HomeMy WebLinkAboutSample R and R DocumentsCity of Larsen Bay
R&R Fund Account – Sample Documents 1
First National Bank Alaska
Renewal and Replacement Account
Escrow Managed “First Investment” Account Agreement
Dated:_______________________ Account No._____________
The parties to this deposit account agreement are ____________________, TIN No.
__________________ (hereinafter “depositor”) and First National Bank Alaska (hereinafter “bank”).
The agreement of the parties is as follows:
1. Money paid to bank for credit to the above account and interest earned thereon and
credited to the above account shall constitute the “Renewal and Replacement Account” of depositor
specified under the terms of depositor’s agreement with the Denali Commission intended for use by
depositor for replacement and repair of capital expenditure items that are part of depos itor’s Energy
Facility as contemplated under that agreement. Depositor hereby represents and warrants, which
representations and warranties shall be continuing and shall be deemed to be reaffirmed upon each
instruction given by depositor, that: (a) depositor is duly organized and existing under the laws of the
jurisdiction of its organization, with full power to carry on its business as now conducted, to enter
into this agreement and to perform its obligations hereunder; (b) this agreement has been duly
authorized, executed and delivered by depositor, constitutes a valid and legally binding obligation of
depositor, enforceable in accordance with its terms, and not statute, regulation, rule, order, judgment
or contract binding on depositor prohibits depositor’s execution or performance of this agreement; (c)
the Taxpayer Identification Number shown above (TIN) is depositor’s correct taxpayer identification
number; and (d) depositor is not subject to backup withholding because taxpayer is an exempt
recipient under the Internal Revenue Service Regulations.
2. Under the terms of its agreement with Denali Commission, depositor is obliged to
pay to bank the sum of $_______ and a like sum, not later than the last day of each and every month
thereafter until the expiration of this agreement, equal to 1/12 of the annual deposit required in the
respective year, as set forth in Attachment D entitled “40 Year Renewal and Replacement Cashflow”
and any revisions thereof to be administered by FNBA in accordance with the terms hereof. . Bank
will furnish to depositor payment coupons that may be submitted by depositor with a payment to
bank for credit to the above account. Bank will give only provisional credit until collection is final for
any item, other than cash, bank accepts from depositor (including items drawn “on us”). Actual
credit for payments of, or payable in, foreign currency will be at the exchange rate in effect on final
collection in U.S. dollars. Bank is not responsible for transactions by mail or at an outside
depository until it actually record them at it Escrow Department. Bank will treat and record all
transaction received after bank’s “daily cutoff time” on a business day bank is open, or received on a
day bank’s escrow department is not open for business on the next following day bank’s Escrow
Department is open.
3. Bank shall credit to the above account interest earned on the account balance in
accordance with the provisions of bank’s “First Investment Account” agreement, as amended by bank
from time to time.
4. Bank shall disburse credit to the account to the order of depositor when it receives a
resolution from depositor in the form of Attachment A hereto. Any two officers of depositor, acting
together, may execute a resolution in the form of Attachment A to withdraw or transfer all or any
part of the above account balance at any time. Bank may require not less than 7 days after receiving
such a resolution before a withdrawal. Depositor authorizes any officer of depositor to endorse any
item payable to depositor or depositor’s order for deposit to the above account or any other
transaction with bank. Bank may require the governing body of the legal entity opening this account
to give bank a separate authorization telling bank who is authorized to act on its behalf. Bank will
not honor the authorization until bank actually receives at its Escrow Department written notice of a
change from the governing body of depositor.
City of Larsen Bay
R&R Fund Account – Sample Documents 2
5. Bank’s current fee schedule for its services hereunder is attachment B hereto. Bank’s
set-up fee and first year’s annual fee have been paid to bank as of the date of acceptance of this
account by bank specified below. Future annual fees shall be due and payable by depositor to bank
on the same day each consecutive year of the term hereof. An annual fee is due and earned when an
account year begins. The first account year begins on the effective date hereof. Any fee due and
payable to bank hereunder may be charged against the above account when due. Bank may amend
Exhibit B hereto from time to time on thirty days prior written notice to depositor.
6. On the last calendar day of each month of the term hereof, bank shall furnish to
depositor and Denali Commission a written statement of the above account specifying the acco unt
balance, and any payment(s) received and interest earned credited to the account, as well as all
disbursements of credit to the account to the order of depositor and fees charged to the account by
bank, since the last statement date. Until further instructed in writing statements shall be furnished
to depositor and Denali Commission by mailing the same in a first class postage prepaid envelope
addressed as follows:
To Depositor: ______________ To Denali Commission __________
_____________ __________
_____________ __________
_____________ __________
Depositor must examine its statement of account with “reasonable promptness.” If depositor
discovers (or reasonably should have discovered) any unauthorized signatures or altera tions,
depositor must promptly notify bank of the relevant facts. As between depositor and bank, if
depositor fails to do either of these duties, depositor will either share the loss with bank, or bear the
loss entirely itself (depending on whether bank used ordinary care and, if not, whether bank
substantially contributed to the loss). The loss could be not only with respect to items on the
statement but other items with unauthorized signatures or alterations by the same wrongdoer.
Depositor agrees that the time it has to examine its statement and report to bank will depend on the
circumstances, but will not, in any circumstance exceed a total of 30 days from when the statement
is first sent or made available to depositor. Depositor further agrees that if depositor fails to report
any unauthorized signatures, alterations, forgeries or any other errors in its account within 30 days
of when bank first sends or makes the statement available, depositor cannot assert a claim against
bank on any items in that statement, and as between depositor and bank the loss will be entirely
depositor’s.
7. Bank’s duties are determined from these instructions alone and without reference to
other agreements, including, without limitation, any agreement between depositor an d Denali
Commission, and no covenant or obligation shall be implied against bank in connection with this
agreement.
8. The effective date hereof is the date of acceptance of the account as specified by bank
below. Money received by bank prior to acceptance is deemed to be received on the date of
acceptance.
9. Bank may assign its duties hereunder (and thereby be released from its duties) to
any corporation regularly engaged in the business of providing, in Alaska, the service bank is
required to provide hereunder.
10. Bank may terminate the above account upon 30 days written notice to depositor and
Denali Commission. After such termination bank will pay any account balance to the order of
depositor.
11. Bank is deemed to have notice only when notice is actually received at its Escrow
Department office, which does not include any branch office of bank.
12. A claim against bank is unenforceable unless an action is commenced within 90 days
after termination of this agreement.
City of Larsen Bay
R&R Fund Account – Sample Documents 3
13. Bank shall not be liable for any costs, expenses, damages, liabilities or claims
including attorneys’ and Accountants’ fees (collectively, “Losses”) incurred by or asserted against
depositor except those Losses arising out of the negligence or willful misconduct of bank. In no event
shall bank be liable to depositor or any third party for special indirect or consequential damages, or
lost profits or loss of business, arising in connection with this agreement.
14. Bank has no duty to look to the propriety or application of any payment or
distribution made to depositor, or to the order of depositor, and depositor agrees to indemnify bank
and hold bank harmless from and against any and all Losses sustained or incurred by or asserted
against bank by reason of or as a result o f any action or inaction, or arising out of bank’s
performance hereunder, including reasonable fees and expenses of counsel incurred by bank in a
successful defense of claims by depositor; provided, that depositor shall not indemnify bank for those
Losses arising out of bank’s negligence or willful misconduct. This indemnity shall be a continuing
obligation of depositor, its successors and assigns, notwithstanding the termination of this
agreement.
15. Bank shall have no duty or responsibility to inquire into, make recommendations,
supervise, or determine the suitability of any transactions affecting the above account.
16. Bank shall be entitled to rely upon any resolution in the form of Attachment A
actually received by bank and reasonably believed by bank to be duly authorized and delivered.
17. Bank is authorized to supply to any third party any information regarding the above
account which is required by any law, regulation, rule or court order (including without limitation
any subpoena) now or hereafter in effect.
18. Bank shall not be responsible for preparing or filing any tax report or return nor for
the payment of any tax assessed against, or with respect to, any of the assets of the above account or
any transaction for the account of depositor.
19. Each and every right granted to either party hereunder or under any other document
delivered hereunder or in connection herewith, or allowed it by law or equity, shall be cumulative
and may be exercised from time to time. No failure on the part of either party to exercise, and no
delay in exercising, any right will operate as a waiver thereof, nor will any single or partial exercise
of any other right.
20. In case any provision in or obligation under this agreement shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions
shall not be amended or modified in any manner except by a written agreement executed by both
parties. This agreement shall extend to and shall be bi nding upon the parties hereto, and their
respective successors and assigns.
21. This agreement shall be construed in accordance with the substantive laws of the
State of Alaska, without regard to conflicts of laws principles thereof. Depositor and bank hereby
consent to the jurisdiction of a state or federal court situated in the Third Judicial District, State of
Alaska, in connection with any dispute arising hereunder. Depositor hereby irrevocable waives, to
the fullest extent permitted by applicable l aw, any objection which it may now or hereafter have to
the laying of venue of any such proceeding brought in such a court and any claim that such
proceeding brought in such a court has been brought in an inconvenient forum. Depositor and bank
each hereby irrevocably waives any and all rights to trial by jury in any legal proceeding arising out
of or relating to this agreement. To the extent that in any jurisdiction depositor may hereafter be
entitled to claim, for itself or its assets, immunity from suit, execution, attachment (before or after
judgment) or other legal process, depositor irrevocably agrees not to claim, and it hereby waives,
such immunity.
City of Larsen Bay
R&R Fund Account – Sample Documents 4
22. This agreement and the attachments hereto constitute the entire agreement of the
parties. Bank has not made representations or assurances to depositor not stated herein.
Date: _______________________________
____________________________________
Depositor
By:_________________________________
By:_________________________________
First National Bank Alaska accepted this account on __________________.
By: _________________________________
City of Larsen Bay
R&R Fund Account – Sample Documents 5
Wells Fargo
Renewal and Replacement Account
Escrow Managed “Regular Savings” Account Agreement
, 2003 Account No.
1. The parties to this agreement are (Owner), and Wells Fargo. Owner
hereby appoints Wells Fargo, acting through its Trust Department, as the Invested Escrow
Agent for the investment and disbursement of the funds in accordance with this agreement.
Wells Fargo agrees to serve as Invested Escrow Agent, pursuant to the terms set forth in this
agreement.
2. Monies deposited by the Owner with Wells Fargo shall be for the purpose of establishing an
R&R Account, which shall be used for replacement and repair of capital expenditure items
with regard to the Owner’s Energy Facility, which is partially or fully funded with monies
from the Denali Commission.
3. On or before , 2003, Owner shall deposit the sum of $_______
and a like sum, not later than the last day of each and ever y month thereafter,until the
expiration of this agreement, equal to 1/12 of the annual deposit required in the respective
year, as set forth in Attachment D entitled “40 Year Renewal and Replacement Cashflow”
and any revisions thereof to be administered in accordance with the terms of this Agreement.
4. The funds shall be deposited into an interest bearing “Regular Savings” account.
Disbursements from this account will be restricted and can only be approved by Wells
Fargo’s Escrow Department pursuant to this agreement.
5. Upon written instruction from Owner, in the form of a Resolution identical to Attachment A,
signed by two parties, Wells Fargo’s Escrow Department shall disburse funds to the Owner.
6. The interest earned on the account shall accrue for the benefit of the Owner.
7. Wells Fargo will assess the fees and charges set forth in the fee schedule which is attached as
Attachment B.
8. Wells Fargo will compile a “Monthly Report”, at the end of each calendar month, on all
Renewal and Replacement Accounts that are established under similar agreement. This
report will show all account activity by each Owner including; deposit amounts, date of
deposits, disbursements, and date of disbursements. Monthly reports shall be sent to:
Denali Commission
Attn: Chief of Staff
510 L Street Suite 410
Anchorage, AK 99501
City of Larsen Bay
R&R Fund Account – Sample Documents 6
9. Wells Fargo shall have no duties not expressly provided for herein, and will not incur
liability if it substantially complies with the instructions contemplated herein, using
reasonable care in executing transactions, and in safekeeping the funds.
Wells Fargo
By: Date
Its:
_________________________
(Owner)
Date
By:
Its:
Taxpayer ID #
Address:
City of Larsen Bay
R&R Fund Account – Sample Documents 7
PLEASE COMPLETE THIS AREA TO INSURE CORRECT ROUTING
ORIGINATED BY
ESCROW AGREEMENT
ACCEPTED COPY
Acct. # RETURN TO
TO: WELLS FARGO BANK ALASKA (WF),
its successors and assigns Date:
I hand you herewith the following described item(s):
Beginning Balance $ Payments of $ Maturity Date
Monthly Quarterly Semi-Annually Annually
First payment due: Interest start date at %
Payments made in excess of the regular scheduled amount will will not satisfy future payments due.
Excess funds will will not be applied to prior mortgage/debt. Interest calculation based on 360 days 365
days.
Attached: Exhibit A Special Payment Provisions Exhibit B Multiple Disbursements Exhibit C Partial Releases Exhibit D Reserves
Additional Instructions:
You are authorized to charge my WF Account # for the scheduled escrow payments, balloon payments.
Payer Signature
Remit payments to payee:
Address
Or Credit Payments to: Cashier’s Check E.F.T. (Enclose voided check)
Checking Savings: WF Acct. No. (Disbursement fees paid by payee per payment/ transaction)
Upon execution of this agreement the parties herein agree to pay fees in accordance with the current fee schedule, fees are collected per
payment/transaction. Set up fee: paid collect from first payment. Fees Paid by: Payee Payer Divide Equally
(Fees Subject to Change Without Notice) We request late payment monitoring (additional fee)
Unless otherwise instructed, all service charges and fees will be charged to Payee.
WF is hereby authorized to deliver, by registered mail or personally, the instrument(s) and/or document(s) herein mentioned to any one of the undersigned Payees for and on behalf of all Payees at any address given below or such other
address as any one of the undersigned Payees shall designate in writing upon Payee’s request or at WF’s option under the following conditions:
At Payee’s request when:
(a) Any payment is delinquent 30 days or more; or
(b) Payee furnishes WF evidence that Payer has received at least 20 days’ written notice of Payee’s intent to terminate, delivered by
registered or certified mail.
At WF’s option when:
(a) One payment has been delinquent for three months and WF has provided 10 days’ prior notice to Payee and Payer.
(b) Upon 30 days’ prior written notice by WF to Payee and Payer.
We the undersigned have read this Agreement, including the Terms and Conditions set forth on the reverse side, and understand the contents thereof and acknowledge that the terms of the Agreement are satisfactory to
each of us. Upon receipt by the Bank of the final payment, the Bank will deem the contract satisfied and the Instrument(s) and/or document(s) will be released to the Payer. Under penalty of perjury, I certify that the Social Security or
Employer I.D. Number provided below is true, correct and complete, and I am not subject to backup withholding.
Date Date
PLEASE PRINT NAME SOCIAL SECURITY NO. OR EMPLOYEE I.D. NO. PLEASE PRINT NAME SOCIAL SECURITY NO. OR EMPLOYEE I.D. NO.
X X
PAYEE (SELLER) SIGNATURE PAYER (BUYER) SIGNATURE
ADDRESS ADDRESS
PLEASE PRINT NAME SOCIAL SECURITY NO. OR EMPLOYEE I.D. NO. PLEASE PRINT NAME SOCIAL SECURITY NO. OR EMPLOYEE I.D. NO.
X X
PAYEE (SELLER) SIGNATURE PAYER (BUYER) SIGNATURE
ADDRESS ADDRESS
Received above item(s) subject to conditions herein mentioned.
Wells Fargo Bank Alaska.
By
PLEASE COMPLETE THIS AREA TO INSURE CORRECT ROUTING
City of Larsen Bay 8
R&R Fund Account - Sample Documents
WELLS FARGO BANK ALASKA ESCROW AGREEMENT
Terms and Conditions
Payments. Payer shall pay all sums due Payee from time to time in the manner set forth herein to WF Escrow Service Department, at P.O. Box 100600, Anchorage, Alaska
99510-0600 or such other address as may be directed by WF in the future. WF shall accept all payments tendered on this transaction, rega rdless of whether they are partial,
full, or additional payments or whether they are tendered before or after the payment due date. WF shall have no duty or obligation to refuse any payment nor shall it be
responsible for determining the sufficiency of any such payment unless otherwise agreed in writing by WF. WF will credit the account for payments as received and will
disburse funds the following business day, but shall not be required to disburse to Payee prior to the time WF determines the payment is from collected funds. If any check
received by WF is dishonored upon presentment for any reason, WF may notify Payee of such disho nor and the amount of funds which WF has disbursed to Payee or other
named Payees in reliance upon Payer’s dishonored payment. Upon receipt of such notice, Payee shall promptly remit to WF the amount of such funds so disbursed by WF
together with WF’s then customary charge for the handling of returned checks, which charge shall be stated in the notice sent to Payee. WF is here by given authority to reverse
the credit to an account to which it has disbursed funds and/or to deduct from Payee’s account the amount of the charge plus the amount of funds it has disbursed in reliance
upon said dishonored payment. If two (2) checks are dishonored during any calendar year for any reason, WF may without notic e terminate this account, cancel this Agreement
and return the documents to Payee.
Interest Computation. Interest will be computed on a 365-day factor, except for leap year. Payments will be applied first to WF’s fees, then to interest, the remainder, if any, to
principal. The parties shall have 30 days in which to dispute the application of payments as computed by WF. WF shall be notified of any such dispute in writing within 30 days.
If WF does not receive such notice within 30 days, all computations made by WF shall be conclusively deemed correct. Nothin g in this paragraph shall modify or change any of
the agreements between, or rights and remedies of Payer and Payee, as between the two. Any modification to this method of co mputation must be agreed to in writing by WF.
Service Charge. WF may deduct its fees and service charges from payments received or credited to Payee’s account. If fees or service charges are not received within 30
days of their due date, WF is authorized to terminate this Agreement without notice and deliver the documents to Payee. The expenses of closing of this collection may be
deducted from the proceeds of the final payment. Service charges and fees are set forth in WF’s published rates, which are s ubject to change from time to time without notice.
Disputes. In the event of any dispute or misunderstanding, WF shall have the option to close the escrow and deliver instruments or documents to any one of the Payees or on
behalf of the Payees upon 30 days prior written notice by WF to Payee and Payer or to hold undisbursed funds, or to require settlement by a neutral party, such as an arbitrator
for determination, or to pursue any legal remedies which may be available to it, including the right to deposit the subject matter hereof in interpleader in the appropriate court of
the Third Judicial District, Anchorage, Alaska, and upon so doing to be absolved from all further obligations or liability hereunder. Payee and Payer jointly and severally agree to
pay to WF all costs and expenses incurred by WF, including actual attorney’s fees, in any interpleader action.
Limitation of WF’s Responsibility. WF shall be responsible only for the exercise of ordinary care in performing the duties set forth in this Agreement. WF shal l be relieved
from any further or additional liability beyond the performance of the duties expressly set forth herein. The parties hereto jointly and severally agree to defend, indemnify, and
hold WF, its officers, employees, shareholders, attorneys, directors, agents and representatives harmless from and against, a nd to pay on demand all claims, costs, damages,
judgments, attorney’s fees, expenses, obligations and liabilities of every kind and nature suffered or incurred in connection with this Agreement except any liability founded upon
WF’s failure to exercise ordinary care in performing the duties contained herein. Payee and Payer agree that WF will not be responsible for any of the fol lowing.
(a) To notify any party of nonpayment or declaration of default, condemnation or the condition of any property;
(b) To construe, enforce or determine the performance or nonperformance of any terms of the documents underlying the transaction;
(c) To determine if any agreement or document is in compliance with local, state, or federal laws and regulations;
(d) To determine the authenticity, validity, enforceability or sufficiency of any document deposited, or for the accuracy of description of any su ch document, the
description having been furnished by the parties;
(e) To give notice of any change of ownership or to enforce any due-on-sale or similar provisions;
(f) To determine if any payment schedule will amortize any obligation;
(g) To determine the sufficiency or verification of the account balances on any other previously or subsequently-recorded encumbrance or security interest against the
property, including security interests which this collection agreement may, in whole or in part, satisfy; further, WF does no t assume any responsibility for
determining if any payments being made by this escrow to satisfy, in whole or in p art, any other obligation will, in fact, amortize the obligation receiving the
payments hereunder at or before the satisfaction of this escrow;
(h) To pay or notify any party regarding recording of documents, perfection of security interests, or nonpayment of insurance premiums, taxes or other assessments or
encumbrances;
(i) To assess, bill, collect or pay any late charges due under the terms of the documents deposited herewith unless otherwise agr eed in writing by WF;
(j) For the determination of balances to third parties or overpayments to them where instructed to credit payments to persons other than the Payee;
(k) To verify or determine whether the assignment of the payments under this escrow for security purposes or otherwise does not c reate a default in the terms of the
documents underlying this transaction;
(l) To account or give credit for any payment made or received outside this collection;
(m) To vote or exercise any of the rights of ownership of corporate stock or similar items deposited herewith ; or
(n) To perform any act not expressly set forth in this Agreement even though contained in any documents deposited herewith.
The liability of WF for negligent performance, or negligent non-performance, shall be limited to the amount of charges or fees charged to the parties hereto, under this
Agreement, for the month in which any damages are incurred. Under no circumstances will WF be liable for any special, conseq uential, or punitive damages. Notwithstanding
any other provision of this Agreement, WF will not be liable for any damage, loss, liability, or delay caused, directly or indirectly, in whole or in part, by those it ems set forth
above.
Lien-Offset. WF shall have a first and paramount lien on all documents, monies and things deposited in connection with this Agreement and the right of offset against any WF
account of any party hereto to secure payment of all costs, expenses, obligations and fees due WF.
Agreement Controls. In the event of conflict or omission between the documents deposited in connection with this Agreement, this Agreement shall control as to WF. WF
shall not be responsible for determining the existence of any such conflict or omission.
Authority to Release Information. If any party to this Agreement sells or contracts to sell the property described in the documents deposited herewith, or applies for financing
secured by the property, WF is authorized to furnish to the lender, closing agent, or any other interested party, any informa tion concerning the status of this account, including
the payment records and copies of the documents deposited.
Authority to Transfer. WF is authorized to assign, delegate and/or transfer all its duties and the documents held hereunder to another institution u pon ten (10) days’ prior
written notice to Payer and Payee. Upon such transfer, WF shall be relieved of all further duties and liabilities under or related to this Agreement.
Notice. Any notice to WF required or permitted hereunder shall be sent certified or registered mail to Wells Fargo Bank Alaska Escrow Service Department, P.O. Box 100600,
Anchorage, Alaska 99510-0600, or such other address as may be designated by WF. Notice shall be effective only when received in the Escrow Service D epartment.
General. This Agreement may be modified or amended only by written instructions accepted by WF and payment of the applicable fee. This Agreement is intended for the sole
benefit of the parties hereto, and shall not be construed to create any rights in third parties. This Agreement shall b e governed and interpreted in accordance with the laws of
the State of Alaska, and any litigation arising out of or relating to this Agreement to which WF is a party shall be commence d and maintained only in the appropriate court of the
Alaska State Court System, Third Judicial District, at Anchorage.
City of Larsen Bay 9
R&R Fund Account - Sample Documents
ATTACHMENT A
Resolution for Disbursement of Renewal and Replacement Funds
for Energy Facility
An Identical Resolution to This Must be Passed and Signed by the Community To Withdraw Funds from
The R&R Account
Community of_______________
Resolution No. ______
WHEREAS, the Community of __________ has established an escrow managed interest bearing renewal and
replacement account with the financial institution of _____________ for the purpose of renewal and re placement
expenditures related to the _____________facility, which was partially or fully funded by the Denali Commission,
and
WHEREAS, pursuant to the communities approved business plan for _____________facility the community has
agreed that funds deposited into this renewal and replacement account will only be used for the renewal and
replacement of _____________facility, and
WHEREAS, eligible withdrawal of funds from this account must be for the labor, transportation, equipment rental,
professional services, materials, equipment and other costs for the replacement and repair of assets essential to the
on-going sustainability of the ___________________facility. For energy facilities this is including but not limited
to: Access Roads, Buildings, Poles, Transformers, Generators, Radiators, Electrical Systems, Wires, Meter
Systems, Pumps, Fencing, Fuel Storage Tanks, Fuel Distribution Systems, Walkways, Access Roads Dispensers,
Fill Stations, Tank Liners, Fencing, Pad, Valves, Pipelines, Piling, Decks, Manwalks, Headers, Ground Maintenance
and Containment Systems
THEREFORE, the Community of _____________ hereby attests that the funds being requested from the escrow
managed interest bearing renewal and replacement account with the financial institution of __________________ is
for renewal and replacement expenses related to the ____________________facility as outlined above and is not
being used for any other purpose, and
THEREFORE, the Community of ______________ requests the total sum of $_______ for t he following detailed
expenses___________________________________________
__________________________________.
Signed by two people representing the community,
City of Larsen Bay 10
R&R Fund Account - Sample Documents
ATTACHMENT B
How to Establish a Renewal and Replacement Account for
Denali Commission Funded Public Infrastructure
Background
Under the guidelines of Denali Commission funding a community is required to have a business plan that outlines
how the Denali Commission funded project will be operated and maintained. One of the conditions required i n the
business plan is a community established Renewal and Replacement (R&R) Account. An R&R account will
provide a mechanism for the community to save money for the inevitable renewal and replacement costs associated
with the facility.
General Guidelines of a Renewal and Replacement Account
Allows community to make monthly deposits
Must be an interest bearing account
Only allows withdrawal of funds for Renewal and Replacement costs of the facility.
o Requires a Resolution from the community certifying fund s are being used for Renewal and
Replacement expenses related to the facility that was partially or wholly funded by the Denali
Commission.
Account must allow for Denali Commission and other Auditing agencies to monitor deposit and
withdrawal activity (Monthly Reports on account activity must be sent to Denali Commission)
Financial Institutions
The Denali Commission has negotiated terms with two Financial Institutions that will allow for the unique
guidelines of these R&R accounts. Other institutions that will allow accounts that meet the guidelines above are
acceptable.
First National Bank Wells Fargo
Contact Person Lorraine O’Neal
Sr. Escrow Officer
First National Bank Operations
Center
1751 Gambell St.
Anchorage, AK 99501
Phone: (907) 777-3424
Fax: (907) 777-3446
Jackie Zuspan
Escrow Manager
Wells Fargo
301 West Northern Lights Blvd.
Anchorage, AK 99503
Phone: (907) 265-2162
Fax: (907) 265-2170
Type of Account Escrow Managed “First
Investment”Account
Escrow Managed “Regular
Savings” Account
Set-Up Fee $30.00 $35.00
Annual/Monthly Fee $50.00 Annual Fee and $5
monthly fee until account balance
is above $2,500
$3 Monthly Fee until account
balance is above $300
Disbursement Fee $25.00 each time a community
requests funds (through approved
resolution)
$5.00 each time (for a Money
Order) when a community
requests funds (through approved
City of Larsen Bay 11
R&R Fund Account - Sample Documents
resolution)
Check Writing None None
Reports Monthly Report to Denali
Commission on Deposit and
Withdrawal activity (.50 Charge)
Monthly Report to Denali
Commission on Deposit and
Withdrawal activity (No Charge)
Requirement for Withdrawal of
Funds
Approved Resolution Identical to
Attached Template must be
submitted to Escrow Department
Approved Resolution Identical to
Attached Template must be
submitted to Escrow Department
Interest First Investment Account
Tiered depending on balance of
account (based on current
Treasury Bill). Below are
1/02/02 rates:
$0-$2,499 .557%
$2,500-$4,999 .778%
$5,000-$24,999 .825%
$25,000-$49,999 .846%
$50,000-$99,999 .887%
$100,000+ .917%
Based on the Regular Savings
account:
5/20/02 rate = 1%
To establish an account:
1. Contact one of the representatives above
2. Tell them you need to establish a “Denali Commission Renewal and Replacement Acc ount”
3. Sign the Account Agreement for the institution.
4. Pay set-up fee and fill out other general information to establish account
Sample documents attached include:
o Business plan language that requires R&R accounts
o Account agreements (between institution and community) templates
o Example of the resolution that is required to withdraw funds from a R&R account
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R&R Fund Account - Sample Documents
ATTACHMENT C
EXAMPLE OF LANGUAGE IN ALL DENAI COMMISSION FUNDED ENERGY
FACILTIES
Financial Responsibilities
There are two cost categories that will be incurred in the ongoing operation and upkeep of the
Facility – O&M and R&R.
The Primary Operator will incur a number of expenses relating to the O&M of the Facility. O&M
items are defined as expenses that are incurred on a regular basis (administration, audits, etc) and
maintenance expenses that are incurred on an annual basis. O&M expenses are detailed in Table C:
Annual O&M Costs and a narrative detail is provided in Section IX: Financial Information to address
estimates and assumptions.
R&R costs are those expenses defined as items costing greater than $5,000 and/or that are not
replaced on an annual basis. Table E: 40 Year R&R Schedule details the anticipated items, the
frequency of their replacement and their present day value.
The Primary Operator will maintain separate O&M and R&R accounts and will maintain a sufficient
account balance to meet the O&M and R&R financial goals in this Plan. The O&M account may be
an active non-interest bearing account, while the R&R account must be an interest-bearing, managed
savings account, which requires two signatories and a community resolution for withdrawals, until
such time as the cash balance makes an escrow account more cost effective; then the R&R account
must be transferred to an interest-bearing invested escrow account that is acceptable to the Denali
Commission. The Manager will be authorized to draw against the O&M and R&R funds for routine
expenses of the Facility, however individual expenditures in excess of $5,000 will require the
authorization of the Primary Operator’s management or governing body. See Appendix A: Primary
Operator Statement of Qualification for an overview of the Primary Operator’s fiscal controls and
accounting procedures.
At least once a year, no later than May 31, the Primary Operator will develop a budget for the
upcoming calendar year, July 1 through June 30, for both O&M and R&R.
Operations and Maintenance Guidelines
The Primary Operator will establish an active non-interest bearing account for the Facility O&M so
that the O&M schedule can be completed and the Facility operations can be sustained into the
future. Section IX: Financial Information provides Table C: Annual O&M Costs as a guide to plan for
annual maintenance activities and Table D: 40 Year O&M Cashflow as a guide to estimated yearly
O&M required contributions. These costs are based upon the O&M cost estimate provided by
HMS, Inc, see Appendix B: O&M and R&R Cost Estimate.
Renewal and Replacement Guidelines
The Primary Operator will establish an interest bearing escrow managed renewal and replacement
account acceptable to the Denali Commission, which will ensure capitalization of an amount
sufficient to maintain the R&R Schedule (see R&R Fund Account – Sample Documents for “How to
Establish a R&R Account”). It is assumed that the R&R activities for Year 20 will be funded 40%
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R&R Fund Account - Sample Documents
from the R&R account and 60% from debt financing, at 5.5% over 10 years. Section IX: Financial
Information provides Table E: 40 Year R&R Schedule as a guide to plan for annual R&R activities,
Table F: 40 Year R&R Cashflow as a guide to estimated yearly R&R required contributions, and Table
G: Loan Schedule as a guide to Year 20 R&R loan assumptions and payment schedules. These costs
are based upon the R&R cost estimate provided by HMS, Inc, see Appendix B: O&M and R&R Cost
Estimate.
The Primary Operator will periodically remit R&R funds to the administrator of its R&R escrow
account according to guidelines to be established by the Denali Commission. Management and
other fees charged by the escrow fund administrator will be automatically deducted from the
Primary Operator’s R&R escrow account, according to an Escrow Agreement or other similar
document.
The Primary Operator will use the estimates in this Plan for year one contributions, and in
subsequent years will recalculate contributions based upon assets to be maintained as actually built.
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R&R Fund Account - Sample Documents
ATTACHMENT D
40 YEAR RENEWAL AND REPLACEMENT CASHFLOW