HomeMy WebLinkAboutItem 2D: EWEB Long-Term Borrowing
ECC
UGENE ITY OUNCIL
AIS
GENDA TEM UMMARY
Adoption of Resolution 4974 Authorizing Electric Utility System Refunding Revenue
Bonds in the Aggregate Principal Amount of not to Exceed Forty-Six Million Three
Hundred and Fifty-Five Thousand Dollars ($46,355,000) for the Purpose of
Financing and Refinancing the Harvest Wind Project and Providing for Related
Matters
Meeting Date: May 11, 2009 Agenda Item Number: 2D
Department: Central Services Staff Contact: Sue Cutsogeorge
www.eugene-or.gov Contact Telephone Number: 682-5589
ISSUE STATEMENT
Eugene Water & Electric Board (EWEB) is requesting authority to proceed with the financing of
the Harvest Wind Project. The authorization consists of two separate financing resolutions. The
first resolution (the previous item, 2C) is for the issuance of an Electric Utility System line of credit
agreement in an amount not to exceed, $46,355,000, and the second resolution (this item, 2D) is for
the issuance of Electric Utility System, Refunding Revenue Bonds in the amount of $46,355,000 to
provide long-term financing for the Harvest Wind Project.
BACKGROUND
See Item 2C for background on this item.
RELATED CITY POLICIES
There are no City policies related to this item.
COUNCIL OPTIONS
The council can approve or not approve this resolution. If the council does not approve the
resolution, EWEB would not be able to issue a line of credit to finance the construction of the wind
project and EWEB would reassess its involvement in the project.
CITY MANAGER’S RECOMMENDATION
The City Manager recommends approval of the resolution.
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SUGGESTED MOTION
Move to adopt Resolution 4974 authorizing Electric Utility System Refunding Revenue Bonds in
the aggregate principal amount of not to exceed forty-six million three hundred and fifty-five
thousand dollars ($46,355,000) for the purpose of financing and refinancing the Harvest Wind
Project and providing for related matters.
ATTACHMENTS
A. Resolution
FOR MORE INFORMATION
Staff Contact: Sue Cutsogeorge
Telephone: 682-5589
Staff E-Mail: Sue.L.Cutsogeorge@ci.eugene.or.us
EWEB Contact: Cathy Bloom
Telephone: 344-6311 ext. 3277
E-Mail: Cathy.Bloom@eweb.org
Z:\CMO\2009 Council Agendas\M090511\S0905112D.doc
ATTACHMENT A
RESOLUTION NO. ____
A RESOLUTION AUTHORIZING ELECTRIC UTILITY SYSTEM REFUNDING
REVENUE BONDS IN THE AGGREGATE PRINCIPAL AMOUNT OF NOT TO
EXCEED FORTY-SIX MILLION THREE HUNDRED FIFTY-FIVE THOUSAND
DOLLARS ($46,355,000) FOR THE PURPOSE OF FINANCING AND REFINANCING
THE HARVEST WIND PROJECT AND PROVIDING FOR RELATED MATTERS
The City Council of the City of Eugene finds that:
A.
EWEB has requested by resolution that the City Council adopt this Resolution in part to
set the terms for the issuance of electric utility system revenue bonds, notes, certificates,
warrants or other evidences of indebtedness, in an aggregate principal amount of not to
exceed $46,355,000 (the “Refunding Bonds”), on a tax-exempt or taxable basis, as parity
or subordinate lien obligations for the purpose of refinancing the Harvest Wind Interim
Financing and financing the acquisition of an interest in and construction of the Project,
whether through an output prepayment contract, acquisition of an undivided interest in
the Project or otherwise, to fund necessary reserves, and to pay the costs of issuance of
the Refunding Bonds.
B.
On February 17, 1993, the City Council adopted Resolution No. 4360 (the “Authorizing
Resolution”), to authorize the City of Eugene, Oregon (the “City”), acting through the
Eugene Water & Electric Board (“EWEB”), to borrow money and issue, from time to
time, revenue bonds (the “Bonds”) in the aggregate principal amount of $150,000,000,
for the purpose of financing certain improvements to the City’s electric utility system and
related facilities and systems (the “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 at an election to be held on May 18, 1993
(the “1993 Election”), and the requirement that the terms of the Bonds shall be prescribed
by a supplemental bond resolution or resolutions of EWEB.
C.
On May 18, 1993, the City’s electors approved the issuance of the Bonds at the 1993
Election (such electors’ approval and the Authorizing Resolution are collectively referred
to herein as the “Bond Authorization”).
D.
As of the date hereof, the aggregate principal amount of Bonds issued pursuant to the
Bond Authorization is $103,645,000, consisting of $27,000,000 principal amount of
Electric Utility System Revenue Bonds, Series 1994, issued under City Council
Resolution No. 4394, $31,500,000 principal amount of Electric Utility System Revenue
Bonds, Series 1994C, issued under City Council Resolutions No. 4370 and No. 4405,
$19,890,000 principal amount of Electric Utility System Revenue Bonds, Series 1996,
issued under City Council Resolution No. 4425, $12,455,000 principal amount of Electric
Utility System Revenue Bonds, Series 1998A, issued under City Council Resolution No.
4571, $1,800,000 principal amount of Bonds pursuant to a Revolving Line of Credit
issued under City Council Resolution No. 4616, and $11,000,000 principal amount of
Electric Utility System Revenue Bonds, Series 2002B, issued under City Council
Resolution No. 4719.
E.
On the date hereof, the City Council authorized an Electric Utility System Line of Credit
Agreement in the amount not to exceed $46,355,000 (the “Harvest Wind Project Interim
Financing”) for the purpose of providing interim financing for the acquisition of an
interest in and construction of new capital facilities in the State of Washington, to be
known as the Harvest Wind Project (the “Project”);
F.
On June 16, 1986, EWEB adopted a resolution authorizing and providing for the
issuance, from time to time, of City of Eugene, Oregon Electric Utility 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”).
G.
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.
H.
The Bond Resolution does not prohibit, and EWEB has by resolution undertaken to
authorize and provide for, the issuance, from time to time, of bonds, notes, certificates,
warrants or other evidences of indebtedness for any corporate use or purpose relating to
the Electric Utility System payable as to principal and interest from the Revenues subject
and subordinate to the deposits and credits required to be made to the Bond Resolution,
or from securing such bonds, notes, certificates, warrants or other evidences of
indebtedness and the payment thereof by a lien and pledge on the Revenues junior and
inferior to the lien and pledge on the Revenues in the Bond Resolution created for the
payment and security of the bonds issued under the Bond Resolution.
I.
EWEB has by resolution undertaken to provide that the principal of, premium, if any, and
interest on such subordinate lien obligations 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.
J.
Oregon Revised Statutes 287A.180(1)(c) and 287A.360 authorize a public body to issue
current refunding bonds to refund outstanding revenue bonds.
K.
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 Refunding Bonds authorized by this Resolution.
L.
To the extent that the expenditures and the use of proceeds of the Refunding 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”).
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M.
The City and EWEB anticipate incurring expenditures (“Expenditures”) to finance the
costs of the Project and wish to declare their official intent to reimburse themselves for
the Expenditures made on the Project from the proceeds of the Refunding Bonds.
NOW THEREFORE, BE IT RESOLVED BY THE CITY OF EUGENE, a
municipal corporation of the State of Oregon, as follows:
Section 1.
Authorization of Refunding Bonds; Purpose of Issue. Based on the above
findings, the City Council hereby authorizes EWEB, on behalf of the City, to issue and sell the
Refunding Bonds designated as the “City of Eugene, Oregon Electric Utility System Revenue
Refunding Bonds” (or such similar designation as necessary to adequately describe the Bonds),
in the aggregate principal amount of not to exceed $46,355,000, in one or more series, on a tax-
exempt or taxable basis, as parity or subordinate lien obligations, for the purpose of refinancing
the Harvest Wind Interim Financing, whether through an output prepayment contract, acquisition
of an undivided interest in the Project or otherwise, to fund necessary reserves, and to pay the
costs of issuance of the Refunding Bonds.
Section 2.
Conditions of Issuance and Sale. The City Council hereby prescribes that:
(a)The Refunding Bonds of each series shall: (i) mature not later than thirty
(30) years from the date of issuance thereof; (ii) be sold (1) through public competitive sale and
awarded to the bidder offering the most favorable terms to EWEB, on behalf of the City, or (2)
pursuant to negotiation, at par or with a net original issue discount or premium that does not
exceed seven percent (7%) of the aggregate principal amount thereof; (iii) have an effective
interest rate of not to exceed seven percent (7%) per annum; and (iv) not exceed $46,355,000 in
aggregate principal amount; and
(b)The proceeds of the Refunding Bonds shall be used only for the purposes
above described.
(c) At any one time the maximum amount of outstanding Refunding Bonds
and outstanding Harvest Wind Interim Financing shall not exceed $46,355,000, less any amount
placed in an irrevocable escrow to refund the Harvest Wind Interim Financing.
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Section 3.
Delegation of Authority for Terms of Refunding Bonds; Provisions for
Issuance. Pursuant to ORS 287A.300, the EWEB Treasurer or Assistant Treasurer, or any
individual designated by EWEB, is hereby authorized and directed to determine, with respect to
the Refunding Bonds, the form of bond and series designation, the manner of disbursement of
proceeds of the Refunding 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 Refunding Bonds because
the same cannot be determined by the City Council at this time. Prior to the issuance of any
Refunding 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 Refunding Bonds;
(ii) adopt a supplemental 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
Refunding 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 expenditures, cost of issuance and other project
expenditures that qualify as “Original Expenditures” under Treasury Regulation §1.150-2 prior
to the date of issuance of the Refunding Bonds, and hereby declares its official intent to
reimburse itself or EWEB with proceeds of the Refunding Bonds in an amount not to exceed
$46,355,000.
Section 5.
Statement on Form of Refunding Bonds . The Refunding 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 that 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.
Refunding Bonds Payable Solely from Revenues. The Refunding 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 that EWEB pledges to the payment thereof pursuant
to ORS 287A.310 and ORS 287A.325, the Bond Authorization and in accordance with this
Resolution and any supplemental bond resolutions of EWEB.
Section 7.
Refunding Bonds Reporting. EWEB shall submit to the City by May 1 of
each year the following annual reports commencing after entering into the Refunding Bonds and
each year thereafter until the Refunding Bonds have been paid and retired:
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(a)A report on the funds for Refunding 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 Refunding Bonds 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 the Refunding 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 Refunding
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 therefore, 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, or from
such other bond rating agency as may be nationally recognized at the time of issuance, if
required, and to issue and publish such notices of sale of the Refunding Bonds as may be
necessary or required to accomplish the public competitive sale of the Refunding Bonds or
negotiate and execute a bond purchase agreement if the Refunding Bonds are to be sold by a
negotiated sale, whichever the case may be in EWEB’s determination, in accordance with this
Resolution
Section 10.
Effective Date of Resolution. This Resolution shall become effective
immediately upon its adoption.
th
The foregoing Resolution adopted by the City Council this 11 day of May, 2009.
City Recorder
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