1998 AGN NOV 10 I02 - Laserfiche WebLink

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CITY OF COLTON CITY COUNCIL AGENDA REPORT For Council Meeting of November 10, 1998 TO: Honorable Mayor and City Co c'I APPROVAL: Henry T. Garcia, City Manag FROM: Thomas K. Clarke, Utility Director SUBJECT: Approval of Resolution Authorizing the Sale of Water Revenue Bonds in an Amount not to Exceed $11,500,000 DATE: November 5, 1998 BACKGROUND Previously, the City Council authorized the formation of a financing team to structure a revenue bond sale which would provide a capital improvement construction fund to complete approximately $10,000,000 of improvements. The debt service for the bond sale was specifically outlined in the rate increase that went into effect in September. For the most part, the sole reason for the rate increase was to fund the bond sale and debt service. DISCUSSION / ANALYSIS The bond sale will fund the initial stages of the recommendations of the Water Master Plan and the system report of the State Health Department's inspection. Both of those reports identified projects that need to be reviewed to assure both reliability and deliverabilty of water in the City. ALTERNATIVES In order to complete the projects in a timely fashion, there are no other alternatives available except for massive rate increases to create the cash to perform the capital improvements. FINANCIAL The sale of the revenue bonds will create a debt service obligation in the amount of approximately $750,000 per year for the 30 -year life of the bonds. The rate increase will produce sufficient revenues to pay the debt service and provide the stipulated coverage. ENVIRONMENTAL IMPACTS There are no environmental impacts as a result of the bond sale. Any environmental issues related to the individual projects will be addressed as they occur. RECOMMENDATION That the City Council approves the attached resolution authorizing the execution of all documents required consummating the sale of water revenue bonds in an amount not to exceed $11,500,000. Page 1 of 1 Item No. �L