2002 AGN MAY 21 I25 - Laserfiche WebLink

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Item #25 CITY OF COLTON AGENDA REPORT For the Colton Public Financing Authority Meeting of May 21, 2002 TO: HONORABLE CHAIRPERSON AND AUTHORITY MEMBERS APPROVAL: DARYL PARRISH, CITY MANAGER FROM: THOMAS K. CLARKE, UTILITY DIRECTOR"%r____� SUBJECT: APPROVAL OF RESOLUTION TO REIMBURSE CERTAIN EXPENDITURES FOR 43 MW COLTON JETS PROJECT FROM THE PROCEEDS TO A PROPOSED TAX- EXEMPT FINANCING DATE: MAY 8, 2002 BACKGROUND On February 5, 2002, the City Council authorized staff to issue the Request For Proposal (RFP) for the Colton Jets project, a gas-fired generator not to exceed 49 megaWatts. Following an extensive evaluation of the responses to the RFP, staff is finalizing a contract with the most responsive bidder. Staff is also in process of formulating the Financial Team and preparing the Official Statement for the sale of up to $50 -million in revenue bonds. An aggressive schedule has been developed so that the project would be completed prior to summer 2003. In addition, on March 26, 2002, the City Council has approved an interim financing plan for $7.5 -million to cover necessary project costs prior to bond issuance. DISCUSSIONIANALYSIS Prior to finalizing the project fixed price, several tasks related to site soil conditions, environmental concerns, transmission route, and air emission costs need to be completed. These expenditures will occur prior to the date of issuance of the Bonds. The Electric Utility will make such expenditures from the operating budget. These expenditures, including City Attorney fees to negotiate the Engineering/Procurement/Construction (EPC) contract and review of the financing package need to be reimbursed to the Electric Utility when the proceeds from Revenue Bond of the proposed tax-exempt financing are available. ALTERNATIVES The City could opt to wait to incur any project -related costs and award the bid only after securing the financing for the entire project. This will delay the project schedule beyond the targeted in-service date.