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CONSENT
CALENDAR |
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4. |
CONSIDER ADOPTION OF
RESOLUTION NO. 2014-13 TO OBTAIN CREDIT LINE WITH RABOBANK, N.A. |
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Meeting
Date: |
July 21, 2014 |
Budgeted: |
Yes |
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From: |
David J.
Stoldt, |
Program/ |
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General
Manager |
Line Item No.: |
Debt Service |
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Prepared
By: |
Suresh
Prasad |
Cost Estimate: |
$3,500 |
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General Counsel Review: Reviewed by Counsel |
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Committee Recommendation: The Administrative Committee considered this item on July 15, 2014 and recommended approval. |
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CEQA Compliance: N/A |
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SUMMARY: In 2013,
the District entered into a Loan Agreement with Rabobank, N.A. (Rabobank) to
fund for development of water projects and reimbursement of District reserves. As part of the loan requirement, the District
had to close out its credit line with Bank of America, N.A. Since the District’s major sources of revenue
are collected through the Monterey County Assessor’s Office and submitted twice
per year, there is a need to establish a new credit line with Rabobank to fund
for water projects and other cash flow requirements.
There is a loan fee of $2,500 plus up to $1,000 in legal fee charged by
the bank. The term of the credit line
will be 3 years, with interest rate of 30 day LIBOR rate plus 2.75%. On July 14, the 30 day LIBOR rate was .15%,
so the interest rate for the credit line would have been 2.90%. Expression of Interest letter from Rabobank
is attached as Exhibit 4-B.
RECOMMENDATION: The Administrative Committee considered this item on July 15, 2014 and recommend adoption of Resolution 2014-13 (attached as Exhibit 4-A) that authorizes the Water Management District to establish a $500,000 line of credit with Rabobank.
BACKGROUND: In October 2008, the District entered into a
Loan Agreement with BofA to establish a $2.5 million line of credit to fund
development of water supply projects. In
2010, the District renewed the Agreement.
In 2013, the District entered
into a Loan Agreement with Rabobank to fund for development of water projects
and reimbursement of District reserves.
As part of the loan requirement, the District had to close out its
credit line with Bank of America, N.A.
Since the District’s major sources of revenue are collected through the
Monterey County Assessor’s Office and submitted twice per year, there is a need
to establish a new credit line with Rabobank to fund for water projects and
other cash flow requirements.
U:\staff\Boardpacket\2014\20140721\Consent
Clndr\04\item4.docx