Memorandum

City of Lawrence

City Manager’s Office

TO:	David L. Corliss, City Manager
FROM:	Diane Stoddard, Assistant City Manager
CC:	Cynthia Wagner, Assistant City Manager
Date:	November 30, 2010
RE:	Bowersock Mills and Power Company Industrial Revenue Bond Issuance

Please place the following item on the City Commission agenda for December 7, 2010:

Adopt on first and second reading, Ordinance No. 8599, authorizing the issuance of $23,720,000 in Industrial Revenue Bonds for Bowersock Mills and Power Company for the purpose of financing a portion of the costs of acquiring, constructing and equipping a new hydroelectric powerhouse and all related facilities and equipment on the north bank of the Kansas River at the Bowersock Dam.

Background: 

As the City Commission is aware, the Bowersock Mills and Power Company is planning a new powerhouse facility on the north side of the Kansas River at the location of the dam.  Bowersock has held a number of public meetings concerning this project over the past year or so.  The City of Lawrence has taken several formal steps to assist Bowersock with accessing special bond authority to assist with the financing of this project to date.  However, it is key to point out that with Industrial Revenue Bond financing, the City only serves as a conduit for the financing and assumes no obligation whatsoever regarding the repayment of the bonds for the project.  This type of financing, however, will assist the project with more favorable financing terms than conventional financing. 

The City Commission held a public hearing regarding this issuance at its November 23, 2010 meeting. 

Next Steps:

The City Commission is requested to declare an emergency and adopt on first and second reading an ordinance authorizing the issuance of the bonds.  The bond issuance is then anticipated to be closed prior to December 31, 2010. 

Action Requested:

Adopt on first and second reading, Ordinance No. 8599, authorizing the issuance of industrial revenue bonds for the Bowersock project.