HomeMy WebLinkAboutDrinking Water Facility Loan PresentationDRINKING WATER FACILITY
LOAN
Department of Environmental Quality (DEQ)
PROJECT DETAILS
Major upgrade to our water facilities occurred from Fiscal Year (FY) 2016 up until (FY) 2022
Provided the needed production, storage, and delivery capacity to meet the current water demands and
future water demands as our population grows
Expenses totaled over $11,229,000
City Submitted 11 ORF Reimbursement requests adding up to $11,100,000
DEQ covered that total cost,but also provided principal forgiveness of $2,211,250
As draws occurred, interim interest was added
Final Payoff Amount was $9,425,549.21 through 3/18/22
PAYOFF TERMS AND OPTIONS
Advised by DEQ to keep the 30-year term at interest of 1.75%
City had option to pay down as much as desired up front and amortize the rest
City can paydown the loan as quickly as desired with no prepayment penalties
City will maintain a minimum reserve of $319,274 in the Diversified Bond Fund during the life of loan
STAFF PAYOFF RECOMMENDATIONS
Pay down $2 Million up front and amortize balance remaining of $7,425,549.21
Annual payment $319,273.18
38%to be paid by operating reserves
62% to be paid by capacity reserves
Reason for $2 Million paydown was based on cash flow needs after reviewing the 2022-2025 Capital Improvement Plan (CIP)
City can reinvest any current reserves on a two year plus agency or treasury investment near or above the 1.75%rate
Reserves left if pay $2 million now
Operating Reserve $ 6,935,236 as of 9/30/21 (Debt Remaining $ 4,603,840.51)
Capital Reserve $1,473,000 as of 9/30/21 (Debt Remaining $ 2,821,708.70)
Consider not charging for the debt in the user rates, as long sufficient reserves are in place to pay the debt
MOTION REQUESTED FROM COUNCIL
Motion to have Mayor sign Promissory Note and accept proposed amortization schedule (see attached)
$2 Million to be wired by 3/18/22