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A resolution expressing the Metropolitan Government’s intent to issue revenue bonds, notes, and/or other obligations in an aggregate principal amount not to exceed $140,000,000, as requested by the Electric Power Board.
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WHEREAS, the Electric Power Board of The Metropolitan Government of Nashville and Davidson County (the "Board") has control and jurisdiction over the electric light and power plant and distribution system (hereinafter sometimes referred to as the "System") of The Metropolitan Government of Nashville and Davidson County (the "Metropolitan Government"); and
WHEREAS, a severe ice storm occurred on January 25, 2026 (the "Storm"), causing extensive and significant damage to the System; and
WHEREAS, the Board, by resolution duly adopted at its meeting held on February 25, 2026, is expected to (i) determine that it is in the best interest of the System that the Metropolitan Government issue revenue bonds, notes, and/or other obligations in an amount not to exceed $140,000,000, the proceeds thereof to be used for the payment of all or a portion of the costs incurred to repair such damage to the System, and (ii) request that the Metropolitan Council adopt this resolution to express the official intent of the Metropolitan Government to issue such revenue bonds, notes, and/or other obligations.
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY:
Section 1: The Metropolitan Council hereby expresses the present intention of the Metropolitan Government, pursuant to the provisions of Section 103 and Sections 141 through 150 of the Internal Revenue Code of 1986, as amended (the "Code"), and the regulations promulgated thereunder, including without limitation §1.150-2 of said regulations, (i) to finance all or a portion of the costs of designing, developing, acquiring, constructing, installing and equipping (including financing costs thereof) repairs to the System necessitated by the Storm (collectively, the "Repairs") through the issuance by the Metropolitan Government of one or more series of tax-exempt revenue bonds, notes and/or other obligations (collectively, the "Obligations"), expected to aggregate not more than $140,000,000 in principal amount, and (ii) to allocate a portion of the proceeds from the sale of the Obligations to reimburse the Board for certain of the costs related to the Repairs incurred by the Board prior to the issuance of the Obligations.
Section 2. The Metropolitan Council hereby declares the intention of the Metropolitan Government to allocate a portion of the proceeds of the Obligations to reimburse the Board for expenditures for the Repairs incurred after the date that is no more than sixty (60) days before the date of the adoption of this Resolution, but prior to the issuance of the Obligations; and
Section 3. This resolution is being adopted pursuant to, and is intended to constitute the Metropolitan Government’s "official intent" within the meaning of, § 1.150-2(d) and § 1.150-2(e) of the aforesaid regulations promulgated under the Code; and
Section 4. This resolution shall take effect from and after its adoption, the welfare of the Metropolitan Government of Nashville and Davidson County requiring it.
Agenda Analysis
Analysis
This resolution expresses the future intent of the Metropolitan Government to issue municipal, tax-exempt revenue bonds, notes, and/or other obligations in an amount not to exceed $140,000,000 (the “Bonds”), as requested by the Electric Power Board. Although the Metropolitan Charter grants Nashville Electric Service (“NES”) complete authority over the operation of the electric system, NES does not have independent authority to issue bonds. Instead, the Electric Power Board will adopt a resolution confirming that electric system revenues will be sufficient to pay all outstanding and proposed bonds, after which the Metro Council must authorize the issuance. The bonds will be repaid solely from NES revenues and will not constitute an obligation of the general government or be backed by Metro’s taxing authority.
At its February 25, 2026, meeting, the Electric Power Board adopted a resolution that determined that it is in the best interest of NES that Metro issue the Bonds, of which the proceeds would repair damage related to Winter Storm Fern. The Bonds would finance some or all of the costs of designing, developing, acquiring, constructing, installing, and equipping NES repairs caused by the winter storm.
This resolution does not authorize the issuance of the Bonds. Rather, its purpose is to satisfy federal requirements, allowing NES to reimburse itself from the Bonds proceeds for eligible expenditures paid before the Bonds authorization and issuance. Federal law requires that a declaration of official intent be adopted within 60 days of the original expenditure and include a description of the project to be debt-financed and the maximum principal amount of debt to be issued.