2002 AGN JUL 02 I24 - Laserfiche WebLink

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Annual Debt Service. The annual installment purchase agreement payments are estimated at approximately $3,350,000 per year. These amounts will be largely offset by a reduction in purchase power costs due to the impending termination of the City's power supply contracts with the City of Pasadena, the Bonneville Power Authority and Idaho Power Company. Manner of Sale. The 2002 Bonds will be sold by way of competitive sale, currently scheduled for mid-August. Bond Documents. The issuance of the 2002 Bonds will require the City Council to approve the following Bond documents: Installment Purchase Agreement. This is an agreement between the City and the Authority. It requires the City to make annual Purchase Payments to the Authority for the purpose of repaying the 2002 Bonds. The Purchase Payments are payable and secured solely from the Net Revenues of the Electric System. The Installment Purchase Agreement follows the flow of funds established by the City Council under the 2002 Ordinances. The Installment Purchase Agreement establishes a rate covenant and the requirements for the issuance of additional bonds. The City has agreed to a rate covenant and additional bonds test restriction in connection with its previous electric bond obligations, most recently in the Installment Sale Agreement, dated April 1, 1997, with the Financing Authority for Resource Efficiency of California. Indenture of Trust. This is an agreement between the Authority and the Union Bank of California, as bond trustee. The Indenture of Trust sets forth the terms under which the 2002 Bonds are issued and repaid and establishes the responsibilities of the trustee. Notice of Sale. This document sets forth the terms under which the 2002 Bonds will be bid. It provides for the winner to be determined on the basis of the lowest true interest cost. Preliminary Official Statement. This document is the public offering statement for the issuance of the 2002 Bonds. This document describes the terms of the 2002 Bonds, the security and sources of repayment for the 2002 Bonds, the Electric System, the electric utilities industry in general and provides certain demographic and financial information about the City. FINANCIAL IMPACT The City's annual debt service requirements under the Installment Purchase Agreement are estimated at approximately $3,350,000 per year, assuming a 25 year bond issue and current interest rates. These amounts will be largely offset by a reduction in purchase power costs due to the impending termination of the City's power supply contracts with the City of Pasadena, the Bonneville Power Authority and Idaho Power Company. Funds for the Purchase Payments have been budgeted in the following fiscal year in account 520-8000-8001-2500-0427-000 and 520-8000-8001-2510-0427-000. ENVIRONMENTAL IMPACT None. Staff recommends approval of the following, categorized by legal entity: Citv Council Resolution of the City Council of the City of Colton approving the issuance of not to exceed $50,000,000 aggregate principal amount of bonds by the Colton Financing Authority, approving an Installment Purchase Agreement, an Indenture of Trust, a Continuing Disclosure Agreement and an Official Notice of Sale, authorizing the delivery of a Preliminary Official Statement, authorizing the execution and delivery of an Official Statement, approving the appointment of a trustee and authorizing certain actions in connection therewith.