HomeMy WebLinkAbout2007-01 AFN Debt Service
RESOLUTION NO. 2007- 0 \
A RESOLUTION ESTABLISHING THE METHODOLOGY TO PAY ANNUAL
DEBT SERVICE FOR THE ASHLAND FIBER NETWORK FULL FAITH AND
CREDIT BONDS, SERIES 2004
Recitals:
A. The City of Ashland has issued $15.5 million in revenue bonds for the construction and
operation of the Ashland Fiber Network (AFN) from 1999 to 2003, and
B. The revenue bonds are backed by the full faith and credit of the City, pledging its
financial resources to assure debt service payments will be made in a timely fashion,
and
C. AFN construction, assets and operations developed out of the Electric Fund and all
previous financing has identified the Electric Fund and electric rates as the resources to
assure debt service payments, and
D. AFN operations, debt service and other activities have been accounted for in the City
budget within the enterprise fund known as the Telecommunications Fund, and
E. The above mentioned debt was moved to the Debt Service Fund in the FY 2006-2007
budget process in recognition of the general obligation nature of the debt, and
F. Current operations of AFN have not generated enough revenue to provide adequate
cash balances to meet the total annual debt service requirements, and
G. Additional cash is needed from other funds to meet the scheduled total annual debt
service requirements of approximately $1,056,000 in FY 2007-2008, $1,298,303 in FY
2008-2009 and approximately $1.43 million thereafter until FY 2024-2025.
THE CITY OF ASHLAND RESOLVES AS FOllOWS:
SECTION 1. The Finance Director is hereby authorized to include in the annual budget the
requirement of the Telecommunications Fund to contribute toward the annual debt service
unrestricted monies held by the fund beyond those needed for operations known as an
ending fund balance. Any other amounts needed to be generated to pay the annual debt
service will be allocated on an equitable basis to other major funds including, but not limited
to, the General, Water, Wastewater and Electric funds as reviewed and approved through
the budget process.
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SECTION 2. Council establishes an ending fund balance policy for the
Telecommunications Fund of 20% of annual operational revenues.
SECTION 3. Any shortfall in paying the budgeted amount to come from the
Telecommunications Fund will be provided through an operational transfer from the Electric
Fund.
SECTION 4. Anticipated subsidy amounts and transfers will be budgeted as is necessary
for compliance with Oregon Budget Law.
SECTION 5. This resolution takes effect upon signing by the Mayor.
This resolution was read by title only in accordance with Ashland ~iciPal Code
92.04.090 and duly PASSED and ADOPTED this / ~ day of aAVdh7
2007.
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'Barbara Christensen, City Recorder
SIGNED and APPROVED this
17 dayof Ja;w~ ,2007:
Reviewed as to form:
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