06-07-2013 BPU RPT 10 - Laserfiche WebLink

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W A t E R E N E R G Y L I t AW& RIVERSIDE PUBLIC UTILITIES Board Memorandum PUBLIC UTILITIES BOARD OF PUBLIC UTILITIES DATE: June 7, 2013 ITEM NO: 10 SUBJECT: APPROVE THE ISSUANCE OF 2013 ELECTRIC REVENUE REFUNDING BONDS ISSUE: The item for Board of Public Utilities consideration is approval to issue up to $150 million of Electric Revenue Refunding Bonds to finance the purchase obligation pursuant to the Clearwater Asset Purchase and Sale Agreement and to refund certain outstanding variable rate bonds and to terminate the related interest rate swap agreements using fixed rate bonds. Proceeds may also fund a debt service reserve and will pay bond issuance costs. RECOMMENDATIONS: That the Board of Public Utilities recommend that the City Council: 1. Approve the City's Financing Team, as described herein; 2. Conduct a public hearing to consider the issuance of Electric Revenue Refunding Bonds of an amount not-to-exceed $150 million; 3. Adopt resolutions for the issuance of Electric Revenue Refunding Bonds; 4. Delegate to the City's Financing Team, at the time of issuance, the determination of specific maturities to be refunded and the form of new bonds as outlined in Recommendation No. 3 above; 5. Approve and adopt a resolution authorizing the application of GASB 62 for Regulated Operations; and 6. Authorize the City Manager, or his designee, to execute all documents related to these transactions. COMMITTEE RECOMMENDATION: On May 24, 2013, the Board of Public Utilities Finance and Marketing Committee unanimously recommended that the full Board approve this transaction. BACKGROUND: Clearwater Power Plant The Board of Public Utilities and City Council approved the purchase of the Clearwater Power Plant, a 30- megawatt combined cycle, natural gas-fired power plant from the City of Corona (Corona) on February 5, 2010 and February 23, 2010, respectively. Under the Clearwater Asset Purchase Agreement (Purchase Agreement), RPU must make a series of payments to Corona which in turn enables Corona to pay for the debt service payments on two series of bonds [2003 and 2005 Certificates of Participation proceeds (COPs)] originally issued by Corona to finance the construction of the Clearwater Power Plant. The principal amount of Corona's outstanding COPs (related to the power plant) on the purchase date