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CITY OF COLTON <br />AGENDA REPORT <br />For Council Meeting of December 6, 1994 <br />TO: Honorable Mayor, City Council, and City Manager <br />FROM: Thomas K. Clarke, Electric Utility Director` Date: 11/29/94 <br />SUBJECT: SECOND READING AND ADOPTION OF ORDINANCE NO. 0-21- <br />94 OF THE CITY COUNCIL OF THE CITY OF COLTON, <br />CALIFORNIA, ESTABLISHING AN ELECTRIC SYSTEM <br />REVENUE FUND AND ACCOUNTS THEREIN AND PROVIDING <br />FOR THE FLOW OF FUNDS FROM THE ELECTRIC SYSTEM <br />REVENUE FUND <br />BACKGROUND <br />The Colton Electric Utility is proposing to issue electric revenue bonds through the Colton Public <br />Financing Authority for improvements to the electric system. One of the major components of any <br />financing arrangement is to assign the order of priorities for the flow of funds. This description <br />outlines the order in which electric revenues are spent. It also gives the holders of the debt the <br />security of knowing as to where the debt repayment is in the funds flow description. <br />STATEMENT OF THE PROBLEM <br />The order of the priorities will be disclosed in the bond documents. The City Council must <br />establish and approve those priorities in advance of the issuance of the debt. <br />ALTERNATIVES <br />This is a procedural matter. Without this action, it would be virtually impossible to issue the debt <br />since the bondholders would have no assurance of having the debt repaid. <br />FINANCIAL IMPACT <br />The are no financial impacts since the electric rates are established to recover the costs of <br />operation, including those described in the flow of funds. <br />Page 1 oft Item No. <br />3 2 <br />