3.A.
San Luis Facility Development Corporation
- Meeting Date:
- 01/26/2023
- Department Head:
- Kay Macuil
- Submitted By:
- Kay Macuil, City Attorney, Attorney's Office
ITEM:
Discussion and possible action on any and all matters regarding using the Operating Reserve/Repair/Contingency Account for a water softener system or other capital expenses of the San Luis Regional Detention and Support Center. (Warden David Rivas and City Finance Director Monica Castro)
SUMMARY:
Detention Center Waterfall
On January 12, 2023, the U.S. Bank Trustee e-mailed staff that after reconciliation the accounts, there is $420,000.00 in the Operating/Reserve/Repair/Contingency account. The federal agencies pay directly into the U.S. Bank's Trust Account for the services of the Detention Center. The U.S. Bank Trustee pays out to each account in the below order as funding is available. This order of priority is called a "waterfall" and is found in the language of the contract ( called the "Trust Indenture") between U.S. Bank and the San Luis Facility Development Corporation.
The Waterfall under the Trust Indenture (references to the sections of the Trust Indenture):
All revenue is deposited in the General Account and disbursed in this priority (5.06 (a))
1. Bond Interest, see 5.06 (b)(i),
2. Restore Bond Reserve if necessary under 5.02, see 5.06(b),
3. Bond Principal, see 5.06(b)(ii),
4. Operation & Maintenance Costs, see 5.06 (c),
5. Trustee Fees, see 5.06(c) (subaccount of the Operating Account),
6. Operator Fee, see 5.06(d),
Note, through the 2018 Operating Agreement with LaSalle the $35,000
City Business License Fee is paid equally with the 6% of Operation & Maintenance Costs paid to LaSalle.
7. Operating/Reserve/Repair/Contingency pay up to $10,000 per month until there is $300,000 in the account, see 5.06(e)
8. Surplus, see 5.06(f).
Water Softener System Repeatedly Leaking even after Repairs
Warden Rivas has prepared a presentation (attached) for this meeting.
On September 20 and 21, 2022, staff and President Jenny Torres received e-mail communications from the Detention Center that the water softener system had been leaking repeatedly after repairs. The Detention Center is working on one of three systems. The remaining system is a dedicated Culligan system requiring repair by a single employee of Culligan. Culligan provided a scope of work and a cost of $59,821.18 for rebuilt but again tied to Culligan repair exclusively. Diamond Brooks Waters gave a quote of $91,005.40 to replacing all Culligan equipment with a new system not tied to Culligan repairs.
As explained above, at the time of the September request, no cash had trickled down to the Operating Reserve / Repair / Contingency Account.
Once staff received the news that there was money in the Operating Reserve / Repair / Contingency Account, staff reached out to the Warden for all the needs that may come up for the funds. Keep in mind that indenture requires that the fund not go below $300,000 once funded. La Salle has been taking care of the capital expenses without the Operating/Reserve/Repair/Contingency account. since they started in 2017 The Warden projects that for 2023 there will be the following expenses:
On January 12, 2023, the U.S. Bank Trustee e-mailed staff that after reconciliation the accounts, there is $420,000.00 in the Operating/Reserve/Repair/Contingency account. The federal agencies pay directly into the U.S. Bank's Trust Account for the services of the Detention Center. The U.S. Bank Trustee pays out to each account in the below order as funding is available. This order of priority is called a "waterfall" and is found in the language of the contract ( called the "Trust Indenture") between U.S. Bank and the San Luis Facility Development Corporation.
The Waterfall under the Trust Indenture (references to the sections of the Trust Indenture):
All revenue is deposited in the General Account and disbursed in this priority (5.06 (a))
1. Bond Interest, see 5.06 (b)(i),
2. Restore Bond Reserve if necessary under 5.02, see 5.06(b),
3. Bond Principal, see 5.06(b)(ii),
4. Operation & Maintenance Costs, see 5.06 (c),
5. Trustee Fees, see 5.06(c) (subaccount of the Operating Account),
6. Operator Fee, see 5.06(d),
Note, through the 2018 Operating Agreement with LaSalle the $35,000
City Business License Fee is paid equally with the 6% of Operation & Maintenance Costs paid to LaSalle.
7. Operating/Reserve/Repair/Contingency pay up to $10,000 per month until there is $300,000 in the account, see 5.06(e)
8. Surplus, see 5.06(f).
Water Softener System Repeatedly Leaking even after Repairs
Warden Rivas has prepared a presentation (attached) for this meeting.
On September 20 and 21, 2022, staff and President Jenny Torres received e-mail communications from the Detention Center that the water softener system had been leaking repeatedly after repairs. The Detention Center is working on one of three systems. The remaining system is a dedicated Culligan system requiring repair by a single employee of Culligan. Culligan provided a scope of work and a cost of $59,821.18 for rebuilt but again tied to Culligan repair exclusively. Diamond Brooks Waters gave a quote of $91,005.40 to replacing all Culligan equipment with a new system not tied to Culligan repairs.
As explained above, at the time of the September request, no cash had trickled down to the Operating Reserve / Repair / Contingency Account.
Once staff received the news that there was money in the Operating Reserve / Repair / Contingency Account, staff reached out to the Warden for all the needs that may come up for the funds. Keep in mind that indenture requires that the fund not go below $300,000 once funded. La Salle has been taking care of the capital expenses without the Operating/Reserve/Repair/Contingency account. since they started in 2017 The Warden projects that for 2023 there will be the following expenses:
| Equipment Description | Location | Install/Lease Date | LEASEE | Make/Model | NEW/USED | Equipment Description Functions | Malfunctions/Issues | Comments | EST REPLACEMENT COST |
| Boiler # 2 | Unit # 1 Boiler Room | 6/29/2007 | Purchased | CYCLONE XHE/100G | BOILER UNIT #1 | Corrosion and original Equip. | $9,800.00 | ||
| RTU # 05 | D Dorm | 6/29/2007 | Purchased | CARREIR 12.5TONS | Used | Air Conditioner | Issues with the Condenser Coils | $15,000.00 | |
| RTU # 22 | Kitchen | 6/29/2007 | Purchased | CARREIR 15 TONS | Used | Air Conditioner | Issues with the Condenser Coils | $18,000.00 | |
| Washer #1 | Laundry | 9/25/2010 | Purchased | Uni Mac | Used | Washer | Corrosion/ No replaceemnt parts | $26,855.00 | |
| Water Softner unit 1 and unit 2 | Maintenance Shop | 9/25/2010 | Purchased | Culligan | Used | Quik Tanks | Corrosion/Rusty tanks. | Waiting on approval | $91,005.40 |
| DISHWASHER | Kitchen | 6/27/2007 | Purchased | SWISHER/ADC-44 | Used | Metal Detector | No Parts | $18,000.00 | |
| GARBAGE DISPOSAL (3) | Kitchen | 5/15/2020 | Purchased | SALVAJOR/200 | Used | GARBAGE DISPOSAL | Hard water causes deteriation and wear out | 1 out of three are replaced each year. | $6,000.00 |
| MCI 2018 | 310 Diesel Shop | 7/10/2018 | Purchased | MCI 4800 | Used | Motor | Motor | Under replacement | $64,079.28 |
| Security System | Video | Obsolete | Pending Assessment from IT | ||||||
| Total: |
RECOMMENDATION / SUGGESTED MOTION:
I MOVE TO APPROVE USE OF THE OPERATING RESERVE / REPAIR / CONTINGENCY ACCOUNT TO PURCHASE A WATER SOFTENER SYSTEM IN AN AMOUNT NOT TO EXCEED $__________________ FOR THE REASONS PRESENTED.
Attachments
- Water Softener Presentation
- September Culligan Quote
- Sept Photo Water Softener
- Warden's Projected Capital Costs 2023