HomeMy WebLinkAboutMINUTES - 12071999 - C154 TO: BOARD OF SUPERVISORS
FROM: FINANCE COMMITTEE
DATE: December 7, 1999
SU83ECT: Report from Finance Committee on Wildcat/San Pablo Creeks
=ject Financin
SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION
I. Recommended Action:
A. LOAN unrestricted non-tax revenue Flood Control District funds to Flood
Control Zone 7 and Drainage Area 73 to cover the project shortfall from the
Army Corps of Engineers Wildcat/San Pablo Creek project.
B. WAIVE repayment of the above loan from Zone 7 and drainage Area 73 to
the Flood Control District.
C. APPROVE transfer of$300,000 from Drainage Area 73 to Zane 7 for Drainage
Area 73's share of project engineering and administration.
II. Financial lmpact:
The local cost share of the federal flood control improvements for Wildcat/San Pablo
Creeks is underfunded by approximately $91.7,000. Interest on this debt is
increasing the funding shortfall as timll SO .
Continued an Attachment: X SIGNATOR .
_ RECOMMENDATION OF BOAR} COMMITTEE
APPROVE ,___,,,OTHER I hereby certify that this is a true and correct copy of an
SIGNATURE(S): action taken and entered on the minutes of the Board of
ACTION OF BOARD ON Supervisors on the date shown.
APPROVED A5 RECOMMENDED X OTHER
ATTESTED: DECaaER 7 1999
PHIL BATCHELOR, Clerk of the Board of Supervisors and
VOTE OF SUPERVISORS County Administrator
X UNANIMOUS (ABSENT None )
AYES: NOES:
ABSENT: ABSTAIN: BY , Deputy
RMA:d
G:dad min}mltchtwl ldcatbo
Ong. Div:Public Works
Contact: Mitch Avalon 313-2203
C: CAO
Auditor/Controller
P.W.Accounting
J.Kennedy,Redevelopment
D.Eckerson,Flood Control
WiidcatdSan Pablo Design Team
Finance Committee-Wildcat/San Pablo Creeks Financing
Page Two
IL Finp_ncial Impact Continued:
The funds to cover the shortfall would be from non-restricted revenue received in the
past by the Flood Control District and deposited in the Flood Control District Revolving
Fund. Waiving repayment of the loan will reduce the funds available in the Revolving
Fund by the amount of the loan to the Wildcat/San Pablo Creeks Project.
III. Reasons for Recommendati ns and Background.
In the late 1970s, the Flood Control District worked with the Army Corp of Engineers
to develop a plan to provide flood protection for the community of forth Richmond
from overflows coming from Wildcat and San Pablo Creeks. A preferred plan was
selected, however the citizens in the area that would have to pay the local cost
share did not support the plan. The Corp would not pursue the project without
community financial support. The District requested the opportunity to develop an
alternate plan that the community would be willing to fund.
In 1982, the District completed an alternate plan with an environmental report and
a financial plan. The community was willing to support the District's alternative plan
and approved Assessment District 1982-2 to fund the local cost share. The Corp of
Engineers then began the planning and design process based upon the District's
alternative plan. Opposition to the plan, however, developed from several
environmental groups and regulatory agencies. Regulatory agencies would not issue
a permit for the project unless changes were made to the plan to provide a more
environmental design. The Board of Supervisors formed the Wildcat/San Pablo
Creeks Design Team to sort through the issues and recommend a plan for the
project. The Design Team membership consisted of interested environmental
groups, agencies, local citizens, property owners, Corp of Engineers and District
staff. The Board ultimately approved a plan that was recommended by the Design
Team, although opposed by District staff, and the project was built. District staff
opposed the plan recommended by the Design Team because of the increased
project cost.
The project has been constructed and performs flood protection for the community
of North Richmond and is highly touted as an environmental model for flood
protection improvements. Unfortunately, the way the cost sharing formulas at the
time were structured, the project resulted in a total funding shortfall of$1,631.,000.
There are three parcels from the project that could be sold to reduce the shortfall
to $917,000.
Committee-Wildcat/San Pablo Creeks Financing
Page Three
Short of a General Fund allocation or use of non-restricted District funds, there is
no means of paying off the shortfall for the Wildcat/San Pablo Creeks Project. All of
Finance the District's annual revenue is restricted funds and can only be used for
specified purposes, none of which can be used to pay off the loan. Some years ago,
the District received unrestricted revenue, which was put into the Revolving Fund
as a Flood Control district deposit. This revenue has been receiving interest over the
years and there is enough in the Revolving Fund to cover the shortfall for the
Wildcat/San Pablo Creeks Project. Staff recommends loaning Zone 7 and drainage
Area 73 monies from the Revolving Fund to cover the project shortfall. Staff also
recommends that the Board of Supervisors then approve defaulting the loans and
the corresponding decrease in the Flood Control districts deposits in the Revolving
Fund.
Attached is the Board Order dated March 23, 1999, referring this item to the
Finance Committee. More detailed information on this issue is contained in that
board order.
IV. Conseguences of Negative Action:
The unfunded balance will continue to accrue interest, which will further increase
the unfunded balance for this flood control project.
' TO: BOARD OF SUPERVISORS,AS GOVERNING BOARD OF CONTRA COSTA COUNTY AND
CONTRA COSTA COUNTY FLOOD CONTROL AND WATER.CONSERVATION DISTRICT
FROM: J. MICHAEL,WALFORD, CHIEF ENGINEER.
BATE: March 23, 1999
SUBJECT: Report from Chief Engineer on Corps of Engineer's Wildcat/San Pablo Creeks Proj ect Financing and
Recommending Referral to Finance Committee for Review and Recommendation
SPECIFIC REQUEST(S)OR MCOMMENDATION(S)&BACKGROLND AND JUSTIFICATION
I. R.eeotnmended.action:
A. ACCEPT report from the Chief Engineer regarding funding shortfall for the Corps of Engineers
Wildcat/San Pablo Creeks Flood Control Project.
B. REFER report to Board of Supervisors' Finance Committee for review and recommendation.
II. Financial Impact:
The local cost share of the federal flood control improvements for Wildcat/San Pablo Creeks is underfunded
by approximately$917,000. Interest on the debt is increasing the extent of funding short fall. A summary
of each creek entity's financial status is attached.
Continued on Attachment:— SIGNATURE:
RECOMMENDATION OF BOARD COMMITTEE
—APPROVE _OTHER
SIGNATURE (S):
ACTION OF BOARD ON Ma"EcE 21, 1911APPROVED AS RECOMMEN5ED� ,a„_
VOTE OF SUPERVISORS
UNANIMOUS(ABSENT None �
AYES: NOES"
ABSENT: ABSTAIN: I hereby certify that this is a true and correct copy
R1r1A ci of an action taken and entered on the minutes of
C` 1t,ktttttfit u '23
Orth.Div: Public
w�arka the Board of Supervisors on the date shown.
tatie
Contact- (Mitch Avalon—713-2263)
C: CAO ,,~
A"tttr/Controtter ATTESTED?: e3 /, ", y
Accounting
1.Kennedy,
PHIL BATCHELOR,Clerk of the Board of
D.I. Redevelopment
WildcSan �'°°' ' Supervisors and County Administrator
Wiidcaz7San Pablo Design Team,T.7ccucm
By `~' ' >Deputy
Report from Chief Engineer on Corps of Engineer's
Wildcat/San Pablo Creeps Project
Page 2
III. Reasons for Recommendations and Background:
In 1975, the Corps of Engineers developed several alternative plans for eliminating the frequent flooding
of North Richmond from Wildcat and San Pablo Creeks. After community meetings involving the greater
community, including interested parties not residing in the area of flooding, it was decided that the Corps'
Environmental Quality Plan was the preferred alternative.Unfortunately,the citizens within the area subject
to flooding,who would have to assess themselves to raise the needed local cost share of$4,500,000,did not
like the plan. In their minds, the plan adversely impacted their businesses by taking a significant portion of
their properties and the resultant local cost/share for lands and relocations was too high.
With the lack of community financial support, the Corps of Engineers was ready to close the project as
"unfeasible, due to lack of community financial support." The District asked the Corps of Engineers to hold
the project open long enough to give Flood Control District staff the opportunity to develop another
alternative that the adjacent commercial property owners would be willing to fund.
In 1982, the District completed an alternative plan of a conventional earth channel with a concrete lined
channel upstream of Third Street,completed an environmental impact report, completed a financial plan,
and secured community support for an assessment district to raise the remaining unmet local funding of
$1,300,000 for the new plan. Assessment District 1982-2 was formed and the Board of Supervisors asked
the Corps of Engineers to implement the plan.
During the Corps of Engineers'planning and design process,opposition to the plan developed within several
environmental groups and regulatory agencies (Bay Conservation and Development Commission, State
Coastal Conservancy, East Bay Regional park District and Federal Fish and Wildlife). The regulatory
agencies refused to permit the project unless changes were made to the plan more in keeping with the
original environmental plan developed by the Corps of Engineers.
A design team was formed by the Board of Supervisors. The team consisted of interested environmental
groups, agencies, local citizens, property owners, Corps of Engineers, and District staff; The design team
developed a plan that all of the team members supported except staff. Staff could not support the design
team's proposal due to the high local cost share,which exceeded available funding,and anticipated future
maintenance problems. Ultimately, two-hydraulically equivalent options were presented to the Board of
Supervisors. The Board of Supervisors selected the design team's proposal, although it significantly
increased the local cost share,primarily due to the extra right of way required, On December 10, 1985,the
plan was approved by the Board of Supervisors assurning that grants would be found to fund the shortfall
in funding. Several factors contributed to the Board of Supervisor's decision: 1) the North Richmond
community flooded four times in 1982 and five times in 1983; and 2) the Corps of Engineers' continued
participation in the project appeared to be tenuous if the project were stalled again.
During the course of project final design and construction, the design team process continued on the
remaining upstream improvements.The design team suggested additional modification that further increased
the local cost share by removing the concrete lining on Wildcat Creek from the elementary school site
upstream to the AT&SF railroad tracks. On April 19, 1988,the Board of Supervisors approved the proposed
change. This change moved the planned sedimentation basin from the City of Richmond property at Third
Deport from Chief Engineer on Corps of Engineer's
Wildcat/San Pablo Creeks Project
Page 3
Street upstream onto private property,which increased right of way costs. It also required the construction
of a more expensive bridge to the school site and the construction of a new $250,000 sewer main for the
school. All of these environmental enhancements increased the local cost share. At that time, the increase
was estimated to be$400,000.
On June 2, 1987, the Board adopted a report from the Chief Engineer proposing a financing plan for the
estimated shortfall at that time of$400,000. The April 19, 1988,modifications further increased the funding
shortfall. On April 26, 1988, an additional financing report was presented to the Board further discussing
project costs. A cost table from this report is reproduced below. The row entitled"Actual Cost"has since
been added. Incidentally,,due to the higher actual costs, the Corps determined there was insufficient flood
reduction benefits remaining to do the upstream improvements in the City of San Pablo.
TOTAL COST FEDERAL COST NON-FEDERAL STATE MIST LOCAL COST
SHARE COST SHARE SHARE SHARE
ORIGINAL PLAN $ 12,500,000 $ 8,900,000 $ 3,600,000 $ 2,200,000 $ 1,400,000
COE PLAN $ 13,600,000 $ 7,700,000 $ 5,900,000 $ 3,600,000 $ 2,300,000
DESIGN TEAM $ 17,700,000 $ 10,200,000 75000000) $ 4,100,000 $ 3,400,000(')
PLAN
ACTUAL COST $ 27,000,000(2) $ 14,000,000 $ 13,000,000 $ 9,000,000 $ 4,000,0007
(1) Includes 5%local cash contribution of total project cost.
(2) Does not include recreation trail and bridge costs.
(3) Does not include District staff coordination costs($700,000).
In the April 26, 1988 Board Order, the Board confirmed to the City of San Pablo that the District would
meet the previous commitment that$250,000 would remain in the Zone 7 fund for,creep improvements with
the City. At this time, the$250,000 does not exist.
The original financing plan for the project was based on the Corps of Engineers' cost sharing policy in
existence in 1982. Prior to the District's final project approval, that policy changed placing a greater
financial burden upon the non-federal sponsors(local costs).The requirement of "5%of total project costs"
cash contribution to the federal government from the non-federal sponsors increased the local costs by
$345,000.
The project has since incurred unexpected interest costs due to the State of California's failure to promptly
reimburse their share of the non-federal project costs. This lack of prompt payment compounded the cash
flow problem that could only be corrected by borrowing funds from the Flood Control District Revolving
Report from Chief Engineer on Carps of Engineer's
Wildcat/San Pablo Creeks Project
Page 4
Fund. As of this date,the State still awes Zane 7 and Drainage Area 73,$1,022,073. The total interest cost
through January 1999 is estimated to be $270,000.
A portion of the short fall has already been funded by the following contributions:
• Special District Augmentation Funds $200,000
• North Richmond Redevelopment Agency $200,000
+ West County Sanitary District X0„,()0.0
TOTAL OTHER FUNDS $600,000
Attached are projected financial status reports for Zone 7 (Wildcat Creek)and Drainage Area 73 (San Pablo
Creek.). The reports already reflect the above contributions that have been received. The reports show a total
funding shortfall of$1,631,000. To partially offset the shortfall,Drainage Area 73 has two surplus properties
valued at$453,000 and Zone 7 has one parcel valued at$261,000. A significant portion of the Zone 7 parcel
should be retained to minimize future sediment basin maintenance costs. if these properties can be sold at
their estimated values, the shortfall would be reduced to $917,000.
Potential Funding_Sources: When the plan was approved, the Board of Supervisors was led to believe by
various speakers in favor of the environmental enhancements to the Plan that grants would be found to cover
the additional costs. To date those funds have not been produced. A further complication is that additional
federal funding in the form of a grant would require a corresponding decrease in Corps funding.The District
was successful in acquiring funding from the West County Sanitary District and the North Richmond
Redevelopment Agency(noted above) and the purchase of one property by the Coastal Conservancy.
We have been able to identify only one alternative source for funding the shortfall other than the County
General Fund or additional funds from the North Richmond Redevelopment Agency.That alternative is for
the Flood Control District to absorb the loss using unrestricted District funds from non-tax share revenue.
The District's share of tax revenue cannot be used, as those funds are restricted to general countywide use.
unung)L The Corps of Engineers channel improvements that were constructed in Wildcat and San Pablo
Creeks provide habitat and uses not provided in the conventional design adapted with the 1982 project
financing plan. These improvements have successfully controlled flooding in the North Richmond
community from Wildcat and San Pablo Creeks.The improvements cost approximately$27,000,000 with
the local share being only$4,000,000. Of this amount, $917,000 remains unfunded.
IV. Consequences of Negative Action.
The unfunded balance will continue to accrue interest, which further increases the unfunded balance.
PROJECTED FINANCIAL STATUS
DRAINAGE AREA 73
FOR DECEMBER 31, 1998
Estimate cif Rerrtalr rng' urids
Cash $ 3034,000
Drainage Fees $ 20,000
SDWR Claims Unpaid $ 478,000
SDWR Claims Earned but not claimed 0
SDWR Claims Earnabie by Year End 0
Total SDWR Funding $ 478,000
CE Reimbursement for Landscaping 75,000
Sale of Excess Property (3.7) Acres0) $ 453,000
Est. Funds to be Deceived 1.026.000
Est. Funds Available $ 1,330,000
Estimate of Remaining Costs
CE Deposits $ 57,000
Coordination Costs 90.000
Est. Total Expenditures $ 67,000
Est. Debt Service $1,215,000
Balancing Funds Due Zone 7 $ 300,000
TOTAL COSTS 1.582.000
ESTIMATE OF FUND BALANCE $ (252,000)
Shortfall (Fund balance + value of surplus land) $ (705,000)
(1) Two parcels @ 3rd/Brookside (3.0 acres x 43,560 x 3.00 i $392,000 and .7 acres x 43,560 x
$2,00 = $61,000.)
cc: D. Eckerson, F/C
R. Gilchrist, Acctg:
Ak. e..
Milton Kubicek
MFK:drg
giadmi nlmi f k198-3ifinda73.wpd
1(3113197
Rev(11/3197)
Rev(3123/98)
PROJECTED FINANCIAL STATUS
FLOOD CONTROL ZONE 7
FOR DECEMBER 3'1, 1998
Estimate of Remaining Funds
Cash $(1,042,000)
Est. Remaining Taxes $ 11,000
SDWR Claims Unpaid (thru 12131/98) $ 544,000
SDWR Claims Earned, but not claimed 0
SDWR Claims Earnable by Year End ._
Total SDWR Funding $ 544,000
CE Reimbursement for Landscaping 75,000
Escrow West County Sanitary Contract 60,000
SUA#17 Maintenance Cost Refund 301,000
Sale of Surplus Land to District( ) 261,000
Est. Additional Funding from DA 73 300,000
North Richmond Redevelopment Agency Participation 200.000
Total Additional Funds 1752 000
Est. Funds Available $ 710,000
Estimate of remaining Costs
Estimated Remaining CE deposits $ 57,000
Estimated Debt Service 1,308,000
Coordination Costs 1 0�o
Est. Total Expenditures $ 1,375,000
Estimate of Fund Balance $ (655,000)
Shortfall (Fund balance + value of surplus land) $ (926,000)
(1) Disposal site adjacent to sedimentation basin (4 acres x 43,560 x$1.5 per square foot)
cc: D.Eckerson,FIG
R.Gilchrist,Acctg. f
Milton Kubicek
RMA:ol
gtadrnlnlmllt198-3%finstaz7.wpd
Rev.2123199