2002 AGN JUN 18 I03 - Laserfiche WebLink

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CITY OF COLTON AGENDA REPORT FOR COUNCIL MEETING OF June 18, 2002 TO: Honorable Mayor and City Council FROM: Thomas K. Clarke, Electric Utility Director Item #3 SUBJECT: Ordinance Approving the Entering Into A Leaseback Agreement (Electric Generation Facility Project) DATE: June 13, 2002 On May 28, 2002, the City Council authorized the City to enter into a contract with EI Colton LLC for the acquisition, construction and installation of a gas-fired simple cycle combustion turbine nominally rated at 43 megawatts (the "Project"). The City will need to finance the cost of the Project through revenue bonds to be sold by the Colton Public Financing Authority (the "Authority") by mid-August 2002 (the "2002 Bonds"). In connection with issuance of the 2002 Bonds, the City will need to enter into an Installment Purchase Agreement (the "2002 Installment Purchase Agreement') with the Authority pursuant to which the Authority will acquire, construct and install the Project and the City will agree to purchase the Project from the Authority. DISCUSSION/ANALYSIS: In order for the City to enter into the 2002 Installment Purchase Agreement, Bond Counsel, Fulbright & Jaworski, has indicated that the City needs to adopt an ordinance approving the entering into of a leaseback agreement pursuant to Section 54241 of the Government Code of the State of California (the "Ordinance"). In order for the Authority to sell the 2002 Bonds by mid-August so that the City can meet its obligations under the contract with EI Colton LLC, the Ordinance must be in effect. For the Ordinance to be in effect, there must be two readings, a publication of the Ordinance in a newspaper of general circulation in the City and the passing of 30 days from the date of the second reading without challenge. The City and its financing team are in the process of developing the necessary documentation for the 2002 Bonds, including the 2002 Installment Purchase Agreement, an Indenture of Trust, a Preliminary Official Statement and a Notice of Sale (the "2002 Bond Documents"). Staff will bring the 2002 Bond Documents in substantially final form to the City Council for its approval at a subsequent meeting prior to the sale date. Council is requested to direct the first reading of the Ordinance. Council is further requested to direct the second reading of the Ordinance at its meeting on July 2, 2002. Provided the Ordinance is not challenged, these actions are needed before the City can enter into the 2002 Installment Purchase Agreement and before the Authority can issue the 2002 Bonds to finance the acquisition, construction and installation of the Project. FINANCIAL IMPACT: None. ENVIROMENTAL IMPACT: None. RECOMMENDATION: Council is requested to direct the first reading of an ordinance of the City of Colton, California, approving the entering into of a leaseback agreement (Electric Generation Facility Project) Attachment: (One Attachment)