Item 2E: Resolution Authorizing EWEB Borrowing (water system)

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ECC UGENE ITY OUNCIL AIS GENDA TEM UMMARY Adoption of Resolution 5026 Authorizing the Issuance and Sale of Electric Utility System Revenue Bonds for the Purpose of Financing Improvements to the Electric Utility System in the Aggregate Principal Amount of Not to Exceed Thirty-Six Million Dollars ($36,000,000); Authorizing the Issuance and Sale of Electric Utility Revenue Refunding Bonds in the Aggregate Principal Amount of Not to Exceed Forty-Six Million Eight Hundred Thousand Dollars ($46,800,000) to Refund Series 1998A Taxable Bonds and Series 2001B Bonds; and Providing for Related Matters Meeting Date: March 14, 2011 Agenda Item Number: 2E Department: Central Services Staff Contact: Sue Cutsogeorge www.eugene-or.gov Contact Telephone Number: 541-682-5589 ISSUE STATEMENT The Eugene Water & Electric Board (EWEB) is requesting authority to proceed with the issuance of Electric Utility Revenue Bonds in the amount of $36,000,000 for capital improvements and $46,800,000 for the purpose of refinancing to achieve interest rate savings. BACKGROUND A new authorization for $36,000,000 of Electric Utility System Revenue Bonds is being requested under the provisions of the Uniform Revenue Bond Act. The bonds that are issued pursuant to this authorization will provide funds for design and construction work associated with electric utility capital infrastructure improvements such as electric substation rebuilds and upgrades. The City, acting by and through EWEB, previously issued $12,455,000 Series 1998A and $39,385,000 Series 2001B Electric System Revenue Bonds. As of August 1, 2011, a balance of $8,295,000 and $33,385,000, respectively, will remain outstanding for these bonds. The 1998A bonds were originally issued to finance the acquisition of an undivided ownership interest in a wind power generation facility located in the Foote Creek Rim area in Carbon County, Wyoming. The 2001B bonds were primarily for facility improvements to the Leaburg-Walterville hydroelectric project. The series of bonds are currently callable. EWEB is proposing to refinance these bonds to achieve approximately $1,400,000 in interest savings over the life of the bonds. The savings of these bonds will help reduce future rates. The overall impact on electric rates net of the savings from the refunding is a two percent rate increase. RELATED CITY POLICIES There are no City policies related to this item. \\Cesrv500\cc support\CMO\2011 Council Agendas\M110314\S1103142E.doc