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City of Redwood City
<br />Notes to the Basic Financial Statements
<br />For the fiscal year ended June 30, 2017
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<br />NOTE 5 – INVESTMENT IN SILICON VALLEY CLEAN WATER AUTHORITY (CONTINUED)
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<br />During the fiscal year ended June 30, 2017, the City contributed $10,019,052 toward the cost of operating
<br />and maintaining the facility and paid debt principal and interest of $5,701,084 that included the state
<br />revolving fund loan and the financing agreements to finance the construction and rehabilitation of the
<br />SVCW’s wastewater system.
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<br />At June 30, 2017, the total obligation for the 2009, 2014 and 2015 revenue bonds is $130,890,000. The
<br />City’s direct obligation is $68,488,754. For the fiscal year 2017‐18, the City is obligated to pay debt
<br />principal and interest payments totaling $5,225,548. The financing agreements for these bonds are
<br />secured by a pledge of the City’s Sewer Enterprise Fund Net Revenue as defined under the financing
<br />agreements. For the fiscal year 2016‐17, gross Sewer Fund revenues, including operating revenues and
<br />non‐operating interest earnings, amounted to $37,294,014. The operating and maintenance costs,
<br />including operating expenses, transfers out for overhead and administrative cost but excluding interest,
<br />and depreciation or amortization amounted to $26,523,079. Net revenues available for debt services
<br />amounted to $10,770,935, which represented coverage of 2.03 times over the total of debt services of
<br />$5,302,806.
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<br />In October 2015, SVCW issued the 2015 wastewater revenue bonds in the amount of $70.2 million.
<br />Pursuant to the financing agreement, the City’s allocable share of the 2015 bonds is approximately
<br />51.3%. Of the total bond proceeds, $8.5 million will be used to refund, on an advance basis, certain
<br />maturities of the 2008 Bonds and approximately $49.8 million will be used to refund, on an advance
<br />crossover basis, certain maturities of the 2009 Bonds.
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<br />Proceeds associated with the Refunded 2008 Bonds have been deposited into the “2008 Escrow Fund”
<br />for principal and interest payments through August 1, 2017, when the remaining proceeds will be applied
<br />to pay the redemption price of the outstanding Refunded 2008 Bonds in full. As result of the deposit and
<br />the application of funds under the escrow agreement relating to the Refunded 2008 Bonds, the Refunded
<br />2008 bonds are considered fully defeased upon the issuance of the 2015 bonds and are no longer secured
<br />by revenues that were originally pledged for the payment of the 2008 Bonds.
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<br />Proceeds associated with the Refunded 2009 Bonds have been deposited into the “2009 Escrow Fund”
<br />until the crossover date of August 1, 2019, when all of the outstanding Refunded 2009 Bonds will be
<br />redeemed, without premium. Prior to the crossover date, the Refunded 2009 Bonds will continue to be
<br />secured by and payable from the revenues that were originally pledged for the payment of the 2009
<br />Bonds.
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<br />Audited financial statements are available from Silicon Valley Clean Water Authority, 1400 Radio Road,
<br />Redwood City, CA 94065.
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<br />6.1.E. - Page 80
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