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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 09/17/2002 - SECOND READING OF ORDINANCE NO. 122, 2002, APPROPR FAGENDA ITEM SUMMARY ITEM NUMBER: 9 FORT COLLINS CITY COUNCIL DATE: September 17, 200216 FROM: Alan Krcmarik SUBJECT: Second Reading of Ordinance No. 122, 2002, Appropriating Proceeds from the Issuance of City of Fort Collins, Colorado, General Obligation Water Refunding Bonds, Series 2002, Dated September 15, 2002, in the Aggregate Principal Amount of$19,460,000. RECOMMENDATION: Staff recommends adoption of the Ordinance on Second Reading, EXECUTIVE SUMMARY: Ordinance No. 122, 2002, which was unanimously adopted on First Reading on September 3, 2002, appropriates the proceeds of the bonds. I AGENDA ITEM SUMMARY ITEM NUMBER: 14 A-B FORT COLLINS CITY COUNCIL DATE: September 3, 2002 STAFF: Alan Krcmarik SUBJECT: Items Relating to the Issuance of City of Fort Collins, Colorado, General Obligation Water Refunding Bonds, Series 2002. RECOMMENDATION: Staff recommends adoption o & e Ordi jes pstadin FINANCIAL IMPACT: The City issued three series of General Obligation Water Bonds in 1992. Two of these issues are eligible to be refunded to provide debt service savings over the remaining term of the bonds. When issued, the Bonds carrie fav e i r rently the rates on municipal bonds are at the lowest rates he ►a p po funding will reduce the interest rates from 6.30% and 5.95% approxjaytjely ver t remaining term of the bonds, the savings will total over $1.5 mt The s swill accrue to the Water Fund and a portion will be shared with Anheuser-Busch according to contractual requirements. EXECUTIVE SUMMARY: A. First Reading of Ordinance No. 121, 2002, Authorizing the Issuance of City of Fort Collins, Colorado, General Obligation Water Refunding Bonds, Series 2002, Dated September 15, 2002, i e A r ate n t $19,460,000. B. First Reading of Ordi ce N 2, 2 ppropri g Proceeds from the Issuance of City of Fort Collins, Colora o, General O igation Water Refunding Bonds, Series 2002, Dated September 15, 2002, in the Aggregate Principal Amount of$19,460,000. Authorizing the issuance of the bonds and appropriating the proceeds are both necessary to complete the bond transaction. The Ordinance would appropriate bond proceeds in the Water Fund for payment to the refunded bond escrow agent and the cost of issuing the bonds. The City of Fort Collins and its Water Utility Enterprise have issued bonds to raise funds to provide for needed capital improvements that provide a consistent and stable supply of water to the residents and customers of the City. In 1992, the City issued three separate bond issues. Two of these bond issues are now eligible to be refinanced. The City will be paying off higher cost bonds with new bonds that will have much lower interest rates. The 1992 issues carried interest rates up to 6.40%. The refunding bonds in this Ordinance will likely carry interest rates DATE: September 3, 2002 2 ITEM NUMBER: 14 A-B under 3.5%. The savings on the lower rates should be over $1.5 million, a portion of which will I be shared with Anheuser-Busch according to contractual agreements. The final rates will be determined by selling the bonds at a competitive sale on September 17. The final rates will be provided at the meeting on September 17. BACKGROUND: The City of Fort Collins has provided water services since 1892. Following a series of fires, the electors of the City voted to construct a water works to provide water for domestic and fire I protection purposes. I The Water System has aboutLe ` f waC Pi se 33,284 customers in a service area that includes the central ity d o side the City's boundaries. Other water districts serve the remathe re €Latimer County adjacent to the City. The Water System consists of water supply, treatment and distribution facilities which meet the I Colorado Department of Public Health and Environment standards. In 2001, the City delivered 9,978 billion gallons of water to customers. According to the City's master plan for the Water Utility, the City has sufficient water rights to serve the community for the next forty to fifty years. i The City Water System's m ' r souk of r to n e~ie Cache la Poudre River, the Colorado Big Thompson pr ct wit torag i setoo Reservoir, and stock owned in irrigation companies. The qu of fr t se source nd their reliability are very high, however, due to natural fluctuations in water runoff and drought cycles, levels of water yield cannot be guaranteed. The City owns water rights that entitle it to an average annual volume of about 71,460 acre feet of water. The City's Water System has one water treatment plan capable of a sustained capacity of 87 million gallons per day and an average daily flow of 29 million gallons per day. To facilitate the competitive sale of the bonds, staff has prepared a Preliminary Official Statement which is available f F' c e t. Sources and Uses of the Bo Sources Bond Proceeds $19,460,000 Accrued Interest to be determined Schedule 12/1/02 Payment 3,696,655 Total Sources $23,156,655 r DATE: ITEM NUMBER: Uses Escrow Deposit 22,967,105 Accrued Interest to be determined Costs of Issuance: Credit Agency Ratings $17,500 Bond & Disclosure Counsel 40,000 Financial Adviser 17,000 Printing and Mailing 7,500 CPA Verification 3,000 Escrow Agent 300 Miscellaneous Subtotal 90,000 Underwriters Discoun 97,300 Contingency ily 2,250 Total Uses $23,156,655 Recommendation Staff recommends adoption of the Ordinance on First Reading. The level of savings projected on the refunding is about 7.7% of the current debt service on the bonds. This level of savings meets the desired level of savin o are din taff ev the current interest rates now available make this an optima met r ❑d.