Loading...
HomeMy WebLinkAbout10 Broadband Financing A 0 Benda Item # Memorandu m To: Board of Directors From: Peter Holzmeister Date: October 15, 2004 Subject: Broadband financing WHY THIS MATTER IS BEFORE THE BOARD: This matter involves approval of resolutions which in turn approves financing documents. Only the board can adopt resolutions and only the board can approve the issuance of long term debt. HISTORY: We have been talking at length about implementing a broadband business unit. We have been carefully analyzing the issue and following a careful process to secure the proper approvals prior to proceeding with the project. Most recently we applied for and received LAFCo approval for activation of a latent power. We are now in a position to deal with financing of the project. NEW INFORMATION: Attached for your review are the following documents: • A Resolution of the Board of Directors Approving a Broadband Project, Ratifying Actions Taken in Connection Therewith, Authorizing the Execution and Delivery of an Installment Purchase Agreement and a Trust Agreement and Certain Other Actions in Connection Therewith. • Installment Purchase Agreement • Trust Agreement • Purchase Contract • Private Placement Agreement These documents have been prepared by attorneys retained by the District. They are similar to other COP documents that the District has adopted. The documents are very legalistic and formal. We conducted a workshop on these documents on April 28, 2004. RECOMMENDATION: I recommend that the board approve the Resolution Approving a Broadband Project, Ratifying Actions Taken in Connection Therewith, Authorizing the Execution and Delivery of an Installment Purchase Agreement and a Trust Agreement and Certain Other Actions in Connection Therewith j f fi S RESOLUTION NO._ OF THE TRUCKEE DONNER PUBLIC UTILITY DISTRICT A RESOLUTION OF THE BOARD OF DIRECTORS APPROVING A BROADBAND PROJECT, RATIFYING ACTIONS TAKEN IN CONNECTION THEREWITH, AUTHORIZING THE EXECUTION AND DELIVERY OF AN INSTALLMENT PURCHASE AGREEMENT AND A TRUST AGREEMENT AND CERTAIN OTHER ACTIONS IN CONNECTION THEREWITH WHEREAS, the Truckee Donner Public Utility District, a public utility district duly organized and existing under and pursuant to the Constitution and laws of the State of California (the "District"), including the Public Utility District Act, Section 15501 et seq. of the Public Utilities Code of the State of California (the "Public Utilities Code") has previously determined to develop, acquire, install and operate a system for providing broadband services (including but not limited to data, voice, video and security services) to customers of the District(the "Project"); WHEREAS, in furtherance of the Project, the District has entered into agreements with Eagle Broadband, Inc., Wave 7 Optics, Riviere Jenison Securities Ltd., Aggregate Networks, Stradling Yocea Carlson & Rauth, Pettit Gilwee Public Relations, Porter Simon, Sierra Pacific Communications, Tetra Tech and MasTec to provide various services and materials with respect to the Project(collectively, the"Project Agreements"); WHEREAS, in furtherance of the Project, the District has solicited bids from additional contractors to provide services and materials related to the acquisition and installation of the Project; WHEREAS, in connection with the development of the Project, the District was required to obtain written approval from the Nevada County Local Agency Formation Commission ("LAFCO") to provide telecommunication services via the Project; WHEREAS, after conducting public hearings and other proceedings whereat materials provided by the District with respect to the Project were considered, LAFCO unanimously approved the District's right to provide telecommunication services via the Project(the "LAFCO Approval"); WHEREAS, in reliance on the LAFCO Approval and in furtherance of the District's desire to develop, acquire, install and operate the Project, the District now intends to approve the execution and delivery of certificates of participation to finance the costs of developing, acquiring and installing the Project; WHEREAS, the District is authorized under provisions of the Constitution and laws of the State of California, including without limitation, Section 16431 of the Public Utilities Code, to dispose of and acquire certain equipment and facilities as the District may determine is necessary or proper; and WHEREAS, the District desires to finance the development, acquisition and installation of the Project by authorizing and directing the execution and delivery of certificates of participation (the "Certificates") evidencing fractional interests in the installment payments to be made by the District DOC S S F/43403 v3/22925-001 I to the Truckee Donner Public Utility District Financing Corporation (the "Corporation") under the Installment Purchase Agreement described below; and WHEREAS, in the judgment of this Board it is in the best interest of the District to enter into the Installment Purchase Agreement described below in order to finance the Project; and WHEREAS, a majority of the Board of Directors of the District(the `Board") constituting a quorum for the transaction of business, is present, as required by Section 16071 of the Public Utilities Code; and WHEREAS, all acts, conditions and things required by the Constitution and law of the State of California to exist, to have happened and to have been performed precedent to and in connection with the consummation of the financing authorized hereby, the transactions contemplated hereby, and the Project, do exist,have happened and have been performed in regular and due time, form, and manner as required by law, and the District is now duly authorized and empowered, pursuant to each and every requirement of law, to consummate such financing for the purpose, in the manner and upon the terms herein provided; NOW, THEREFORE the Board of Directors of the Truckee Donner Public Utility District does hereby resolve as follows: Section 1. Installment Purchase Agreement. The form of Installment Purchase Agreement (the "Installment Purchase Agreement'), dated as of November 1, 2004, between the District and the Truckee Donner Public Utility District Financing Corporation (the "Corporation"), presented to this meeting and on file with the Clerk of the Board of the District, and each of the underlying transactions contemplated thereby, are hereby approved. In accordance with Section 16033 of the Public Utilities Code, the President of the Board (the "President') is hereby authorized and directed, for and in the name and on behalf of the District, to sign the Installment Purchase Agreement, and in accordance with Section 16115 of the Public Utilities Code, the Clerk or Deputy Clerk of the District (the "Clerk") is hereby authorized to countersign the Installment Purchase Agreement, and both the President and the Clerk are hereby authorized and directed to deliver to the Corporation the Installment Purchase Agreement in substantially said form, with such changes therein as the President may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof. Section 2. Trust Agreement. The form of Trust Agreement (the "Trust Agreement'), dated as of November 1, 2004, among the District, the Corporation and the trustee named therein (the "Trustee"), presented to this meeting and on file with the Clerk, and each of the underlying transactions contemplated thereby, are hereby approved. In accordance with Section 16033 of the Public Utilities Code, the President is hereby authorized and directed, for and in the name and on behalf of the District, to sign the Trust Agreement, and in accordance with Section 16115 of the Public Utilities Code, the Clerk is authorized and directed to countersign the Trust Agreement, and both the President and the Clerk are hereby authorized and directed to deliver to the Corporation and the Trustee the Trust Agreement in substantially said form, with such changes therein as the President may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof. 2 DOCSSF/43403v3/22 92 5-00 1 1 Section 3. Certificates. The Trustee is hereby directed to execute and deliver the Certificates, in the form and pursuant to the provisions of, the above-described Trust Agreement for the purposes of financing the Project. Section 4. Purchase Contract. The Purchase Contract, in substantially the form on file with the District and, upon execution as authorized below, be and the same is hereby approved. The General Manager is hereby authorized and directed to execute and deliver the Purchase Contract with such changes, insertions and omissions as may be approved by the General Manager, said execution being conclusive evidence of such approval; provided, however, that in no event shall the principal amount of the Certificates exceed $24,000,000 (except such principal amount may be increased to provide original issue discount), nor shall the net interest cost of the Certificates exceed 8% per annum. Section 5. Private Placement Memorandum. The Private Placement Memorandum, in the form on file with the District,be and the same is hereby approved. The President, Vice-President or General Manager is hereby authorized and directed to execute, approve and deliver the final Private Placement Memorandum which, upon execution as authorized below, with such changes, insertions and omissions as the officer executing said document may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof. Section 6. Attestations. The Clerk is hereby authorized and directed to attest the signature of the President, Vice President or General Manager, if necessary, and to affix and attest the seal of the District, as may be required or appropriate in connection with the execution and delivery of the Installment Purchase Agreement, the Trust Agreement, the Purchase Contract and the Private Placement Memorandum. Section 7. Other Actions. The President, the Vice-President, the General Manager, the Clerk and any other proper officer of the District are hereby authorized and directed to do any and all things and to execute and deliver, and the Clerk is hereby authorized and directed to do any and all things and to countersign, any and all documents which they may deem necessary or advisable in order to consummate the sale, execution and delivery of the Certificates by the Trustee and otherwise to carry out, give effect to and comply with the terms and intent of this resolution, the Certificates, the Purchase Contract, the Installment Purchase Agreement, the Private Placement Memorandum and the Trust Agreement. Such actions heretofore taken by such officers are hereby ratified, confirmed and approved. Section 8. Protect. All of the prior actions taken with respect to the Project (including but not limited to the District's execution of the Project Agreements and the other actions and undertakings described in the recitals to this Resolution) are hereby acknowledged and ratified. The Project is hereby approved and the General Manager is directed to take actions necessary to cause a portion of the proceeds of the Certificates to be used to finance the Project. Section 9. Effective Date. This resolution shall take effect immediately upon its adoption. 3 DOCSSF/43403v3/22925-001 I PASSED AND ADOPTED this _day of 2004 by the following majority vote of the Board, as required by Section 16072 of the Public Utilities Code: AYES: NOES: ABSENT: TRUCKEE DONNER PUBLIC UTILITY DISTRICT By President ATTEST: District Clerk 4 DOCSSF/43403v3/22925-001 1