Friday, September 19, 2014 • 02:59
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Water Board approves project reimbursements


July 23, 2014
VC Municipal Water District met July 14 to discuss approval of the contract for assessment of engineering services for the South Village Annexation/Modification to Assessment District 2012-1.

The underlying financial vehicle for the Phase 2 Wastewater Expansion Project is an assessment district. Through the assessment district, VCMWD will make annual assessments to pay back the SRF loan to the State of California. An aspect of forming an assessment district is determining the benefit each parcel will receive from the project and each parcel's assessed share of the project. In this project, all parcels will benefit from all components of the project treatment expansion and seasonal storage and will be assessed equal shares.

An assessment engineer allocates project benefits and associated assessments. With the pending expansion of the project by 16 parcels and an additional 600 EDUs, an updated assessment engineering study was required.

Board action hired the firm of Koppel and Grubber of San Marcos for the amount of $28,870 to perform the assessment engineering for the expanded wastewater project.

There was a request for approval of a contract amendment with HDR Engineering to provide additional services for the South Village Wastewater Expansion Project. The expanded project will include facilities which were not evaluated in the original project EIR which was done by HDR Environmental Services. These facilities will service the North Village project service area.

Board action was to extend the HDR contract of $151,800 by an additional $72,150 to complete the environmental analysis of the facilities included in the expanded project.

The Board considered the request for approval of the contract amendment with Anderson and Brabant to provide appraisal services for parcels being annexed to Assessment District 2012-1.

In order to ascertain net value above existing liens and assessments, an appraiser is hired to determine the value of the participating parcel and the level of existing senior liens and assessments to determine the value to lien ratio. The value to lien ratio is conducted for participating parcels as well as for the entire project. This provides a way to assess the overall financial health of the assessed district underlying the project.

Board action of this meeting was to extend the original Anderson and Brabant contract of $74,000 by $30,000 to appraise 16 additional parcels and update the appraised values on the original 74 parcels already included in the assessment district.

The Board was requested to approve the Village Redevelopment expense allocation work on the wastewater project began in late 1990.

Two primary private proponents of the project, Wayne Hilbig representing Butterfield Trails and Steve Flynn representing the Bell Properties, moved the project forward with earnest contributions. As the project progressed, upfront cash contributions were taken from interested parties. The initial investments by Hilbig and Flynn, now Village Redevelopment, LLC, were instrumental to the project being where it is today. With the project financing secured, Village Redevelopment made application for reimbursement of the $1.25 million in project costs incurred since 1998. These costs include deposits paid to VCMWD, legal fees, engineering and interest costs, and $410,000 invested in purchasing one of the parcels to host the seasonal storage reservoir.

District staff analyzed those costs and the Board action approved a total of $944,438 for reimbursement costs to Village Redevelopment, LLC. $855,000 will be applied to the 171 EDUs secured for their projects with a net proceed of $89,438 being paid by VCMWD to Village Redevelopment at the close of escrow on the storage reservoir parcel.

Concluding the meeting was the request for approval of reimbursement for the Woods Valley Ranch Water Reclamation Facility Phase 1 construction (WVRWRF).

A portion of the Phase 2 expansion project will expand the treatment capacity of existing Phase 1 WVRWRF to serve an additional 970 EDUs of wastewater flow. This facility was built by Newland Communities to serve the 280-unit Woods Valley Ranch residential development and golf course at a cost of $11.5 million. When constructing the Phase 1 facility, certain portions such as the site, building, piping, and processing structures were oversized anticipating future expansion. VCMWD staff determined approximately $4.0 million of the Phase 1 project cost is attributed to oversizing which benefits future expansion and such costs are reimbursable to Newland. Staff determined that of the $40 million, $2.7 million benefits Phase 2 expansion. The balance of $1.3 million in reimbursable oversizing investment by Newland will be attributed to future expansions of the WVRWRF.

Based on recommendations of VCMWD staff, the Board approved the reimbursement to Newland Communities.

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