HomeMy WebLinkAbout1985-07-01-R t
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RESOLUTION NO.
A RESOLUTION AUTHORIZING A CONTRACT BETWEEN
THE CITY AND RESOURCE MANAGEMENT
INTERNATIONAL, INC. FOR FEASIBILITY REVIEW,
POWER MARKETING CONSULTATION AND OTHER
PURPOSES RELATED TO THE FINANCING OF
HYDROELECTRIC GENERATION FACILITIES AT LOCK
AND DAM NO. 1 ON THE WHITE RIVER; AND FOR
OTHER PURPOSES .
WHEREAS, the City of Batesville, Arkansas owns Lock
and Dam No. 1 on the White River; and
WHEREAS, the City has preliminarily investigated the
feasibility of constructing and financing hydroelectric
generation facilities in or near Lock and Dam No. 1 (the
"Project" ) ; and
WHEREAS, application has been made by the City to the
Federal Energy Regulatory Commission for a license i;o construct
(W the Project; and
WHEREAS, the chief impediment to the ± .nancing of the
Project, at this stage, is the burden of financing costs of
design, feasibility studies, power supply contract negotiations,
license al.plication, construction contract negotiations and
similar, preliminary services, as traditional methods of
financing contemplate the issuance of revenue bonds subsequent
to the accomplishment of these tasks; and
WHEREAS, there has been presented to the City the
proposal (the "Proposal" ) of Resource Management International,
Inc . ( "RMI" ) for the performance of feasibility review, power
marketing consultation and related services, to the end that
financing of the Project may be undertaken and carried out prior
to the completion of preliminary services; and
WHEREAS, RMI has performed services in connection with
a number of successful hydroelectric generation projects and
appears clearly to be qualified to perform the services
described in the Proposal;
NOW THEREFORE, BE IT RESOLVED by the City Council of
the City of Batesville, Arkansas:
Section 1 . The Mayor is authorized and directed to
negotiate with RMI for the consummation of an agreement between
the City and RMI , for the services described in the Proposal.
The Mayor is authorized to execute such writings and take such
•
action as may be appropriate to carry out and consummate such
negotiations and to carry out the purposes of this Resolution.
Any agreement arranged by the Mayor pursuant to this Resolution
shall be presented to the City Council for approval and
ratification.
Section 2 . All resolutions and parts thereof in
conflict herewith are hereby repealed to the extent of such
conflict.
Section 3 . This Resolution shall be in force upon its
passage and approval .
APPROVED `7 - 9 1985 .
CIT BATESV LE, ARKANSAS
ATTEST: r �
1 By
City Clerk
(SEAL)
•
CERTIFICATE
The undersigned, City Clerk of the City of Batesville,
Arkansas, hereby certifies that the foregoing pages are a true
and perfect copy of Resolution No. adopted at a
session of the City Council of the City of
Batesville, Arkansas, held at the regular meeting place in said
City at o' clock, _.m. , on the day of ,
1985, and that the Resolution is of record in Resolution Record
Book No. , Page , now in my possession.
GIVEN under my hand and seal on this day of
1985 .
City Clerk
(SEAL)
COMPENSATION FORMULA FOR RMI SCOPE OF WORK
ON EVALUATION AND FINANCING PLAN
FOR WHITE RIVER HYDROELECTRIC PROJECT
LOCK AND DAM NO. 1
Reimbursable Fee $44 , 000
Formula Fee Multiplier 1] . 00,27�.-x First $10 million
(Multiplier on Bond l/
Issue Amount) . 0015��x Next $10 million
. 0tI All over $20 million
Owner Termination Cost 2] $15, 000
1] All fees are based on Independence County pursuing financing
of Locks and Dams Nos. 2 and 3 concurrently. If the County
elects not to proceed, the formula fee increases 15% .
2 ] Based on concurrent work on the County' s Locks and Dams Nos .
2 and 3 . If County does not authorize work on a concurrent
basis, termination cost increases to $20 , 000 .
WHITE RIVER HYDROELECTRIC PROJECT
LACK AND DAM 1
TABLES AND FIGURES BRIEFING PACKAGE
E
JULY 1985
RESOURCE MANAGEMENT I NTE RNAT I ONAL INC
F
TABLE 1
WHITE RIVER HYDROELECTRIC PROJECT
LOCK AND DAM NO. 1
SUMMARY OF COSTS
($ X 1000)
August 1983 Direct Cost 13 , 829
Escalation to Construction 1/
Midpoint 3, 788
Escalated Cost 17 , 617
Allowance for Past Costs 150
Preconstruction -V Engineering
and Administration 1, 010
Final Design, Administration
and Management 1, 200
Contingency 1, 880
Total Cost 21,857
f.
4-v
1/ 4. 5%/year from August 1983 to assumed midpoint of
construction expenditure of February 1989 .
V "Preconstruction" refers to expenditures for work
performed after the bond sale and prior to the
2 to 2. 5 years initial bond term.
TABLE 2
PRELIMINARY BOND ISSUE ESTIMATE
FOR
WHITE RIVER HYDROELECTRIC PROJECT
LOCK AND DAM 1
($ X 1000)
Construction Cost 21,857
Bonu Issuance Cost 914
Debt Service Reserve 3 , 156
Net Capitalized Interest l/ 3 , 566
Estimated Total Bond Issue 29,493
l� This amount plus the net interest earnings on the bond
issue will provide for all debt service payments prior
to commercial operation plus one year ' s interest only
payments to allow for delay.
TABLE 3
PRELIMINARY PROJECTION
OF AVAILABLE FUNDS FOR
PROJECT DEVELOPMENT DURING
SHORT TERM BOND PERIOD
WHITE RIVER HYDROELECTRIC PROJECT
LOCK AND DAM 1
($ X 1000)
APPLICATION OF FUNDS
1) Estimated Total Bond Issue: $29,493
2) Less issuance cost: 914
3 ) Less deposit to construction fund: 24, 950
4) Less deposit to debt service reserve fund: 3, 156
Beginning Working Funds $ 473
Interest Earnings
Interest Earnings on Construction Fund $ 5, 8771/
Interest Earnings on Debt Service 1/
Reserve Fund 744
Short Term Earnings on Working Capital 86
Total Interest Earnings $ 6, 707
Bond Issuance and Interest Costs
Interest Cost on Bonds $ 4, 636 3/
Bond Issue Costs 914
Total Bond Issuance and Interest Costs $ 5, 550
Available Funds for City' s Project Uses:
Total Interest Earnings $ 6, 707
Less Total Bond Issuance and Interest Costs 5, 550
Available for Use $ 1, 157
l/ Assumed 9 .75% interest rate 11/1/85 to 4/1/88 .
Assumed "overnight" rate of 5% .
Assumed 6.5% interest rate paid on short term bonds .
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Figure 1
ORGANIZATIONAL STRUCTURE FOR DEVELOPEMENT
a THROUGH FINANCING
h; OF WHITE RIVER LOCK AND DAM 1
4
BATESVILLE
CITY COUNCIL
t CITY OF BATESVILLE
---------�
REPRESENTATIVE I
I
Halliwell Under -
",- "` Associates RMI writers
Garver dt Bond
Garver Counsel
FI RC License Financial A
Icomomic
Application Feasibilit
�t
TechnicalConsn tants
Fi
le�ort for
Feasibility nancia
Design Power Market
Iagineering Analysis
Adasagement of
oat Istimating Technical Input
to Financing
RESOURCE •
MANAGEMENT
INTERNATIONAL
INC.
RIVER FRONT PLACE • SUITE 710
RTH LITTLE ROCK, ARKANSAS 72114
(501) 372-1773
May 2 , 1986
The Honorable James Shirrell
Mayor, City of Batesville
170 South Fourth Street
Batesville, AR 72501
Subject: Feasibility Assessment for Lock and Dam No. 1
Hydroelectric Project
Dear Mayor Sherrill:
Resource Management International (RMI ) entered into a
contract with the City of Batesville for assessment of the
feasibility of the Lock and Dam No. 1 Hydroelectric Project in
July 1985 . Under the terms of that agreement, in the event
RMI determined the Project to be feasible and the City elected
not to proceed with the Project, the City was obligated to
compensate RMI in the amount of $15, 000 .
RMI conducted the feasibility assessment and found the
Project to be feasible. The City Council elected not to proceed
with the Project in October 1985 . After the City Council decision,
the City entered into an arrangement with Independence County
to participate in the development of the Project if financing
was obtained. As part of this agreement, the County agreed
to assume the City' s responsibilities to compensate RMI for
work performed with regard to Lock and Dam No. 1 . The County has
completed financing arrangements for Hydroelectric Projects at
Lock and Dam Nos. 1, 2 and 3. Through this financing, the County
has compensated RMI for its services, including those performed
with respect to Lock and Dam No. 1. The City has no further
obligation to RMI under our agreement. We look forward to the
opportunity to continue working with the City as a joint partici-
pant in the White River Hydroelectric Projects.
Sincerely,
Henry C. Koner
Vice President
HCK/kg
cc: Lloyd Harvego
Ronald 0. Nichols