RESOLUTION NO. 2005-____

A RESOLUTION AUTHORIZING A SUBSIDY FROM THE ELECTRIC FUND TO THE TELECOMMUNICATIONS FUND FOR DEBT SERVICE

Recitals:

A. The City of Ashland has constructed and operates a telecommunications utility known as Ashland Fiber Network (AFN), and

B. AFN operations and debt service and other activities are accounted for in the city budget within the enterprise fund known as the Telecommunications Fund, and

C. AFN construction, assets and operations developed out of the Electric Fund and all previous financing has identified the Electric Fund and electric rates as the resources to assure debt service payments, and

D. The cost of construction and operational losses from FY 1999 to date have resulted in a debt amount of $15.5 million dollars with annual payments exceeding $1,000,000, and

E. The debt was obtained though selling revenue bonds backed by the full faith and credit of the city, pledging its financial resources to assure debt service payments will be made in a timely fashion, and

F. Current operations of AFN have not generated enough revenue to provide adequate cash balances to meet the annual debt service requirements, and

G. Additional cash is needed from another fund to meet current debt service requirements including approximately $802,0000 in interest July 15, 2005 and an interest payment of approximately $432,000 on January 15, 2006.

THE CITY OF ASHLAND RESOLVES AS FOLLOWS:

SECTION 1. The Finance Director is hereby authorized to transfer sufficient funds in FY 2004-05 and FY 2005-06 to meet debt service and other requirements as is established by separate resolution of the Council. Each transfer will be supported with justification and brought to Council for approval prior to implementation.

SECTION 2. Any transfer will be considered a subsidy to the Telecommunications Fund from the Electric Fund, will be done only as needed and authorized by Council.

SECTION 3. Anticipated subsidy amounts and transfers will be budgeted as is necessary for compliance with Oregon Budget Law.

SECTION 4. 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 3rd day of May, 2005.

PASSED and ADOPTED this ______day of ______, 2005:
Barbara Christensen, City Recorder

SIGNED and APPROVED this ______day of ______, 2005:
John W. Morrison, Mayor

Reviewed as to form:
Michael W. Franell, City Attorney