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8.A. - Page 4 <br />Next Steps <br />A sale of bonds is scheduled for early February 2018, and the bond closing is <br />scheduled for February 22. No further action on the part of the City Council is required. <br />ALTERNATIVES <br />The Council may reject staff's recommendation to approve the Authority's sale of the <br />2018 Bonds, in which case the City would be dropped from the Authority's 2018 bond <br />issue. The City would then have to secure alternative funding for its CIP obligation to <br />the Authority. <br />FISCAL IMPACT <br />The City's share of the 2018 Bonds is approximately $86.9 million; the City's share of <br />financing cost is estimated at $809,394, which is just under 1% of the amount being <br />borrowed. Debt service payments are expected to be approximately $4.47 million <br />annually. This expense has already been factored into sewer enterprise cash flow <br />projections and can be paid by the enterprise without adversely affecting the financial <br />condition of the enterprise. <br />The City has raised sewer rates annually for a number of years in anticipation of <br />providing sufficient resources to meet its own sewer enterprise operating and capital <br />needs and its expected operating and capital obligations to the Authority. Rates have <br />been approved through 2019, and additional annual rate increases are expected to be <br />determined through Fiscal Year 2023 to meet the operating and capital requirements of <br />the City's sewer enterprise. <br />ENVIRONMENTAL REVIEW <br />This activity is not a project under CEQA as defined in CEQA Guidelines, section <br />15378, because it has no potential for resulting in either a direct or reasonably <br />foreseeable indirect physical change in the environment. <br />KIMBRA MCCARTHY <br />ASSISTANT CITY MANAGER -ADMINISTRATIVE SERVICES <br />MELISSA STEVENSON DIAZ <br />CITY MANAGER <br />