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AGENDA ITEM NO. 15
Meeting Date: February 12, 2008
Subject/Title: Adopt a Resolution appointing an underwriter, bond and disclosure counsel, Swap provider and Swap advisor; authorizing the City Manager to enter into agreements with an Underwriter, Bond and Disclosure Counsel, Swap provider and Swap advisor; and declaring official intent to reimburse certain expenditures from proceeds of indebtedness in connection with the financing of the new water treatment plant to be constructed by the Contra Costa Water District and refinancing prior obligations issued for the water enterprise; and authorizing necessary staff to undertake the proceedings of debt issuance for future council consideration
Prepared by: Jim Malberg, Assistant Director of Finance and Information Systems
Submitted by: Pamela Ehler, Director of Finance and Information Systems
Adopt a Resolution appointing an underwriter, bond and disclosure counsel, Swap provider and Swap advisor; authorizing the City Manager to enter into agreements with an Underwriter, Bond and Disclosure Counsel, Swap provider and Swap advisor; and declaring official intent to reimburse certain expenditures from proceeds of indebtedness in connection with the financing of the new water treatment plant to be constructed by the Contra Costa Water District and refinancing prior obligations issued for the water enterprise; and authorizing necessary staff to undertake the proceedings of debt issuance for future council consideration.
On September 11, 2007, City Council approved Resolution No. 2007-209 approving and authorizing the City Manager to execute, a second amendatory agreement with the Contra Costa Water District pertaining to long term treated water services as a part of the Surface Water Treatment Facility Project.
The agreement between ECCID and Brentwood, approved by the City Council in December of 1999, provided the City with the first right of refusal of 14,800 acre-feet of water annually to be used for municipal and industrial purposes. Additionally, the City Council approved an agreement with CCWD in December of 1999 to resolve overlapping service boundaries, provided interim treatment of this water source at CCWD’s Randall-Bold Water Treatment Plant (RBWTP) and required both agencies to continue discussions for long treatment possibilities.
Staff from CCWD and the City have analyzed several options to provide the long term treatment of this water. The options ranged from the City constructing its own facility adjacent to the Randall-Bold Water Treatment Plant, to jointly expanding RBWTP with CCWD or jointly constructing a facility with CCWD. During the analysis of these alternatives it was determined that a “hybrid” approach was the most optimal and cost effective solution for both the City and CCWD. This approach consists of the City purchasing 3,200 acre-feet/year of existing treatment capacity in the RBWTP and then constructing a scaled down water treatment facility adjacent to the RBWTP.
The agreement updated on September 11, 2007, further clarified the City’s financial responsibility related to the financing of the Surface Water Treatment Facility and the issuance of Water Revenue Bonds.
It is anticipated that the City will realize a savings through the direct issuance of Water Revenue Bonds as opposed to CCWD issuing debt and charging the City for the cost of debt service. The actual savings will depend on the structuring of the bond issue and market conditions in the tax-exempt bond market at the time of bond issuance and will be quantified at the time the financing package is brought before Council for consideration and approval.
There is no fiscal impact associated with the adoption of this resolution. Fees paid to the underwriter, bond and disclosure counsel, Swap provider and Swap advisor are contingent upon the successful completion of the issuance of bonds.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BRENTWOOD APPOINTING AN UNDERWRITER, BOND AND DISCLOSURE COUNSEL, SWAP PROVIDER AND SWAP ADVISOR; AUTHORIZING THE CITY MANAGER TO ENTER INTO AGREEMENTS WITH AN UNDERWRITER, BOND AND DISCLOSURE COUNSEL, SWAP PROVIDER AND SWAP ADVISOR; AND DECLARING OFFICIAL INTENT TO REIMBURSE CERTAIN EXPENDITURES FROM PROCEEDS OF INDEBTEDNESS IN CONNECTION WITH THE FINANCING OF THE NEW WATER TREATMENT PLANT TO BE CONSTRUCTED BY THE CONTRA COSTA WATER DISTRICT AND REFINANCING PRIOR OBLIGATIONS ISSUED FOR THE WATER ENTERPRISE; AND AUTHORIZING NECESSARY STAFF TO UNDERTAKE THE PROCEEDINGS OF DEBT ISSUANCE FOR FUTURE COUNCIL CONSIDERATION
WHEREAS, the City Council (the “City Council”) of the City of Brentwood (the “City”) has determined to commence proceedings for the financing of a new water treatment plant (the “Project”) to be constructed by Contra Costa Water District (“CCWD”) pursuant to an agreement to be entered into between the City and CCWD; and
WHEREAS, the City desires to appoint the members of the financing team to enable the City to pursue said proceedings and financing; and
WHEREAS, the City expects to pay certain expenditures (the "Reimbursement Expenditures") in connection with the Project prior to the issuance of indebtedness for the purpose of financing costs associated with the Project on a long-term basis; and
WHEREAS, the City reasonably expects that debt obligations in an amount not expected to exceed $50,000,000 will be issued and that certain of the proceeds of such debt obligations will be used to reimburse the Reimbursement Expenditures; and
WHEREAS, the City desires to refinance certain tax-exempt obligations issued in 1996 for the Water Enterprise as a part of this transaction;
NOW, THEREFORE BE IT RESOLVED by the City Council of the City of Brentwood that:
1. The foregoing recitals are true and correct, and this City Council so finds and determines.
2. The City hereby determines to undertake proceedings for the financing of the Project and the refinancing of the prior obligations and hereby directs the City Manager, City Treasurer, Director of Finance and Information Systems, City Engineer, City Attorney, and all other necessary officers and employees of the City to prepare or cause to be prepared proceedings to accomplish same and to submit same to the City Council for consideration at the earliest practical opportunity.
3. The firm of RBC Capital Markets is hereby appointed Underwriter for said financing.
4. The firm of Orrick, Herrington & Sutcliffe LLP is hereby appointed Bond and Disclosure Counsel for said financing.
5. The Royal Bank of Canada is hereby appointed Swap provider for said financing.
6. The firm of Bond Logistix LLC is hereby appointed Swap advisor for said financing.
7. The City Manager or her designee is hereby authorized and directed to negotiate an agreement between the City and each of the above-mentioned financing team members in connection with the services to be provided by them with respect to the Project.
8. The declaration to pay the Reimbursement Expenditures is made solely for purposes of establishing compliance with the requirements of Section 1.150-2 of the United States Treasury Regulations. This declaration does not bind the City to make any expenditure, incur any indebtedness, or proceed with the Project.
9. The City hereby declares its official intent to use proceeds of indebtedness to reimburse itself for Reimbursement Expenditures.
10. This resolution shall take effect immediately upon its passage.
PASSED, APPROVED AND ADOPTED by the City Council of the City of Brentwood at a regular meeting on the 12th day of February 2008, by the following vote:
I, Margaret Wimberly, City Clerk of the City of Brentwood, do hereby certify as follows:
The foregoing resolution is a full, true and correct copy of a resolution duly adopted at a regular meeting of the City Council of said City duly and regularly held at the regular meeting place thereof on the 12th day of February, 2008, of which meeting all of the members of said City Council had due notice and at which a majority thereof were present; and that at said meeting said resolution was adopted by the following vote:
An agenda of said meeting was posted at least 72 hours before said meeting at City Hall, 150 City Park Way, Brentwood, California 94513, a location freely accessible to members of the public, and a brief description of said resolution appeared on said agenda.
I have carefully compared the foregoing with the original minutes of said meeting on file and of record in my office, and the foregoing is a full, true and correct copy of the original resolution adopted at said meeting and entered in said minutes.
Said resolution has not been amended, modified or rescinded since the date of its adoption and the same is now in full force and effect.
Dated: _______________, 2008
City Clerk, City of Brentwood
City of Brentwood City Council
150 City Park Way
Brentwood, CA 94513
Fax (925) 516-5441