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RIVERSIDE PUBLIC UTILITIES Board Memorandum BOARD OF PUBLIC UTILITIESDATE: APRIL9, 2018 ITEM NO: 8 SUBJECT: ESCROW AGREEMENT WITH U.S. BANK NATIONAL ASSOCIATION AS FISCAL AGENT FOR THEELECTRIC REVENUE BONDS, ISSUE OF 2008D, FOR THE PURPOSE OF THE PREVIOUSLY APPROVED DEFEASANCE OFUP TO $11,244,000 OF OUTSTANDING ELECTRIC REVENUE BONDS, ISSUE OF 2008D,RELATED TO BOND PROCEEDS THAT FUNDED PART OF SAN ONOFRE NUCLEAR GENERATING STATIONCAPITAL COSTS ISSUE: Recommend that the City Council approve the Escrow Agreement with U.S. Bank National Association, as 2008D Fiscal Agent, to serve as Escrow Agent for the purpose of the previously approved defeasance up to $11,244,000of outstanding Electric Revenue Bonds, Issue of 2008D which was previously approved on June 27, 2017. RECOMMENDATIONS: That the Board of Public Utilitiesrecommend that the City Council: 1.Approve theEscrow Agreement with U.S. Bank National Association as Escrow Agent and as 2008D Fiscal Agent in order to defeasea portion of outstanding Electric Revenue Bonds, Issue of 2008D, and authorize the City Manager, or his designee, to execute that agreementand make any minor, non-substantive changes; 2.Authorize the City Manager, or his delegate, to transfer up to $11,244,000to the Escrow Agent, U.S. Bank National Association, for deposit into the Escrow Fund to defeasea portion of outstanding Electric Revenue Bonds, Issue of 2008D; and 3.Authorize Escrow Agent to purchase those certain securities specified in the Escrow Agreement,of which the interest on and principal will be sufficient to provide for the payment or prepayment of a portion of the outstanding Electric Revenue Bonds, Issue of 2008D. BACKGROUND: On June 12, 2017,the Board of Public Utilities received an update on the San Onofre Nuclear Generating Station (SONGS) decommissioning and recommended that the City Council authorize the use of settlementproceeds of $11,244,000 to partially defease existing debt. The settlementproceeds were related to the early closure of theSan Onofre Nuclear Generation Station, Units 2 and 3(SONGS) and are being used to partially defease existing debt related to bond proceeds that funded part of the Steam Generator Replacement project and other SONGS capital costs. The partial bond defeasance will reduce debt and realize interest savings of approximately $7millionover the remaining 20-year life of the bonds.On June 27, 2017, the City Council approved the Board’s recommendation. Page 44