3.A.
San Luis Facility Development Corporation
- Meeting Date:
- 10/12/2023
- Department Head:
- Kay Macuil
- Submitted By:
- Janet Taylor, Legal Secretary, Attorney's Office
ITEM:
Discussion and possible action on any and all matters regarding using the Operating/Reserve/Repair/Contingency Account to purchase a new water heater/boiler to replace the one that stopped working. (Monica Castro, Finance Director)
SUMMARY:
Water Heater/Boiler has stopped working.
Water Heater/Boiler has rusted out and is no longer serviceable. It is an original piece of equipment (2007).
Proposal
The quote to replace it is $6,266.21. There was only one quote obtained because Ferguson Enterprises LLC is the only company in Arizona that carries the brand the Detention Center requires. Other boiler brands will not match the detention center's plumbing connections. Retrofit other brands would be more expensive than the Ferguson Enterprise quote.
The Warden is requesting to use of the Operating/Reserve/Repair/Contingency Account to replace the water heater/boiler.
Account Balance and Detention Center Waterfall
As of the writing of this Agenda Item, the staff is in the process of contacting the U.S. Bank Trustee for the balance in the Operating Reserve/Repair/Contingency Account. Since January 2023, the Board agreed to use the same account to purchase a water softener system and an A.C. Unit.
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 the 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 and Maintenance Costs, see 5.06 (c),
5. Trustee Fees, see 5.06 (c) (sub-account of the Operating Account),
6. Operator Fee, see 5.06 (d),
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 La Salle.
Note: LaSalle will be setting up a meeting with staff to discuss that the waterfall has not funded this fee.
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)
Procedure to Pay
For the Trustees at U.S. Bank to pay, they must have a requisition approved by the Board. The staff will bring to the Board meeting a letter, so the Trustee can release the funds from the Operating Reserve/Repair/Contingency account for the water heater/boiler.
Water Heater/Boiler has rusted out and is no longer serviceable. It is an original piece of equipment (2007).
Proposal
The quote to replace it is $6,266.21. There was only one quote obtained because Ferguson Enterprises LLC is the only company in Arizona that carries the brand the Detention Center requires. Other boiler brands will not match the detention center's plumbing connections. Retrofit other brands would be more expensive than the Ferguson Enterprise quote.
The Warden is requesting to use of the Operating/Reserve/Repair/Contingency Account to replace the water heater/boiler.
Account Balance and Detention Center Waterfall
As of the writing of this Agenda Item, the staff is in the process of contacting the U.S. Bank Trustee for the balance in the Operating Reserve/Repair/Contingency Account. Since January 2023, the Board agreed to use the same account to purchase a water softener system and an A.C. Unit.
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 the 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 and Maintenance Costs, see 5.06 (c),
5. Trustee Fees, see 5.06 (c) (sub-account of the Operating Account),
6. Operator Fee, see 5.06 (d),
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 La Salle.
Note: LaSalle will be setting up a meeting with staff to discuss that the waterfall has not funded this fee.
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)
Procedure to Pay
For the Trustees at U.S. Bank to pay, they must have a requisition approved by the Board. The staff will bring to the Board meeting a letter, so the Trustee can release the funds from the Operating Reserve/Repair/Contingency account for the water heater/boiler.
RECOMMENDATION / SUGGESTED MOTION:
I MOVE TO APPROVE THE USE OF THE OPERATING RESERVE/REPAIR/CONTINGENCY ACCOUNT TO PAY FERGUSON ENTERPRISES, LLC FOR THE PURCHASE OF A CCY 100G COMM NAT WATER HEATER AND APPROVE THE REQUISITION LETTER PROVIDED TO THE BOARD.