HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 03/02/2010 - SECOND READING OF ORDINANCE NO. 010, 2010, APPROPR DATE: March 2, 2010 SUMMARYAGENDA ITEM
STAFF: Chuck Seest _
T COLLINS CITY COUNCIL
Bill Freeman
FrD
Second Reading of Ordinance No. 010, 2010, Appropriating Proceeds from the Issuance of City of Fort Collins,
Colorado,Wastewater Utility Enterprise,Sewer Revenue Refunding Bonds,Series 2010A,in the Maximum Aggregate
Principal Amount of$4,100,000, in the Wastewater Utility Fund.
EXECUTIVE SUMMARY
This Ordinance, unanimously adopted on First Reading on February 16, 2010, appropriates the Wastewater Utility
Enterprise Fund proceeds from bonds issued by Ordinance No.005 of the Board of the Wastewater Utility Enterprise.
The bonds will refund, pay and discharge all of the outstanding Sewer Revenue Bonds, Series 2000. The bonds being
refunded have interest rates of 5.00%to 5.50%; the new bonds should result in an average interest rate of less than
4.00%. Overall, the transaction should yield cashflow savings of approximately $300,000 and net present value
savings of at least$275,000.
ATTACHMENTS
1. Copy of First Reading Agenda Item Summary- February 16, 2010
(w/o attachments)
ATTACHMENT 1
DATE: February 16, 2010 AGENDA ITEM SUMMARY I`
STAFF: Chuck Seest _
T COLLINS CITY COUNCIL
Bill Freeman
First Reading of Ordinance No.010,2010,Appropriating Proceeds from the Issuance of City of Fort Collins,Colorado,
Wastewater Utility Enterprise,Sewer Revenue Refunding Bonds,Series 2010A, in the Maximum Aggregate Principal
Amount of$4,100,000, in the Wastewater Utility Fund.
EXECUTIVE SUMMARY
After the regular Council meeting, the�Boarro;bf he Was ewater Utility Enterprise will consider an ordinance which
authorizes the issuance of City of Fort�Gollins Colorado, Wastewater Utility Enterprise, Sewer Revenue Refunding
Bonds,Series 2010A,in the Maximum Aggregate Principal Amount of$4,100,000. The Bonds will be issued to refund,
pay and discharge all of the outstanding Sewer Revenue Bonds, Series 2000.
BACKGROUND / DISCUSSION
The City will be paying off higher cost bonds with new bonds that will have lower interest rates. In response to the
passage of Amendment 1 (the TABOR Amendment) by the Colorado voters in 1992, the City formed enterprises in
order for its utilities to be able to issue municipal bonds w`thodtanelecti6n 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
Wastewater Utility. Authorizing the issuance of the bonds and appropriating the proceeds are both necessary to
complete the bond transaction utilizing the-services-of James Capital in a private placement sale of the bonds.
FINANCIAL IMPACT
The Ordinance would appropriate in the Wastewater Utility Fund proceeds from bonds proposed to be issued in
Ordinance No. 005, of the Board of the Wastewater Utility Enterprise, for the purpose of refunding, paying and
discharging all of the Enterprise's outstanding Sewer Revenue Bonds, Series 2000. The bonds being refunded have
interest rates of 5.00%to 5.50%; the new bonds should result in an average interest rate of less than 4.00%. Overall,
the transaction should yield cashflow,savings oU. DO
ately$300,000 andmet present value savings of at least
$275,000.
SUSTAINABILITY: ECONOMIC, ENVIRONMENTAL AND SOCIAL IMPACTS
The Ordinance will not have an impact on environmental and social elements in the community. It will generate
savings of$300,000 that will have a positive economic impact by reducing the cost of the operating the Wastewater
Utility.
STAFF RECOMMENDATION _
Staff recommends adoption of the Ordinance 0n Stadin'g.T,/
February 16, 2010 -2- ITEM 11
BOARD / COMMISSION RECOMMENDATION
Staff presented this refunding opportunity to the Council Finance Committee at its November 16, 2009 meeting. The
Council Finance Committee recommended that staff proceed with the refunding and present it at a regular meeting
of the City Council.
ATTACHMENTS
1. Council Finance Committee minutes- November 16;2009.
P v
COPY
C 0
Py
ORDINANCE NO. 010, 2010
OF THE COUNCIL OF THE CITY OF FORT COLLINS
APPROPRIATING PROCEEDS FROM THE ISSUANCE OF CITY OF FORT COLLINS,
COLORADO, WASTEWATER UTILITY ENTERPRISE, SEWER REVENUE REFUNDING
BONDS, SERIES 2010A, IN THE MAXIMUM AGGREGATE PRINCIPAL AMOUNT OF
$4,100,000, IN THE WASTEWATER UTILITY FUND
WHEREAS, upon passage on first and second reading of Ordinance No. 005 of the Board
of the City of Fort Collins, Colorado, Wastewater Utility Enterprise (the "Board Ordinance"), the
Enterprise intends to issue City of Fort Collins, Colorado, Wastewater Utility Enterprise, Sewer
Revenue Refunding Bonds, Series 2010A, to be issued during 2010, in the Maximum Aggregate
Principal Amount of$4,100,000 (the "Bonds"); and
WHEREAS, the issuance of the Bonds, and the appropriation of the proceeds thereof, is
necessary to complete the refunding of the City's Sewer Revenue Refunding Bonds, Series 2010A;
and
WHEREAS,proceeds from the Bonds of$4,100,000 were not included in the 2010 budget,
the appropriation of which 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 combination 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$4,100,000 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; and
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 FOUR
MILLION ONE HUNDRED THOUSAND DOLLARS ($4,100,000) are hereby appropriated in the
Wastewater 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 16th day of
February, A.D. 2010, and to be presented for final passage on 2nd day of March, A.D. 2010.
ayo
ATTEST:
17�
City Clerk
Passed and adopted on final reading on the 2nd day of March, A.D.,2010.
Mayor
ATTEST:
City Clerk