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HomeMy WebLinkAboutResolution No. 4817 COUNCIL RESOLUTION NO. 4817 A RESOLUTION AUTHORIZING THE ISSUANCE AND SALE OF ELECTRIC UTILITY SYSTEM REVENUE BONDS IN THE AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED FIFTEEN MILLION FOUR HUNDRED THOUSAND DOLLARS ($15,400,000) FOR THE PURPOSES OF FINANCING ELECTRIC UTILITY SYSTEM IMPROVEMENTS; AND PROVIDING FOR RELATED MATTERS. PASSED: 7/0 REJECTED: OPPOSED: ABSENT: Poling CONSIDERED: December 6, 2004 RESOLUTION NO. 4817 A RESOLUTION AUTHORIZING THE ISSUANCE AND SALE OF ELECTRIC UTILITY SYSTEM REVENUE BONDS IN THE AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED FIFTEEN MILLION FOUR HUNDRED THOUSAND DOLLARS ($15,400,000) FOR THE PURPOSES OF FINANCING ELECTRIC UTILITY SYSTEM IMPROVEMENTS; AND PROVIDING FOR RELATED MATTERS The City Council of the City of Eugene finds that: A. ORS §288.805 to §288.945, commonly known as the Uniform Revenue Bond Act, authorizes the City to issue bonds payable solely from revenues generated by facilities, projects, utilities or systems owned or operated by the City. The City, acting by and through the Eugene Water & Electric Board ("EWEB"), owns and operates an electric utility and related facilities and systems. B. On June 16, 1986 EWEB adopted a resolution authorizing and providing for the issuance, from time to time, of City of Eugene, Oregon Electric System Revenue Bonds to be equally and ratably secured by the pledge of revenues, funds and accounts thereunder (as amended and supplemented, the "Bond Resolution"). C. The Bond Resolution provides in part that the principal of, premium, if any, and interest on the bonds issued thereunder shall not be payable from any funds of the City nor constitute a general obligation of the City or create a charge upon the tax revenues or any other property or revenues of the City. D. On June 25, 2001 the City Council adopted Resolution No. 4677 authorizing the issuance and sale by the City, acting by and through EWEB, of electric revenue bonds, in one or more series, in an aggregate principal amount not to exceed $50,000,000 for the purpose of financing certain capital improvements to the electric utility as described in the resolution (the "Project"). E. On July 22, 2001 the Notice of Revenue Bond Authorization was published in The Register- Guard, a newspaper of general circulation within the geographical boundaries of the City. Sixty (60) days elapsed since the publication of the Notice, and no voters residing within the geographical boundaries of the City filed a petition with the City asking to have the question of whether to issue the electric utility system revenue bonds referred to a vote (the "2001 URBA Authorization"). F. On May 12, 2003 the City Council adopted Resolution No 4757 setting the terms for the issuance of not to exceed $7,000,000 principal amount of bonds (the "2003 New Project Bonds") for the purpose of financing capital improvements to the electric utility system which constitute Project purposes under the 2001 URBA Authorization, to fund necessary reserves for the 2003 New Project Bonds, and to pay the costs of issuance of the 2003 New Project Bonds. G. As of the date of this Resolution, the aggregate principal amount of bonds issued pursuant to the 2001 URBA Authorization is $44,570,719.21, consisting of $37,570,719.21 of Electric Resolution- 1 Utility System Revenue Bonds, Series 200lB, and $7,000,000 of the 2003 New Project Bonds, leaving $5,429,280.79 of authorized but unissued debt remaining under the 2001 URBA Authorization. It. EWEB has by resolution requested that the City Council adopt this Resolution in part to set the terms for the issuance of not to exceed $5,400,000 principal amount of bonds (the "2005 New Project Bonds") for the purpose of financing capital improvements to the electric utility system which constitute Project purposes under the 2001 URBA Authorization (the "2005 New Project"), to fund necessary reserves for the 2005 New Project Bonds, and to pay the costs of issuance of the 2005 New Project Bonds. I. It is in the best interest of the City, acting by and through EWEB, to provide funds for the design, construction, installation, equipping and relicensing of certain capital improvements, including related acquisitions of land and relicensing of the Carmen-Smith Hydroelectric Project (herein referred to collectively as the "2005 Improvement Program"), to the Electric Utility System operated by EWEB, including structural and environmental enhancement facilities and facilities to improve the generation, transmission, distribution and operations of the Electric Utility System. J. The cost of the 2005 Improvement Program, including bond issuance costs and debt service reserves, is estimated not to exceed $10,000,000. K. EWEB has by resolution requested that the City Council adopt this Resolution in part to authorize and set the terms for the issuance and sale of not to exceed $10,000,000 principal amount of bonds (the "2005 Improvement Bonds"), which bonds will not be general obligations of the City, nor a charge upon its tax revenues, but will be payable solely from revenues of the Electric Utility System which EWEB pledges to the payment of such bonds pursuant to ORS 288.825(1) and the resolutions to be adopted by EWEB pursuant to this Resolution. L. EWEB has by resolution undertaken to cause to be prepared a plan showing that EWEB's estimated Electric Utility System revenues are sufficient to pay the estimated debt service on the 2005 Improvement Bonds authorized by this Resolution. M. The City and EWEB anticipate incurring expenditures ("Expenditures") to finance the costs of the 2005 New Project and the 2005 Improvement Program and wish to declare their official intent to reimburse themselves for the Expenditures made on the 2005 New Project and the 2005 Improvement Program from the proceeds of the 2005 New Project Bonds and the 2005 Improvement Bonds. To the extent that the expenditures and the use of proceeds of the 2005 New Project Bonds and the 2005 Improvement Bonds may qualify under federal tax law and regulations, the City, including EWEB, intends for the interest on such bonds to be excludable from gross income for federal income tax purposes under § 103 of the Internal Revenue Code of 1986, as amended (the "Code"). N. EWEB has by resolution requested that the City Council adopt this Resolution in part to authorize the publication of the Notice of Revenue Bond Authorization relating to the 2005 Improvement Bonds (being the revenue bonds authorized under this Resolution which are Resolution - 2 not already authorized under the 2001 URBA Authorization), such notice being in substantially the form attached to this Resolution as Exhibit "A" (the "Notice"). The Notice shall specify the last date on which petitions may be submitted, and the City, acting by and through EWEB, shall cause the Notice to be published in The Register-Guard, a newspaper of general circulation within the boundaries of the City, in the same manner as are other public notices of the City. NOW THEREFORE, THE CITY OF EUGENE DOES ORDAIN AS FOLLOWS: Section 1. Authorization of Bonds and Publication of Notice; Purpose of Issue. Based on the above findings (but with regard only to the 2005 Improvement Bonds, subject to the prior publication of the Notice and the expiration of the 60-day period following the publication of the Notice without the receipt of a petition for an election questioning the issuance of the 2005 Improvement Bonds, which facts and circumstances shall be determined conclusively and for all purposes by any individual designated by EWEB), the Council hereby authorizes EWEB, on behalf of the City, to issue and sell "City of Eugene, Oregon Electric Utility System Revenue Bonds" (the "Bonds") in one or more series (being 2005 New Project Bonds and/or 2005 Improvement Bonds), in the aggregate principal amount of not to exceed $15,400,000, for the purpose of financing the costs of the design, construction, installation, acquisition, relicensing and equipping of the 2005 New Project and the 2005 Improvements, and to fund any required reserves and costs of issuance, and to publish the Notice as aforesaid. If petitions for an election, containing the valid signatures of not less than 5 percent of the City's qualified electors, are received within the time indicated in the Notice, the question of issuing that portion of the Bonds which are 2005 Improvement Bonds shall be placed on the ballot at the next legally available election date. If such petitions are received no Bonds which are 2005 Improvement Bonds may be sold until the question of whether to issue the Bonds is approved by a majority of electors living within the boundaries of the City who vote on that question. Any such petitions will be subject to ORS 288.815 and Sections 2.970-2.992 of The Eugene Code, 1971. Section 2. Conditions of Issuance and Sale. The City Council hereby prescribes that: (a) The Bonds of each series shall: (i) mature not later than thirty (30) years from the date of issuance of the series; (ii) be sold pursuant to public competitive bid pursuant to ORS §288.835 at par or with a net original issue discount or premium that does not exceed seven percent (7%) of the aggregate principal amount thereof; and (iii) have an effective interest rate of not to exceed nine percent (9%) per annum; and (b) The proceeds of the Bonds shall be used only for the following purposes: (i) An amount not to exceed $5,400,000 shall be used to finance the 2005 New Project, to pay related costs of issuance and to fund a reserve fund for the payment of Bonds issued to finance the 2005 New Project; and (ii) An amount not to exceed $10,000,000 shall be used to finance the 2005 Improvement Program, to pay related costs of issuance and to fund a reserve fund for the payment of Bonds issued to finance the 2005 Improvement Program. Resolution - 3 Section 3. Delegation of Authority for Terms of Bonds; Provisions for Issuance. Pursuant to ORS §288.825(4)(a), ORS §288.520(4), ORS §288.540 and ORS §288.545, EWEB, or any individual designated by EWEB, is hereby authorized and directed to determine, with respect to the Bonds, the form of bond and series designation, the manner of disbursement of proceeds of the bonds, the maturity dates, principal amounts, redemption provisions, interest rates or the method for determining a variable or adjustable interest rate, denominations, form and authorized signatory and other terms and conditions of the Bonds because the same cannot be determined by the Council at this time. Prior to the issuance of any Bonds, EWEB shall: (i) prepare a plan showing that the estimated Electric Utility System revenues are sufficient to pay the estimated debt service on the Bonds; (ii) adopt a bond resolution and provide a copy of such resolution to the City; and (iii) provide to the City a resolution determining that any and all acts, conditions and things required to exist, to happen and to be performed precedent to and in the issuance of the Bonds, exist, have happened and have been performed in due time, form and manner as required by the Constitution and statutes of the State of Oregon, the Charter of the City of Eugene and this Resolution. Section 4. Declaring Intent To Reimburse. The City reasonably anticipates that the City and EWEB may incur preliminary, cost of issuance and other project expenditures with respect to the 2005 New Project and/or the 2005 Improvement Program that qualify as "Original Expenditures" under Treasury Regulation §1.150-2 prior to the date of issuance of the Bonds, and hereby declares its official intent to reimburse itself or EWEB with proceeds of the sale of the Bonds. Section 5. Statement on Form of Bond. All Bonds shall include a statement on their face to the effect: (a) That they do not in any manner constitute a general obligation of EWEB or of the City, or create a charge upon the tax revenues of the City, or upon any other revenues or property of the City, or property of EWEB, but are charges upon and are payable solely from the revenues of the Electric Utility System operated by EWEB, or any portion thereof, pledged to the payment thereof; and (b) That the holders thereof may look for repayment only to the revenues of the Electric Utility System which are pledged for the payment thereof, and may not directly or indirectly be paid or compensated through the property of the City, or EWEB, or by or through the taxing power of the City. Section 6. Bonds Payable Solely from Revenues. The Bonds shall not be general obligations of the City, nor a charge upon its tax revenues, but shall be payable solely from the revenues and funds which EWEB pledges to the payment thereof pursuant to the 2001 URBA Authorization, the provisions of City Council Resolution 4677, ORS §288.825 and in accordance with this Resolution. Section 7. Bonds Reporting. EWEB shall submit to the City by May 1 of each year the following annual reports commencing after the first sale of any Bonds or other evidences of indebtedness hereunder and each year thereafter until the Bonds have been paid and retired: Resolution - 4 (a) A report on the funds for each series of Bonds describing the funds established, the amounts in each fund, expenditure from each fund, the manner in which the monies in each fund have been invested, the income from such investments and the application of such income; and (b) A report on Bond payments describing amounts paid and amounts scheduled to be paid and the source of such payments. If the contents of the reports required by subsections (a) and (b) above are included in the yearly audit report of EWEB, then EWEB may comply with this section 7 by transmitting a copy of its yearly audit report to the City. Section 8. Appointment of Professionals. EWEB is authorized to appoint bond counsel, disclosure counsel, financial advisors, a registrar and paying agent and any other professional assistance that EWEB determines is necessary or convenient to accomplish the issuance and sale of any or all of the Bonds. Section 9. Official Statement; Sale Documents. EWEB or any party designated by EWEB is authorized to prepare and distribute or direct the preparation and distribution of one or more preliminary official statement(s) or other disclosure document(s) for any of the Bonds or in connection with a preliminary official statement or other disclosure document for any other bonds, as determined to be necessary by EWEB, to obtain bond insurance or other credit enhancement or commitments therefor, if required, to obtain a rating on any or all of the Bonds from Moody's Investors Service, Inc., Standard & Poor's and/or Fitch Ratings, if required, and to issue and publish such notices of sale of the Bonds as may be necessary or required to accomplish the public competitive sale of the Bonds in accordance with this Resolution. Section 10. Effective Date of Resolution. This Resolution shall become effective immediately upon its adoption. The foregoing Resolution adopted by the City Council this 6th day of December, 2004. City l~ecorder Resolution - 5 EXHIBIT A FORM OF NOTICE OF REVENUE BOND AUTHORIZATION NOTICE IS HEREBY GIVEN t. hat the City Coup. cil of the City of Eugene, Oregon (the "City") has adopted Resolution No. __ on ,2004, authorizing the issuance of the City's revenue bonds acting by and through the Eugene Water & Electric Board ("EWEB"). The bonds will be issued in one or more series to provide funds for the design, construction, installation, equipping and relicensing of certain capital improvements, including related acquisitions of land and relicensing of the Carmen-Smith Hydroelectric Project (herein referred to collectively as the "2005 Improvement Program"), to the Electric Utility System operated by EWEB, including structural and environmental enhancement facilities and facilities to improve the generation, transmission, distribution and operations of the Electric Utility System, and to fund any necessary reserves and costs of issuance. Subject to certain parameters, EWEB may establish all terms, conditions and covenants regarding the bonds and the revenues which are necessary or desirable to effect the sale of the bonds. The City estimates that the bonds will be issued in an aggregate principal amount not to exceed $10,000,000. Bond principal and interest are expected to be paid from EWEB's Electric Utility System revenues. The bonds will not be general obligations of the City, nor a charge upon its tax revenues, but will be payable solely from the revenues which EWEB pledges to the payment of the bonds. If written petitions, signed by not less than 5 percent of the City's qualified electors, are filed at the Office of the City Recorder on or before *, 200_* (the 61st day after the date of publication of this notice), the question of issuing $10,000,000 of the revenue bonds shall be placed on the ballot at the next legally available election date. Any such petition shall be subject to ORS 288.815 and Sections 2.970-2.992 of The Eugene Code, 1971. The Office of the City Recorder is located at 777 Pearl Street, Room 105, Eugene, Oregon 97401. Information on procedures for filing petitions may also be obtained at such address or by telephone at (541) 682-5042. The resolution authorizing the bonds is available for inspection at the Office of the City Recorder. The bonds will be issued and sold under the Uniform Revenue Bond Act (ORS 288.805 to 288.945); this notice is published pursuant to ORS 288.815(7). * Information must be included prior to publication of the notice. Resolution - 6