AgdaPkt 2018-01-22 Joint SA PFA - Laserfiche WebLink

Browse Search

Staff retained the services of the City's long-time municipal advisor, William Euphrat Municipal Finance ("WEMF") to evaluate the financial feasibility of the City's participation in the proposed 2018 Bond issue. WEMF prepared sewer enterprise cash flow projections using City sewer enterprise budget and operating data provided by City staff, and projected JPA capital obligations provided by the Authority. WEMF's analysis concluded that the City would be able to finance its share of the 2018 Bonds and future Authority bond sales with annual rate increases of approximately 7.75% during the period 2020 — 2023. Additionally, a strategy of four Authority bond sales every two years from 2018 through 2024 would be more cost effective than issuing bonds annually to meet Authority CIP cash flow needs. The primary assumptions to reach this conclusion include: assuming no low cost SRF Loans are secured by the Authority in the future; the City finances all of its future Authority CIP obligations via market -rate Authority bond sales at 3.5% for the 2018 Bonds and 5% for future bonds; and the City finances all of its own sewer enterprise CIP needs using cash resources. Actual future sewer rate increases will depend in large part on future bond interest rates and the actual cost of the Authority's CIP, and will be evaluated periodically. The next sewer rate setting cycle will be for Fiscal Year 2019-20. Bond Documents As the issuer of the 2018 Bonds, the Authority will approve the primary bond documents, including the primary disclosure document, the preliminary official statement. The only documents to be approved by the City are Appendix A to the Official Statement (Attachment Two), which contains financial and operating information relating to the City, and the Continuing Disclosure Certificate (Attachment Three), which states what operating and financial information the City will disclose to investors in future years and by what dates this information will be made available. The City already has procedures in place for collecting and disseminating this information. Responsibilities of Elected Officials Under Federal Securities Laws The entire preliminary official statement, including Appendixes, must include all facts that would be material to an investor in the 2018 Bonds. Material information is information that would have a substantial likelihood of actual significance in the deliberations of a reasonable investor in deciding whether to buy or sell the 2018 Bonds. Authority Commission members have a responsibility to review the entire preliminary official statement. The City Council is responsible for the accuracy of Appendix A to the preliminary official statement. Appendix A to the preliminary official statement has been reviewed and approved for transmittal to the City Council by City staff and its financing team.