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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 07/17/2007 - SECOND READING OF ORDINANCE NO. 079, 2007, APPROPR ITEM NUMBER: 7 AGENDA ITEM SUMMARY DATE: July17, 2007 FORT COLLINS CITY COUNCIL STAFF: Chuck Seest Terri Bryant SUBJECT Second Reading of Ordinance No. 079,2007,Appropriating Proceeds from the Issuance of City of Fort Collins, Colorado, Stormwater Utility Enterprise, Stormwater Utility Revenue Refunding Bonds, Series 2007A and Series 2007B, in the Maximum Aggregate Principal Amount Of $21,820,000 in the Stormwater Utility Fund. RECOMMENDATION Staff recommends adoption of the Ordinance on Second Reading. FINANCIAL IMPACT The Ordinance would appropriate in the Stormwater Utility Fund proceeds from bonds proposed to be issued in Ordinance No. 008, of the Board of the Stormwater Utility Enterprise, for the purpose of refunding,paying and discharging all or a portion of the Enterprise's outstanding Storm Drainage Revenue Refunding Bonds and Improvement Bonds, Series 1997, and a portion of the outstanding Storm Drainage Revenue Bonds, Series 1999. Overall, the combined transaction is estimated to yield cashflow savings of$1 million and net present value savings of$800,000. EXECUTIVE SUMMARY The Board of the Stormwater Utility Enterprise will be considering at its next meeting, which is scheduled to take place after the regular July 17, 2007 Council meeting, Ordinance No. 008 of the Board of the Stormwater Utility Enterprise, which authorizes the issuance of City of Fort Collins Colorado, Stormwater Utility Enterprise, Stormwater Utility Revenue Refunding Bonds, Series 2007A and Series 2007B,in the Maximum Aggregate Principal Amount of$21,820,000. The Bonds will be issued to refund, pay and discharge all or a portion of the outstanding Storm Drainage Revenue Refunding Bonds and Improvement Bonds, Series 1997, and a portion of the outstanding Storm Drainage Revenue Bonds,Series 1999. Approximately 25%of the overall aggregate amount of$21,820,000 will be assigned to the Series B, which will close by September 4th, which is the earliest date allowed by the 1997 bonds. However,the larger portion of the refunding(75%of the $21,820,000) will be assigned to Series A and is estimated to close by early August. This arrangement provides the City the greatest amount of flexibility for pricing the bonds. July 17, 2007 -2- Item No. 7 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 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 Stormwater Utility. Authorizing the issuance of the bonds and appropriating the proceeds are both necessary to complete the bond transaction. ATTACHMENTS 1. Copy of the First Reading Agenda Item Summary- June 19, 2007. ATTACHMENT 1 ITEM NUMBER: 9 AGENDA ITEM SUMMARY DATE: June 19, 2007 FORT COLLINS r?jLpTFF: Chuck Seest Terri Bryant SUBJECT First Reading of Ordinance No.079,2007,Appropriating Proceeds from the Issuance of City of Fort Collins,Colorado,Stormwater Utility Enterprise,Storm Drainage Revenue Refunding Bonds,Series 2007,in the Maximum Aggregate Principal Amount of$21,820,000,in the Stormwater Utility Fund. RECOMMENDATION Staff recommends adoption of the Ordinance on First Reading. FINANCIAL IMPACT The Ordinance would appropCeinthe orm ' ty proceeds from bonds proposed to be issued in Ordinance No. 00 d o tormwat Utility Enterprise, for the purpose ofrefunding,paying and discha or a rtion o the Enterprise's outstanding Storm Drainage Revenue Refunding Bonds and Improvement Bonds, Series 1997, and a portion of the outstanding Storm Drainage Revenue Bonds, Series 1999. EXECUTIVE SUMMARY The Board of the Stormwater Utility Enterprise will be considering at its next meeting, which is scheduled to take place after the regular June 19,2007, Council meeting, Ordinance No. 008 of the Board of the Stormwater Utility Enterprise, which authorizes the issuance of City of Fort Collins Colorado, Stormwater Utility Enterprise, Storm Drainage Revenue Refunding Bonds, Series 2007, in the Maximum Aggregate Principal Amount of$21,820,000. The Bonds will be issued to refund, pay and discharge all or a portion of the outstanding Storm Drainage Revenue Refunding Bonds and Improvement Bonds, Series 1997,and a portion of the outstanding Storm Drainage Revenue Bonds, Series 1999. The City will be paying off hi r co nds Pewbond that will have lower interest rates. The passage of Amendment 1 (the ABOR men ment)by e Colorado voters in 1992,required 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 Stormwater Utility. Authorizing the issuance of the bonds and appropriating the proceeds are both necessary to complete the bond transaction. ORDINANCE NO, 079, 2007 OF THE COUNCIL OF THE CITY OF FORT COLLINS APPROPRIATING PROCEEDS FROM THE ISSUANCE OF CITY OF FORT COLLINS , COLORADO, STORMWATER UTILITY ENTERPRISE, STORMWATER UTILITY REVENUE REFUNDING BONDS , SERIES 2007A and SERIES 2007B , IN THE MAXIMUM AGGREGATE PRINCIPAL AMOUNT OF $21 ,820,000 IN THE STORMWATER UTILITY FUND WHEREAS , upon passage on first and second reading of Ordinance No 008 , of the Board of the City of Fort Collins, Colorado, Stormwater Utility Enterprise (the "Bond Ordinance"), the Enterprise intends to issue City of Fort Collins, Colorado, Stormwater Utility Enterprise, Stormwater Utility Revenue Refunding Bonds, Series 2007A and Series 2007B , in the Maximum Aggregate Principal Amount of $21 , 820,000 (the "Bonds") ; and WHEREAS , the issuance of the Bonds, and the appropriation of the proceeds thereof, is necessary to complete the refunding, paying and discharging or all or a portion of the Stormwater Enterprise ' s outstanding Storm Drainage Revenue Refunding Bonds and Improvement Bonds, Series 1997, and a portion of the outstanding Storm Drainage Revenue Bonds, Series 1999 ; and WHEREAS , proceeds from the Bonds, in the amount of $21 , 820,000, were not included in the 2007 budget, and the appropriation of such 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 Charter of the City of Fort Collins (the "Charter") provides that an enterprise board of the City shall not exercise any power reserved to the City Council by the Charter or otherwise, except the power to issue revenue bonds and other obligations; and WHEREAS , Article V, Section 9, of the Charter permits 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 $21 , 820,000 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 any 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 TWENTY-ONE MILLION EIGHT-HUNDRED TWENTY THOUSAND DOLLARS ($21 , 820,000) are hereby appropriated in the Stormwater 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 19th day of June, A.D . 2007, and to be presented for final passage on the 17th day of July, A.D . 2007 , Mayor ATTEST : City Clerk Passed and adopted on final reading on the 17th day of July, A.D . 2007 . Mayor ATTEST : City Clerk