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Home My WebLink About2007 10_Profect Refinancing Revenue Anticipation Vote_2007.08.21CITY OF OWASSO, OKLAHOMA RESOLUTION NUMBER 2007 -10 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 THREE MILLION, FIVE HUNDRED THOUSAND DOLLARS ($3,500,000), 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 legal restrictions placed upon the placement of public funds in the market; 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 the Garnett Road Regional Detention Facilities; WHEREAS, the City Council of the City of Owasso, Oklahoma, finds that a present need in the amount not to exceed Three Million, Five Hundred Thousand Dollars ($3,500,000) 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; and, WHEREAS, under the public finance provisions of the statutes of the State of Oklahoma, relating to municipal investment of funds, 68 O.S. Section 348.1 /Authorized Investments/Disposition of Income, the City Treasurer of the City, when authorized by the City Council by written investment policy, 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 Three Million, Five Hundred Thousand Dollars ($3,500,000). 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, 68 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 21" day of August, 2007. AI PEST: Sherry nljCJ OF O1 � City APPROVED AS TO FORM: P / Julie ombardi, City Attomey CITY OF OWASSO, OKLAHOMA By: Stephen Cat udella, Mayor MEMORANDUM TO: HONORABLE MAYOR AND CITY COUNCIL CITY OF OWASSO FROM: SHERRY BISHOP ADMINISTRATIVE SERVICES DIRECTOR SUBJECT: CITY RESOLUTION NO. 2007-10 PROJECT FINANCING — REVENUE ANTICIPATION NOTE DATE: August 17, 2007 BACKGROUND: The City of Owasso continually explores alternatives in order to achieve the most cost effective strategy for financing capital projects. The issuance of and investment in a Revenue Anticipation Note (RAN) has been one of the successful methods used to finance capital projects. The City of Owasso utilizes a "pooled" cash system for the receipt, disbursement and investment of funds. The Consolidated Cash Fund includes all cash for the city and the trust authorities (except OEDA). The total in the Consolidated Cash Fund varies throughout the year depending on cash flows and major expenditures. The current cash balance is approximately five million dollars. One investment option available to the City's Consolidated Cash Fund is a RAN issued by a trust authority of the City. A RAN offers advantages for both the Authority and the City. The Authority may borrow funds through a fairly simple process and the City acquires a secure investment at a determined interest rate. Actions necessary in order to accomplish this financing method are: 1. Council approval of a Resolution authorizing the investment in a RAN of the OPWA, 2. OPWA Trustee approval of a Resolution authorizing the borrowing and issuance of a RAN, 3. OPWA Trustee approval of the transfer of the proceeds of the RAN from the OPWA to the Stormwater Management Fund of the City, 4. Future fiscal year budgets include the transfer of funds from the Stormwater Management Fund to the OPWA for debt service on the RAN. City of Owasso Resolution No. 2007 -10 authorizes the city treasurer to invest city funds in a Revenue Anticipation Note issued by the Owasso Public Works Authority and approves the indebtedness of the OPWA. The Revenue Anticipation Note is structured to allow the OPWA to draw funds as needed for the Garnett Road Regional Detention Facilities project for an amount not to exceed $3,500,000. The RAN will pay 4.0% interest to the city on the balance of the funds drawn against the note. The RAN matures September 1, 2017. The OPWA may prepay the note as funds become available. Funding is expected from three sources: the Stormwater Management utility fees, a mandatory fee in lieu of detention on undeveloped property in the project drainage basin (to be established by ordinance), and a fee for off -site detention by owners of the Owasso Market. OPWA Resolution No. 2007 -07 authorizes the issuance of the Revenue Anticipation Note by the OPWA and authorizes the execution of all necessary documents. The resolution also authorizes the transfers of the proceeds drawn on the note to the Stormwater Management Fund of the City to pay for the construction of the Garnett Road Regional Detention Facilities project. RECOMMENDATION: Staff recommends Council approval of Resolution No. 2007 -10 authorizing the investment in a Revenue Anticipation Note issued by the Owasso Public Works Authority and approving the indebtedness of the OPWA. ATTACHMENTS: City Resolution No. 2007 -10 Revenue Anticipation Note Loan Agreement