The Pella City Council approved a resolution directing sale of Electric Revenue Capital Loan Notes, Series 2014 during their regular meeting last week.
At the December 17, 2013 meeting, Council approved taking additional action for the authorization of a loan agreement and the issuance of not to exceed $4,000,000 Electric Revenue Capital Loan Notes and approval of the electronic bidding procedures and the official statement. The proceeds from the Notes will be used to fund improvements to the municipal electric utility. This includes demolition of the existing power plant, acquisition and installation of control systems upgrade for the diesel plant, conversion of a portion of the electrical overhead distribution system to an underground distribution system, construction of the underground distribution system, and related site improvements.
On January 7, 2014, staff received bids for the Electric Revenue Capital Loan Notes prior to the Council meeting with the results of the bids being disclosed to Council during the meeting. This resolution awards the Notes to the bidder with the lowest true interest cost to the City of Pella. In addition, it authorizes the Mayor and City Clerk to sign the statement of contract for the Capital Loan Notes on behalf of the City of Pella. The term of the bonds is 10 years with a final maturity date of June 1, 2025.
While the bond issue limit is listed as not to exceed $4.0 million, the proposed Electric Revenue Notes will be for $3.5 million with a ten year term to assist in funding the following projects:
-Power Plant Deconstruction Project - $2,354,000
-Southeast Electrical Underground Conversion Project - $571,000
-Diesel Plant Control System Upgrade - $575,000
These Notes will be payable from the net earnings of the Municipal Electric Utility and shall not constitute general obligations or be payable in any manner by taxation by the City of Pella.