[Council Communication]  [Proposed Resolution]

Council Communication

Title:	Resolution Authorizing the Issuance of Water Revenue Bonds for a Total Not To Exceed $3,500,000, and Providing for Publication of Notice.
Dept:	Finance Department
Date:	February 18, 2003
Submitted By:	Lee Tuneberg, Finance Director
Approved By: ...........................	Brian Almquist, Interim City Administrator

Synopsis:	Attached is a resolution authorizing staff to take the necessary steps to issue Water Revenue Bonds for capital projects and refunding the 1994 bonds. Included in the steps is publishing a Notice of Revenue Bond Authorization (sample attached) for legal compliance.
Recommendation:	Staff recommends approval of this resolution.
Fiscal Impact:	This is consistent with the 2002-2003 budget and past practices in financing capital projects.
Background:	The listing of projects included in the Capital Improvement Program approved as part of the FY 2002-2003 budget process identified certain water infrastructure projects deemed necessary and appropriate to meet public need. Such projects routinely utilize multiple funding sources for the work including System Development Charges, Local Improvement Districts proceeds and borrowings paid over the life of the loan(s) with water rate revenues. Approved projects requiring partial funding through bond sale with the debt service paid by rates are: 1. New Fire Flow Distribution Reservoir ($2.3 million, $1.6 million form bonds) 2. Transmission Line from Reeder to the Plant ($1.2 million, $734,000 from bonds) 3. Main Supply Line from the Plant to Crowson Reservoir, ($1.1 million, $541,000 from bonds) Note: The amounts shown are the most current estimates for project costs. These estimates translate into a bond sale of approximately $2.9 million for projects. The resolution asks for a not to exceed amount of $3.5 million allowing issue costs and reserve requirements to be included in the sale. We estimate a rate of 4.5% on the new issue of 20 year bonds. The potential for refunding the 1994 Water Revenue Bonds is high with a net savings to the city of $188,000 over the remaining life of the bonds replacing the current 6.3% rate with a 3.6% borrowing.

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RESOLUTION NO. ____________

A RESOLUTION OF CITY OF ASHLAND, JACKSON COUNTY, OREGON, AUTHORIZING THE ISSUANCE OF WATER REVENUE BONDS FOR A TOTAL NOT TO EXCEED $3,500,000, AND PROVIDING FOR PUBLICATION OF NOTICE.

The City of Ashland resolves as follows:

Section 1. Findings

The Council finds as follows:

1.1 It is financially feasible and in the best interests of the City to authorize the issuance of bonds under the Uniform Revenue Bond Act to finance improvements, property acquisition and other public purposes related to the water system, including a transmission line, a distribution line, fire flow distribution, a reservoir, and a water treatment plant, and to pay all cost incidental thereto (the "Projects").

1.2 The City is authorized to issue revenue bonds for any public purpose under Oregon's Uniform Revenue Bond Act (ORS 288.805 to 288.945 or the "Act"). Revenue bonds issued under the Act may be payable from all or any portion of the water system revenues of the City (the "Revenues").

1.3 It is desirable to obtain $3,500,000 of bonding authority to finance the Projects.

1.4 The City will cause a plan to be prepared showing that the City's estimated Revenues which are pledged to pay each series of bonds authorized by this resolution will be sufficient to pay that series.

1.5 The City previously issued its Water Revenue Bonds, Series 1994 (the "1994 Bonds") that bear interest at rates that are higher than current market rates, and the City may be able to reduce debt service expense by refunding the 1994 Bonds. The City will establish the terms and conditions associated with those refunding bonds by subsequent resolution.

Section 2. Bonds Authorized

The City hereby authorizes the issuance of not more than Three Million Five Hundred Thousand Dollars ($3,500,000) in aggregate principal amount of revenue bonds to finance the Projects and pay related costs. The bonds shall be issued and sold in accordance with the Act, and shall be payable solely from the Revenues which the City pledges to pay the bonds. Prior to selling the bonds the City Council shall establish by resolution or delegate the authority to establish the terms and conditions of the bonds pursuant to ORS 288.520.

Section 3. Professional Appointments

The City hereby appoints Preston, Gates and Ellis LLP as bond counsel and Western Financial Group, LLC as financial advisor for the revenue bonds. Western Financial Group is authorized to submit an advance refunding plan to the Oregon State Treasury in preparation for issuing refunding bonds to refund the 1994 Bonds.

Section 4. Notice; Procedure

4.1 No bonds may be sold, and no purchase agreement for the bonds may be executed, until at least sixty (60) days after publication of the Notice of Revenue Bond Authorization, which is attached to this resolution as Exhibit "A" (the "Notice"). The Notice shall specify the last date on which petitions may be submitted, and shall be published in at least one newspaper of general circulation in the City in the same manner as are other public notices of the City.

4.2 If petitions for an election, containing valid signatures of not less than five percent (5%) of the City's electors, are received by the date indicated in the Notice: the question of issuing the bonds shall be placed on the ballot at the next legally available election date; and, no bonds may be sold under this ordinance until the question of issuing those bonds is approved by a majority of the electors of the City who vote on that question.

Section 5. Bonds Payable Solely from Revenues

The bonds shall not be general obligations of the City, and neither the authorization nor issuance of the bonds shall authorize the City to levy any additional taxes. The bonds shall be payable solely from the portion of the Revenues which the City pledges to payment of the bonds pursuant to ORS 288.825(1) and the resolution to be adopted by the City pursuant to Section 2 of this resolution.

Section 6. Effective Date

This resolution takes effect upon signing by the Mayor.

This resolution was read by title only in accordance with Ashland Municipal Code §2.04.090 duly PASSED and ADOPTED this 18th day of February, 2003.

City Recorder
Barbara Christensen

SIGNED and APPROVED this 18th day of February, 2003.
Mayor
Alan W. DeBoer

Reviewed as to form:
City Attorney
Paul Nolte

Exhibit A

Notice of Revenue Bond Authorization

NOTICE IS HEREBY GIVEN that the City Council of the City of Ashland, Oregon (the "City"), adopted Resolution No. ____ on February 18th, 2003, authorizing the issuance of revenue bonds to finance improvements, property acquisition and other public purposes related to the water system, including a transmission line, a supply line and a fire flow distribution reservoir (the "Projects").

The City Council may establish by subsequent resolution all terms, conditions and covenants regarding the bonds and the Project revenues pledged to the bonds which are necessary or desirable to sell the bonds.

The revenue bonds described in this notice will not be issued in an aggregate principal amount of more than Three Million Five Hundred Thousand Dollars ($3,500,000). The bonds shall be payable solely from the portion of the "revenues" (as defined in the Uniform Revenue Bond Act ORS 288.805 to 288.945, or the "Act") from the City's water system which the City pledges to the payment of the bonds. The bonds shall not be general obligations of the City, nor a charge upon its tax revenues, but will be payable solely from the revenues which the City pledges to the payment of the bonds.

If written petitions requesting an election on the issuance of the bonds, signed by not less than five percent (5%) of the City's electors, are filed at the Office of the City Recorder on or before ______, 2003 (the 61st day after the date of publication of the notice), the question of issuing the bonds shall be placed on the ballot at the next legally available election date.

The Office of the City Recorder is located at 20 East Main, Ashland, Oregon 97520.

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 Act; this Notice is published pursuant to ORS 288.815(6).

By order of

THE CITY COUNCIL OF CITY OF ASHLAND, Jackson County, Oregon

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