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HomeMy WebLinkAbout4 COP . .. ........ ........................... Agenda Item # y Memorandum To: Board of Directors From: Peter Holzmeister Date: January 10, 2003 Subject: Resolution approving Installment Purchase Agreement and Trust Agreement for $26 Million COP 1. Why this item is before the board This item initiates the funding of the settlement with Idacoro Energy. It involves adoption of a resolution approving the form of two financing documents. Only the board can adopt a resolution. 2. History We have been engaged in a dispute with Idacorp Energy over the terms of our wholesale power contract. We recently settled that dispute. A key term in the settlement is our promise to pay $26 million to Idacorp Energy by early April 2003. We have retained McDonald Partners to serve as financial advisor, Stradling Yocca Carlson and Rauth to serve as bond counsel, and Bear Sterns to serve as underwriter. We are now processing the required documents to make that payment. 3. New information David Casnocha and Greg Blonde are the attorneys at Stradling Yocca who are working directly with us. They have prepared the attached documents for your review and consideration. The documents are a resolution authorizing execution and delivery of the other two attached documents-- those two documents being an Installment Purchase Agreement and a Trust Agreement. The recommendation is that the board approve these documents as to form. We recognize that there are blanks in the documents. Those blanks will be filled-in prior to the board taking final action on the entire package of financing documents. It is important that we consider adopting these documents at this time, notwithstanding the blanks, because there is a sixty-day protest period during which time a person can challenge our plans to issue Certificates of Participation in this manner. Adopting the documents as to form at this time allows the sixty-day clock to begin and run its course before the closing in early April. The documents are a lot of standard language that bond counsel has prepared and is recommending we adopt. 4. Recommendation I recommend that the board adopt the resolution authorizing execution and delivery of an Installment Purchase Agreement and a Trust Agreement and certain other actions in connection therewith .. ......... ........................ IIII��IN I�ply 111 �� I�,i'l � o ` : ri �► s R solu ion No . 2003- XXX A RESOLUTION OF THE BOARD OF DIRECTORS 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") 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; WHEREAS, the District has previously entered into a certain $26 million settlement obligation of the District owing to Idacorp Energy L.P. ("Idacorp"), as evidenced by that certain promissory note of the District issued to Idacorp dated January 3, 2003 (the "Settlement Obligation"), and proposes to refinance the Settlement Obligation 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 to the Truckee-Donner Public Utility District Financing Corporation (the "Corporation") under the Installment Purchase Agreement described below; WHEREAS, in the judgment of this Board it is for the best interest of the District to enter into the Installment Purchase Agreement described below in order to refinance the Settlement Obligation; 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 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, dated as of January 1, 2003, 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, is 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 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, dated as of January 1, 2003, among the District, the Corporation and the trustee named therein (the 'Trustee"), presented to this meeting and on file with the Clerk, is 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. Section 3. Certificates. The Corporation is hereby directed to execute and deliver the Certificates, in the form and pursuant to the provisions of, the above-described Trust Agreement. Section 4. Certificate Insurance and Surety Policy. The General Manager is hereby authorized to select a municipal bond insurer to insure payments of interest with respect to and principal of the Certificates so long as the General Manager determines that obtaining the municipal bond insurance policy provided thereby will result in a lower interest rate or yield to maturity with respect to the Certificates. The General Manager is hereby authorized to select a municipal bond insurer to provide a surety policy with respect to the Reserve Fund (as defined in the Trust Agreement) and to execute and deliver an agreement relating to such surety policy. Section 5. Attestations. The Clerk is hereby authorized and directed to attest the signature of the President, 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 and the Trust Agreement. Section 6. Other Actions. The President, 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 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, Installment Purchase Agreement and the Trust Agreement. Such actions heretofore taken by such officers are hereby ratified, confirmed and approved. Section 7. Special Counsel and Underwriter. The District hereby appoints Stradling Yocca Carlson & Rauth, a Professional Corporation, as Special Counsel and Bear, Stearns&Co. Inc. as Underwriter with respect to the sale and delivery of the Certificates. Section 8. Effective Date. This resolution shall take effect immediately upon its adoption. PASSED AND ADOPTED this 15th day of January, 2003 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 J. Ronald Hemig, President ATTEST: Peter L. Holzmeister, District Clerk