I. RECOMMENDATION:
Council Consideration and Adoption of Resolution No. 3988 authorizing the commencement of proceedings in connection with the issuance and sale of revenue bonds by the Coalinga Public Financing Authority to the Finance Department and refinance water system and sewer system improvements, retaining a municipal advisor, an underwriter, bond counsel and disclosure counsel.
II. BACKGROUND:
The City is in the process of raising its water and sewer rates to support a future bond authorization to fund future capital expenditures for the water enterprise. As part of the bond issuance will be the refunding of the 2012 water and sewer bonds in order to capitalize on lower interest rates and refinance debt into the bond issuance. Including in this bond issue is a possible solar project at the water and wastewater plants and the cost of entering into a long term contract with USBR under the WINN Act.
III. DISCUSSION:
The purposed of Resolution No. 3988 is to allow the City, once rates have been approved to immediately begin working on the list of projects identified and once bonds are issued seek reimbursement for cost incurred between the time of resolution adoption and bond issuance. This Resolution also authorizes the retention of a municipal services advisor (Wulff Hansen & Co.), underwriter (Brandis Tallman, LLC), bond counsel and disclosure counsel (Quint & Thimmig, LLP) needed to process the bond. This does not commit the City to issue the proposed $16,000,000 but does permit the reimbursement for costs incurred between the time of the resolution adoption and bond issuance and establishes the team to complete the transaction. At the appropriate time, a resolution to issue the bonds will be brought back to the City Council for approval.
The estimated tax exempt bonds to be issued total $16,000,000 which is comprised of $8,000,000 in new water projects and $8,000,000 for solar. In addition, the refunding of the 2012 water and wastewater bonds (taxable) in the amount of 12,000,000 and the initial purchase of water $1,000,000 will be issued. All of these costs are subject to change and will be reflected in the final bond documents.
IV. ALTERNATIVES:
Do not approve Resolution No. 3988 - Staff does not recommend.
V. FISCAL IMPACT:
All the costs associated with the bond issuance will be absorbed within the bond and will not directly effect the existing water or wastewater budgets. | | |