HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 05/05/2009 - SECOND READING OF ORDINANCE NO. 034, 2009, APPROPR ITEM NUMBER: 7
AGENDA ITEM SUMMARY DATE: May 5, 2009
FORT COLLINS CITY COUNCIL STAFF: Chuck Seest
Terri Bryant
SUBJECT
Second Reading of Ordinance No. 034,2009,Appropriating Proceeds from the Issuance of City of
Fort Collins Water Utility Enterprise, Water Revenue Refunding Bonds, Series 2009, in the
Maximum Aggregate Principal Amount of$8,500,000.
RECOMMENDATION
Staff recommends adoption of this Ordinance on Second Reading.
EXECUTIVE SUMMARY
This Ordinance, unanimously adopted on First Reading on April 21, 2009, appropriates the Water
Utility Fund proceeds from bonds issued by Ordinance No. 007, of the Board of the Water Utility
Enterprise,for the purpose of refunding,paying and discharging all of the Enterprise's outstanding
Revenue Refunding Bonds and Improvement Bonds, Series 1998. The bonds being refunded have
interest rates of 4.25% to 4.625%; the new bonds would result in an average interest rate of
approximately 2.50%. Overall, the transaction is estimated to yield cashflow savings of$430,000
and net present value savings of$400,000.
ATTACHMENTS
1. Copy of First Reading Agenda Item Summary - April 21, 2009.
(w/o original attachments)
ATTACHMENT 1
ITEM NUMBER: 10
AGENDA ITEM SUMMARY DATE: April 21, 2009
FORT COLLINS CITY COUNCIL
STAFF: Chuck Seest
IT))71 Terri Bryant
SUBJECT
First Reading of Ordinance No. 034,2009,Appropriating Proceeds from the Issuance of City of Fort
Collins Water Utility Enterprise, Water Revenue Refunding Bonds, Series 2009, in the Maximum
Aggregate Principal Amount of$8,500,000.
RECOMMENDATION
Staff recommends adoption of the Ordinance on First Reading.
FINANCIAL IMPACT ,� -v-r 1-7"
This Ordinance will appropriate in the ater Utility Fund proceeds from bonds proposed to be
issued in Ordinance No. 007, ofthe"Board.of the-Water Utility Enterprise, for the purpose of
refunding,paying and discharging all of the Enterprise's outstanding Revenue Refunding Bonds and
Improvement Bonds, Series 1998. The bonds being refunded have interest rates of 4.25% to
4.625%; the new bonds would result in an average interest rate of approximately 2.50%. Overall,
the transaction is estimated to yield cashflow savings of$430,000 and net present value savings of
$400,000.
EXECUTIVE SUMMARY
After the regular Council meeting, the Board of the Water Utility Enterprise will consider an
Ordinance which authorizes the issuance of City of Fort Collins Colorado,Water Utility Enterprise,
Water Revenue Refunding Bonds, Series 2009, in the Maximum Aggregate Principal Amount of
$8,500,000. The Bonds will be issued to refund,_pay_and_discharge all of the outstanding Water
Revenue Refunding Bonds and Improvement Bonds,(Series 1998fihis Ordinance will appropriate
in the Water Utility Fund proceeds fromCbonds proposed to be issued in Ordinance No. 007, of the
Board of the Water Utility Enterpr�!for`t�purpose of refunding, paying and discharging all of
the Enterprise's outstanding Revenue Refunding Bonds and Improvement Bonds, Series 1998.
BACKGROUND
The City will be paying off higher cost bonds with new bonds that will have lower interest rates.
The passage of Amendment 1 (the TABOR Amendment)by the Colorado voters in 1992,required
April 21, 2009 -2- Item No. 10
the City to form enterprises in order for its utilities to be able to issue municipal bonds without an
election. Since that time, all utility bonds have been issued by the appropriate utility enterprise.
However, the City Charter grants only the Council the power to appropriate the funds. Therefore,
this action by the Council is necessary in,order to-appropriate the bond proceeds for the Water
Utility. Authorizing the issua ce of 1& onds�andlappropriatingthe proceeds are both necessary
to complete the bond transaction utilizing the esse i& of George K. Baum in a negotiated sale of
the bonds.
Staff presented this refunding opportunity to the Council Finance Committee at the March 16
meeting. The Council Finance Committee recommended that staff proceed with the refunding and
present to the Regular Council for action.
ATTACHMENTS
1. Council Finance Committee minutes, March 16, 2009.
ORDINANCE NO. 034, 2009
OF THE COUNCIL OF THE CITY OF FORT COLLINS
APPROPRIATING PROCEEDS FROM THE ISSUANCE OF CITY OF FORT COLLINS,
COLORADO, WATER UTILITY ENTERPRISE, WATER REVENUE REFUNDING BONDS,
SERIES 2009, IN THE MAXIMUM AGGREGATE PRINCIPAL AMOUNT OF $8,500,000
WHEREAS, upon passage on first and second reading of Ordinance No. 007 of the
Board of the City of Fort Collins, Colorado, Water Utility Enterprise (the "Bond Ordinance"),
the Enterprise intends to issue City of Fort Collins, Colorado, Water Utility Enterprise, Water
Revenue Refunding Bonds, Series 2009, in the Maximum Aggregate Principal Amount of
$8,500,000 (the `Bonds"); and
WHEREAS, the issuance of the Bonds and the appropriation of the Bond's proceeds are
necessary to complete the refunding of the City's Water Revenue Refunding Bonds, Series 2009;
and
WHEREAS, a portion of the Bonds proceeds, in the amount of $8,500,000, was not
included in the 2009 budget, and the appropriation of those proceeds is necessary to authorize
the payment to the refunded bond escrow agent and of bond issuance costs; and
WHEREAS, Section 19.3(b) of Article V of the City Charter provides that an enterprise
board of the City shall not exercise powers reserved to the Council by the City Charter or
otherwise (other than the power to issue revenue bonds and other obligations); and
WHEREAS, Article V, Section 9, of the City Charter authorizes the City Council to
make supplemental appropriations by ordinance at any time during the fiscal year, provided that
the total amount of such supplemental appropriations, in conjunction with all previous
appropriations for that fiscal year, does not exceed the current estimate of actual and anticipated
revenues to be received during the fiscal year; and
WHEREAS, City staff has determined that the appropriation of the previously
unappropriated proceeds of the Bonds in the amount of $8,500,000 will not cause the total
amount appropriated in the relevant funds to exceed the current estimate of actual and
anticipated revenues to be received during the fiscal year.
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF
FORT COLLINS that the previously unappropriated proceeds of the Bonds in the amount of
EIGHT MILLION FIVE HUNDRED THOUSAND DOLLARS ($8,500,000) are hereby
appropriated in the Water Fund for payment to the refunded bond escrow agent and bond
issuance costs contingent upon the final adoption of the Bond Ordinance and the final sale and
issuance of the Bonds by the Enterprise.
Introduced, considered favorably on first reading, and ordered published this 21st day of
April, A.D. 2009, and to be presented for final passage on the 5 ay of May, A.D. 2009.
O t
Mayor
ATTEST:
City Clerk
Passed and adopted on final reading on the 5th day of May, A.D. 2009.
Mayor
ATTEST:
City Clerk