MINUTES OF THE REGULAR MEETING
November 9, 2012
Table of Contents
Subject Page No. Exhibit
1. Adoption of the November 9, 2012 Proposed Meeting Agenda 3
2. Approval of the Minutes of the Regular Meeting held on July 26, 2011 4
4. Next Meeting Next Meeting 7
Minutes of the regular meeting of the New York Power Authority’s Finance Committee held via video conference at the Authority’s offices at 123 Main Street, White Plains, New York at approximately 11:00 a.m.
Members of the Finance Committee present were:
John R. Koelmel, Chairperson
Trustee Jonathan Foster
Trustee Joanne M. Mahoney (via telephone conference)
Also in attendance were:
Terrance P. Flynn Trustee
R. Wayne LeChase Trustee
Judith McCarthy Executive Vice President and General Counsel
Donald Russak Executive Vice President and Chief Financial Officer
Jill Anderson Chief of Staff and Director – Energy Policy
Joan Tursi Senior Vice President – Corporate Support Services
Paul Belnick Vice President – Energy Efficiency
Brian McElroy Treasurer
Karen Delince Corporate Secretary
Timothy Sheehan Special Counsel
Dennis Eccleston Chief Information Officer
Helen Eisenfeld Director – Financial Controls
Connie Cullen Deputy Director – Media Relations
Eric Alemany Project Manager – Energy Efficiency
Christine Keta Manager – Program Operations, Energy Efficiency
Gary Schmid Manager – Network Services, Infrastructure
Lorna Johnson Assistant Corporate Secretary
Ruth Colon Senior Business Integration Project Manager
Brian Wilkie Rotational Business Integration Project Manager
John V. Connorton, Jr. Hawkins Delafield & Wood LLP
Sheri L. Mooney Senior Vice President, Senior Programs Manager - First Niagara
Chairman John Koelmel presided over the meeting. Corporate Secretary Delince kept the Minutes.
Chairman John Koelmel welcomed committee members, and also Trustees Flynn and LeChase and Authority senior staff to the meeting. He said the meeting has been duly noticed as required by the Open Meetings Law and called the meeting to order pursuant to Section B(4) of the Finance Committee Charter.
1. Adoption of the Proposed Meeting Agenda
By motion made and seconded the agenda for the meeting was adopted.
2. Approval of the Minutes
The Minutes of the Committee’s Regular Meeting of July 26, 2011, were approved.
3. Issuance of the 2012 Subordinated Notes
Mr. Donald Russak submitted the following report:
“The Trustees will be requested at their November 9, 2012 special meeting to approve the issuance of the 2012 Subordinated Notes (‘Notes’) to be funded, as described below, by an adjustment to the payment schedule for the Niagara Relicensing Settlement Agreement State Parks Greenway Fund pursuant to the terms of the Relicensing Settlement Agreement entered into by the Authority and the New York State Office of Parks, Recreation and Historic Preservation (‘OPRHP’) at the request of OPRHP. The Finance Committee is requested to recommend to the Trustees adoption of the related resolutions.
“On July 18, 2005, the Authority executed the Relicensing Settlement Agreement Addressing New License Terms and Conditions (‘Settlement Agreement’) entered into by several parties to the relicensing of the Niagara Project, including OPRHP. Section 3.1 of Appendix E of the Settlement Agreement provides for the establishment of a Relicensing Settlement Agreement State Parks Greenway Fund, which is to be funded by the Authority in the amount of $3 million per year for the term of the 50-year License. The State Parks Greenway Fund was established to support the construction and/or rehabilitation of parks, recreation and related facilities in and around the Niagara River Greenway. A State Parks Standing Committee was created to administer and oversee projects financed by the State Parks Greenway Fund.
“The Settlement Agreement further provides that the Authority may elect to adjust the schedule of payments after consultation with OPRHP. OPRHP, in order to accelerate the funding of certain projects it wants to complete in the region, has requested of the Authority that it elect to make an adjustment to the schedule of payments as allowed under the terms of the Settlement Agreement. Specifically, OPRHP has identified approximately $25 million of qualifying improvements it wishes to make in the next few years.
“OPRHP requested that the Authority consider issuing Notes to a third-party investor for which the proceeds may be deposited into the State Parks Greenway Fund and a portion of the Authority’s annual payments, which would otherwise be deposited into the State Parks Greenway Fund, would be used to repay the Notes. The New York State Environmental Facilities Corporation (‘EFC’) was identified as a potential third-party participant in this process. Pursuant to a Note Purchase Agreement between EFC and the Authority (a draft of which is attached as Exhibit ‘3-A’), EFC has advised that it would purchase the Notes and expects to hold it in its portfolio as an authorized investment. The Authority would issue the Notes pursuant to a Resolution Authorizing Subordinated Notes, Series 2012 (Federally Taxable), attached hereto as Exhibit ‘3-B.’ Approval of certain provisions of such resolution by the State Comptroller under Section 1010-a of the NYPA Act will be sought.
“The Authority’s financial advisor, Public Financial Management, will advise Authority staff and verify the reasonableness of the interest rates employed in the transaction. Upon the execution and closing of such Notes, the net proceeds received by the Authority shall immediately be deposited into the State Parks Greenway Fund and made available for qualifying projects as set forth in the Section 3 of Appendix E of the Settlement Agreement. The Authority will continue to make $3 million per year available for the State Parks Greenway Fund for the term of the License with the payment schedule adjusted to reflect the use of a portion of the $3 million provided each year for up to twenty-five years to pay the debt service associated with the Notes. After the payment of the debt service, all the remainder of the annual $3 million amount will be deposited into the State Parks Greenway Fund and made available for qualifying projects.
“The issuance of the 2012 Subordinated Notes would be limited to an amount no greater than $30 million; to a term no greater than twenty-five years; and at an interest rate no greater than 5.5%. The fiscal impact on the Authority is negligible. The transaction is revenue neutral to the Authority and would result in only a nominal increase to the amount of the Authority’s subordinated debt outstanding. The Authority is currently obligated to make the $3 million per year payment under the Relicensing Settlement Agreement. A portion of these payments will be used to retire the Notes.
“It is requested that the Finance Committee recommend that the Authority’s Trustees adopt the necessary resolutions authorizing the issuance of the 2012 Subordinated Notes to be funded by such adjusted payment schedule.”
RESOLVED, That the Finance Committee recommends that the Authority’s Trustees adopt the necessary resolutions authorizing the issuance of Subordinated Notes, Series 2012 (Federally Taxable), substantially in the form as attached hereto as Exhibit “3-B,” as discussed in the foregoing report of the Executive Vice President and Chief Financial Officer.
4. Next Meeting
The next regular meeting of the Finance Committee is to be determined.
On motion made and seconded, the meeting was adjourned by the Chairman at approximately 11:10 a.m.