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7 It was moved by Mr. Pico, seconded by Ms. Ayala, to approve the concept to address LAVWMA's short-term cash flow needs for the Expert Pipeline Project, and direct staff to develop an escrow agreement for consideration with other LAV'vVMA financial documents on December $, 2000. Ms. Michclotti had mixed feelings about this action and Eked for comments ~'om the City's financial advisors. She asked if delayin~ action until December was the cause of the problem that required the current action? She inquired why other jurisdictions were not participating in this escrow. Ed Schilling, Stone and Youngberg, explained that it was contemplated there would be a rate stabilization fund of at least $20 million when LAVWMA requested approval to sell the LAVWMA bonds. That was put in place last summer when DSRSD sold its plant expansion bonds. It is in reliance of that rate stabilization fund to pay the expansion related debt service that the rating agencies have seen the credit of DSRSD and LAVWMA in a positive light, despite the primary reliance on connection fees. Because of the requirement that LAVWMA is to pay about $10 million at the end of December, it would have depleted the rate stabilization fund to below the level that it was at the time the DSRSD bonds were sold and would call into question how serious LAVWMA is in using and reserving the rate stabilization fund to make those expansion debt service payments. It might have the analysts' thinking LAVWMA was relying more on connection fees than previously thought. Because Pleasanton was not able to schedule consideration of this issue until December 5, that keeps LAVWMA from selling the bonds prior to the December 31st payment date and therefore created the need to do somethln~. There was consternation expressed by other members of the LAVWMA Board about the delay and in response to that, the Pleasanton members of the Board directed staff to meet with him to come up with some way to address that concern and this is the result. If other members had delayed, this proposal may not have been devised; other members may have been asked to advance funds to keep from reducing the rent stabilization fund to below $20 million. Mayor Tarver clarified that if the bonds had been sold earlier, the investors would not have known that $10 million would have come out of the rate stabilization fund. Mr. Schilling said the money would not have been taken out of the rate stabilization fund at all. The bond proceeds would have provided the necessary funding. Ms. Michelord had no problem in looking more closely at the financing program, but did not think it needed to be put off until December. After hearing Mr. Schilling's comments, she supports the current action because she suppor'm LAVWMA. The roll call vote was as follows: AYES: Councilmembers- Ayala, Dennis, Michelotti, Pico, and Mayor Tarver NOES: None ABSENT: None PIston City Council Minutes 6 11/07/00