Explanation
1. Background
As authorized by Ordinance 2235-2014, the City issued its $205,425,000 Sewerage System Revenue Refunding Bonds, Series 2014, dated December 1, 2014 (the “2014 Sewer Revenue Bonds”). It is now advantageous for the City to refund all or a portion of the outstanding amount of the 2014 Sewer Revenue Bonds through the Ohio Water Development Authority (“OWDA”) Refinance Loan Program.
In order for the City Auditor to apply for and enter into a Refinance Loan Program Loan Agreement, the OWDA requires legislation authorizing the City Auditor to do so. This ordinance authorizes the City Auditor to apply for and execute a Refinance Loan Program Loan Agreement for the refinancing of the 2014 Sewer Revenue Bonds.
2. Fiscal Impact
The OWDA Loan Administration Fee will be rolled into the total loan amount of the loan. The loan will be paid off from revenues from sewer system rates (the dedicated source of repayment). Sewer rate increases have been projected and planned in anticipation of this loan.
3. Emergency Designation
The Refinance Program Loan Application is now being processed for this refinancing loan. This authorizing legislation is a requirement for loan approval and must be submitted to the OWDA as a part of the Loan Application process prior to consideration by the OWDA Board for loan award. Emergency designation is requested for the purpose of refunding the 2014 Sewer Revenue Bonds expeditiously to take advantage of current interest rates.
Title
To authorize the City Auditor to apply for, accept, and enter into an Ohio Water Development Authority Refinance Loan Program Loan Agreement, for the purpose of providing funds to refund certain outstanding special obligations of the City; to designate a dedicated source of repayment for the loan; to authorize an expenditure of $200,000.00 in the Sewer Operating Fund for costs of issuance; and to declare an emergency ($143,100,000.00).
Section 44-1(b)
Body
WHEREAS, the City of Columbus, Ohio (the "City") owns and operates as a public utility a municipal sewerage system (the "Utility"), the services of which are, and are to be, supplied to persons and corporations within and without the corporate limits of the City; and
WHEREAS, pursuant to Ordinance 2235-2014 passed by City Council (the “Council”) of the City and a Master Trust Agreement, dated as of January 1, 2008, as supplemented by a First Supplemental Trust Agreement, dated as of January 1, 2008, a Second First Supplemental Trust Agreement, dated as of January 1, 2008, and a Third Supplemental Trust Agreement, dated as of December 1, 2014, each by and between the City and the Bank of New York Mellon Trust Company, N.A., as Trustee, the City issued its $205,425,000 Sewerage System Revenue Refunding Bonds, Series 2014, dated December 1, 2014 (the “2014 Sewer Revenue Bonds”) for the purpose of refunding certain outstanding special obligation bonds of the City which were originally issued to provide funds to expand and improve the Utility and to refund bonds previously issued for such purpose; and
WHEREAS, the City Auditor is scheduled to prepare a Loan Application for submittal to the Ohio Water Development Authority (OWDA) under the Refinance Loan Program to refinance all or a portion of the outstanding amount of the 2014 Sewer Revenue Bonds, which are currently outstanding in the principal amount of $141,900,000, which will achieve a reduction in the debt service associated with the 2014 Sewer Revenue Bonds and will promote the purposes of the Utility; and
WHEREAS, prior to Loan Agreement approval by OWDA, the Refinance Loan Program application documents require the City to submit to OWDA a certified copy of approved Council legislation authorizing the City Auditor to apply for and subsequently execute the Loan Agreement, on the terms set forth in the Cooperative Agreement (defined below) (the “Refinancing”); and
WHEREAS, an emergency exists in the usual daily operations of the City Auditor’s Office, in that it is immediately necessary to adopt this Ordinance to timely authorize the City Auditor to enter into a Refinance Loan Program Loan Agreement with OWDA to achieve a reduction in the debt service associated with the 2014 Sewer Revenue Bonds, all for the immediate preservation of the public peace, property, health, or safety; NOW, THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
Section 1. That this Council hereby authorizes the City Auditor to apply for, accept, and enter into the Refinancing with OWDA under the provisions, terms and conditions set forth in the “Cooperative Agreement for the Refinancing of a State Water or Wastewater Project” (the “Cooperative Agreement”) and the “Refinance Loan Program Loan Agreement” (the “Loan Agreement”), the forms of which are on file with the City Auditor’s Office. Such Refinancing shall be in a principal amount not to exceed $142,900,000.00. The Mayor, the City Auditor, the Director of Finance and Management, and the Director of Public Utilities, or any of them individually, are hereby authorized to execute the Cooperative Agreement and the Loan Agreement on behalf of the City, together with any changes or amendments that are not inconsistent with this Ordinance and not substantially adverse to the City and that are approved by the person executing the Cooperative Agreement and the Loan Agreement on behalf of the City, all of which shall be conclusively evidenced by the signing of the Cooperative Agreement and the Loan Agreement or amendments thereto.
The Mayor, the City Auditor, the Director of Finance and Management, the Director of Public Utilities, and the City Clerk, or other appropriate officers of the City, are further authorized and directed to make the necessary arrangements on behalf of the City to take such action and to execute and deliver, on behalf of the City, such additional instruments, agreements, certificates, and other documents as may be in their discretion necessary or appropriate in order to carry out the intent of this Ordinance. Such documents shall be in the form not substantially inconsistent with the terms of this Ordinance, as they in their discretion shall deem necessary or appropriate. Such officers are further authorized, for and in the name of the City, to execute any amendments to any of the foregoing agreements, which amendments are not inconsistent with this Ordinance and not substantially adverse to the City, all of which shall be conclusively evidenced by the execution of such amendments thereto.
Section 2. That this Council hereby approves the redemption or pre-payment of the 2014 Sewer Revenue Bonds, and hereby authorizes the City Auditor or the Director of Finance and Management to designate the date on which such redemption or pre-payment is to occur.
Section 3. That the Utility rates payments are hereby authorized to be the dedicated source of repayment for the Refinancing.
Section 4. That the funds necessary to carry out the purpose of this Ordinance are hereby deemed appropriated and the necessary accounting and expenditure codes are to be assigned by the City Auditor.
Section 5. That the City Auditor is hereby authorized to pay the costs of issuance of the Refinancing, which shall include, but shall not be limited to, the fees and expenses of the City's bond counsel and the fees and expenses of the City's municipal advisor, from the Sewer Operating Sanitary Fund (Fund 6100) in an amount not to exceed $200,000.00.
Section 6. That the City Auditor is hereby authorized to make the necessary accounting changes in order to carry out the purpose of this Ordinance.
Section 7. It is hereby found and determined that all formal actions of this Council concerning and relating to the adoption of this Ordinance were adopted in an open meeting of this Council, and that all deliberations of this Council and of any of its committees that resulted in such formal action, were in meetings open to the public, in compliance with all legal requirements including Section 121.22 of the Ohio Revised Code.
Section 8. That in accordance with Sections 22 and 44-1(b) of the Charter of the City of Columbus, Ohio, and for the reason stated in the preamble hereto, which is hereby made a part hereof, this Ordinance is hereby declared to be an emergency measure and shall take effect and be in force from and immediately after its passage and approval by the Mayor, or ten (10) days after passage if the Mayor neither approves nor vetoes the same.