item summary Simple Storage Service
ITEM SUMMARY DATE: FEBRUARY 11, 2009 TWDB
FINANCE COMMITTEE
APPLICANT
EVIDENCE OF DEBT
PLEDGE
CONSENT PRESENTED BY: JERRY LAMAN TWRFA
AUDIT COMMITTEE
City of Aledo $675,000 Tax and Waterworks and Sewer System Surplus Revenue Certificates of Obligation, Proposed Series 2009 $2,110,000 Tax and Waterworks and Sewer System Surplus Revenue Certificates of Obligation, Proposed Series 2010 $3,345,000 Tax and Waterworks and Sewer System Surplus Revenue Certificates of Obligation, Proposed Series 2011 $2,570,000 Tax and Waterworks and Sewer System Surplus Revenue Certificates of Obligation, Proposed Series 2012 Ad Valorem Taxes and Surplus Net System Revenues
Taxable Tax-Exempt Approval by Minute Order
AMT (Tax-Exempt) Approval by Resolution
RWAF (Tax-Exempt)
ACTION REQUESTED Approve by resolution a request from the City of Aledo (Parker County) for a loan in the amount of $8,700,000 from the Clean Water State Revolving Fund to finance wastewater system improvements, utilizing the pre-design funding option. PROJECT DESCRIPTION The City of Aledo’s (City) existing wastewater treatment plant (WWTP) is under enforcement for effluent violations, and influent flows to the WWTP are nearing permit capacity. As per Texas Commission of Environmental Quality (TCEQ) requirements, the City must initiate planning to increase plant capacity and remedy the effluent violations. The City proposes to expand the WWTP capacity from 0.35 mgd to 0.6 million-gallon-per-day (mgd) by construction of a new WWTP. The new WWTP will incorporate equipment from the existing WWTP where practical. ENTITY DESCRIPTION The City is located approximately 10 miles west of Fort Worth and about 4 miles southwest of the intersection of Interstate Highway 20 and Interstate Highway 30. The City has an estimated population of 2,550 and provides service to approximately 979 connections. SOURCE OF FUNDS Clean Water State Revolving Fund
AMOUNT $8,700,000
COMMITMENT PERIOD: SERIES 2009--EXPIRES JANUARY 31, 2011 SERIES 2010--EXPIRES JANUARY 31, 2011 SERIES 2011--EXPIRES JANUARY 31, 2012 SERIES 2012--EXPIRES JANUARY 31, 2013
PROGRAM FY ’08 – Tier II
ITEM SUMMARY
PAGE 2
BACKGROUND This is the City’s third request for financial assistance from the Texas Water Development Board (Board). In April 2007, the Board approved a $5,765,000 loan from the Drinking Water State Revolving Fund (DWSRF). Of this amount, the City has closed on $3,355,000. In May 2008, the Board approved a $2,060,000 loan from the Texas Water Development Fund (DFund). Loan proceeds will be used to build a metering station, storage facilities, and transmission lines to participate in the Fort Worth regional water system. The City has open market issues totaling $915,000. The open market issues will be paid off in 2017. FINANCIAL SECTION Key Issues The City is pledging ad valorem taxes and surplus net system revenues to repay the debt service on the proposed loan. The City is requesting a 30-year loan term which is eligible under the Clean Water State Revolving Fund (CWSRF) program. Debt Service Analysis The City completed a rate study in November 2008. The results of the rate study indicate that the City will need to increase system rates each fiscal year beginning February 2009 through February 2012 to pay for the existing debt as well as the proposed CWSRF debt and the DFund loan (which is expected to close in 2009). In December 2008, the City passed an ordinance to increase total system rate revenue by approximately 20%, effective February 1, 2009. The current combined water and wastewater rate is approximately $74. The following table shows estimates of total system rates needed, based on estimated growth rates in customers.
Annual Growth Rate 4% 2% 0%
2009 $74 $74 $74
Table 1. Estimated System Rates Needed 2010 2011 $82 $83 $84
$92 $95 $99
2012 $107 $113 $120
The City also intends to use approximately $175,000 in tax revenue annually to support projected debt service in addition to the rate increases. Assuming the City could access the public market with a BBB rating, the estimated effective yield on the full $8.7 million would be approximately 6.28%. The estimated savings between an estimated CWSRF interest rate of 4.40% and the estimated rate for a market issue are approximately $125,000 a year and $4.29 million in total debt service. Projected Closing Dates The City intends to close the proposed loans from the CWSRF in four series: 1) Series 2009 for $675,000; 2) Series 2010 for $2,110,000; 3) Series 2011 for $3,345,000; and 4) Series 2012 for $2,570,000. In addition, the City anticipates closing the 2008 DFund loan commitment in two series: one for $360,000 in April 2009 and one for $1,700,000 in February 2011. Closing the commitments in different series of bonds will allow the City to implement the necessary rate increases prior to the issuance of the bonds and will limit the Board’s risk exposure.
ITEM SUMMARY
PAGE 3
Since the City is requesting to utilize the financial assistance in four series of bond issuances, a separate commitment date is recommended for each series to ensure that the City utilizes the funds expeditiously. City Ordinance The ordinance approved by the City in 2008 further states, in part, that while the Board is the owner of any outstanding debt of the City, commencing in Fiscal Year 2010, the City shall review its water and sewer rates and based on the most recently adopted budget, determine whether such water and sewer rates are sufficient to produce revenues, after payment of all reasonable operating and maintenance expenses of the water and sewer system equal to at least 1.10 times the principal and interest requirements scheduled to come due in the then fiscal year of the City. The ordinance further states, in part, that if the City’s then current water and sewer rates would not produce revenues sufficient to provide such debt service coverage, the City will, by February 1st, establish and maintain water and sewer rates sufficient to provide such debt service coverage. The loan has been conditioned accordingly. Internal Risk Score Staff assigns an internal risk score of 2C to the proposed commitment. The City has closed on a DWSRF loan and anticipates closing part of the May 2008 DFund loan commitment in April 2009. Periodic rate increases are needed to support these obligations as well as the proposed debt. With the proposed financing, the City will incur an increase in new debt, and accordingly, a higher level of debt on a per capita basis. The City has a greater than average capacity for system and tax rate increases, as evidenced by the high median household income ($67,000 vs. state median average of $46,000). In addition, the City has taken a proactive stance by performing a rate study, and has already passed an ordinance increasing rates to a level that will support current debt and the anticipated debt issuances for 2009. Staff has conditioned the proposed loans to be released in four series of bonds to match the construction schedule for both the water and wastewater system improvements. Staff will review system rates before each closing, and the City will be evaluating system rates each fiscal year and institute necessary rate increases. Internal Risk Score
1
2A
2B
2C X
3
Origination Fee Amount
$158,027
Included in Loan
Yes
Non-Profit, Non-Community
N/A
Disadvantaged
No
Disadvantaged Funds Available
N/A
Insurance
N/A
CREDIT QUALITY
Standard & Poor’s
Non-Rated
Moody’s
Non-Rated
Fitch
Non-Rated
ENGINEERING SECTION Key Issues WWTP Capacity Wastewater flows are reaching the available capacity of the WWTP. The City is under enforcement for effluent violations. TCEQ regulations require that planning to upgrade facilities begin when average flows exceed 75% of the permitted flow rates for three months. When
ITEM SUMMARY
PAGE 4
average flows exceed 90% of the permitted flow rates, the TCEQ requires the City (permit holder) to seek the necessary authorization from TCEQ to commence construction to expand facilities. The City is currently at 87% of capacity. The City expects to be at 90% in the next year or two with the addition of just 75 more people. For these reasons, the planning and construction of additional capacity is now necessary. Population Growth The City is proposing to expand the WWTP capacity to 0.6 mgd from 0.35 mgd. A capacity of 0.6 mgd is expected to serve a population of approximately 5,000 people. When the population reaches 3,750 people, planning for the next capacity expansion must begin. For the past eight years, the population has increased at an average rate of 110 persons per year.
Year 2009 2016 2020
Table 2 City’s Growth Projections and Design Flows Population Flow (mgd) 2550 0.306 3750 0.450 5000 0.600
Capacity (mgd) Exist – 0.350 0.600 0.600
The City is estimating slow growth of about 55 people per year until the new WWTP becomes operational. When additional WWTP capacity is available in four years, the City believes population growth could increase substantially to approximately 350 people per year. The City believes the 0.6 mgd WWTP will reach capacity limits in 11 years or the year 2020. The Board’s Water Resources Planning group’s review of the population projections proposed for the project commented that the City’s projections were reasonable for planning purposes in this area. Alternatives Considered The proposed project is to expand the capacity of the WWTP at the existing site. The expansion will include the construction of the new facilities as well as the tie-in and retrofit of some existing facilites. Prior to submission of the current loan application, the City investigated several alternatives. A summary of the findings follows: Upgrade existing plant – The alternative of upgrading the existing WWTP was not selected because the existing plant suffers from corrosion, rust, walls that bow, and other structural concerns. The existing plant is near the end of its useful life, can not meet existing effluent permit requirements, and will not be able to meet more stringent limits imposed by the new WWTP permit (see below). The existing sludge digestor, sludge dewatering facilities, and office building at this stage of planning are to be utilized in the new WWTP. Phasing the Expansion – Building a small treatment plant at this time could achieve a small capital cost savings, but it would result in the likelihood of having to start construction of the next phase of WWTP expansion within a few years after completion of this expansion. Also, the rate savings of a smaller plant compared to a larger plant would be minimal. For example, at the population growth rate expected by the City, a second phase expansion of an alternative 0.45 mgd facility would need to be completed about the year 2016. Planning and financing of that second phase WWTP expansion would need to begin in the year 2013. Furthermore, construction of a 0.45 mgd WWTP is estimated to cost $5.9 million ($13/gallon) and would serve about 3,750 people. The 0.6 mgd facility, on the other hand, was estimated to cost $6.4
ITEM SUMMARY
PAGE 5
million ($10.50 / gallon). The 0.45 mgd facility has a potential cost savings of approximately $500,000. This equates to a 6% reduction in rates and charges to the customer. However, it is very possible the City would need to seek financing for their next phased expansion in a matter of months after completion of this project. Regional Options – A regional study entitled “Eastern Parker County – Regional Wastewater Facilities Plan” by Alan Plummer Associates (July 31, 2007) was partially funded by the Board to address the needs of the following communities: Weatherford, Aledo, Annetta, Annetta North and South, Hudson Oaks, Weatherford, Willowpark, Tarrant Regional Water District, Parker County Utility District No. 1, and the City of Fort Worth. This study described a conceptual design to build a regional system for wastewater treatment for an area within the Clear Fork Trinity River basin. Aledo was assumed to operate their existing plant, without expansion, until they could connect to the system in Phase 1 of the regional WWTP in approximately 2012. Only the City of Aledo and the City of Fort Worth partnered to further study the possibility of regional cooperation. With only Aledo participating, Fort Worth focused on its more immediate needs in the Marys Creek basin east of Aledo. The plan for a regional solution became focused on Fort Worth’s needs and Aledo’s regional option evolved into pumping to Fort Worth’s Marys Creek facility. The cost estimate for Aledo to pump wastewater to the Marys Creek facilities was $11-13 million, which would be more expensive than the option of Aledo expanding its own plant. Treatment Alternatives – The current plan is to utilize a sequencing batch reactor (SBR) type WWTP. This type WWTP achieves many of the treatment functions in a single basin saving on construction footprint. This type treatment is also very adaptable to the tight effluent limits proposed by the City’s permit (see below). Also, SBR plants are readily expandable as the City grows in the future. As planning proceeds, other treatment alternatives will be considered before final design begins. WWTP Permit The City has been actively planning for this expansion. They have applied and received a permit amendment to 0.6 mgd from the TCEQ. The permit for the expansion received some opposition, resulting in more stringent discharge parameters (BOD5 of 10 mg/l, TSS of 15 mg/l, NH3 of 3 mg/l, DO of 4 mg/l and P of 1 mg/l), which increases the cost of the project. The treated water discharge flows into Lake Benbrook, which is a water supply reservoir for the City of Fort Worth. Tarrant Regional Water Authority dropped its opposition to the permit with the addition of a 1 milligram per liter (mg/l) phosphorous limitation. The existing WWTP can not meet the more stringent discharge parameters. Land owners in the near vicinity had concerns about the safety of chlorine being stored nearby. This lead to UV disinfection being included in the design for the proposed WWTP. The City will add sand filtration to the treatment processes in order to insure complete disinfection. The permit requires odor control equipment in the proposed WWTP design due to odor complaints at the existing plant. These additional items along with the issues with site add about $2,000,000 to the estimated probable cost for the project. WWTP Site The plant site has a further complicating issue in that facilities will be constructed adjacent to a bluff that is showing signs of erosion. The City anticipates the need to stabilize the hillside prior to construction. The exact location of the 100 year floodplain at the site needs to be determined. Some level of flood protection may be required for the plant. The City has searched for an alternative site for the proposed WWTP but informs staff that there is no viable alternative site.
ITEM SUMMARY
PAGE 6
A new site would require a completely new permit from the TCEQ which would add considerable time and might not be successful. The WWTP can be expanded to 1.8 mgd at the present site. Engineering Fees The City submitted a draft engineering contract with its application. At this stage, the City, has selected an engineer based upon qualifications, but has not executed the contract for engineering services. A previous firm provided the services that lead to the above WWTP permit conditions. Following the commitment of Board funds and prior to closing, the City and the engineer will negotiate and execute a contract for the planning phase services. Following the planning phase, and prior to the release of funds for design, a contract for design and construction services will be executed. The budget for engineering services is an estimate of what might be needed to plan, design, and oversee construction of a WWTP at the proposed site that can meet the more stringent levels of wastewater treatment required to discharge into the Clear Fork of the Trinity River which flows into Lake Benbrook. The fees also reflect the incorporation in the design of some existing facilities which will save on construction costs by not building other new units. The budget for Environmental in the Special Engineering Fees assumes that environmental issues may be discovered that will require significant attention, such as issues related to the 100year floodplain, the potential impact of wetland area(s), and the potential presence of threatened/endangered species. In addition, provisions for public hearings, if needed, are included in the Environmental budget item. The budget for inspection services during the construction period reflects a full-time senior inspector for two contracts over 18 months which would provide the City better construction management and reduce the potential for change order claims. State Water Plan The Board is required to consider consistency with the state and regional water plans only for water supply projects. Therefore, no consistency determination is required for this project.
Conventional
No
Pre-Design
Yes
CWSRF Tier II
Yes
Project Number
72212
FMT Complete
N/A
DWSRF
No
CWSRF Tier III
No
ITEM SUMMARY
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BUDGET
PROJECT TWDB Funds
Uses Administration
Other Funds
Total Cost
Category
Qty./Size
$0
$0
$0
Planning
$45,000
$0
$45,000
Design Construction
$543,000 $172,000
$0 $0
$543,000 $172,000
Subtotal Basic Engineering Fees Special Engineering Services Environmental Surveying Geotechnical/Testing Inspection Testing O&M Manual
$760,000
$0
$760,000
$100,000 $25,000 $20,000 $375,000 $40,000 $65,000
$0 $0 $0 $0 $0 $0
$100,000 $25,000 $20,000 $375,000 $40,000 $65,000
Subtotal Special Engineering Fees
$625,000
$0
$625,000
Treated Effluent Reuse
Contingency
$645,073
$0
$645,073
New Storage Facility
gallons
Construction
$6,433,000
$0
$6,433,000
Rehab Storage Facility
gallons
$0
$0
$0
$44,000
$0
$25,000
Basic Engineering Fees
New Water Plant
mgd
New Distribution System
lin. ft.
Rehab Water Plant
Easements/Land Acquisition
mgd
lin.ft.
New Wells
each
$44,000
Rehab Wells
each
$0
$25,000
New Wastewater Plant
mgd
$9,900
$0
$9,900
New Collection System
Bond Reserve Fund
$0
$0
$0
Rehab Wastewater Plant
Insurance or Surety Costs
$0
$0
$0
Rehab Collection System
$158,027
$0
$158,027
$0
$0
$0
$8,700,000
$0
$8,700,000
Fiscal Fees Legal Fees
(Financial Advisor) (Bond Counsel)
Bond Issuance (Printing, TCEQ fees)
Origination Fees Capacity Buy-In
(If Applicable)
TOTAL COSTS
lin. ft. 0.6
mgd lin. ft.
Other:
each
OTHER PROJECT CONSIDERATIONS Water Supply OK for Loan Life
Yes
X
No
Water Conservation Plan
Approvable
Adopted
Water Plan Consistency (Water Supply Project only)
Yes
No
N/A
X
Water Rights Certification Required
Yes
No
N/A
X
X
ITEM SUMMARY
PAGE 8
CONSERVATION SECTION Water Loss Based on the 2005 Water loss audit, the apparent loss equates to 7.1 acre ft. of the produced water of 406 acre ft. Real loss equates to 47 acre ft. The water loss when compared to the amount of produced water was approximately 13.5 percent. Board staff contacted the City regarding the difference between the water audit’s 13.5 percent water loss and the 20 percent water loss in the Water Conservation Plan (WCP). The WCP’s water loss calculation does not account for other uses, such as theft, fire department use, line flushing and other unmetered municipal uses. Whereas, the water audit accounts for all the items listed above. Board staff met with City staff on January 15, 2009 to discuss water loss. Staff provided guidance and clarification for the preparation of the water loss report. On February 11, the City Manager indicated that they will reevaluate the water loss data submitted to Board. The City has recently reported that in 2007 the water loss was determined to be 11.5 percent. Water Conservation Plan For reducing water use, the WCP has established a five year goal of 155 gallon-per-capita-day (gpcd) and a 10-year goal of 147 gpcd. Presently, water loss is averaging 20 percent and the WCP establishes a goal of reducing water loss to 15 percent within 10 years. The reported Water Use Survey data for 2000 to 2006 averaged 145 gpcd. The City has adopted an increasing block rate structure and proposes to replace residential meters with electronically read meters within ten years. An annual water loss audit will be conducted. Meters will be installed at all city-owned facilities within one year. The City reports that new meters are being installed. ENVIRONMENTAL Key Issues Socioeconomic impacts associated with significant rate increases. ENVIRONMENTAL SUMMARY As set forth in the preliminary environmental information submitted by the City, there are no known environmental or permitting issues that would preclude construction of the project or cause additional alternatives to be examined. However, there are potential socioeconomic issues associated with the proposed rate increases. In order to meet its financial obligations, the City is intending to implement a series of rate increases. On December 18, 2008, the City Council approved a rate ordinance increasing system rates effective February 1, 2009. The ordinance further states that the City will review system rates each fiscal year and institute rate increases as necessary. A notice regarding the December 18 City Council meeting was available on the City’s website and was posted at the Aledo City Hall. The notice was posted 72 hours in advance of the meeting. Four members of the public attended the December 18 Council meeting. One citizen spoke on the proposed rate increase and asked questions regarding the City’s options. The
ITEM SUMMARY
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City’s rate consultant addressed those questions and provided information via a PowerPoint presentation. No further comments were received. In order to ensure that the public was kept informed of the potential economic impacts of this project, a letter was sent to each utility customer providing the rate increase information. The letter was included in the utility bill sent in late December. The City held a public hearing at 7:00 p.m. on January 12, 2009 to discuss the proposed rate increases. Information regarding the public hearing was included in the previously sent letter and was posted at the Aledo City Hall and made available on the City’s website. Approximately 30 members of the public were in attendance at the January 12 meeting. Five citizens spoke at that meeting and posed questions for the City Council and the rate consultant. Those questions were about the proposed wastewater treatment plant project, the structure of the rate increase, and the use of property taxes to fund the proposed project. Questions were addressed by Council members and by the City’s rate consultant. No further questions or adverse comments were received. Following the January 12 meeting, Mayor Kit Marshall sent a letter to each member of the public that spoke at the meeting. One response was received. No additional comments regarding the proposed project or rate increase have been received by the City. The first rate increase went into effect on February 1, 2009. Based on information provided by the City, the City has been diligent in their efforts to inform the public of the potential socioeconomic impacts of this project. This potential socioeconomic issue will be addressed further as part of the environmental review requirements for the CWSRF program. Based on this initial environmental review, it is not anticipated that the proposed project’s primary environmental impacts would be especially significant or adverse, with the exception of socioeconomic issues being addressed by the City. None of these issues should affect implementation or the alternatives considered. Pursuant to the 31 Texas Administrative Code §375.39 pre-design funding requirements, all financial assistance for this loan shall be conditioned to read that funding for design and construction costs for specific project elements not be released from escrow until the environmental review has been completed and a favorable environmental determination has been issued by the Executive Administrator. With these provisions, staff recommends the project as suitable for use of the pre-design funding option. If PRE-DESIGN The preliminary review has been conducted; full review to occur following commitment. Applicant has stated that there appear to be no known environmental, social or permitting issues that will affect the project or the evaluation of project alternatives, and staff concurs, based upon preliminary information.
Yes X
LEGAL SECTION Key Issues None. CONDITIONS Standard tax-exempt, tax and surplus revenue conditions and further conditioned as follows: • Pre-design funding option; • Surplus revenue; and • Useful life of 30 years.
No
ITEM SUMMARY
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CERTIFICATIONS
The application and documentation submitted by the applicant for consideration of this financial assistance have been reviewed and have been determined sufficient for the Board’s consideration. I have reviewed the application and legal documentation submitted by the applicant and have determined that the application contains the information required by the applicable statutes and rules for consideration by the Board. The application and documentation submitted by the applicant for consideration of this financial assistance have been reviewed and have been determined sufficient for the Board’s consideration I have reviewed the application and financial documentation submitted by the applicant and have determined that the application and documentation are sufficient from a financial perspective for consideration by the Board. I have reviewed the application and engineering documentation submitted by the applicant and have determined that the application and documentation are sufficient from an engineering perspective for consideration by the Board. I have reviewed the application and environmental documentation submitted by the applicant and have determined that the application and documentation are sufficient from an environmental perspective for consideration by the Board.
Gregory J. Kuchy Deputy Executive Administrator
Michelle McFaddin, Attorney
Jerry Laman, Project Lead
Maxine Gilford, Team Lead Financial Assessment
Mark Olson, Project Engineer
Clay Schultz, Environmental Reviewer
For additional information of review of the memorandums regarding this application, please refer to the applicant’s files.
Attachments: 1. Resolution (09- ) 2. Location Map 3. Debt Service Schedule
Attachment 1 A RESOLUTION OF THE TEXAS WATER DEVELOPMENT BOARD APPROVING AN APPLICATION FOR FINANCIAL ASSISTANCE FROM THE CLEAN WATER STATE REVOLVING FUND THROUGH THE PROPOSED PURCHASE OF $675,000 CITY OF ALEDO, TEXAS TAX AND WATERWORKS AND SEWER SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION, PROPOSED SERIES 2009, $2,110,000 CITY OF ALEDO, TEXAS TAX AND WATERWORKS AND SEWER SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION, PROPOSED SERIES 2010, $3,345,000 CITY OF ALEDO, TEXAS TAX AND WATERWORKS AND SEWER SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION, PROPOSED SERIES 2011 AND $2,570,000 CITY OF ALEDO, TEXAS TAX AND WATERWORKS AND SEWER SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION, PROPOSED SERIES 2012 (09- ) WHEREAS, the City of Aledo, Parker County, Texas (the “City”) has filed an application for financial assistance in the amount of $8,700,000 from the Clean Water State Revolving Fund to finance wastewater system improvements; and WHEREAS, the City seeks financial assistance from the Texas Water Development Board (the “Board”) through the Board’s proposed purchase of $675,000 City of Aledo, Texas Tax and Waterworks and Sewer System Surplus Revenue Certificates of Obligation, Proposed Series 2009, $2,110,000 City of Aledo, Texas Tax and Waterworks and Sewer System Surplus Revenue Certificates of Obligation, Proposed Series 2010, $3,345,000 City of Aledo, Texas Tax and Waterworks and Sewer System Surplus Revenue Certificates of Obligation, Proposed Series 2011 and $2,570,000 City of Aledo, Texas Tax and Waterworks and Sewer System Surplus Revenue Certificates of Obligation, Proposed Series 2012 (the “Obligations”), all as is more specifically set forth in the application and in recommendations of the Board’s Project Finance and Construction Assistance staff, to which documents express reference is made; and WHEREAS, in accordance with §15.607, Water Code, the Board hereby finds: 1.
that in its opinion the taxes and surplus revenue pledged by the City will be sufficient to meet all the obligations assumed by the City;
2.
that the application and financial assistance requested meet the requirements of the Federal Water Pollution Control Act, 33 U.S.C. 1251 et seq. (1972), as amended, as well as state law;
3.
that the City will consider cost-effective, innovative methods of treatment; and
4.
that the City has adopted and is implementing a water conservation program for the more efficient use of water that will meet reasonably anticipated local needs and conditions and that incorporates practices, techniques or technology prescribed by the Texas Water Code and Board’s rules.
NOW THEREFORE, based on these considerations and findings, the Texas Water Development Board resolves as follows: A commitment is made by the Board to City of Aledo, Texas for financial assistance in the amount of $8,700,000 from the Clean Water State Revolving Fund, to be evidenced by the Board’s proposed purchase of $8,700,000 City of Aledo, Texas Tax & Waterworks & Sewer System Surplus Revenue Certificates of Obligation, Proposed Series 2009. The commitment on the proposed Series 2009 Obligations will expire on January 31, 2011. The commitment on the proposed Series 2010 Obligations will expire on January 31, 2011. The commitment on the proposed Series 2011 Obligations will expire on January 31, 2012. The commitment on the proposed Series 2012 Obligations will expire on January 31, 2013. Such commitment is conditioned as follows: 1.
this commitment is contingent on a future sale of bonds by the Board or on the availability of funds on hand;
2.
this commitment is contingent upon issuance of a written approving opinion of the Attorney General of the State of Texas stating that all of the requirements of the laws under which said obligations were issued have been complied with; that said obligations were issued in conformity with the Constitution and laws of the State of Texas; and that said obligations are valid and binding obligations of the City;
3.
this commitment is contingent upon the city’s compliance with all applicable requirements contained in the rules and regulations of the Board;
4.
the City’s bond counsel must prepare a written opinion that states that the interest on the obligations is excludable from gross income or is exempt from federal income taxation. Bond counsel may rely on covenants and representations of the District when rendering this opinion;
5.
the City’s bond counsel must also state in the written opinion that the obligations are not "private activity bonds." Bond counsel may rely on covenants and representations of the District when rendering this opinion;
6.
the ordinance/resolution authorizing the issuance of these obligations, (hereinafter referred to as the “Authorizing Document”), must include a provision prohibiting the City from using the proceeds of this loan in a manner that would cause the obligations to become “private activity bonds”;
7.
the Authorizing Document must include a provision requiring the City to comply with the provisions of §148 of the Internal Revenue Code of 1986 (relating to arbitrage);
8.
the Authorizing Document must include a provision requiring the City to make any required rebate to the United States of arbitrage earnings;
2
9.
the Authorizing Document must include a provision prohibiting the City from taking any action which would cause the interest on the obligations to be includable in gross income for federal income tax purposes;
10.
the Authorizing Document must provide that the obligations can be called for early redemption only in inverse order of maturity, and on any date beginning on or after the first interest payment date which is 10 years from the dated date of the obligations, at a redemption price of par, together with accrued interest to the date fixed for redemption;
11.
the Authorizing Document must provide that the City will not cause or permit the obligations to be treated as “federally guaranteed” obligations within the meaning of §149(b) of the Internal Revenue Code;
12.
the bond transcript must include a No Arbitrage Certificate or similar Federal Tax Certificate setting forth the City’s reasonable expectations regarding the use, expenditure and investment of the proceeds of the obligations;
13.
the bond transcript must include evidence that the information reporting requirements of §149(e) of the Internal Revenue Code of 1986 will be satisfied. This requirement is currently satisfied by filing IRS Form 8038 with the Internal Revenue Service. A completed copy of IRS Form 8038 must be provided to the Executive Administrator of the Board prior to the release of funds;
14.
the City, or an obligated person for whom financial or operating data is presented to the Board in the application for financial assistance either individually or in combination with other issuers of the City’s obligations or obligated persons, will, at a minimum, covenant to comply with requirements for continuing disclosure on an ongoing basis substantially in the manner required by Securities and Exchange Commission (“SEC”) rule 15c2-12 and determined as if the Board were a Participating Underwriter within the meaning of such rule, such continuing disclosure undertaking being for the benefit of the Board and the beneficial owner of the City’s obligations, if the Board sells or otherwise transfers such obligations, and the beneficial owners of the Board’s bonds if the City is an obligated person with respect to such bonds under SEC rule 15c2-12;
15.
the Authorizing Document must contain a provision requiring the City to levy a tax and/or to maintain and collect sufficient rates and charges to produce net system revenues in an amount necessary to meet the debt service requirements of all outstanding revenue bonds and to maintain the funds established and required by this ordinance;
16.
prior to closing, the City shall submit documentation evidencing the adoption and implementation of sufficient system rates and charges or, if applicable, the levy of an interest and sinking tax rate sufficient for the repayment of all system debt service requirements;
17.
prior to or at closing, the City shall pay a 1.85% origination fee to the Board calculated pursuant to Board rules;
3
18.
prior to closing, and if not previously provided with the application, the City shall submit an executed engineering contract for design and construction, an executed financial advisor contract, and an executed bond counsel contract in a form and substance that are satisfactory to the Board’s Executive Administrator;
19.
if a bond insurance policy is utilized: (a)
thirty (30) days before closing, the City shall submit a draft of the policy to the Board’s Executive Administrator for a determination on whether the policy provides appropriate security in accordance with Board policies;
(b)
prior to closing, the City shall provide the executed underlying documents of the policy (e.g; commitment letter, specimen policy) in a form and substance that is satisfactory to the Board’s Executive Administrator; and
(c)
prior to closing, the Attorney General of the State of Texas must have considered the use of said policy as a part of its approval of the proposed bond issue.
20.
Subject to the availability of funds, the City's debt structure or the timing of its funding needs, the Board’s Executive Administrator may request that the City execute a separate financing agreement with the Board;
21.
loan proceeds shall not be used by the City when sampling, testing, removing or disposing of contaminated soils and/or media at the project site. The Authorizing Document shall include an environmental indemnification provision wherein the City agrees to indemnify, hold harmless and protect the TWDB from any and all claims, causes of action or damages to the person or property of third parties arising from the sampling, analysis, transport, storage, treatment and disposition of any contaminated sewage sludge, contaminated sediments and/or contaminated media that may be generated by the City, its contractors, consultants, agents, officials and employees as a result of activities relating to the project to the extent permitted by law; and
22.
the City may be required to submit outlay reports with sufficient supporting documentation (e.g; invoices, receipts) on a quarterly basis. The Board shall retain the right to request project progress reports and outlay reports monthly as the project proceeds through each project phase;
23.
At the Board's option, the Board may fund the financial assistance under this Resolution with either available cash-on-hand or from bond proceeds. If the financial assistance is funded with available cash-on-hand, the Board reserves the right to change the designated source of funds to bond proceeds issued for the purpose of reimbursing funds used to provide the financial assistance approved in this Resolution; and
24.
Should one or more of the provisions in this resolution be held to be null, void, voidable or, for any reason whatsoever, of no force and effect, such provision(s) shall be construed as
4
severable from the remainder of this resolution and shall not affect the validity of all other provisions of this resolution which shall remain in full force and effect. PROVIDED, however, the Authorizing Document is subject to the following special conditions: 25.
the loan is approved for funding under the Board's pre-design funding option, as specified in Board rule 31 TAC §375.39, and initial and future releases of funds are subject to all rules of the Board relating to such funding option;
26.
the Authorizing Document must contain a provision that provides as follows: (a)
if system revenues are actually on deposit in the Interest and Sinking Fund in advance of the time when ad valorem taxes are scheduled to be levied for any year, then the amount of taxes which otherwise would have been required to be levied and collected may be reduced to the extent and by the amount of revenues then on deposit in the Interest and Sinking Fund; or
(b)
if surplus revenues are based upon budgeted amounts: i.
the Authorizing Document must include a requirement that the City transfer and deposit in the Interest and Sinking Fund each month an amount of not less than 1/12th of the annual debt service on the Obligations until the amount on deposit in the Interest and Sinking Fund equals the amount required for annual debt service on the obligations; further, that the ordinance authorizing the issuance of the obligations must include a requirement that the City shall not transfer any funds from the City’s pledged system revenues to any fund other than the Interest and Sinking Fund until such time as an amount equal to the annual debt service on the obligations for the then-current fiscal year has been deposited in the Interest and Sinking Fund;
ii.
the Authorizing Document must include a requirement that for each year the obligations are outstanding, and prior to the time taxes are to be levied for such year, the City shall establish, adopt, and maintain an annual budget that provides for either the monthly deposit of sufficient surplus pledged revenues and/or tax revenues, the monthly deposit of any other legally available funds on hand at the time of the adoption of the annual budget, or a combination thereof, into the Interest and Sinking Fund for the repayment of the obligations; and
5
iii.
the Authorizing Document must include a requirement that the City shall at all times maintain and collect sufficient rates and charges in conjunction with any other legally available funds so that after payment of the costs of operating and maintaining the system, it produces revenues in an amount not less than 1.10 times debt service requirements of all outstanding obligations of the City and other obligations of the City which are secured in whole or in part by the pledged revenues, for which the City is budgeting the repayment of such obligations, or the City shall provide documentation which evidences the levy and collection of an ad valorem tax rate dedicated to the Interest and Sinking Fund, in conjunction with any other legally available funds, sufficient for the repayment of debt service requirements;
27.
the Authorizing Document for each series of obligations shall provide that the City review its water and sewer rates on an annual basis to ensure that these rates are sufficient to produce required revenues; and
28.
prior to the release of funds, the City shall provide a schedule of the useful life of the project components prepared by an engineer as well as a certification by the applicant that the average weighted maturity of the obligations purchased by the Board does not exceed 120% of the average estimated useful life of the project, as determined by the schedule.
APPROVED and ordered of record this, the 15th day of January, 2009. TEXAS WATER DEVELOPMENT BOARD
_____________________________________ James E. Herring, Chairman ATTEST:
__________________________________ J. Kevin Ward Executive Administrator
6
City of Aledo, Parker County
Aledo !
ATTACHMENT # 2
Attachment 3 ISSUE BEING EVALUATED
City of Aledo $8,700,000 Tax and Waterworks and Sewer System Surplus Revenue Certificates of Obligation, Proposed Series 2009 - 2012 Dated Date Delivery Date First Interest First Principal Last Principal Fiscal Year End
04/15/09 Source: CWSRF 04/15/09 Rate: 4.15% 10/01/09 Insurance: No 10/01/13 Case: Revenues 10/01/42 9/30 RATES ARE FOR ILLUSTRATION PURPOSES ONLY AND ARE SUBJECT TO CHANGE
BOND AMOUNT LOAN FORGIVENESS NET FINANCIAL ASSISTANCE
FISCAL YEAR 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043
PROJECTED NET SYSTEM REVENUES 381,710 654,036 893,089 1,072,511 1,072,511 1,072,511 1,072,511 1,072,511 1,072,511 1,072,511 1,072,511 1,072,511 1,072,511 1,072,511 1,072,511 1,072,511 1,072,511 1,072,511 1,072,511 1,072,511 1,072,511 1,072,511 1,072,511 1,072,511 1,072,511 1,072,511 1,072,511 1,072,511 1,072,511 1,072,511 1,072,511 1,072,511 1,072,511 1,072,511
CURRENT DEBT SERVICE 233,528 378,020 355,120 352,350 359,330 355,650 351,840 357,765 352,870 357,838 362,113 355,680 358,950 356,495 358,580 355,090 356,125 351,580 146,545 142,435 143,325 143,940 144,280 139,345 139,410 144,200 143,445 142,415 141,110 139,530 147,675 $ 8,166,579
$ $ $
8,700,000 8,700,000
ATTACHMENT 3
--------------- THIS $8,700,000 ISSUE -------------PRINCIPAL INTEREST INTEREST TOTAL PAYMENT RATE PAYMENT PAYMENT* 347,009 347,009 4.15% 361,050 361,050 4.15% 361,050 361,050 4.15% 361,050 361,050 85,000 4.15% 359,286 444,286 130,000 4.15% 354,825 484,825 135,000 4.15% 349,326 484,326 145,000 4.15% 343,516 488,516 150,000 4.15% 337,395 487,395 330,963 490,963 160,000 4.15% 170,000 4.15% 324,115 494,115 185,000 4.15% 316,749 501,749 185,000 4.15% 309,071 494,071 200,000 4.15% 301,083 501,083 205,000 4.15% 292,679 497,679 220,000 4.15% 283,860 503,860 235,000 4.15% 274,419 509,419 245,000 4.15% 264,459 509,459 255,000 4.15% 254,084 509,084 270,000 4.15% 243,190 513,190 285,000 4.15% 231,674 516,674 300,000 4.15% 219,535 519,535 315,000 4.15% 206,774 521,774 330,000 4.15% 193,390 523,390 350,000 4.15% 179,280 529,280 370,000 4.15% 164,340 534,340 390,000 4.15% 148,570 538,570 410,000 4.15% 131,970 541,970 435,000 4.15% 114,436 549,436 455,000 4.15% 95,969 550,969 480,000 4.15% 76,568 556,568 505,000 4.15% 56,129 561,129 535,000 4.15% 34,549 569,549 565,000 4.15% 11,724 576,724 $ 8,700,000 $ 8,234,084 $ 16,934,084
*represents all four bond issues combined AVERAGE (MATURITY) LIFE NET INTEREST RATE TRUE INTEREST RATE AVERAGE ANNUAL REQUIREMENT
22.81 YEARS 4.150% 4.150% $738,255
$
TOTAL DEBT SERVICE 347,009 594,578 739,070 716,170 796,636 844,155 839,976 840,356 845,160 843,833 851,953 863,862 849,751 860,033 854,174 862,440 864,509 865,584 860,664 659,735 659,109 662,860 665,714 667,670 668,625 673,750 682,770 685,415 691,851 692,079 696,098 708,804 569,549 576,724 25,100,663
COVERAGE BEING REQUIRED 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10
ACTUAL COVERAGE 1.10 1.10 1.21 1.50 1.35 1.27 1.28 1.28 1.27 1.27 1.26 1.24 1.26 1.25 1.26 1.24 1.24 1.24 1.25 1.63 1.63 1.62 1.61 1.61 1.60 1.59 1.57 1.56 1.55 1.55 1.54 1.51 1.88 1.86
FINANCE COMMITTEE
APPLICANT
EVIDENCE OF DEBT
PLEDGE
CONSENT PRESENTED BY: JERRY LAMAN TWRFA
AUDIT COMMITTEE
City of Aledo $675,000 Tax and Waterworks and Sewer System Surplus Revenue Certificates of Obligation, Proposed Series 2009 $2,110,000 Tax and Waterworks and Sewer System Surplus Revenue Certificates of Obligation, Proposed Series 2010 $3,345,000 Tax and Waterworks and Sewer System Surplus Revenue Certificates of Obligation, Proposed Series 2011 $2,570,000 Tax and Waterworks and Sewer System Surplus Revenue Certificates of Obligation, Proposed Series 2012 Ad Valorem Taxes and Surplus Net System Revenues
Taxable Tax-Exempt Approval by Minute Order
AMT (Tax-Exempt) Approval by Resolution
RWAF (Tax-Exempt)
ACTION REQUESTED Approve by resolution a request from the City of Aledo (Parker County) for a loan in the amount of $8,700,000 from the Clean Water State Revolving Fund to finance wastewater system improvements, utilizing the pre-design funding option. PROJECT DESCRIPTION The City of Aledo’s (City) existing wastewater treatment plant (WWTP) is under enforcement for effluent violations, and influent flows to the WWTP are nearing permit capacity. As per Texas Commission of Environmental Quality (TCEQ) requirements, the City must initiate planning to increase plant capacity and remedy the effluent violations. The City proposes to expand the WWTP capacity from 0.35 mgd to 0.6 million-gallon-per-day (mgd) by construction of a new WWTP. The new WWTP will incorporate equipment from the existing WWTP where practical. ENTITY DESCRIPTION The City is located approximately 10 miles west of Fort Worth and about 4 miles southwest of the intersection of Interstate Highway 20 and Interstate Highway 30. The City has an estimated population of 2,550 and provides service to approximately 979 connections. SOURCE OF FUNDS Clean Water State Revolving Fund
AMOUNT $8,700,000
COMMITMENT PERIOD: SERIES 2009--EXPIRES JANUARY 31, 2011 SERIES 2010--EXPIRES JANUARY 31, 2011 SERIES 2011--EXPIRES JANUARY 31, 2012 SERIES 2012--EXPIRES JANUARY 31, 2013
PROGRAM FY ’08 – Tier II
ITEM SUMMARY
PAGE 2
BACKGROUND This is the City’s third request for financial assistance from the Texas Water Development Board (Board). In April 2007, the Board approved a $5,765,000 loan from the Drinking Water State Revolving Fund (DWSRF). Of this amount, the City has closed on $3,355,000. In May 2008, the Board approved a $2,060,000 loan from the Texas Water Development Fund (DFund). Loan proceeds will be used to build a metering station, storage facilities, and transmission lines to participate in the Fort Worth regional water system. The City has open market issues totaling $915,000. The open market issues will be paid off in 2017. FINANCIAL SECTION Key Issues The City is pledging ad valorem taxes and surplus net system revenues to repay the debt service on the proposed loan. The City is requesting a 30-year loan term which is eligible under the Clean Water State Revolving Fund (CWSRF) program. Debt Service Analysis The City completed a rate study in November 2008. The results of the rate study indicate that the City will need to increase system rates each fiscal year beginning February 2009 through February 2012 to pay for the existing debt as well as the proposed CWSRF debt and the DFund loan (which is expected to close in 2009). In December 2008, the City passed an ordinance to increase total system rate revenue by approximately 20%, effective February 1, 2009. The current combined water and wastewater rate is approximately $74. The following table shows estimates of total system rates needed, based on estimated growth rates in customers.
Annual Growth Rate 4% 2% 0%
2009 $74 $74 $74
Table 1. Estimated System Rates Needed 2010 2011 $82 $83 $84
$92 $95 $99
2012 $107 $113 $120
The City also intends to use approximately $175,000 in tax revenue annually to support projected debt service in addition to the rate increases. Assuming the City could access the public market with a BBB rating, the estimated effective yield on the full $8.7 million would be approximately 6.28%. The estimated savings between an estimated CWSRF interest rate of 4.40% and the estimated rate for a market issue are approximately $125,000 a year and $4.29 million in total debt service. Projected Closing Dates The City intends to close the proposed loans from the CWSRF in four series: 1) Series 2009 for $675,000; 2) Series 2010 for $2,110,000; 3) Series 2011 for $3,345,000; and 4) Series 2012 for $2,570,000. In addition, the City anticipates closing the 2008 DFund loan commitment in two series: one for $360,000 in April 2009 and one for $1,700,000 in February 2011. Closing the commitments in different series of bonds will allow the City to implement the necessary rate increases prior to the issuance of the bonds and will limit the Board’s risk exposure.
ITEM SUMMARY
PAGE 3
Since the City is requesting to utilize the financial assistance in four series of bond issuances, a separate commitment date is recommended for each series to ensure that the City utilizes the funds expeditiously. City Ordinance The ordinance approved by the City in 2008 further states, in part, that while the Board is the owner of any outstanding debt of the City, commencing in Fiscal Year 2010, the City shall review its water and sewer rates and based on the most recently adopted budget, determine whether such water and sewer rates are sufficient to produce revenues, after payment of all reasonable operating and maintenance expenses of the water and sewer system equal to at least 1.10 times the principal and interest requirements scheduled to come due in the then fiscal year of the City. The ordinance further states, in part, that if the City’s then current water and sewer rates would not produce revenues sufficient to provide such debt service coverage, the City will, by February 1st, establish and maintain water and sewer rates sufficient to provide such debt service coverage. The loan has been conditioned accordingly. Internal Risk Score Staff assigns an internal risk score of 2C to the proposed commitment. The City has closed on a DWSRF loan and anticipates closing part of the May 2008 DFund loan commitment in April 2009. Periodic rate increases are needed to support these obligations as well as the proposed debt. With the proposed financing, the City will incur an increase in new debt, and accordingly, a higher level of debt on a per capita basis. The City has a greater than average capacity for system and tax rate increases, as evidenced by the high median household income ($67,000 vs. state median average of $46,000). In addition, the City has taken a proactive stance by performing a rate study, and has already passed an ordinance increasing rates to a level that will support current debt and the anticipated debt issuances for 2009. Staff has conditioned the proposed loans to be released in four series of bonds to match the construction schedule for both the water and wastewater system improvements. Staff will review system rates before each closing, and the City will be evaluating system rates each fiscal year and institute necessary rate increases. Internal Risk Score
1
2A
2B
2C X
3
Origination Fee Amount
$158,027
Included in Loan
Yes
Non-Profit, Non-Community
N/A
Disadvantaged
No
Disadvantaged Funds Available
N/A
Insurance
N/A
CREDIT QUALITY
Standard & Poor’s
Non-Rated
Moody’s
Non-Rated
Fitch
Non-Rated
ENGINEERING SECTION Key Issues WWTP Capacity Wastewater flows are reaching the available capacity of the WWTP. The City is under enforcement for effluent violations. TCEQ regulations require that planning to upgrade facilities begin when average flows exceed 75% of the permitted flow rates for three months. When
ITEM SUMMARY
PAGE 4
average flows exceed 90% of the permitted flow rates, the TCEQ requires the City (permit holder) to seek the necessary authorization from TCEQ to commence construction to expand facilities. The City is currently at 87% of capacity. The City expects to be at 90% in the next year or two with the addition of just 75 more people. For these reasons, the planning and construction of additional capacity is now necessary. Population Growth The City is proposing to expand the WWTP capacity to 0.6 mgd from 0.35 mgd. A capacity of 0.6 mgd is expected to serve a population of approximately 5,000 people. When the population reaches 3,750 people, planning for the next capacity expansion must begin. For the past eight years, the population has increased at an average rate of 110 persons per year.
Year 2009 2016 2020
Table 2 City’s Growth Projections and Design Flows Population Flow (mgd) 2550 0.306 3750 0.450 5000 0.600
Capacity (mgd) Exist – 0.350 0.600 0.600
The City is estimating slow growth of about 55 people per year until the new WWTP becomes operational. When additional WWTP capacity is available in four years, the City believes population growth could increase substantially to approximately 350 people per year. The City believes the 0.6 mgd WWTP will reach capacity limits in 11 years or the year 2020. The Board’s Water Resources Planning group’s review of the population projections proposed for the project commented that the City’s projections were reasonable for planning purposes in this area. Alternatives Considered The proposed project is to expand the capacity of the WWTP at the existing site. The expansion will include the construction of the new facilities as well as the tie-in and retrofit of some existing facilites. Prior to submission of the current loan application, the City investigated several alternatives. A summary of the findings follows: Upgrade existing plant – The alternative of upgrading the existing WWTP was not selected because the existing plant suffers from corrosion, rust, walls that bow, and other structural concerns. The existing plant is near the end of its useful life, can not meet existing effluent permit requirements, and will not be able to meet more stringent limits imposed by the new WWTP permit (see below). The existing sludge digestor, sludge dewatering facilities, and office building at this stage of planning are to be utilized in the new WWTP. Phasing the Expansion – Building a small treatment plant at this time could achieve a small capital cost savings, but it would result in the likelihood of having to start construction of the next phase of WWTP expansion within a few years after completion of this expansion. Also, the rate savings of a smaller plant compared to a larger plant would be minimal. For example, at the population growth rate expected by the City, a second phase expansion of an alternative 0.45 mgd facility would need to be completed about the year 2016. Planning and financing of that second phase WWTP expansion would need to begin in the year 2013. Furthermore, construction of a 0.45 mgd WWTP is estimated to cost $5.9 million ($13/gallon) and would serve about 3,750 people. The 0.6 mgd facility, on the other hand, was estimated to cost $6.4
ITEM SUMMARY
PAGE 5
million ($10.50 / gallon). The 0.45 mgd facility has a potential cost savings of approximately $500,000. This equates to a 6% reduction in rates and charges to the customer. However, it is very possible the City would need to seek financing for their next phased expansion in a matter of months after completion of this project. Regional Options – A regional study entitled “Eastern Parker County – Regional Wastewater Facilities Plan” by Alan Plummer Associates (July 31, 2007) was partially funded by the Board to address the needs of the following communities: Weatherford, Aledo, Annetta, Annetta North and South, Hudson Oaks, Weatherford, Willowpark, Tarrant Regional Water District, Parker County Utility District No. 1, and the City of Fort Worth. This study described a conceptual design to build a regional system for wastewater treatment for an area within the Clear Fork Trinity River basin. Aledo was assumed to operate their existing plant, without expansion, until they could connect to the system in Phase 1 of the regional WWTP in approximately 2012. Only the City of Aledo and the City of Fort Worth partnered to further study the possibility of regional cooperation. With only Aledo participating, Fort Worth focused on its more immediate needs in the Marys Creek basin east of Aledo. The plan for a regional solution became focused on Fort Worth’s needs and Aledo’s regional option evolved into pumping to Fort Worth’s Marys Creek facility. The cost estimate for Aledo to pump wastewater to the Marys Creek facilities was $11-13 million, which would be more expensive than the option of Aledo expanding its own plant. Treatment Alternatives – The current plan is to utilize a sequencing batch reactor (SBR) type WWTP. This type WWTP achieves many of the treatment functions in a single basin saving on construction footprint. This type treatment is also very adaptable to the tight effluent limits proposed by the City’s permit (see below). Also, SBR plants are readily expandable as the City grows in the future. As planning proceeds, other treatment alternatives will be considered before final design begins. WWTP Permit The City has been actively planning for this expansion. They have applied and received a permit amendment to 0.6 mgd from the TCEQ. The permit for the expansion received some opposition, resulting in more stringent discharge parameters (BOD5 of 10 mg/l, TSS of 15 mg/l, NH3 of 3 mg/l, DO of 4 mg/l and P of 1 mg/l), which increases the cost of the project. The treated water discharge flows into Lake Benbrook, which is a water supply reservoir for the City of Fort Worth. Tarrant Regional Water Authority dropped its opposition to the permit with the addition of a 1 milligram per liter (mg/l) phosphorous limitation. The existing WWTP can not meet the more stringent discharge parameters. Land owners in the near vicinity had concerns about the safety of chlorine being stored nearby. This lead to UV disinfection being included in the design for the proposed WWTP. The City will add sand filtration to the treatment processes in order to insure complete disinfection. The permit requires odor control equipment in the proposed WWTP design due to odor complaints at the existing plant. These additional items along with the issues with site add about $2,000,000 to the estimated probable cost for the project. WWTP Site The plant site has a further complicating issue in that facilities will be constructed adjacent to a bluff that is showing signs of erosion. The City anticipates the need to stabilize the hillside prior to construction. The exact location of the 100 year floodplain at the site needs to be determined. Some level of flood protection may be required for the plant. The City has searched for an alternative site for the proposed WWTP but informs staff that there is no viable alternative site.
ITEM SUMMARY
PAGE 6
A new site would require a completely new permit from the TCEQ which would add considerable time and might not be successful. The WWTP can be expanded to 1.8 mgd at the present site. Engineering Fees The City submitted a draft engineering contract with its application. At this stage, the City, has selected an engineer based upon qualifications, but has not executed the contract for engineering services. A previous firm provided the services that lead to the above WWTP permit conditions. Following the commitment of Board funds and prior to closing, the City and the engineer will negotiate and execute a contract for the planning phase services. Following the planning phase, and prior to the release of funds for design, a contract for design and construction services will be executed. The budget for engineering services is an estimate of what might be needed to plan, design, and oversee construction of a WWTP at the proposed site that can meet the more stringent levels of wastewater treatment required to discharge into the Clear Fork of the Trinity River which flows into Lake Benbrook. The fees also reflect the incorporation in the design of some existing facilities which will save on construction costs by not building other new units. The budget for Environmental in the Special Engineering Fees assumes that environmental issues may be discovered that will require significant attention, such as issues related to the 100year floodplain, the potential impact of wetland area(s), and the potential presence of threatened/endangered species. In addition, provisions for public hearings, if needed, are included in the Environmental budget item. The budget for inspection services during the construction period reflects a full-time senior inspector for two contracts over 18 months which would provide the City better construction management and reduce the potential for change order claims. State Water Plan The Board is required to consider consistency with the state and regional water plans only for water supply projects. Therefore, no consistency determination is required for this project.
Conventional
No
Pre-Design
Yes
CWSRF Tier II
Yes
Project Number
72212
FMT Complete
N/A
DWSRF
No
CWSRF Tier III
No
ITEM SUMMARY
PAGE 7
BUDGET
PROJECT TWDB Funds
Uses Administration
Other Funds
Total Cost
Category
Qty./Size
$0
$0
$0
Planning
$45,000
$0
$45,000
Design Construction
$543,000 $172,000
$0 $0
$543,000 $172,000
Subtotal Basic Engineering Fees Special Engineering Services Environmental Surveying Geotechnical/Testing Inspection Testing O&M Manual
$760,000
$0
$760,000
$100,000 $25,000 $20,000 $375,000 $40,000 $65,000
$0 $0 $0 $0 $0 $0
$100,000 $25,000 $20,000 $375,000 $40,000 $65,000
Subtotal Special Engineering Fees
$625,000
$0
$625,000
Treated Effluent Reuse
Contingency
$645,073
$0
$645,073
New Storage Facility
gallons
Construction
$6,433,000
$0
$6,433,000
Rehab Storage Facility
gallons
$0
$0
$0
$44,000
$0
$25,000
Basic Engineering Fees
New Water Plant
mgd
New Distribution System
lin. ft.
Rehab Water Plant
Easements/Land Acquisition
mgd
lin.ft.
New Wells
each
$44,000
Rehab Wells
each
$0
$25,000
New Wastewater Plant
mgd
$9,900
$0
$9,900
New Collection System
Bond Reserve Fund
$0
$0
$0
Rehab Wastewater Plant
Insurance or Surety Costs
$0
$0
$0
Rehab Collection System
$158,027
$0
$158,027
$0
$0
$0
$8,700,000
$0
$8,700,000
Fiscal Fees Legal Fees
(Financial Advisor) (Bond Counsel)
Bond Issuance (Printing, TCEQ fees)
Origination Fees Capacity Buy-In
(If Applicable)
TOTAL COSTS
lin. ft. 0.6
mgd lin. ft.
Other:
each
OTHER PROJECT CONSIDERATIONS Water Supply OK for Loan Life
Yes
X
No
Water Conservation Plan
Approvable
Adopted
Water Plan Consistency (Water Supply Project only)
Yes
No
N/A
X
Water Rights Certification Required
Yes
No
N/A
X
X
ITEM SUMMARY
PAGE 8
CONSERVATION SECTION Water Loss Based on the 2005 Water loss audit, the apparent loss equates to 7.1 acre ft. of the produced water of 406 acre ft. Real loss equates to 47 acre ft. The water loss when compared to the amount of produced water was approximately 13.5 percent. Board staff contacted the City regarding the difference between the water audit’s 13.5 percent water loss and the 20 percent water loss in the Water Conservation Plan (WCP). The WCP’s water loss calculation does not account for other uses, such as theft, fire department use, line flushing and other unmetered municipal uses. Whereas, the water audit accounts for all the items listed above. Board staff met with City staff on January 15, 2009 to discuss water loss. Staff provided guidance and clarification for the preparation of the water loss report. On February 11, the City Manager indicated that they will reevaluate the water loss data submitted to Board. The City has recently reported that in 2007 the water loss was determined to be 11.5 percent. Water Conservation Plan For reducing water use, the WCP has established a five year goal of 155 gallon-per-capita-day (gpcd) and a 10-year goal of 147 gpcd. Presently, water loss is averaging 20 percent and the WCP establishes a goal of reducing water loss to 15 percent within 10 years. The reported Water Use Survey data for 2000 to 2006 averaged 145 gpcd. The City has adopted an increasing block rate structure and proposes to replace residential meters with electronically read meters within ten years. An annual water loss audit will be conducted. Meters will be installed at all city-owned facilities within one year. The City reports that new meters are being installed. ENVIRONMENTAL Key Issues Socioeconomic impacts associated with significant rate increases. ENVIRONMENTAL SUMMARY As set forth in the preliminary environmental information submitted by the City, there are no known environmental or permitting issues that would preclude construction of the project or cause additional alternatives to be examined. However, there are potential socioeconomic issues associated with the proposed rate increases. In order to meet its financial obligations, the City is intending to implement a series of rate increases. On December 18, 2008, the City Council approved a rate ordinance increasing system rates effective February 1, 2009. The ordinance further states that the City will review system rates each fiscal year and institute rate increases as necessary. A notice regarding the December 18 City Council meeting was available on the City’s website and was posted at the Aledo City Hall. The notice was posted 72 hours in advance of the meeting. Four members of the public attended the December 18 Council meeting. One citizen spoke on the proposed rate increase and asked questions regarding the City’s options. The
ITEM SUMMARY
PAGE 9
City’s rate consultant addressed those questions and provided information via a PowerPoint presentation. No further comments were received. In order to ensure that the public was kept informed of the potential economic impacts of this project, a letter was sent to each utility customer providing the rate increase information. The letter was included in the utility bill sent in late December. The City held a public hearing at 7:00 p.m. on January 12, 2009 to discuss the proposed rate increases. Information regarding the public hearing was included in the previously sent letter and was posted at the Aledo City Hall and made available on the City’s website. Approximately 30 members of the public were in attendance at the January 12 meeting. Five citizens spoke at that meeting and posed questions for the City Council and the rate consultant. Those questions were about the proposed wastewater treatment plant project, the structure of the rate increase, and the use of property taxes to fund the proposed project. Questions were addressed by Council members and by the City’s rate consultant. No further questions or adverse comments were received. Following the January 12 meeting, Mayor Kit Marshall sent a letter to each member of the public that spoke at the meeting. One response was received. No additional comments regarding the proposed project or rate increase have been received by the City. The first rate increase went into effect on February 1, 2009. Based on information provided by the City, the City has been diligent in their efforts to inform the public of the potential socioeconomic impacts of this project. This potential socioeconomic issue will be addressed further as part of the environmental review requirements for the CWSRF program. Based on this initial environmental review, it is not anticipated that the proposed project’s primary environmental impacts would be especially significant or adverse, with the exception of socioeconomic issues being addressed by the City. None of these issues should affect implementation or the alternatives considered. Pursuant to the 31 Texas Administrative Code §375.39 pre-design funding requirements, all financial assistance for this loan shall be conditioned to read that funding for design and construction costs for specific project elements not be released from escrow until the environmental review has been completed and a favorable environmental determination has been issued by the Executive Administrator. With these provisions, staff recommends the project as suitable for use of the pre-design funding option. If PRE-DESIGN The preliminary review has been conducted; full review to occur following commitment. Applicant has stated that there appear to be no known environmental, social or permitting issues that will affect the project or the evaluation of project alternatives, and staff concurs, based upon preliminary information.
Yes X
LEGAL SECTION Key Issues None. CONDITIONS Standard tax-exempt, tax and surplus revenue conditions and further conditioned as follows: • Pre-design funding option; • Surplus revenue; and • Useful life of 30 years.
No
ITEM SUMMARY
PAGE 10
CERTIFICATIONS
The application and documentation submitted by the applicant for consideration of this financial assistance have been reviewed and have been determined sufficient for the Board’s consideration. I have reviewed the application and legal documentation submitted by the applicant and have determined that the application contains the information required by the applicable statutes and rules for consideration by the Board. The application and documentation submitted by the applicant for consideration of this financial assistance have been reviewed and have been determined sufficient for the Board’s consideration I have reviewed the application and financial documentation submitted by the applicant and have determined that the application and documentation are sufficient from a financial perspective for consideration by the Board. I have reviewed the application and engineering documentation submitted by the applicant and have determined that the application and documentation are sufficient from an engineering perspective for consideration by the Board. I have reviewed the application and environmental documentation submitted by the applicant and have determined that the application and documentation are sufficient from an environmental perspective for consideration by the Board.
Gregory J. Kuchy Deputy Executive Administrator
Michelle McFaddin, Attorney
Jerry Laman, Project Lead
Maxine Gilford, Team Lead Financial Assessment
Mark Olson, Project Engineer
Clay Schultz, Environmental Reviewer
For additional information of review of the memorandums regarding this application, please refer to the applicant’s files.
Attachments: 1. Resolution (09- ) 2. Location Map 3. Debt Service Schedule
Attachment 1 A RESOLUTION OF THE TEXAS WATER DEVELOPMENT BOARD APPROVING AN APPLICATION FOR FINANCIAL ASSISTANCE FROM THE CLEAN WATER STATE REVOLVING FUND THROUGH THE PROPOSED PURCHASE OF $675,000 CITY OF ALEDO, TEXAS TAX AND WATERWORKS AND SEWER SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION, PROPOSED SERIES 2009, $2,110,000 CITY OF ALEDO, TEXAS TAX AND WATERWORKS AND SEWER SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION, PROPOSED SERIES 2010, $3,345,000 CITY OF ALEDO, TEXAS TAX AND WATERWORKS AND SEWER SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION, PROPOSED SERIES 2011 AND $2,570,000 CITY OF ALEDO, TEXAS TAX AND WATERWORKS AND SEWER SYSTEM SURPLUS REVENUE CERTIFICATES OF OBLIGATION, PROPOSED SERIES 2012 (09- ) WHEREAS, the City of Aledo, Parker County, Texas (the “City”) has filed an application for financial assistance in the amount of $8,700,000 from the Clean Water State Revolving Fund to finance wastewater system improvements; and WHEREAS, the City seeks financial assistance from the Texas Water Development Board (the “Board”) through the Board’s proposed purchase of $675,000 City of Aledo, Texas Tax and Waterworks and Sewer System Surplus Revenue Certificates of Obligation, Proposed Series 2009, $2,110,000 City of Aledo, Texas Tax and Waterworks and Sewer System Surplus Revenue Certificates of Obligation, Proposed Series 2010, $3,345,000 City of Aledo, Texas Tax and Waterworks and Sewer System Surplus Revenue Certificates of Obligation, Proposed Series 2011 and $2,570,000 City of Aledo, Texas Tax and Waterworks and Sewer System Surplus Revenue Certificates of Obligation, Proposed Series 2012 (the “Obligations”), all as is more specifically set forth in the application and in recommendations of the Board’s Project Finance and Construction Assistance staff, to which documents express reference is made; and WHEREAS, in accordance with §15.607, Water Code, the Board hereby finds: 1.
that in its opinion the taxes and surplus revenue pledged by the City will be sufficient to meet all the obligations assumed by the City;
2.
that the application and financial assistance requested meet the requirements of the Federal Water Pollution Control Act, 33 U.S.C. 1251 et seq. (1972), as amended, as well as state law;
3.
that the City will consider cost-effective, innovative methods of treatment; and
4.
that the City has adopted and is implementing a water conservation program for the more efficient use of water that will meet reasonably anticipated local needs and conditions and that incorporates practices, techniques or technology prescribed by the Texas Water Code and Board’s rules.
NOW THEREFORE, based on these considerations and findings, the Texas Water Development Board resolves as follows: A commitment is made by the Board to City of Aledo, Texas for financial assistance in the amount of $8,700,000 from the Clean Water State Revolving Fund, to be evidenced by the Board’s proposed purchase of $8,700,000 City of Aledo, Texas Tax & Waterworks & Sewer System Surplus Revenue Certificates of Obligation, Proposed Series 2009. The commitment on the proposed Series 2009 Obligations will expire on January 31, 2011. The commitment on the proposed Series 2010 Obligations will expire on January 31, 2011. The commitment on the proposed Series 2011 Obligations will expire on January 31, 2012. The commitment on the proposed Series 2012 Obligations will expire on January 31, 2013. Such commitment is conditioned as follows: 1.
this commitment is contingent on a future sale of bonds by the Board or on the availability of funds on hand;
2.
this commitment is contingent upon issuance of a written approving opinion of the Attorney General of the State of Texas stating that all of the requirements of the laws under which said obligations were issued have been complied with; that said obligations were issued in conformity with the Constitution and laws of the State of Texas; and that said obligations are valid and binding obligations of the City;
3.
this commitment is contingent upon the city’s compliance with all applicable requirements contained in the rules and regulations of the Board;
4.
the City’s bond counsel must prepare a written opinion that states that the interest on the obligations is excludable from gross income or is exempt from federal income taxation. Bond counsel may rely on covenants and representations of the District when rendering this opinion;
5.
the City’s bond counsel must also state in the written opinion that the obligations are not "private activity bonds." Bond counsel may rely on covenants and representations of the District when rendering this opinion;
6.
the ordinance/resolution authorizing the issuance of these obligations, (hereinafter referred to as the “Authorizing Document”), must include a provision prohibiting the City from using the proceeds of this loan in a manner that would cause the obligations to become “private activity bonds”;
7.
the Authorizing Document must include a provision requiring the City to comply with the provisions of §148 of the Internal Revenue Code of 1986 (relating to arbitrage);
8.
the Authorizing Document must include a provision requiring the City to make any required rebate to the United States of arbitrage earnings;
2
9.
the Authorizing Document must include a provision prohibiting the City from taking any action which would cause the interest on the obligations to be includable in gross income for federal income tax purposes;
10.
the Authorizing Document must provide that the obligations can be called for early redemption only in inverse order of maturity, and on any date beginning on or after the first interest payment date which is 10 years from the dated date of the obligations, at a redemption price of par, together with accrued interest to the date fixed for redemption;
11.
the Authorizing Document must provide that the City will not cause or permit the obligations to be treated as “federally guaranteed” obligations within the meaning of §149(b) of the Internal Revenue Code;
12.
the bond transcript must include a No Arbitrage Certificate or similar Federal Tax Certificate setting forth the City’s reasonable expectations regarding the use, expenditure and investment of the proceeds of the obligations;
13.
the bond transcript must include evidence that the information reporting requirements of §149(e) of the Internal Revenue Code of 1986 will be satisfied. This requirement is currently satisfied by filing IRS Form 8038 with the Internal Revenue Service. A completed copy of IRS Form 8038 must be provided to the Executive Administrator of the Board prior to the release of funds;
14.
the City, or an obligated person for whom financial or operating data is presented to the Board in the application for financial assistance either individually or in combination with other issuers of the City’s obligations or obligated persons, will, at a minimum, covenant to comply with requirements for continuing disclosure on an ongoing basis substantially in the manner required by Securities and Exchange Commission (“SEC”) rule 15c2-12 and determined as if the Board were a Participating Underwriter within the meaning of such rule, such continuing disclosure undertaking being for the benefit of the Board and the beneficial owner of the City’s obligations, if the Board sells or otherwise transfers such obligations, and the beneficial owners of the Board’s bonds if the City is an obligated person with respect to such bonds under SEC rule 15c2-12;
15.
the Authorizing Document must contain a provision requiring the City to levy a tax and/or to maintain and collect sufficient rates and charges to produce net system revenues in an amount necessary to meet the debt service requirements of all outstanding revenue bonds and to maintain the funds established and required by this ordinance;
16.
prior to closing, the City shall submit documentation evidencing the adoption and implementation of sufficient system rates and charges or, if applicable, the levy of an interest and sinking tax rate sufficient for the repayment of all system debt service requirements;
17.
prior to or at closing, the City shall pay a 1.85% origination fee to the Board calculated pursuant to Board rules;
3
18.
prior to closing, and if not previously provided with the application, the City shall submit an executed engineering contract for design and construction, an executed financial advisor contract, and an executed bond counsel contract in a form and substance that are satisfactory to the Board’s Executive Administrator;
19.
if a bond insurance policy is utilized: (a)
thirty (30) days before closing, the City shall submit a draft of the policy to the Board’s Executive Administrator for a determination on whether the policy provides appropriate security in accordance with Board policies;
(b)
prior to closing, the City shall provide the executed underlying documents of the policy (e.g; commitment letter, specimen policy) in a form and substance that is satisfactory to the Board’s Executive Administrator; and
(c)
prior to closing, the Attorney General of the State of Texas must have considered the use of said policy as a part of its approval of the proposed bond issue.
20.
Subject to the availability of funds, the City's debt structure or the timing of its funding needs, the Board’s Executive Administrator may request that the City execute a separate financing agreement with the Board;
21.
loan proceeds shall not be used by the City when sampling, testing, removing or disposing of contaminated soils and/or media at the project site. The Authorizing Document shall include an environmental indemnification provision wherein the City agrees to indemnify, hold harmless and protect the TWDB from any and all claims, causes of action or damages to the person or property of third parties arising from the sampling, analysis, transport, storage, treatment and disposition of any contaminated sewage sludge, contaminated sediments and/or contaminated media that may be generated by the City, its contractors, consultants, agents, officials and employees as a result of activities relating to the project to the extent permitted by law; and
22.
the City may be required to submit outlay reports with sufficient supporting documentation (e.g; invoices, receipts) on a quarterly basis. The Board shall retain the right to request project progress reports and outlay reports monthly as the project proceeds through each project phase;
23.
At the Board's option, the Board may fund the financial assistance under this Resolution with either available cash-on-hand or from bond proceeds. If the financial assistance is funded with available cash-on-hand, the Board reserves the right to change the designated source of funds to bond proceeds issued for the purpose of reimbursing funds used to provide the financial assistance approved in this Resolution; and
24.
Should one or more of the provisions in this resolution be held to be null, void, voidable or, for any reason whatsoever, of no force and effect, such provision(s) shall be construed as
4
severable from the remainder of this resolution and shall not affect the validity of all other provisions of this resolution which shall remain in full force and effect. PROVIDED, however, the Authorizing Document is subject to the following special conditions: 25.
the loan is approved for funding under the Board's pre-design funding option, as specified in Board rule 31 TAC §375.39, and initial and future releases of funds are subject to all rules of the Board relating to such funding option;
26.
the Authorizing Document must contain a provision that provides as follows: (a)
if system revenues are actually on deposit in the Interest and Sinking Fund in advance of the time when ad valorem taxes are scheduled to be levied for any year, then the amount of taxes which otherwise would have been required to be levied and collected may be reduced to the extent and by the amount of revenues then on deposit in the Interest and Sinking Fund; or
(b)
if surplus revenues are based upon budgeted amounts: i.
the Authorizing Document must include a requirement that the City transfer and deposit in the Interest and Sinking Fund each month an amount of not less than 1/12th of the annual debt service on the Obligations until the amount on deposit in the Interest and Sinking Fund equals the amount required for annual debt service on the obligations; further, that the ordinance authorizing the issuance of the obligations must include a requirement that the City shall not transfer any funds from the City’s pledged system revenues to any fund other than the Interest and Sinking Fund until such time as an amount equal to the annual debt service on the obligations for the then-current fiscal year has been deposited in the Interest and Sinking Fund;
ii.
the Authorizing Document must include a requirement that for each year the obligations are outstanding, and prior to the time taxes are to be levied for such year, the City shall establish, adopt, and maintain an annual budget that provides for either the monthly deposit of sufficient surplus pledged revenues and/or tax revenues, the monthly deposit of any other legally available funds on hand at the time of the adoption of the annual budget, or a combination thereof, into the Interest and Sinking Fund for the repayment of the obligations; and
5
iii.
the Authorizing Document must include a requirement that the City shall at all times maintain and collect sufficient rates and charges in conjunction with any other legally available funds so that after payment of the costs of operating and maintaining the system, it produces revenues in an amount not less than 1.10 times debt service requirements of all outstanding obligations of the City and other obligations of the City which are secured in whole or in part by the pledged revenues, for which the City is budgeting the repayment of such obligations, or the City shall provide documentation which evidences the levy and collection of an ad valorem tax rate dedicated to the Interest and Sinking Fund, in conjunction with any other legally available funds, sufficient for the repayment of debt service requirements;
27.
the Authorizing Document for each series of obligations shall provide that the City review its water and sewer rates on an annual basis to ensure that these rates are sufficient to produce required revenues; and
28.
prior to the release of funds, the City shall provide a schedule of the useful life of the project components prepared by an engineer as well as a certification by the applicant that the average weighted maturity of the obligations purchased by the Board does not exceed 120% of the average estimated useful life of the project, as determined by the schedule.
APPROVED and ordered of record this, the 15th day of January, 2009. TEXAS WATER DEVELOPMENT BOARD
_____________________________________ James E. Herring, Chairman ATTEST:
__________________________________ J. Kevin Ward Executive Administrator
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City of Aledo, Parker County
Aledo !
ATTACHMENT # 2
Attachment 3 ISSUE BEING EVALUATED
City of Aledo $8,700,000 Tax and Waterworks and Sewer System Surplus Revenue Certificates of Obligation, Proposed Series 2009 - 2012 Dated Date Delivery Date First Interest First Principal Last Principal Fiscal Year End
04/15/09 Source: CWSRF 04/15/09 Rate: 4.15% 10/01/09 Insurance: No 10/01/13 Case: Revenues 10/01/42 9/30 RATES ARE FOR ILLUSTRATION PURPOSES ONLY AND ARE SUBJECT TO CHANGE
BOND AMOUNT LOAN FORGIVENESS NET FINANCIAL ASSISTANCE
FISCAL YEAR 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043
PROJECTED NET SYSTEM REVENUES 381,710 654,036 893,089 1,072,511 1,072,511 1,072,511 1,072,511 1,072,511 1,072,511 1,072,511 1,072,511 1,072,511 1,072,511 1,072,511 1,072,511 1,072,511 1,072,511 1,072,511 1,072,511 1,072,511 1,072,511 1,072,511 1,072,511 1,072,511 1,072,511 1,072,511 1,072,511 1,072,511 1,072,511 1,072,511 1,072,511 1,072,511 1,072,511 1,072,511
CURRENT DEBT SERVICE 233,528 378,020 355,120 352,350 359,330 355,650 351,840 357,765 352,870 357,838 362,113 355,680 358,950 356,495 358,580 355,090 356,125 351,580 146,545 142,435 143,325 143,940 144,280 139,345 139,410 144,200 143,445 142,415 141,110 139,530 147,675 $ 8,166,579
$ $ $
8,700,000 8,700,000
ATTACHMENT 3
--------------- THIS $8,700,000 ISSUE -------------PRINCIPAL INTEREST INTEREST TOTAL PAYMENT RATE PAYMENT PAYMENT* 347,009 347,009 4.15% 361,050 361,050 4.15% 361,050 361,050 4.15% 361,050 361,050 85,000 4.15% 359,286 444,286 130,000 4.15% 354,825 484,825 135,000 4.15% 349,326 484,326 145,000 4.15% 343,516 488,516 150,000 4.15% 337,395 487,395 330,963 490,963 160,000 4.15% 170,000 4.15% 324,115 494,115 185,000 4.15% 316,749 501,749 185,000 4.15% 309,071 494,071 200,000 4.15% 301,083 501,083 205,000 4.15% 292,679 497,679 220,000 4.15% 283,860 503,860 235,000 4.15% 274,419 509,419 245,000 4.15% 264,459 509,459 255,000 4.15% 254,084 509,084 270,000 4.15% 243,190 513,190 285,000 4.15% 231,674 516,674 300,000 4.15% 219,535 519,535 315,000 4.15% 206,774 521,774 330,000 4.15% 193,390 523,390 350,000 4.15% 179,280 529,280 370,000 4.15% 164,340 534,340 390,000 4.15% 148,570 538,570 410,000 4.15% 131,970 541,970 435,000 4.15% 114,436 549,436 455,000 4.15% 95,969 550,969 480,000 4.15% 76,568 556,568 505,000 4.15% 56,129 561,129 535,000 4.15% 34,549 569,549 565,000 4.15% 11,724 576,724 $ 8,700,000 $ 8,234,084 $ 16,934,084
*represents all four bond issues combined AVERAGE (MATURITY) LIFE NET INTEREST RATE TRUE INTEREST RATE AVERAGE ANNUAL REQUIREMENT
22.81 YEARS 4.150% 4.150% $738,255
$
TOTAL DEBT SERVICE 347,009 594,578 739,070 716,170 796,636 844,155 839,976 840,356 845,160 843,833 851,953 863,862 849,751 860,033 854,174 862,440 864,509 865,584 860,664 659,735 659,109 662,860 665,714 667,670 668,625 673,750 682,770 685,415 691,851 692,079 696,098 708,804 569,549 576,724 25,100,663
COVERAGE BEING REQUIRED 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10 1.10
ACTUAL COVERAGE 1.10 1.10 1.21 1.50 1.35 1.27 1.28 1.28 1.27 1.27 1.26 1.24 1.26 1.25 1.26 1.24 1.24 1.24 1.25 1.63 1.63 1.62 1.61 1.61 1.60 1.59 1.57 1.56 1.55 1.55 1.54 1.51 1.88 1.86
