HomeMy WebLinkAboutC8. Resolution 4638 INTERCAP Loan
Commission Memorandum
REPORT TO: Honorable Mayor and Commission Members
FROM: Natalie Meyer, Sustainability Program Manager
Anna Rosenberry, Administrative Services Director
SUBJECT: Resolution No. 4638 – Resolution Authorizing Participation in the Board
of Investments of the State of Montana Annual Adjustable Rate Tender
Option Municipal Finance Consolidation Act Bonds (INTERCAP
REVOLVING PROGRAM), Approving the Form and Terms of the Loan
Agreement and Authorizing the Execution and Delivery of Documents
Related Thereto.
MEETING DATE: August 24, 2015
AGENDA ITEM TYPE: Consent
RECOMMENDATION: Adopt Resolution No. 4638 - Authorizing the loan necessary to
complete the LED street lighting retrofit project.
BACKGROUND: The Montana Board of Investments - INTERCAP Program has approved the
City’s request for a loan of up to $222,057, to replace city-owned and metered street lights with
LED fixtures. This resolution is required by the Board in order to secure the loan.
On December 1, 2014, the City Commission approved an Energy Performance Contract with
McKinstry Essention LLC to complete a package of 18 energy-saving projects. Among these, a
LED street lighting retrofit project was approved by the Commission and we were directed to
secure an INTERCAP loan for the project using energy and operational savings to re-pay the
loan.
We submitted a loan application to the Montana Board of Investments requesting as much as
$222,057 for the project. The Board approved the application. Since that time, we have
coordinated with McKinstry to receive bids for the project and a sub-contract has been awarded.
Including the contingency amount, the anticipated amount of the loan will be no larger than
$222,057.
The loan is to be repaid with Street Maintenance District Assessments, over a 15 year period.
Interest rates on INTERCAP loans are variable, being established each February.
FISCAL EFFECTS: We have planned for repayment of this loan from the Street Maintenance
District based on the guaranteed energy and operational savings that will result from this project.
Under current INTERCAP rates, a loan of $222,057 will require annual debt payments of
$16,281 (15 year term, 1.25%). However, this rate is variable and changes each February. Since
1987, INTERCAP has had rates as high as 7.5% and as low as 1.25%, with an average interest
rate of 4.184% (would require an annual payment of $20,080.) The program’s rate history is
attached to this memo.
Report compiled on: August 12, 2015
Attachments: Resolution No. 4638
INTERCAP Rate History Sheet
Montana Board of Investments
INTERCAP LOAN RATE* HISTORY
Year Loan Rate Year Loan Rate
1987 5.625% 2002 3.150%
1988 6.625% 2003 2.850%
1989 7.950% 2004 2.700%
1990 7.500% 2005 3.800%
1991 6.350% 2006 4.750%
1992 4.950% 2007 4.850%
1993 4.350% 2008 4.250%
1994 4.500% 2009 3.250%
1995 6.400% 2010 1.950%
1996 4.850% 2011 1.950%
1997 4.750% 2012 1.250%
1998 4.850% 2013 1.000%
1999 4.300% 2014 1.000%
2000 5.600%
2001 4.750%
Overall Average: 4.184%
Average past 10 years: 2.550%
*variable rate changes every February 16.