Resolution No. 3093-18 JM Pipe1
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RESOLUTION NO. 3093-18
A RESOLUTION BY THE BOARD OF DIRECTORS
3 OF THE SOUTH TAHOE PUBLIC UTILITY DISTRICT
4 ESTABLISHING A RESERVE FUND FOR REPAIR OR REPLACEMENT OF PVC PIPE
5 MANUFACTURED BY J -M MANUFACTURING COMPANY, INC.
6 1 WHEREAS, South Tahoe Public Utility District ("District") is a public utility district
7 operating under the California Public Utility Code, commencing with Section 15,501, et.
8 seq;
9 WHEREAS, during the period from 1996 to 2006, the District acquired, purchased
10 and/or installed as a part of its water delivery facilities PVC pipe (hereinafter "J -M Pipe")
11 manufactured by J -M Manufacturing Company, Inc. (hereinafter "J -M") current doing
12 j business as JM Eagle1m;
13 WHEREAS, The District, along with other governmental entities and agencies (the
14 "Government Entities"), filed a legal action in the United States District Court for the
15 Central District of California, Case No. ED CV06-00055-GW (the "J -M Litigation") to
16 recover damages and civil penalties from J -M arising from false statements and claims
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18 made, and caused to be made, about the J -M Pipe;
19 WHEREAS, on November 14, 2013, a Jury found J -M liable for making false
20 representations to the District regarding the uniform compliance of J -M Pipe with certain
21 industry standards required to be met by the District in certain of the District's projects as
22 set forth in the Jury's Verdict (the "Projects");
23 WHEREAS, a trial is scheduled to commence on October 9, 2018, to determine the
24 Damages to be awarded to the District as a result of J -M's false representations
25 ("Damages Trial");
26 WHEREAS, The District may establish and maintain reserve funds for capital
27 improvement and replacement projects; and
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WHEREAS, The District6 desires to establish a reserve fund to place the damages
29 awarded b the 'u
y jury in the Damages Trial and received by the District (the "Damages")
30 for the purpose of the repair and/or replacement of J -M Pipe installed in the Projects;
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NOW, THEREFORE, BE IT RESOLVED, STPUD DOES RESOLVE, DECLARE, DETERMINE
AND ORDER AS FOLOWS:
1. The matters set for in the recitals to Resolution No. 3093-18 are true and
correct statements.
2. The District shall create a separate reserve account entitled the "the J -M
Pipe Replacement Reserve Account."
3. The Damages recovered in connection with the JM Litigation shall be
retained by the District and placed in the J -M Pipe Replacement Reserve
Account to be used exclusively to pay for the repair and/or replacement
of J -M Pipe in the Projects.
4. The J -M Replacement Reserve Account shall be maintained until
depleted.
5. This Resolution No. 3093-18 shall become effective September 6, 2018.
WE, THE UNDERSIGNED, do hereby certify that the above and foregoing
Zesolution No. 3093-18 was duly and regularly adopted and passed by the Board of
Directors of the South Tahoe Public Utility District at a regular meeting held on the 6'"
Jay of September, 2018, by the following vote:
AYES: CEFALU, JONES, VOGELGESANG, SHEEHAN, WALLACE
NOES: NONE
ABSENT: NONE
I ATTEST:
Melonie Guttry, Clerk of the Board
South Tahoe Public Utility District
Resolution No. 3093-18
September 6, 2018
Page 2
Randy Vogelgesang, Board President
South Tahoe Public Utility District