Loading...
HomeMy WebLinkAboutItem 12 Sewer System Revenue Bond Refunding AGENDA ITEM SUMMARY Meeting Date: 5/1/2017 Meeting Type: Regular Meeting Staff Contact/Dept.: Bob Duey/Finance Staff Phone No: 726-3740 Estimated Time: 10 Minutes S P R I N G F I E L D C I T Y C O U N C I L Council Goals: Financially Responsible and Stable Government Services ITEM TITLE: SEWER SYSTEM REVENUE BOND REFUNDING ACTION REQUESTED: Adopt/not adopt the following resolution: A RESOLUTION OF THE CITY OF SPRINGFIELD, LANE COUNTY, OREGON, AUTHORIZING THE SALE OF SEWER SYSTEM REVENUE REFUNDING BONDS ISSUE STATEMENT: The City Council is requested to approve the issuance of sewer system revenue refunding bonds in an amount that is sufficient to refund all or any portion of the refundable bonds and to pay costs related to issuing the refunding bonds and refunding the refundable bonds. ATTACHMENTS: Attachment 1: Sewer System Revenue Refunding Bonds Resolution DISCUSSION/ FINANCIAL IMPACT: The City issued wastewater revenue bonds in 2009 in the amount of $22,815,000 and stormwater revenue bonds in 2010 in the amount of $10,000,000. The purpose of these bonds was to finance capital improvements to the City’s wastewater and stormwater systems (collectively, the “Sewer System”). The 2009 series bond redemption provisions allow the City to redeem bonds maturing on or after June 1, 2019. Discussions with our financial advisor indicate that it would be advantageous for the City to refund the bonds at this time. The financial advisors have also agreed to evaluate the 2010 bonds during this process to determine if it would be in the best interest of the City to refund those at the same time. The estimated amount needed to refund the 2009 series, including all costs associated with the new issuance, is $16,798,705. The net present value of savings from the refunding is estimated at $534,000. The reduction in total debt service payments through 6/1/2029 is $2,649,000. The estimated costs and savings of refunding the 2010 stormwater bonds will be determined during the process of refunding the 2009 wastewater bonds. RESOLUTION NO. ____ A RESOLUTION AUTHORIZING THE SALE OF SEWER SYSTEM REVENUE REFUNDING BONDS AND RELATED MATTERS WHEREAS, the City of Springfield, Oregon (the “City”) has issued sewer revenue bonds under a Master Sewer System Bond Declaration dated as of May 13, 2005 (the “Master Declaration”), as amended and supplemented by the First Supplemental Sewer System Revenue Bond Declaration dated as of April 2, 2009 (the “First Supplemental Declaration”) and the Second Supplemental Sewer System Revenue Bond Declaration dated as of October 6, 2010 (the “Second Supplemental Declaration”). The Master Declaration, together with the First Supplemental Declaration and the Second Supplemental Declaration, is referred to herein as the “Declaration.” Capitalized terms used but undefined in this Resolution shall have the meaning for such terms in the Declaration; and WHEREAS, on April 2, 2009, the City issued its $22,815,000 Sewer System Revenue Bonds, Series 2009 (the “2009 Bonds”) pursuant to Ordinance No. 6235 and under the First Supplemental Declaration; and WHEREAS, on October 6, 2010, the City issued its $10,000,000 Sewer System Revenue Bonds, Series 2010 (the “2010 Bonds,” and collectively with the 2009 Bonds, the “Refundable Bonds”) pursuant to Ordinance No. 6259 and under the Second Supplemental Declaration; and WHEREAS, the City may reduce its debt service expense by refunding all or a portion of the outstanding Refundable Bonds; and WHEREAS, ORS Sections 287A.360 through 287A.380 authorize the City to issue bonds to refund outstanding City bonds. NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City of Springfield, Oregon, as follows: Section 1. Refunding Bonds Authorized. The City hereby authorizes the sale and delivery of sewer system revenue refunding bonds in a principal amount sufficient to prepay all or any portion of the City’s outstanding Refundable Bonds and to pay costs related to the refunding. The sewer system revenue refunding bonds authorized by this Resolution (the “2017 Bonds”) may be issued as Parity Bonds under the Declaration. Section 2. Security. The 2017 Bonds shall not be general obligations of the City and neither the authorization nor issuance of the 2017 Bonds shall authorize the City to levy additional taxes. The 2017 Bonds shall be special obligations of the City that are payable solely from the Net Revenues of the Sewer System and related amounts as provided in the Declaration. Section 3. Delegation. The City Manager or the City Finance Director or any person designated by the City Manager or the City Finance Director to act on behalf of the City pursuant to this Resolution (each of whom is referred to in this Resolution as a “City Official”) may, on behalf of the City: Resolution No. __, Page 1 ATTACHMENT 1 (1) Determine whether the savings produced by the refunding are adequate to justify the refunding, and select the Refundable Bonds to be refunded. (2) Issue the 2017 Bonds in one or more series, which may be sold at different times. (3) Participate in the preparation of, authorize the distribution of, and deem final any official statement or other disclosure documents relating to each series of the 2017 Bonds. (4) Establish the form, final principal amounts, maturity schedules, interest rates, sale prices and discount, prepayment terms, payment terms and dates, and other terms of each series of the 2017 Bonds. (5) Either publish a notice of sale, receive bids and award the sale of that series to the bidder complying with the notice and offering the most favorable terms to the City, or select one or more underwriters, commercial banks or other investors and negotiate the sale of that series with those underwriters, commercial banks or other investors. (6) Undertake to provide continuing disclosure for each series of the 2017 Bonds, as applicable, and to comply with Rule 15c2-12 and any other applicable requirements of the United States Securities and Exchange Commission. (7) Finalize the terms of, execute and deliver a supplemental bond declaration or similar document for each series of 2017 Bonds, which memorializes the terms under which the series is issued and which may contain additional covenants that the City Official determines are desirable to facilitate the sale of 2017 Bonds or obtain more favorable terms for the City. (8) Apply for one or more credit ratings for each series of the 2017 Bonds. (9) Determine whether to purchase municipal bond insurance or obtain other forms of credit enhancements for each series of the 2017 Bonds, enter into agreements with the providers of credit enhancement (if such enhancement is determined to be beneficial), and execute and deliver related documents. (10) Engage the services of verification agents, escrow agents, paying agents and any other professionals whose services are desirable for the 2017 Bonds and negotiate the terms of and execute any agreement with such professionals. (11) Make any contributions to or withdrawals from the Bond Reserve Account that the City Official determines are desirable and determine the Reserve Requirement, if any, for each series of the 2017 Bonds. (12) Determine whether each series of the 2017 Bonds will bear interest that is excludable from gross income under the Internal Revenue Code of 1986, as amended (the “Code”), or is includable in gross income under the Code. If a series bears interest that is excludable from gross income under the Code, the City Official may enter into covenants to maintain the excludability of interest on that series of the 2017 Bonds from gross income. (13) Designate any series of the 2017 Bonds as “qualified tax-exempt obligations” under Section 265(b)(3) of the Code, if applicable. (14) Provide for the call, defeasance, and redemption of any Refundable Bonds that are refunded and enter into related agreements and take related actions. (15) Execute and deliver each series of the 2017 Bonds to their purchaser. Resolution No. __, Page 2 ATTACHMENT 1 (16) Execute and deliver any agreements or certificates and take any other action in connection with each series of the 2017 Bonds which the City Official finds is desirable to permit the sale and issuance of that series of the 2017 Bonds in accordance with this Resolution. Section 4. Advanced Refunding Plan. The City Official is hereby authorized to file any required advanced refunding plans related to the Refundable Bonds with the State of Oregon. Section 5. Effective Date. This Resolution shall take effect on its date of adoption. Adopted by the Common Council of the City of Springfield at a regular meeting held on the 1st day of May, 2017. Ayes: _______ Nays:________ Absent:______ City of Springfield, Oregon __________________________________________ Mayor Attest: ___________________________________ City Recorder Resolution No. __, Page 3 ATTACHMENT 1