04-10-2017 BPU RPT 13 - Laserfiche WebLink

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wni =R t v t ai,v i i WON PUBLIC UTILITIES BOARD OF PUBLIC UTILITIES RIVERSIDE PUBLIC UTILITIES Board Memorandum DATE: APRIL 10, 2017 ITEM NO: 13 SUBJECT: APPROVAL OF RESOLUTIONS AUTHORIZING LETTERS OF CREDIT RENEWAL OF 2008A ELECTRIC REVENUE BONDS OF $70,540,000 AND 2008C ELECTRIC REVENUE BONDS OF $41,975,000, REMARKETING OF 2011A ELECTRIC REVENUE BONDS FOR $41,925,000, AND APPROVAL OF FINANCING COSTS USING PUBLIC FINANCIAL MANAGEMENT, AS THE FINANCIAL ADVISOR FOR $22,500, STRADLING YOCCA CARLSON & RAUTH AS BOND AND DISCLOSURE COUNSEL FOR $40,000 FOR THE CITY, MCDERMOTT WILL & EMERY, LLP REPRESENTING BARCLAYS FOR THE LETTER OF CREDIT FACILITIES AND CHAPMAN AND CUTLER, LLP REPRESENTING WELLS FOR THE DIRECT PLACEMENT TRANSACTION FOR A TOTAL OF $37,000 FOR BOTH FIRMS. ISSUES: The existing letters of credit agreements and direct placement facility supporting the variable rate 2008A, 2008C and 2011A Electric Revenue Bonds are expiring and need to be renewed. In addition, the 2008A and 2008C remarketing agreements are also expiring and need to be renewed. City staff is asking for authority to extend the letter of credit supporting the 2008A Electric Revenue Bonds, provided by Barclays Bank, PLC, for an additional four years, and substitute the current letter of credit supporting the 2008C Electric Revenue Bonds, which is provided by Bank of America, with a new letter of credit offered by Barclays Bank, PLC, at a lower cost. In conjunction with the letter of credit extension/substitution, staff seeks authority to appoint Barclays as remarketing agent on the 2008A Electric Revenue Bonds, replacing Bank of America. In addition, staff seeks authority to remarket the outstanding 2011A Electric Revenue Bonds in the existing structure (variable rate direct placement) for another three-year term. In the best interests of the City, staff seeks approval of the financing team and costs associated with the transactions. RECOMMENDATIONS: That the Board of Public Utilities recommend that the City Council: Adopt resolution authorizing the replacement of the 2008C letter of credit and the extension of the 2008A letter of credit under substantially similar terms for a period of four years, authorizing the execution of a remarketing agreement with Barclays for the 2008A Electric Revenue Bonds; and 2. Adopt resolution authorizing a remarketing of the 2011A Electric Revenue Bonds (including amending Resolution No. 22193 and the related Continuing Covenant Agreement); and 3. Authorize the City Manager, or designee, to execute all documents related to these actions and to make non -substantive revisions to those documents as needed; and 4. Approve and authorize expenditures for the use of Public Financial Management, Inc., as the City's Financial Advisor, Stradling Yocca Carlson & Rauth as the City's bond and disclosure counsel, and reimburse Barclays Bank, PLC and Wells Fargo Bank for legal costs associated with their transactions.