review of the Interlake Tunnel Project, said funds to be reimbursed to Monterey County if the Project is approved and financed; and directed staff to return to the Board of Supervisors in July 2014 with a project status report and information on financial impact to the County in regards to funding the agreement. The Board of Supervisors for the Monterey County Water Resources Agency also authorized the Water Resources Agency General Manager to enter into the necessary agreements to prepare for and commence environmental review of the Project in an initial amount not to exceed $500,000 provided funding is approved by Monterey County.
DISCUSSION:
The Funding Agreement has been negotiated. (See Attachment A.) County staff has identified funding options which can be approved for use with for the Funding Agreement, as provided in the Financing section. If the Board approves the use of County funds for the Agreement, the Board is requested to re-affirm the authority of the CAO to execute the Funding Agreement; should Agency funds be used the Agreement will not be necessary.
Once funding is identified, and if necessary the Agreement executed, the Agency will contract a Program Manager and Construction Manager, a legal firm to perform the water rights analysis, and solicit a qualified environmental firm. Depending upon the degree of environmental documentation required, the Project will require 1½ - three years to complete. The Project has been divided into three phases: Preliminary Engineering and Water Rights Requirements Analysis; Remaining Pre-construction Tasks, including environmental review permit applications, geotechnical and final design, right-of-way acquisition and financing arrangements; and, construction.
OTHER AGENCY INVOLVEMENT:
The CAO's office and County Counsel's office have been involved in the negotiation and processing of the Funding Agreement.
FINANCING:
Total project cost is estimated at $25 million, including $3.4 million in contingency. The Current agreement seeks up-to $500,000 from the County of Monterey. County staff has identified two sources for funding this agreement.
The first option is for the Agency to self-fund its project with available unreserved funds from Fund 303 CSIP rate stabilization reserves with a current balance of $1.5 million. These reserves are available and appropriate for use on this project. (See Attachment B for a discussion of available Agency sources of reserves.) The Agency has not budgeted these reserves for use in Fiscal Year 2014-15. Implementation of this funding option would be taken by the Board of Supervisors of the Water Resources Agency and the Agreement would not be necessary.
Option two would be to utilize County General Fund Contingencies leaving a balance for Fiscal Year 2014-15 of $3.3 million. This option would reduce the ability of the County to deal with unforeseen financial issues that may arise in the upcoming fiscal year and limit the Boards ability to otherwise allocate these funds to County departments as they deem necessary. Implementation of this funding option would be taken by the Board of Supervisors for Monterey County and the Agreement would need to be executed.
Prepared by: Approved by:
Jesse Avila Dewayne Woods
Deputy County Counsel Assistant CAO
Dated: June 27, 2014 Dated: June 27, 2014
Attachments:
A. Reimbursement and Funding Agreement between the County of Monterey and the Monterey County Water Resources Agency for Preliminary Engineering and Design, Water Rights Analysis, and Initial Program Management for the Inter Lake Tunnel Project
B. Source and History of CSIP Reserve Funds