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Home My WebLink About2017 20_Revenue Anticipation Note_2017.11.07CITY OF OWASSO, OKLAHOMA RESOLUTION 2017 -20 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF OWASSO, OKLAHOMA, AUTHORIZING THE CITY TREASURER OF THE CITY OF OWASSO, OKLAHOMA , TO INVEST CERTAIN UNAPPROPRIATED AND UNENCUMBERED MONIES OF THE CITY OF OWASSO, OKLAHOMA, SURPLUS TO THE PRESENT NEEDS OF SAID CITY, IN A REVENUE ANTICIPATION NOTE OF THE OWASSO PUBLIC WORKS AUTHORITY, AN OKLAHOMA PUBLIC TRUST, HAVING THE CITY OF OWASSO, OKLAHOMA, AS ITS BENEFICIARY, IN AN AMOUNT NOT TO EXCEED SEVEN MILLION DOLLARS ($7,000,000), APPROVING THE OPWA INDEBTEDNESS AS REPRESENTED BY THE PROPOSED AGREEMENT AND REVENUE ANTICIPATION NOTE, AUTHORIZING THE MAYOR, OR VICE -MAYOR AS THE CASE MAY BE, CITY CLERK OR DEPUTY CITY CLERK, AS THE CASE MAY BE AND THE CITY TREASURER OR DEPUTY CITY TREASURER, AS THE CASE MAY BE, TO EXECUTE, DELIVER AND RECEIVE ANY AND ALL DOCUMENTATION, OR AMENDMENTS THERETO, BEING LAWFULLY NECESSARY TO ACCOMPLISH THE INVESTMENT PURPOSES SET FORTH HEREINAFTER WHEREAS, the City Council of the City of Owasso, Oklahoma, finds that the City presently maintains funds that have reserves which have reached a level that would allow for investments of a significant nature and for long term investments that might produce a higher yield; WHEREAS, the City Council of the City of Owasso, Oklahoma, finds that investment opportunities are problematical due to the low level of interest rates presently existing in the market as well as legal restrictions placed upon the placement of public funds in the market; WHEREAS, the City Council of the City of Owasso, Oklahoma, finds that after exploration of several investment opportunities and the discovery that the return on investments of a traditional nature would not be significant, alternatives to traditional investments that would produce a higher yield in an otherwise depressed investment climate have been ascertained; WHEREAS, the City Council of the City of Owasso, Oklahoma, has determined that the Owasso Public Works Authority, an Oklahoma Public Trust, having the City of Owasso, Oklahoma, as its beneficiary, has a present need to raise additional funds for Capital Improvement Projects; WHEREAS, the City Council of the City of Owasso, Oklahoma, finds that a present need in the amount not to exceed Seven Million Dollars ($7,000,000) exists on the part of the Owasso Public Works Authority, and that the Owasso Public Works Authority, is desirous of obtaining such funding from the City of Owasso, Oklahoma in a manner that would produce for the City higher yield on its investments while at the same time assisting the Owasso Public Works Authority in completing the Capital Improvement Projects; and, WHEREAS, under the public finance provisions of the statutes of the State of Oklahoma, relating to municipal investment of funds, 62 O.S. Section 348.1 /Authorized Investments /Disposition of Income, the City Treasurer of the City, when authorized by the City Council by writteninvestmentpolicy, ordinance or resolution, is authorized to invest monies in the custody of the City Treasurer in Revenue Anticipation Notes issued by a public trust for which such City is a beneficiary thereof. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF OWASSO, OKLAHOMA, THAT TO -WIT. SECTION ONE. The City Treasurer of the City of Owasso, Oklahoma, is hereby authorized to invest certain unappropriated and unencumbered monies of the City of Owasso, Oklahoma, surplus to the present needs of said City, in the custody of the City Treasurer of the City of Owasso, Oklahoma, in a Revenue Anticipation note to be issued by the Owasso Public Works Authority, an Oklahoma Public Trust having the City of Owasso, Oklahoma as its beneficiary, in an amount not to exceed Seven Million Dollars ($7,000,000). The City Council of the City of Owasso, Oklahoma, hereby approves the OPWA indebtedness as represented by the proposed Agreement and Revenue Anticipation Note to be issued by the Owasso Public Works Authority, a copy thereof being attached hereto, made a part hereof and marked as Exhibit „A„ SECTION TWO. The Mayor, or Vice -Mayor as the case may be, the City Clerk or the Deputy City Clerk as the case may be, and the City Treasurer or Deputy Treasurer as the case may be, of the City of Owasso, be and they hereby are, authorized and empowered for and on behalf of the City of Owasso, Oklahoma, to execute, deliver and receive the Agreement and Revenue Anticipation Note of the Owasso Public Works Authority exhibited hereto and such further agreements and documents and to take such actions as such officer or officers may deem necessary or desirable in order to carry out and perform the investment and to effect the purposes thereof and to consummate the transaction contemplated thereby. SECTION THREE. That in accordance with public finance provisions of the Statutes of the State of Oklahoma relating to municipal investment of funds, 62 O.S. Section 348.1(5), the income received by the City of Owasso from the investment herein contemplated shall be placed, on a pro rata basis as hereinafter set forth, in the Contributing Funds within the City of Owasso, Oklahoma Consolidated Cash Account. Such pro rata distribution of income shall be made on the percentage basis that the Contributing Fund within the Consolidated Cash Account of the City of Owasso, Oklahoma, bears to the Contributing Funds within the Consolidated Cash Account of the City of Owasso, Oklahoma. Any Contributing Fund within the Consolidated Cash Account of the City of Owasso, Oklahoma, subsequently closed by the City Council of the City of Owasso, Oklahoma, shall receive no further pro rata distributions of income. PASSED AND APPROVED this 71h day of November, 2017. CITY OF ti By: ... V� orrrcrna Ly ell I nn, Mayor ATTEST: Sherry Bishop, City APPROVED AS TO FORM: Ju e Lombardi, City Attorney Resolution 2017 -20, page 2 of 2 s� SAAR nn, ity Wit out Limits. O�F o ey Co TO: The Honorable Mayor and City Council *OV O ?� ��% U10 City of Owasso FROM: Linda Jones Finance Director SUBJECT: Resolution 2017 -20 Revenue Anticipation Note (RAN) Financing of CIP Projects DATE: November 3, 2017 BACKGROUND: The City of Owasso and its trust authorities have utilized RAN financing several times in the past. First used in 1998 for the financing of the Elm Creek Sewer Interceptor project, RAN financing was utilized most recently for the purchase of police vehicles in 2015. As has been discussed with Council on multiple occasions, currently authorized Capital Improvement Projects (CIP) will require over six years of sales tax revenues to fund. To enable the City to advance the progress of approved CIP projects without delay, staff recommends utilization of a RAN "construction loan" of up to $7 million to be paid over a seven -year period at an interest rate of 2% of the outstanding loan balance. RAN FINANCING —HOW IT WORKS: The City of Owasso utilizes a "pooled" cash system for the receipt, disbursement and investment of all funds. The Consolidated (pooled) Cash Fund includes all cash and investments for the city and its trust authorities. The total in the Consolidated Cash Fund varies throughout the year depending on cash flow and major expenditures. The current pooled cash balance is in excess of $20 million including approximately $7 million in the Capital Improvements fund. Actions necessary to accomplish this financing method are as follows 1. OPWA Trustee approval of a Resolution authorizing the borrowing and issuance of a RAN. 2. Council approval of a Resolution authorizing the investment in a RAN of the OPWA. 3. Council authorization to execute the Loan Agreement with OPWA. 4. Council and OPWA approval of budget amendments for the receipt of RAN proceeds, transfer of funds from OPWA to the Capital Improvements fund and increased capital expenditures. 5. OPWA Trustee approval of the transfer of the proceeds of the RAN from the OPWA to the Capital Improvements Fund of the City. 6. Council approval_ of future_ _fiscal _ year b_.u_dgets_transfemng. funds _from the Capital..____ Improvements fund to the OPWA for debt service payments on the RAN. RECOMMENDATION: Staff recommends approval of Resolution 2017 -20, authorizing the City Treasurer to invest in a Revenue Anticipation Note (RAN) of the Owasso Public Works Authority in an amount not to exceed $7 million for a period of up to 7 years, approving the OPWA indebtedness as represented by the proposed Loan Agreement, and authorizing the execution of all documents. ATTACHMENTS: Resolution 2017 -20 Loan Agreement Revenue Anticipation Note Council Memo dated October 6, 2017, Revenue Anticipation Note Financing of CIP Projects