Title
Ordinance in the Amount of $38,422,704 Amending FY 14-15 Water Resources Enterprise Fund for Combined Enterprise System Revenue Refunding Bonds, Series 2015
Body
Department: Financial and Administrative Services
Meeting Date: June 16, 2015
Council District: N/A
Public Hearing: N/A
Advertising Date/By: N/A
Contact 1 and Phone: Richard Lusk, Finance Director, 373-2077
Contact 2 and Phone: Marlene Druga, Deputy Finance Director, 373-2077
PURPOSE: To appropriate funds to account for the $33,985,000 revenue refunding bond issue of May 22, 2015 (closing on June 23, 2015) that refunded certain outstanding series 2007A and 2014A bonds of the City's Water and Sewer System, resulting in reduced debt service payments projected to exceed $3.0 million over the next 14 years.
BACKGROUND: On May 5, 2015, City Council authorized the sale and issuance of up to $37 million in Water & Sewer Revenue Refunding Bonds to refinance a portion of the Series 2007A fixed rate bonds maturing in 2018 through 2029 and to refinance $10 million issued in 2014, converting from a variable rate to a fixed rate mode. The bond proceeds of $33,985,000 and premium of $4,437,704 will be delivered to the escrow agent/bond trustee (U.S. Bank) on June 23, 2015 pursuant to a bond purchase agreement with Wells Fargo Bank, N.A. It is necessary to amend the Water Resources Enterprise Fund to properly account for this transaction and record payment to the escrow agent for redemption of the outstanding bonds.
BUDGET IMPACT: The projected reduction in annual interest rates should result in a debt service savings in the Water Resources Operating Fund in excess of $3 million over the next 14 years, an average annual savings of approximately $214,000.
RECOMMENDATION / ACTION REQUESTED: The Financial and Administrative Services Department requests City Council approval of the attached budget ordinance amending the FY 14-15 Water Resources Enterprise Fund by $38,422,7...
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