Item C: MWMC IGA - Laserfiche WebLink

Home Browse Search

EUGENE CITY COUNCIL AGENDA ITEM SUMMARY Work Session: An Ordinance Creating the Metropolitan Wastewater Management Commission as an Intergovernmental Entity; and Providing an Immediate Effective Date; and A Resolution Approving the Issuance of Revenue Bonds by the Metropolitan Wastewater Management Commission; and Providing an Effective Date Meeting Date: May 9, 2005 Agenda Item Number: C Department: Public Works Staff Contact: Peter Ruffler www. cl. eugene, or. us Contact Telephone Number: 682-8606 ISSUE STATEMENT The regional wastewater program is managed under an intergovernmental agreement (IGA) between Eugene, Springfield, and Lane County. Changes to this agreement are being proposed to align it with operational conditions and public policies that have evolved in the wastewater program over the past 25 years of the agreement, and to incorporate recommendations that will facilitate the issuance of revenue bonds by the Metropolitan Wastewater Management Commission (MWMC) in support of the 2004 Facilities Plan and related capital projects for the regional wastewater program. BACKGROUND The council held an informational work session on this topic on February 9, and another work session on April 11, 2005. Feedback from the council on February 9 led to some modifications to the proposed amendments to the IGA. The modified IGA was reviewed and discussed by the council during the April 11 work session. In this work session, concern was expressed about the proposed amendments that provide limited recourse to local government in regard to regional wastewater user rates or charges recommended by the MWMC--specifically the vagueness of the grant of authority to MWMC to adopt and impose "any additional amount [of the recommended user charges or systems development charges] that is necessary to maintain adequate bond ratings and reasonable access to the capital market." Based upon this concern, the definition of MWMC's authority to adopt rates and amounts above the level necessary to meet bond covenants has been modified to read" ....and to achieve and maintain an unenhanced credit rating of A for the Commission's Bonds from at least one nationally recognized rating agency." [Note that this language now appears in Section 3.e. 1 of the draft IGA and is cross-referenced in sections 8c and 16.] An un-enhanced credit rating represents the rating of the bond issuer in the absence of any additional guarantees for payment of debt service, such as bond insurance. This modified language was reviewed by Bond Counsel for the governing bodies and was determined to meet the objective of ensuring the MWMC would have reasonable access to the bond market for capital financing purposes. Questions were also raised in the work session about what the council's authority is in the process for L:\CMO\2005 Council Agendas\M050509\S050509C.doc