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7.1.B. - Page 3 <br /> Bond Buyer 25 -Bond Revenue Index <br /> 5.20 <br /> 5.00% - <br /> 4.50. <br /> 4.40 <br /> 4.20% - - <br /> 4.00` <br /> 3.80 • -- • <br /> 7117/14 8/11/14 9/17,1+ 1G/11/14 11117/14 12/U/11 <br /> Future Capital Needs <br /> The water utility's capital spending needs are sufficiently modest at present such that <br /> Public Works believes that no additional debt is necessary to fund these expenditures. <br /> Consequently, there is no new -money component to the refunding plan. Should longer <br /> term capital requirements exceed the enterprise's ability to fund capital improvements <br /> on a pay -as- you -go basis, projected debt service coverage is sufficiently high that the <br /> enterprise should be strong enough to sell additional debt at that time. Depending on <br /> interest rates at the time bonds are sold, every $1 million of required project funding will <br /> add approximately $75,000 of annual debt service expense. Refunding of the 2007 <br /> bonds will be evaluated periodically, and if economical, could be combined with a future <br /> new -money funding component to address future capital needs. While the 2007 Bonds <br /> could be refunded prior to their first optional call date of February 1, 2017, the refunding <br /> is likely to be most cost effective on or after that date. <br /> Council Finance Committee Approval <br /> The potential refunding was discussed with the Council Finance Committee (Council <br /> Members Ian Bain and John Seybert) at their January 23, 2015 meeting. The <br /> Committee approved staff's recommendation to explore refunding these bonds and to <br /> engage the public finance professionals recommended herein to assist with the <br /> requisite analysis. <br /> Tonight's Actions <br /> The resolution before the Council authorizes staff to enter into professional services <br /> agreements with William Euphrat Municipal Finance, Inc. as the City's municipal <br /> advisor, Jones Hall as bond counsel, and Quint & Thimmig as disclosure counsel. <br /> Future Steps <br /> Staff will return to the City Council at a later date for approval of basic legal documents <br /> and the distribution of an official statement. The bonds will be sold subsequent to such <br /> approval. Approval of bond documents by the Council is anticipated to be scheduled for <br /> April 13 followed by the bond sale on April 30, and bond closing on May 19. <br /> Page 3 of 4 <br />