HomeMy WebLinkAboutReso 2009-113 - MSR Energy Authority
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RESOLUTION NO. 2009 - 113
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF REDDING APPROVING THE ISSUANCE BY THE M-S-R
ENERGY AUTHORITY OF NOT TO EXCEED $1,200,000,000
AGGREGATE PRINCIPAL AMOUNT OF M-S-R ENERGY
AUTHORITY GAS REVENUE BONDS IN ONE OR MORE
SERIES; APPROVING THE FORM OF AND AUTHORIZING
EXECUTION AND DELIVERY OF A SUPPLY
AGREEMENT WITH THE M-S-R ENERGY AUTHORITY
AND CERTAIN PORTIONS OF AN OFFICIAL
STATEMENT; AND AUTHORIZING RELATED ACTIONS
AND MATTERS
WHEREAS, Article I of Chapter 5 of Division 7 of Title I of the Government Code of
the State of California authorizes and empowers local agencies to form a joint powers authority,
and Article 4 of Chapter 5 of Division 7 of Title I of the Government Code of the State of
California authorizes and empowers such an authority to issue bonds for the purpose of financing
public capital improvements, working capital, liability and other insurance needs, or projects
whenever there are significant public benefits, as determined by the local agency; and
WHEREAS, the City of Redding (the "City") the City of Santa Clara and the Modesto
Irrigation District (the "District" and, together with the City and the City of Santa Clara, the
"Participants") have created and established, pursuant to the laws of the State of California, the
M-S-R Energy Authority (the "Authority") for the purpose of, among other things, entering into
contracts and issuing bonds to assist the Participants in financing the acquisition of supplies of
natural gas for use by the Participants in connection with each Participant's respective electric
utility in accordance with the form of a Joint Exercise of Powers Agreement, dated as of July 15,
2008, (the "JP A Agreement"), among the Participants as hereinafter described; and
WHEREAS, the Authority is expected to determine to purchase certain quantities of
natural gas from Citigroup Energy Inc. on a prepaid basis and to sell such natural gas to the City,
as contemplated herein and in the Supply Agreement described herein (the "Gas Project"); and
WHEREAS, the Authority is expected to determine to finance a portion of the costs of
the Gas Project with the proceeds of a portion of one or more series of M-S-R Energy Authority
Gas Revenue Bonds (the "Bonds"); and
WHEREAS, the City has determined that the issuance of the Bonds by the Authority is
desirable and furthers the public purposes of the City and that there are significant public
benefits to be derived from securing the assistance of the Authority in financing the Gas Project,
in that the City will benefit from demonstrable savings in the cost of financing the Gas Project;
and
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WHEREAS, in order to achieve such public purpose, and in accordance with the JPA
Agreement, the City desires to approve the Authority's issuance of not to exceed $1,200,000,000
aggregate principal amount of the Bonds with the City's share of such Bonds not to exceed
$380,000,000; and
WHEREAS, there has been presented to this meeting a proposed form of a natural gas
supply agreement (the "Supply Agreement") between the Authority and the City, pursuant to
which the City will purchase natural gas from the Authority, as more completely described
therein; and
WHEREAS, there has been presented to this meeting a proposed form of Preliminary
Official Statement describing the Bonds, the financing of the Gas Project and other information,
including a description ofthe City's electric system (the "Preliminary Official Statement"); and
WHEREAS, all acts, conditions and things required by law to exist, to have happened
and to have been performed precedent to and in connection with the authorization of the
execution and delivery of the Supply Agreement, the approval of the Bonds and that portion of
the Preliminary Official Statement describing the City's electric system do exist, have happened
and have been performed in regular and due time, form and manner as required by law, and upon
the adoption of this resolution the City will be duly authorized to execute and deliver the Supply
Agreement, to approve the Bonds and to approve that portion of the Preliminary Official
Statement and the final Official Statement describing the City's electric system.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Redding
that:
1. Based upon the terms and conditions of the various documents authorized herein and
consultation with its financial advisors, attorneys, underwriter and staff of the City,
and the recitals in this resolution (the "Resolution"), the City hereby finds and
determines that all of the preambles in this Resolution are true and correct.
Capitalized terms not otherwise defined in this Resolution shall have the meanings set
forth in the Supply Agreement.
2. The City hereby approves the issuance of the Bonds by the Authority in an aggregate
principal amount not to exceed $1,200,000,000 with the City's share not to exceed
$380,000,000 and in one or more series as may be determined by the Authority. The
Bonds approved by this Resolution shall have such terms and conditions, including
Build America Bonds authorized by Section 54AA of the Internal Revenue Code
(Section 1531 of Title I of Division B of the American Recovery and Reinvestment
Act of 2009) (the "Build America Bonds"), as shall be specified by the Authority and
are not inconsistent with the terms of this Resolution.
3. The Supply Agreement, in substantially the form on file with the City Clerk and
incorporated by reference as if fully set forth herein, is hereby approved. The City
Manager, Assistant City Manager or Electric Utility Director of the City (each, an
"Authorized City Representative") is each hereby authorized to execute, and the City
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Clerk is hereby authorized to attest, seal and deliver, the Supply Agreement in
substantially said form with such changes therein as shall be approved by the City
Attorney and such Authorized City Representative executing the same, with such
execution to constitute conclusive evidence of such Authorized City Representative's
approval and the City's approval of any changes or revisions therein from the form of
the Supply Agreement now on file with the City Clerk.
4. The approval of the Bonds and the authorization ofthe execution and delivery of the
Supply Agreement is subject to the following conditions precedent:
(A) The Scheduled Termination Date under the Supply Agreement shall not be
later than thirty (30) years from the first date of delivery of Gas
thereunder;
(B) The total volume of Contract Gas to be delivered in each year under the
Supply Agreement shall not be greater than 6,000 MMBtu per day through
December 31, 2010, and shall not be greater than 8,500 MMBtu per day
thereafter; and
(C) The City's cost per MMBtu of Gas with respect to a Delivery Month shall
not exceed the Index Price for such Delivery Month less $0.75 where the
City's cost of gas includes (i) the related investment earnings anticipated
to result from the investment of funds related to the Gas Project; and (ii)
the related payments, if any, to be made by the United States Treasury
related to the issuance of Bonds that constitute Build America Bonds, all
as determined in a certificate of an Authorized City Representative and
filed with the Authority, which certificate shall be binding and conclusive
for all purposes.
5. The portion of the Preliminary Official Statement relating to the Bonds describing the
City of Redding Electric Utility, in substantially the form on file with the City Clerk
and incorporated by reference as if fully set forth herein, is hereby approved with
such changes therein as an Authorized City Representative may require or approve.
Any Authorized City Representative is hereby authorized to certify that such portion
of the Preliminary Official Statement is "deemed final" by the City for purposes of
Rule 15c2-12 of the Securities Exchange Commission. Following sale of the Bonds,
an Authorized City Representative is authorized and directed to prepare or cause to be
prepared a form of final Official Statement that shall include information concerning
the sale of the Bonds and such other information as may be necessary, customary or
appropriate, and the portion of such final Official Statement describing the City of
Redding Electric Utility, with such changes therein (if any) as an Authorized City
Representative may require or approve, shall be approved by such Authorized City
Representative.
6. The officers, employees and agents of the City are hereby authorized and directed,
jointly and severally, to do any and all things and to execute and deliver any and all
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documents, certificates and other instruments that they may deem necessary or
advisable (including, without limitation, a continuing disclosure agreement, a tax
certificate and agreements relating to municipal bond insurance) in order to
consummate the financing and refinancing of the Gas Project, the execution and
delivery of the Supply Agreement and the issuance of the Bonds by the Authority, all
as authorized herein, and otherwise to carry out, give effect to and comply with the
terms and intent of this Resolution and the documents herein approved and authorized
to be executed.
7. This Resolution shall take effect immediately upon its adoption.
I HEREBY CERTIFY that the foregoing Resolution was introduced and read at a
regular meeting of the City Council of the City of Redding on the 16th day of June, 2009, and
was duly adopted at said meeting by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
COUNCIL MEMBERS:
COUNCIL MEMBERS:
COUNCIL MEMBERS:
COUNCIL MEMBERS:
Dickerson, Jones, McArthur, and Bosetti
None
Stegall
None
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RICK BOSETTI, Mayor
ATTEST:
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FORM APPROVED:
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RICHARD A. DUVERNAY, Ci~torney
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tJlti50NNIE STRl)HM~~ 0"
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!=ity Clerk
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