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6.C. - Page 42 of 57
<br />NHA '
<br />June 26, 2020
<br />Mr. George J. Rodericks, City Manager
<br />Town of Atherton
<br />150 Watkins Avenue
<br />Atherton, CA 94027
<br />RE. TownofAtherton— SBWMAIPA Withdrawal Analysis
<br />Dear Mr. Rodericks:
<br />NHA Advisors and I are pleased to provide this letter report analyzing the Bond Allocation and Defeasance
<br />Analysis prepared by KNN Public Finance ("KNN") For the IPA dated December 6, 2019, the April 27, 2020
<br />response to the Town of Atherton's (the "Town") Notice of Withdrawal from the South Bayside Waste
<br />Management Authority (JPA) and the March 18, 2420 letter from the Town to the JPA. Although we
<br />understand the KNN methodology used, we still believe that the analysis provided by the SBWMA's Financial
<br />advisor does not consider all factors that should be considered when evaluating the financial impacts of the
<br />Town withdrawing from the JPA. As stated, the JPA agreement gives very little direction as to how any costs
<br />incurred by a withdrawing member shall be calculated. To that and. the Town has asked us to take another
<br />look at its reasonable financial obligations in the event of a withdrawal.
<br />The Table below summarizes five different approaches that should be considered when determining the
<br />amount required to defense the Town's liability related to the outstanding bonds, all of which we believe
<br />have merit under the broad withdrawal terms. A description of each is provided in the paragraphs following
<br />the table.
<br />Town of Atherton Withdrawal Scenarios
<br />Scenario
<br />Effective Share of 2019 Bonds
<br />1
<br />2
<br />3
<br />4
<br />5
<br />3.25%
<br />2.15%
<br />2.1340
<br />1.17%
<br />0.58%
<br />A Rate
<br />0.570%
<br />0.557%
<br />4.597%
<br />0.597%
<br />0.597%
<br />Escrow Requirement to Defease
<br />2,158,883
<br />1,415,133
<br />1,466,259
<br />803,623
<br />401,812
<br />Estimated Fees
<br />190,000
<br />100,000
<br />100,000
<br />100,000
<br />100,000
<br />Total Cash Required
<br />2,258,883
<br />1,515,133
<br />1,566,259
<br />903,623
<br />501,812
<br />Amount Overpaid (2009-2018)
<br />581,386
<br />581,386
<br />581,386
<br />581,386
<br />581,386
<br />Net Amount Owed
<br />1,677,498
<br />933,748
<br />984,874
<br />322,238
<br />•79,573
<br />Difference from Scenario 1
<br />-
<br />(743,750)
<br />(692,624)
<br />(1,355,260)
<br />(1,757,471)
<br />3.25%
<br />3.25% in first
<br />No benefit
<br />Scenario 2
<br />Scenario 2,
<br />annual
<br />year, 0.25%
<br />from 2019
<br />and share
<br />no Multi -
<br />share
<br />decline every
<br />Bonds and
<br />related to
<br />Family or
<br />3 years until
<br />nets out New
<br />2019A Bonds
<br />Commercial.
<br />1.5% share
<br />Money
<br />only 2019A
<br />Bonds
<br />73
<br />
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