Rancho Water awards $2.3M recoating contract, approves bond refinancing plan

The Rancho California Water District Board of Directors meet via teleconference Thursday, Oct. 8. Valley News/Courtesy photo

The board of directors of the Rancho California Water District met Thursday, Oct. 8, via teleconference and voted to approve additional funding and awarded a contract for four reservoir recoating projects.

The adopted resolution rejected a bid received by Champion Painting Specialty Services Corporation as “nonresponsive,” approved the awarding of the construction contract to Advanced Industrial Services Inc. in the amount of $2,329,600, and approved additional funding for construction for El Chimisal Reservoir, in the amount of $510,000 to account for a change in scope in the project.

The district authorized funds for the reservoir coating renewals and improvements as part of the fiscal year 2020-2021 Capital Improvement Program.

After initial bidding, staff received bid protests from Champion Painting and Capital Industrial Coatings Inc. claiming they had the experience requested in the contract documents, but staff and legal counsel reviewed the protests and determined that because both contractors failed to provide the experience requirements with their submitted bids and deemed their protests without merit.

The resolution was approved unanimously.

The directors also voted to amend the district’s conflict of interest code and adopted a resolution with it and directed staff to submit an executed copy of the adopted resolution to Best Best & Krieger for submission to the Riverside County Board of Supervisors for approval.

They also adopted a resolution to approve the 2020 bond issuance legal documents to refund a portion of the 2016A and 2016B bonds.

“As I mentioned, this refinancing is all about refunding a portion of our 2016 A and B bonds,” Richard Aragon, assistant general manager, told the district’s finance committee last week. “This has all come about mostly because of COVID-19, us trying to make something positive out of something very negative.

“When the Federal Reserve essentially lowered the rates to about zero back in March that put us into a historic low interest rate position. Again, at least that’s the way it’s been the last few months, and we’re now in a position to refund tax exempt debt, which is usually the other way around and still be able to get significant savings.”

The move would save the district $1.3 million when the district moves on it when the market hits 3.5%, according to Aragon.

“Which would also be right on par with the amount necessary to replenish our rate stabilization funds from not doing the rate increase this year,” he said. “The idea is we will move forward with the 3.5% minimum and wait until the market’s good enough to do that. We think it’ll be good in the next few weeks but we may have to wait a little bit longer.”

The board approved the resolution unanimously.

“A big thank you to your team for putting all this stuff together for S&P and Moody’s, and all those people that judge us accordingly,” Bill Wilson, board president of Rancho Water, said after the vote. “Congratulations, and great job, (general manager) Jeff (Armstrong), you’ll be leaving with a AAA.”

The board also approved the consent calendar, which included the approval of financial statements and treasurer’s report, certification of cash sufficiency as of Aug. 31, ratified the register of audited demands for Aug. 27, through Sept. 23, approved the process report on unclaimed customer refunds and vendor payments, approved and accepted preliminary audit reports of the financial statements of the district and its entities, authorized the updated program framework for the recycled water accelerated retrofit program and adopted a resolution supporting balanced energy solutions and local choice.

At the beginning of the meeting, the board adopted a resolution recognizing, honoring and commending longtime employee Joe Oyhenart for 25 years of service with the district.

Jeff Pack can be reached by email at jpack@reedermedia.com.