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CITY OF GLENDALE, CALIFORNIA
REPORT TO THE CITY COUNCIL
AGENDA ITEM
Report: Glendale Water and Power (GWP) Electric Revenue Bonds, 2024 Second Series – Adoption of Ordinance and Authorizing Issuance of Bonds, and Adoption of Resolution Authorizing the Invitation of Bids and Various Actions Relating to the Issuance of the Bonds.
1) Ordinance authorizing the issuance by the City of not to exceed $230,000,000 aggregate principal amount of the City of Glendale Electric Revenue Bonds 2024 Second Series, payable out of the Electric Works Revenue Fund, and approving certain other actions in connection therewith. 2) Resolution authorizing the invitation of bids for the purchase of Electric Revenue Bonds, 2024 Second Series; approving a Notice of Intention to Sell bonds, a Preliminary Official Statement (POS), a Notice Inviting Bids and Official Bid Form; authorizing the publication of a Notice of Intention to Sell Bonds; authorizing the execution and delivery of a final Official Statement, a Tenth Supplement to the Indenture of Trust, a Continuing Disclosure Agreement, and authorizing the award of the Bonds.
COUNCIL ACTION
Item Type: Ordinance
Approved for June 25, 2024 calendar
EXECUTIVE SUMMARY
Glendale Water and Power’s (GWP) financial plan intends to issue revenue bonds in three tranches of approximately $166 million. The first tranche of $166.9 million was issued in February 2024, the second tranche is expected to be issued in August 2024, and the third tranche is expected to be issued in August 2025. The funds will be used primarily to support the Grayson Repowering Project, as well as provide funding as necessary for the Scholl Biogas Renewable Generation Project, City-Owned Solar Projects, and certain distribution system improvements as they relate to the City’s Zero-Carbon Energy initiatives.
RECOMMENDATION
Approve the herein-requested actions to authorize staff to proceed with the preparation and issuance of the Electric Revenue Bonds 2024 Second Series as follows:
a. Adoption of the Ordinance authorizing the issuance of bonds, which was introduced on May 21, 2024.
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b. Adoption of the resolution authorizing the invitation of bids for the purchase of Electric Revenue Bonds, 2024 Second Series; approving a Notice of Intention to sell bonds, a Preliminary Official Statement (POS), a Notice Inviting Bids and Official Bid Form; authorizing the publication of a Notice of Intention to Sell Bonds; authorizing the execution and delivery of a final Official Statement, a Tenth Supplement to the Indenture of Trust, a Continuing Disclosure Agreement, and authorizing the award of the Bonds (all of the herein referenced documents are attached to this Report as Exhibits A, B, C, D and E).
ANALYSIS
The electric utility seeks to construct the Grayson Repowering Project, the Scholl Canyon Landfill Biogas Renewable Generation Project, and to acquire and/or construct, as necessary, certain improvements to the City’s electric public utility, such as 4kV to 12kV feeder upgrades, solar generation facilities installed on city properties, substation improvements, meter upgrades, vault replacement and transmission and distribution improvements and pole replacements. As GWP does not have unrestricted cash reserves to fund these efforts and they cannot be funded through operations alone, GWP proposes to issue debt in the form of electric revenue bonds. GWP intends to issue approximately $500 million of revenue bonds. The first issuance of $166.9 million closed in February 2024, and the next issue is scheduled to close in August 2024. The third issuance is planned to close in August of 2025.
Additionally, the electric revenue bonds will provide funds to make a deposit to a debt service reserve fund, and to pay the costs of issuance of the New Money Bonds. The maximum debt service is projected to increase to approximately $32.7 million after the second bond issuance and projected to increase to approximately $42.9 million after the third bond issuance.
The Ordinance, which was introduced by the City Council on May 21, 2024, will authorize the second issuance of bonds to fund the projects described herein. The Resolution will authorize the Invitation of Bids for the purchase; will approve a Notice of Intention to Sell Bonds, a Preliminary Official Statement, a Notice Inviting Bids and the Official Bid Form; will authorize the publication of a Notice of Intention to Sell Bonds; will authorize the execution and delivery of a final Official Statement, a Tenth Supplement to Indenture of Trust, a Continuing Disclosure Agreement, and will authorize the award of the bonds.
STAKEHOLDERS/OUTREACH
Not applicable.
FISCAL IMPACT
The issuance of the revenue bonds is projected to increase interest cost approximately $4.0 million in fiscal year 2025, and issuance costs are estimated to be $500,000.
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ENVIRONMENTAL REVIEW
Not applicable for the action requested as the action does not involve a project for the purposes of California Environmental Quality Act.
CAMPAIGN DISCLOSURE
Not applicable.
ALTERNATIVES
Alternative 1: Choose not to authorize the actions requested and recommended in this report, in which case the second series of bonds will not be issued and several capital projects including, but not limited to, the Grayson Repower Project will need to be suspended.
Alternative 2: Consider any other alternative not proposed by staff.
ADMINISTRATIVE ACTION
Submitted by:
Mark Young, General Manager – Glendale Water and Power
Prepared by:
Scott K. Mellon, Assistant General Manager – Power Management Adrine Isayan, Assistant General Manager – Finance and Risk Management David Davis, Utility Finance Manager
Approved by:
Roubik R. Golanian, P.E., City Manager
EXHIBITS / ATTACHMENTS
Exhibit A: Notice of Intention to Sell Bonds
Exhibit B: Preliminary Official Statement (POS)
Exhibit C: Notice Inviting Bids and Official Bid Form
Exhibit D: Tenth Supplement to the Indenture of Trust
Exhibit E: Continuing Disclosure Agreement