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Home My WebLink AboutItem 17 Storm System Revenue Bond Refunding AGENDA ITEM SUMMARY Meeting Date: 10/19/2020 Meeting Type: Regular Meeting Staff Contact/Dept.: Nathan Bell/Finance Staff Phone No: 541-726-2364 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: STORM 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 STORM SYSTEM REVENUE REFUNDING BONDS ISSUE STATEMENT: The City Council is requested to approve the issuance of storm 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: Storm 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 bonds were refunded in 2017, generating net present value savings of $534,233. Discussions with our financial advisor determined that it was not as advantageous to do an advance refunding of the 2010 storm system bonds at that time. This summer, our financial advisors re-evaluated the benefits of refunding the 2010 series bonds and have determined that it would now be advantageous to the City to refund the bonds at the current interest rates. The estimated amount needed to refund the 2010 series, including all costs associated with the new issuance, is $5,910,050. The net present value of savings from the refunding is estimated at $718,000. The reduction in total debt service payments through June 30, 2031 is $1,540,023. {00017089:1} Resolution No. __, Page 1 3511638.3 044661 RSIND 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”), the Second Supplemental Sewer System Revenue Bond Declaration dated as of October 6, 2010 (the “Second Supplemental Declaration”) and the Third Supplemental Sewer System Revenue Bond Declaration dated as of June 27, 2017 (the “Third Supplemental Declaration”). The Master Declaration, together with the First Supplemental Declaration, the Second Supplemental Declaration and the Third 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 October 6, 2010, the City issued its $10,000,000 Sewer System Revenue Bonds, Series 2010 (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 “2020 Bonds”) may be issued as Parity Bonds under the Declaration. Section 2. Security. The 2020 Bonds shall not be general obligations of the City and neither the authorization nor issuance of the 2020 Bonds shall authorize the City to levy additional taxes. The 2020 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: (1) Determine whether the savings produced by the refunding are adequate to justify the refunding, and select the Refundable Bonds to be refunded. Attachment 1, Page 1 of 3 {00017089:1} Resolution No. __, Page 2 3511638.3 044661 RSIND (2) Issue the 2020 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 2020 Bonds. (4) Establish the form, final principal amounts, payment dates, interest rates and other terms of each series of the 2020 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 2020 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 2020 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 2020 Bonds or obtain more favorable terms for the City. (8) Apply for one or more credit ratings for each series of the 2020 Bonds, if necessary. (9) Determine whether to purchase municipal bond insurance or obtain other forms of credit enhancements for each series of the 2020 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 2020 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 2020 Bonds. (12) Determine whether each series of the 2020 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 2020 Bonds from gross income. (13) Designate any series of the 2020 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. Attachment 1, Page 2 of 3 {00017089:1} Resolution No. __, Page 3 3511638.3 044661 RSIND (15) Execute and deliver any agreements or certificates and take any other action in connection with each series of the 2020 Bonds which the City Official finds is desirable to permit the sale and issuance of that series of the 2020 Bonds in accordance with this Resolution. 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 19th day of October, 2020. Ayes: _______ Nays:________ Absent:______ Attest: ___________________________________ City Recorder Attachment 1, Page 3 of 3