1994 AGN NOV 15 I22C - Laserfiche WebLink

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CITY OF COLTON AGENDA REPORT For Council Meeting of November 15, 1994 TO: Honorable Mayor, City Council, and City Manager FROM: Thomas K. Clarke, Electric Utility Director Date: 11/9/94 SUBJECT: CONSIDER FIRST READING OF AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF COLTON, CALIFORNIA, ESTABLISHING AN ELECTRIC SYSTEM REVENUE FUND AND ACCOUNTS THEREIN AND PROVIDING FOR THE FLOW OF FUNDS FROM THE ELECTRIC SYSTEM REVENUE FUND BACKGROUND The Colton Electric Utility is proposing to issue electric revenue bonds through the Colton Public Financing Authority for improvements to the electric system. One of the major components of any financing arrangement is to assign the order of priorities for the flow of funds. This description outlines the order in which electric revenues are spent. It also gives the holders of the debt the security of knowing as to where the debt repayment is in the funds flow description. STATEMENT OF THE PROBLEM The order of the priorities will be disclosed in the bond documents. The City Council must establish and approve those priorities in advance of the issuance of the debt. ALTERNATIVES This is a procedural matter. Without this action, it would be virtually impossible to issue the debt since the bondholders would have no assurance of having the debt repaid. FINANCIAL IMPACT The are no financial impacts since the electric rates are established to recover the costs of operation, including those described in the flow of funds. Page 1 of 2 Item No. 22 C