Title
Ordinance No. 21-61 of the City of Colorado Springs, Colorado Approving and Authorizing the Execution and Delivery of a Notice Regarding Extension of a Standby Bond Purchase Agreement by and Among the City of Colorado Springs, Colorado, Barclays Bank Plc, and Wells Fargo Bank, National Association, as Tender Agent and Paying Agent, and a Letter Agreement by and Among the City of Colorado Springs, Colorado, Barclays Bank Plc, and Wells Fargo Bank, National Association, as Tender Agent and Paying Agent, Relating to the City of Colorado Springs, Colorado, Variable Rate Demand Utilities System Improvement Revenue Bonds, Series 2010c; and Providing Other Matters Relating Thereto.
Presenter:
Tristan Gearhart, Acting Chief Planning and Financial Officer, Colorado Springs Utilities
Aram Benyamin, Chief Executive Officer, Colorado Springs Utilities
Body
Summary:
The Ordinance addresses approval of an extension to a Standby Purchase Agreement (“SBPA”) for the Variable Rate Demand Utilities System Improvement Revenue Bonds, Series 2010C. The current SBPA for the Bonds is set to routinely expire this fall. Utilities has elected to renew the existing 2010C SBPA agreement with Barclays Bank PLC for a term of four years.
Background:
The Bond Ordinance for the City’s 2010C Bonds require that the City “maintain a Liquidity Facility in full force and effect at all times when the bonds are bearing interest at a Variable Rate other than Auction Mode Rate, except as otherwise provided in Section 1212 of the Bond Ordinance”. A Standby Bond Purchase Agreement is one of the acceptable financial instruments to provide liquidity for the City’s variable rate bond issues.
Previous Council Action:
City Council approved the Ordinance authorizing the 2010C bonds as well as all corresponding past Standby Bond Purchase Agreements and amendments associated with this issuance.
Financial Implications:
The City’s resulting overall cost for liquidity will decrease as a result of these actions.
City Council Appointed Board/Commission/Committee Recommendation:
The Utilities Board Finance Committee reviewed this proposed action at their July 16, 2021 meeting. Additionally, the Utilities Board also reviewed this item at the July 21, 2021 meeting.
Stakeholder Process:
N/A
Alternatives:
The City could choose not to replace the Standby Bond Purchase Agreement when it expires in 2021, which would be a violation of the Ordinance. This alternative would not be advantageous to the City.
Recommended Action
Proposed Motion:
Approval of proposed Ordinance.
Summary of Ordinance Language
The City requests approval to renew the expiring Standby Bond Purchase Agreement for the 2010C Bonds for a four-year term. This action maintains The City’s compliance with the bond ordinances requiring such facilities be in place, and does so at lower overall prices than current costs.