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City of Missoula, Montana Item to be Referred to City Council Committee Committee: Administration & Finance Item: BOND RESOLUTION RELATING TO $10,345,000 TAXABLE SEWER SYSTEM REVENUE BONDS, SERIES 2010 (RECOVERY ZONE ECONOMIC DEVELOPMENT BONDS – DIRECT PAY); AUTHORIZING THE ISSUANCE AND FIXING THE TERMS AND CONDITIONS THEREOF” Date: October 22, 2010 Prepared by: Brentt Ramharter Initiated by: Brentt Ramharter Action Required: Approve the BOND RESOLUTION RELATING TO $10,345,000 TAXABLE SEWER SYSTEM REVENUE BONDS, SERIES 2010 (RECOVERY ZONE ECONOMIC DEVELOPMENT BONDS – DIRECT PAY); AUTHORIZING THE ISSUANCE AND FIXING THE TERMS AND CONDITIONS THEREOF” Recommended Motion: I move the City Council approve the “RESOLUTION RELATING TO $10,345,000 TAXABLE SEWER SYSTEM REVENUE BONDS, SERIES 2010 (RECOVERY ZONE ECONOMIC DEVELOPMENT BONDS – DIRECT PAY); AUTHORIZING THE ISSUANCE AND FIXING THE TERMS AND CONDITIONS THEREOF” (the “Resolution”), on file in the original records of the City in my legal custody; that the Resolution was duly adopted by the City Council of the City at a regular meeting on November 1, 2010, and that the meeting was duly held by the City Council and was attended throughout by a quorum, pursuant to call and notice of such meeting given as required by law; and that the Resolution has not as of the date hereof been amended or repealed. Timeline Referral to committee: October 22, 2010 Committee discussion: October 27, 2010 Deadline: Have council approve at the November 1, 2010 meeting Background and Alternatives Explored: This resolution identifies the final form and details for the bond sale recently completed (the $10,345,000 of Taxable Sewer System Revenue Bonds, Series 2010 -Recovery Zone Economic Development Bonds and awarded to DA Davidson on October 18, 2010). This resolution has been prepared by the City's bond counsel, Dorsey Whitney. This bond sale utilized financing that is taxable to handle the construction costs for the recently awarded Sewer Headworks Project, but is subsidized by the federal government to provide the equivalent of tax exempt financing with a 45% interest reimbursement that would be paid to the city at each interest payment date. This financing contains very favorable terms to pay for the costs associated with the sewer plant headworks upgrade. ---PAGE BREAK--- This resolution provides all of the specifics for the purchasers of this recently awarded sewer system bond sale. Financial Implications: This final bond resolution is needed to complete the financing package developed by the City Council to reconstruct the headworks at the city's wastewater plant. Sewer rates were increased last year by 5% and will be increased by 5% in 2011, 2012 and 2013 to handle the debt service requirements of this financing as well as the revenue bonds issued to complete the Rattlesnake Valley sewer project currently under construction. Attachments: Draft Resolution