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CITY OF COLTON <br />AGENDA REPORT <br />For Council Meeting of September 6, 1994 <br />TO: Honorable Mayor, City Council, and City Manager <br />FROM: Thomas K. Clarke, Acting Electric Utility Director Date: 8/22/94 <br />SUBJECT: ADOPTION OF RESOLUTION OF THE CITY COUNCIL OF THE <br />CITY OF COLTON DECLARING ITS INTENT TO REIMBURSE <br />CERTAIN 1994-95 CAPITAL IMPROVEMENT EXPENDITURES <br />FROM PROCEEDS OF INDEBTEDNESS <br />BACKGROUND <br />The City Council has previously been advised that the Electric Utility will include in its capital <br />Improvement Program the costs of the planned system expansion to accommodate the load of the <br />new county hospital and future electrical growth on the west side of the City. This program has <br />been included in the proposed budget of the Utility which remains in the review and approval <br />process. <br />STATEMENT OF THE PROBLEM <br />The Electric Utility has earmarked all of the capital addition costs of the transmission and <br />substation project to be funded through the sale of electric revenue bonds in order to mitigate the <br />effects of the capital improvements in the retail rates. In order to protect the tax exempt status of <br />the proposed revenue bonds, the City Council must take specific action to allow for the expense <br />and repayment of operating revenues from the bond funds. This action satisfies the obligations of <br />the bond -funded capital improvements. <br />ALTERNATIVES <br />The City Council must take this action if it intends to approve the bond sale. The adoption of this <br />resolution does not create any liability or establish an authorization regarding the anticipated bond <br />sale. It merely protects the classification of the bonds in the event they are authorized and sold. <br />Page 1 of 2 Item No. /i( <br />