2021-345-Resolution No. 2021-061 Recorded 8/26/2021Recorded in Deschutes County CJ2021-345
Steve Dennison, County Clerk
Commissioners' Journal 08/26/2021 1 :47:51 PM
REVIEWED
2021-345
LEGAL COUNSEL
I
For Recording Stamp Only
BEFORE THE BOARD OF COUNTY COMMISSIONERS OF DESCHUTES COUNTY, OREGON
A Resolution Authorizing the Cash
Redemption of the County's Full Faith * RESOLUTION NO. 2021-061
and Credit Obligations Related to La Pine
Sewer District
WHEREAS, the County previously refinanced the construction of capital projects,
including sewer system improvements for the La Pine Sewer District (the "La Pine Sewer
Projects") through the County's Full Faith and Credit Obligations, Series 2012 (the "2012
Obligations"); and
WHEREAS, although the County is obligated to pay the debt service on the portion of
the 2012 Obligations allocable to the La Pine Sewer Projects, the County has entered into a loan
with the La Pine Sewer District, which was assumed by the City of La Pine (the "La Pine
Loan"), for the payment of the debt service through sewer system development charges (SDCs);
and
WHEREAS, growth in the City of La Pine has caused sewer SDCs to increase
significantly and the loan is fully funded; and
WHEREAS, the La Pine Sewer Projects are operated by the City of La Pine, and not the
County, and it is possible that the City of La Pine may use the La Pine Sewer Projects in the
future in a way that would result in "private business use" as defined in Section 141(b)(6) of the
Internal Revenue Code of 1986, as amended (the "Code"), such as a sale, lease or private
management of the La Pine Sewer Projects, and that such use could impact the exclusion from
gross income of the 2012 Obligations or any debt issued to refinance the 2012 Obligations; and
WHEREAS, the County wishes to use sewer SDCs collected for repayment of the La
Pine Loan to redeem that portion of the 2012 Obligations allocable to the La Pine Sewer Projects
to satisfy an "anticipatory remedial action" described in Section 1.141-12(d)(3) of the Treasury
Regulations so that future uses of the La Pine Sewer Projects will not impact the exclusion from
gross income of any debt issued to refinance the 2012 Obligations.
Page 1 — Resolution No. 2021-061
BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF
DESCHUTES COUNTY, OREGON, as follows:
Section 1.Transfer of Funds.
The County hereby authorizes the transfer of the SDCs held and collected for the
repayment of the La Pine Loan to U.S. Bank National Association, as escrow agent, for the
redemption of the 2012 Obligations allocable to the La Pine Sewer Projects.
Section 2. Anticipatory Remedial Action.
The County hereby declares its intention to redeem that portion of the 2012 Obligations
allocable to the La Pine Sewer Projects. This action is taken in compliance with Section 1.141-
12(d)(3) of the Treasury Regulations which requires that the County declare its official intent to
take an anticipatory remedial action prior to the redemption of the affected debt.
Section 3. Effective Date.
This Resolution shall take effect immediately upon its adoption.DATED this day
of , 2021.
BOARD OF COUNTY COMMISSIONERS
OF DESCHUTES COUNTY, OREGON
ANTHONY DEBONE, CHAIR
PHIL CHA G, VICE CHAIR
PATTI ADAIR, COMMISSIONER
ATTEST:
e /lam
Recording Secretary
Page 2 — Resolution No. 2021-061
�U� ES CO
COMMISSIONERSBOARD OF
MEETING DATE: August 25, 2021
SUBJECT: Consideration of a Resolution Authorizing the Cash Redemption of the County's
Full Faith and Credit Obligations Related to La Pine Sewer District
RECOMMENDED MOTION:
move to approve Resolution 2021-061 authorizing the cash redemption of the County's
Full Faith and Credit Obligations related to La Pine Sewer District.
BACKGROUND AND POLICY IMPLICATIONS:
In 2004, the Board of County Commissioners (Board) entered into an intergovernmental
agreement with the La Pine Special Sewer District (District), later assumed by City of La Pine
through annexation in 2012, to accommodate the extension of sewer services to the entire
Newberry Neighborhood. The County aided the District in constructing the increased
sewer capacity through the transfer of federal grant funds and a County loan in the
amount of $1,130,350.
Funds to make the improvements, and as the basis for the loan, were a component of a
larger 2003 County debt obligation (Series 2003) that was refinanced in 2012 (Series 2012).
The Series 2012 obligations are callable (able to be refinanced or refunded) on December 1,
2021, The Board approved resolution 2021-056 on July 14, 2021 authorizing the
refinancing of Series 2012 obligations. The balance owing on the bonds related to the
sewer improvement project at the time of the call is approximately $521,588.
The loan and bond payments have been funded by sewer SDCs. Due to recent and
expected growth in the Newberry Neighborhood, County staff expects to collect enough
SDCs this year to fully fund both the loan and outstanding debt balance years ahead of
schedule.
Approval of this resolution will allow the County to fund the portion of the Series 2012 debt
refinancing, related to the sewer improvement project, with cash collected from sewer
SDCs at which time the loan will be fully satisfied.
BUDGET IMPACTS:
The budget impact of the refunding/refinancing of the Series 2012 bonds, and the use of
cash to fund the sewer improvement project, were not known at the time of the adoption
of the FY 2021-22 budget. If the resolution is approved, staff will return to the Board with a
request to adjust budget appropriations accordingly.
ATTENDANCE:
Greg Munn, County Treasurer and Chief Financial Officer
Sherri Pinner, Sr. Management Analyst, Community Development