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07-23-2018 BPU RPT 08
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07-23-2018 BPU AGENDA
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W A T E R E N E R G Y L I F <br />RIVERSIDE PUBLIC UTILITIES <br />aid& <br />P U BLIC UTILITIES Board Memorandum <br />BOARD OF PUBLIC UTILITIES DATE: JULY 23, 2018 <br />ITEM NO: 8 <br />SUBJECT: REIMBURSEMENT RESOLUTION — ELECTRIC UTILITY <br />ISSUE: <br />Approve a Reimbursement Resolution to provide the use of future bond proceeds instead of reserve funds <br />for capital financing requirements for the Electric Utility's Five -Year Capital Improvement Program (CIP), <br />increasing the previous reimbursement resolution from One Hundred Million Dollars ($100,000,000) to <br />One Hundred Four Million Dollars ($104,000,000). <br />RECOMMENDATION: <br />That the Board of Public Utilities recommend that City Council adopt a Reimbursement Resolution to <br />provide the future option of using bond funds instead of reserve funds for capital financing requirements <br />for the Electric Utility, to allow reserve funds to be used for capital needs in the interim period, and <br />increasing the previous reimbursement resolution from $100,000,000 to $104,000,000. <br />BACKGROUND: <br />The Electric Utility requires capital improvement projects to maintain system reliability, serve new <br />residential and commercial developments, and refurbish the electric system. Because these capital <br />improvements are long-term in nature, they are primarily funded through bond financing. The basic <br />philosophy of using bond financing for capital projects is that repayment of the bond is made over the life <br />of the project (usually 20 to 30 years) by the customers that use them. The Electric Utility has been using <br />reserve funds for capital needs since proceeds from its 2010 Electric Revenue Series A Bonds were <br />depleted in June 2016. <br />In order to reimburse capital improvement expenditures funded by reserves with future bond proceeds, a <br />Reimbursement Resolution must be adopted by the Board of Public Utilities (Board) and City Council. This <br />Reimbursement Resolution does not require that the Electric Utility issue bonds in the future, but provides <br />maximum flexibility for financial planning purposes, and provides the legal basis for reimbursement of <br />reserve funds used for capital projects with bond proceeds issued at a later date. <br />On March 29, 2016, the Board recommended and on April 26, 2016, City Council adopted Reimbursement <br />Resolution No. 22992 declaring its official intent to reimburse qualified capital expenditures relating to the <br />Electric Utility's Five -Year CIP from anticipated bond proceeds, for a total amount not to exceed <br />$100,000,000. <br />Page 825 <br />
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