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Consent-General Government # 12.
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| Board of Supervisors |
Financial Services |
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| Subject |
| Authorize the Chief Financial Officer to execute a financing agreement with Reclamation District 1600 in a final form approved by County Counsel not to exceed $162,300 in order to perform maintenance on levees within the district's responsibilities. (No general fund impact) (Rinde) |
| Recommended Action |
| Authorize the Chief Financial Officer to execute a financing agreement with Reclamation District 1600 in a final form to be approved by County Counsel not to exceed $162,300 in order to perform maintenance on levees within the district's responsibilities. |
| Strategic Plan Goal(s) |
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Safe Communities |
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| Reason for Recommended Action/Background |
Reclamation District 1600 reached out to the County in May, 2021 regarding the possibility of borrowing County funds for a temporary period in order to perform maintenance on levees within the district's responsibilities. The District applied for and was awarded a sizable grant through the Flood Maintenance Assistance Program (FMAP) for which work will need to be performed during calendar year 2021 with much of the work to be performed this summer before the district receives the payment of the FMAP funds.
The County Treasurer (part of CFO duties) has some authority pursuant to (Government Code section 53820 et seq.) to lend funds or to allow districts to overdraft funds in the County treasury temporarily; however, this authority is limited to within a given fiscal year and $500,000. The County in the past has on a case-by-case basis evaluated loan requests from special districts that are within the County Treasury and loaned funds where the district is deemed creditworthy and the loan furthers the County's interests (such as strategic plan goal of providing rural community support).
The County reviewed the need for financing with the District on May 27, 2021 to gain additional information and obtained an understanding that the temporary borrowing was needed to be able to pay for the FMAP work until reimbursement was obtained, that the maximum amount would be $162,300 and the district wanted to minimize interest by drawing funds as needed, and that the amount would be repaid no later than December 31, 2021 after receipt of the grant funds. After reviewing the grant information and approvals, the County Chief Financial Officer developed a term sheet (Attachment A) documenting the applicable interest rate that would be charged as well as other applicable terms for the financing and submitted to the district for their approval. The district indicated their interest later in the day on May 28th.
Staff is requesting the Board authorize the Chief Financial Officer to execute a financing agreement with RD1600 in a final form approved by County Counsel not to exceed $162,300 (amount of FMAP grant). The loan would be from the County's Demeter fund which has customarily been used to loan funds temporary while the endowment is being built. |
| Collaborations (including Board advisory groups and external partner agencies) |
| The Department of Financial Services collaborated with the County Administrator's Office and staff from Reclamation District 1600 on this item. |
| Competitive Bid Process |
| None. |
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| Fiscal Impact |
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| Source of Funds for this Expenditure |
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Explanation (Expenditure and/or Revenue) |
| Further explanation as needed: |
| The loan would be from the County's Demeter fund and would earn interest at the Treasury pooled rate. Loaning County funds always presents a risk of default where principal can be lost however this loan would be secured in the loan agreement by the payment of the FMAP funds and the districts funds are deposited in the County Treasury and thus the County was able to evaluate the financial position of the district prior to the loan. |
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