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HomeMy WebLinkAboutResolution No. 4757 RESOLUTION NO. 4757 A RESOLUTION AUTHORIZING THE ISSUANCE AND SALE OF ELECTRIC UTILITY SYSTEM REVENUE BONDS IN THE AGGREGATE PRINCIPAL AMOUNT OF SIXTY-FOUR MILLION DOLLARS ($64,000,000) FOR THE PURPOSES OF FINANCING ELECTRIC UTILITY SYSTEM IMPROVEMENTS AND REFUNDING ELECTRIC UTILITY SYSTEM REVENUE BONDS SERIES 1994, SERIES 1996 AND SERIES 1998B; 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; and 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 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 improvement to the electric utility as described in the resolution (the "Project"). C. On July 22,2001, there was published the Notice of Revenue Bond Authorization in The Register- Guard, a newspaper of general circulation within the geographical boundaries ofthe City and sixty (60) days have elapsed since the publication of such Notice of Revenue Bond Authorization 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"). D. As of the date of this Resolution, the aggregate principal amount of bonds issued pursuant to 2001 URBA Authorization is $37,570,719.21, consisting of$37,570,719.21 of Electric Utility System Revenue Bonds, Series 2001B, leaving $12,429,280.79 of authorized but unissued debt remaining under the 2001 URBA Authorization. E. EWEB has requested the City Council to adopt this Resolution to set the terms for the issuance of not to exceed $7,000,000 principal amount of bonds (the "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 New Project Bonds and to pay the costs of issuance of the New Project Bonds. F. On February 17, 1993, the City Council adopted Resolution No. 4360 to authorize the City, acting through EWEB, to borrow money and issue, from time to time, revenue bonds in an aggregate principal amount of $150,000,000, for the purpose of financing certain improvements to the City's electric utility system which is operated by EWEB, and setting forth certain other terms and conditions for issuance, including the requirement for approval by the City's electors and the requirement that the terms of the bonds should be prescribed by further resolution of the City Council, and on May 18, 1993, the City's electors approved the issuance of bonds (the "1993 Election"). G. Pursuant to the 1993 Election, and subsequent City Council Resolutions numbered 4394 and 4425, the City, acting by and through EWEB, issued its Electric Utility System Revenue Bonds, Series 1994 (the "Series 1994 Bonds") and its Electric Utility System Revenue Bonds, Series 1996, the ("Series 1996 Bonds"). H. On November 24, 1997, the City Council adopted Resolution No. 4545 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 $15,000,000 and on November 28, 1997, there was published the Notice of Revenue Bond Authorization in The Register-Guard, a newspaper of general circulation within the geographical boundaries of the City and sixty (60) days have elapsed since the publication of such Notice of Revenue Bond Authorization and no voters residing within the geographical boundaries ofthe City have 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 "1998 URBA Authorization"). 1. Pursuant to the 1998 URBA Authorization, the City, acting by and through EWEB, issued its Electric Utility System Revenue Bonds, Series 1998B (the "Series 1998B Bonds"). J. ORS ~288.605 to ~288.695 authorize the City to issue bonds without an election to refund outstanding bonds, including advance refunding bonds, in order to effect a savings discounted to present value and to issue bonds to refund revenue bonds that were previously issued in accordance with the Uniform Revenue Bond Act without complying with the procedures prescribed in ORS ~288.815. K. The outstanding Series 1994 Bonds 'lire callable as to principal and interest on August 1, 2003 at a redemption premium of 101 % of the principal amount and may be currently refunded to effect a net debt service savings. L. The outstanding Series 1998B Bonds are callable as to principal and interest at any time without premium and may be currently refunded to effect a net debt service savings. M. EWEB has requested the City Council to adopt this Resolution authorizing and setting the terms for the issuance of not to exceed $40,000,000 principal amount of bonds for the purpose of currently refunding all or a portion of the outstanding Series 1994 Bonds and all or a portion of the outstanding Series 1998B Bonds, and to pay the costs of issuance of the current refunding bonds. N. The Series 1996 Bonds are callable as to principal and interest on August 1,2006 without premium, and net debt service savings may be achieved by issuing refunding bonds for the purpose of advance refunding all or a portion of the outstanding Series 1996 Bonds on August 1, 2006. O. EWEB has requested the City Council to adopt this Resolution authorizing and setting the terms for the issuance of not to exceed $17,000,000 principal amount of bonds for the purpose of advance refunding all or a portion of the outstanding Series 1996 Bonds on August 1,2006, and to pay the costs of issuance of the advance refunding bonds. 2 P. ORS ~288.620 requires that the Oregon State Treasurer (the "State Treasurer") review and approve a refunding plan prior to the sale and issuance of advance refunding bonds. Q. The City, including EWEB, anticipates incurring expenditures to finance the costs of the Project for the New Project Bonds and desires to declare its official intent to reimburse itself for such expenditures from the proceeds of the New Project Bonds. R. To the extent that the expenditures and the use of proceeds of the bonds issued under this Resolution may qualify under federal tax law and regulations, the City, including EWEB, intends for the interest on the bonds to be excludable from gross income for federal income tax purposes under ~103 of the Internal Revenue Code of 1986 (the "Code"), as amended. NOW THEREFORE, THE CITY OF EUGENE DOES ORDAIN AS FOLLOWS: Section 1. Authorization of Bonds; Purpose of Issue; Conditions of Issuance. Based on the above findings, 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 in the aggregate principal amount of not to exceed $64,000,000 subject to the following terms and conditions prescribed by the City Council: (a) The Bonds of each series shall: (i) mature not later than twenty-five (25) years from the date of issuance of the series; (ii) be sold at par or with a net original issue discount/premium that does not exceed seven percent (7%) of the aggregate principal amount thereof; (iii) have an effective interest rate of not to exceed nine percent (9%) per annum; (b) The proceeds of the Bonds shall be used only for the following purposes: (i) An amount not to exceed $7,000,000 shall be issued under a single series and shall be used to finance the Project, to pay a pro-rata share of the costs of issuance of the series and to fund a reserve fund for the payment of Bonds issued to finance the Proj ect; (ii) An amount not to exceed $40,000,000 shall be used to currently refund all or a portion of the Series 1994 Bonds, including payment of a redemption price of 101 % of the principal amount of the Series 1994 Bonds, and all or a portion of the Series 1998B Bonds, provided that such refunding shall result in a net present value debt service savings of at least 2% for each series so refunded, and to pay a pro-rata share of the costs of issuance of the series of Bonds issued for such purpose; and (iii) An amount not to exceed $17,000,000 shall be used for the purpose of advance refunding all or a portion of the outstanding Series 1996 Bonds on August 1, 2006, provided that such refunding will result in a net present value debt service savings of at least 3% in accordance with Oregon Administrative Rule 170-062-0000, and to pay a pro-rata share ofthe costs of issuance of the series of Bonds issued for such purpose. Section 2. 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 3 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, the maturities to be refunded 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. Additionally, prior to the issuance of any advance refunding bonds, EWEB shall comply with Section 9 of this Resolution. Section 3. 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 ofEWEB, 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 to 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 4. Provisions for Sale of Bonds at Private Negotiated Sale. The Council hereby finds that it is desirable for the Bonds to be sold at one or more private negotiated sale(s) and the Bonds are authorized to be sold separately or together in one or more series of any name or designation at one or more private negotiated sale(s) based upon written recommendation ofEWEB's independent financial advisor, provided that such financial advisor makes a written evaluation of the terms and conditions of the sale(s), the pricing thereof and any other relevant aspects of the sale(s) pursuant to ORS ~288.845. Section 5. 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 payment thereof pursuant to the 1993 Election, the provisions of City Council Resolutions numbered 4677, 4360, 4394, 4545, and 4425 and ORS ~288.825 and in accordance with Section 1 hereof. Section 6. 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: (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 4 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 EWEB's yearly audit report, EWEB may comply with this section by transmitting a copy of its yearly audit report to the City. Section 7. Appointment of Professionals. EWEB is authorized to appoint bond counsel, underwriters, financial advisors, a registrar and paying agent, an escrow 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 8. Official Statement. 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, if required, and 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. Section 9. Approval of Plan of Advance Refunding and Submission to Oregon State Treasurer for Review and Approval. The Council hereby approves the advance refunding plan for the refunding of the Series 1996 Bonds and the issuance of the advance refunding bonds (the "Refunding Plan") presented to the Council that was prepared by EWEB's independent financial advisor, Seattle Northwest Securities Corp., in compliance with Oregon Administrative Rule 170-062-0000. Pursuant to ORS ~288.620, the Council hereby directs that the Refunding Plan be submitted to the State Treasurer for review and approval. In accordance with ORS ~288.620, the advance refunding bonds may not be sold until the State Treasurer has authorized or is deemed to have authorized the sale of such bonds. Section 10. Declaration of Intent to Reimburse. The City hereby declares its official intent to reimburse itself or EWEB, within the limits of the Code, with proceeds from the Bonds issued to finance the costs of the Project for expenditures incurred prior to the issuance of the Bonds issued to finance the costs of the Project. 5 Section 11. Effective Date of Resolution. This Resolution shall become effective immediately upon its adoption. The foregoing Resolution adopted by the City Council this 12th day of May, 2003. ~P#~I ;t;7~ Deputy City Recorder 6