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RIVERSIDE PUBLIC UTILITIES Board Memorandum BOARD OF PUBLIC UTILITIES DATE: October 15, 2610 ITEM NO: 8 SUBJECT: APPROVE THE ISSUANCE OF 2014 NEW ELECTRIC REVENUE BONDS AND POTENTIAL ELECTRIC REFUNDING/REVENUE BONDS – SUPPLEMENTAL APPROPRIATION ISSUE: Riverside Public Utilities recommends issuing up to $180 million of new Electric Revenue Bonds and additional Electric Refunding/Revenue Bonds to capture interest rate savings in the currently low interest rate environment and to finance electric capital improvement projects. 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; Z Conduct a public hearing to consider the issuance of Electric Refunding/Revenue Bonds and the issuance of an amount estimated not-to-exceed $180 million of new Electric Revenue Bonds, 3. Consider and adopt resolutions for the issuance of Electric Refunding/Revenue Bonds and the issuance of an amount estimated not-to-exceed $180 million of new Electric Revenue Bonds,either as Taxable Direct Subsidy– Build America Bonds ("BABs"), and/or fixed-rate, tax exempt bonds; 4. Delegate to the Citys 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. Adopt a Reimbursement Resolution to repay operating funds used for eligible bond financed projects prior to issuance of the 2610 Electric Revenue Bonds; 6. Approve a supplemental appropriation from the unappropriated Electric Fund balance in the amount of$4 million to the Debt Service Interest Expense Account No. 612500-482000 to pay additional debt service expenses; and 7. Authorize the City Manager,or his designee,to execute all documents related to these transactions. BACKGROUND: The financial markets continue to experience unprecedented low interest rates for tax-exempt bonds— particularly for high grade credits such as the City's Electric (AA-) Utility. Financing Team A Financing Team is being assembled, consisting of staff from the Public Utilities Department, the City's Finance Department, and the City Attomey's Office,with Public Financial Management, Inc., serving as the Financial Advisor. This Finance Team will also select bond counsel and an underwriter for the proposed transaction. Fees for services will be paid from bond proceeds.