94-1363 R Council File # C14- -1AR3
ORIGINAL Green Sheet #
ESOLUTION
CITY OF S A NT PAUL, MINNESOTA
Presented By " X 7
Referred To j
Committee: Date
1
2 PRELIMINARY RES 11 UTION FOR 1994 BOND ISSUES
3
4 RESOLVED, that for purposes s funding certain Water Utility Plant improvements
5 the Council of the City of Saint Paul, in ccordance with the appropriate statutory and charter
6 provisions, does hereby give preliminary approval for the issuance of Water Revenue Bonds
7 in the estimated aggregate amount of Te 1 Million ($10,000,000) Dollars; and be it
8
9 FURTHER RESOLVED, that th • Director, Department of Finance and Management
10 Services, is hereby authorized to initiate 11 necessary actions toward the sale of the
11 aforementioned bonds, and to report reco endations to the City Council for the offering and
12 sale thereof, including recommendations especting the manner of acceptance of bids,
13 following which the Council will conside a resolution fixing the amount and maturity of the
14 Water Revenue Bonds, determining the anner for the City's acceptance of bids, and
15 providing for the sale of said bonds.
16
Blakey Yeas Nays Absent Requested by Department of:
Harris
Guerin � ✓ Finance and Management Services
Megard -
Re t tman �/ �.,��
Thune By: 4/1/4/#11---'
111(
ct, 0 I
Adopted by Council: Date � �• Form Appr. ed by Ci y At •rney
Adoption Certified by Council Secretary
_ I
B y : a, a' -
Appr•ve• • Mayo for Submission to
Approved by _r. Date I Coun it
By: ait.�_- Le it _ 5` a By �1i�i�t`:,
lr
, C4 14 r6te5
•
htENT/oicticE/couNca. DATE INITIATED
ince and Manigement Services 09/13/94 GREEN SHEET . 1q° 37 8
INITIAL/DATE .
INITIAL/DATE ---
r PER8ON & PHONE n DEPARTMENT DIRECTOR acirrcoukcl
• - . ASSIGN r
tha_Kanibrowici 266 0 CITY ATTORNEY ED CITY CLERK, "
NUMBER
!E COUNCIL AGENDA FOR BY(DATE) ROUTING C:1 BUDGET DIRECTOR a FIN. & MGT. SERVICES DIR:
tember 21, 1994 • ORDER En MAYOR (OR ASSISTANT) ED
•
kL * OF SIGNATURE PAGES
one • (CLIP ALL LOCAEIONS FOR SIGNATURE)
REOUESTED:
s Preliminary Resoietion gives the Department of Finance and Management Services the authority to initiate all
essary action ' to tbo issuance of Water Revente Bonds. The Department of Finance and Manegement'Services
prepared to lead discussion on this resolution, the Itructure of the bond sale and the attached documents.
61MENDATIONS: Approve (A) Or Reject (R) PERSONAL. SERVICE CONTRACTS MUST ANSWER THE FOLLOWING QUESTIONS:
PLANNING COMMISSION - CAVIL SERVICE COMMISSION 1. Has this parson/firm everworked under a contract for this department?
VS NO
CM COMMITTEE 2. Has this person/firm ever been a city employee?
STAFF Y1S NO
omaRicToomer 3. Does this erson/firm possess a skill not normally possessed by any current cfty employee?
NITS WHICH COUNCIL OBJECTIVE? ns NO
Explain all y• answers on separate sheet and attach to green sheet
ATMS PROBLEM. ISSUE, OPPORTUNITY (Who, What, When. Where. Why):
RECEIVED
),000,000 Water Revenue Bonds
?se bonds are for purposes of funding improvements to McCarrons Water Treatment Plant. SEP 13 1994
MAYOR'S OFFICE
,NTAGES IF APPROVED:
is resolution is preliminary as it only authorizes the Department of Finance and Management Services to begin the
94 Water Bond Sale process. •
1DVANTAGES IF APPROVED:
Connek Research Center
SEP 1 5 1994
ADVANTAGES IF NOT APPROVED:
lthout this resolution, the Department of Finance and Management Services would not be authorized to initiate
?cetsary action leading to a 1994 Water Bond Sale.
TAL,AMOUNTOFTRANSACTION$ COST/REVENUESUDGETENCIRCLEONE) YES NO
INDING SOURCE ACTIVITY NUMBER
IANCIAL INFORMATION: (EXPLAIN)
L1 -1363
$10,000,000 Water Revenue Bonds, Series 1994
Information And Rationale
for
Structure of Bond Issue
I epartmeet of Finance
and
Management Services
Saint Pau] Water Utility
City of Saint Paul, Minnesota
Septernb er 21 1994
1
DEPARTMENT OF FINANCE AND
MANAGEMENT SERVICES
Peter Haines, Director
SAINT Qq - (363
■P " LI ` CITY OF SAINT PAU
_Yonn Coleman, Mayor
2% City Hall Telephone: 612 -2
15 W. Kellogg Boulevard F 66 8
AAA Saint Paul, Minnesota 55102 Facsimile: 612 - 2668919
September 15, 1994
Council President Thune
Members of the City Council
Third Floor City Hall
15 West Kellogg Boulevard
Saint Paul, Minnesota 55102
Dear Council President Thune nd Members of the City Cou
•
ncil:
ncil:
Enclosed are documents to sup eirt the $10 sale of
The materials will be present d :t he Septtemb 21 Council revenue bonds. •
il meeting.
If you have any questions about hese materials, please contact me.
Very truly yours,
Gt /4'1(1--
Peter Haines
(r \ users \admia \water.let)
c: Mayor Norm Coleman
Pamela Wheelock
Water Bond Sale Team
•
10
CH -1363
Table of Contents
Page
1 Letter of Transmittal
2 Water Utility Construction ; roject
Ten Year Bond Plan
Project Descriptions
Total Existing and Pr � 2- 1
Average User Debt User
posed Debt Servi 2' 4
2 -12
3 Safe Drinking Water A 2 -14
Act
4 Comparison of Fixed Verses ariable Intere
Decision Criteria st Rate Financing
Historical Interest Rat i s - Graph 4- 1
Fixed Verses Variable interest Rate Comparison 4- 2
Life Cycle Benefit /( . st) - Graph
Fixed Verses Variable terest Rate Com aris 4- 3
1995 to 1997 Benefit / Cost p on
Different Rate Cost Co ) -Graph
parison - Data Tables 4- 4
4- 5
5 Pro Forma -
Miller & Schroed r, Piper Jaffray
Variable and Fixed Rat; Comparison
Variable Rate 5- 1
Fixed Rate 5- 2
5 -5
i
i
1
pcardinat ill
i
I I
1
q
SAINT
P A U L INTERDEPARTMENTAL MEMORANDUM
CITY OF SAINT PAUL
Immo
September 15, 1994
TO: Peter Hames, Direct )r
Finance and Mana� = ent Services
FROM: Shirley Davis � t
Treasury M • 1�
RE: 1994 Water Revenue Bonds Recommendations
The Water Utility has asked for al bond sale of $10,000,000 to fund construction
costs for Water Treatment Plant improvements that will be made over the next two
years.
I recommend a variable interest Pate for the debt structuring. I also recommend
that the City enter into a negotia*ed bond sale with the underwriting firms of Miller
& Schroeder Financial, Inc. and Piper Jaffray Inc. The following is my rationale for
these recommendations.
Variable vs. Fixed Rate Bonds
Historically the City has always sold fixed rate bonds. The reasons for the change
are:
1. Variable rate bonds are re illy short -term debt and that means interest rates
are usually lower than 1o4-term debt interest rates (see Tab 4 -2). Thus,
water customers will pay less for this debt financing.
2. It is expected that Congress will adopt amendments to the Safe Drinking
Water Act (see Tab 3). Anong the amendments is the creation of state
revolving funds to finance Drinking water treatment. The federal funding will
be $4.6 billion for 1994 -1997 and states must contribute a 20 percent match
to their allocation. States will then loan funds, at very low interest rates, for
local improvement projects.
We have assumed that thi legislation will pass in Congress (it has already
passed the House) and it will be signed by the President. Refunds could be
available as early as 1995. Based upon discussions with state officials, the
Saint Paul Water Utility p ojects will be eligible for participation in this new
funding program.
•
Peter Haines ()L _ 1303
1994 Water Revenue Bonds
September 15, 1994
Page 2
The successful result will be hat we are able to initially borrow at low
short -term interest rates and repay that debt with a federal loan at even
lower interest rates.
The federal program is not, of cou e, guaranteed. We believe the variable rate
approach makes sense on its own, 'ut there are some risks. Tab 4 -1 contains a
table which compares fixed and var able rate bonds.
The major risk is that short -term i terest rates would exceed long -term rates. The
graph on Tab 4 -2 shows that this i an infrequent phenomenon, but it does happen.
To protect against this risk, the W. er Utility will budget for fixed rate debt service
and place the difference into a Wa r Rate Stabilization Fund. In the event that
short -term rates exceed long -term ates, the Fund will pay the difference in rates,
protecting water rates from large c anges.
A safety feature of the variable rat: bonds is that they can be bought back upon 30
days notice. This is useful in the e ent that the "breakeven" point, between fixed
and variable bonds, is reached (see the graphs on Tab 4 -3 and 4-4). Under this
scenario, fixed rate bonds would be I sold to replace the variable rate bonds.
Another difference between fixed a d variable rate bonds are the u p front and
ongoing costs. Fixed rate bonds ha l e higher costs up front and lower ongoing costs.
Variable rate bonds have the oppon n te. Even with higher ongoing costs, the variable
rate bonds will still have lower net osts than fixed rate bonds.
Competitive vs. Negotiated Sale
When the City sells a generic bond ssue, a competitive sale works well. However,
there are times when a negotiated • . le fits the bill. A variable rate bond structure,
with a 30 day put option, is one of ■ ese times. The negotiated sale takes advantage
of the skills of the two firms for st cturing the variable rate debt and remarketing
the bonds every 30 days.
On the day of the sale, or pricing d y as it is called, these firms will be pledged by
the City to obtain the best market i terest rates for the debt. A negotiated sale
date is flexible and can be moved t• fit within favorable market conditions.
Underwriter
I recommend the firms of Miller & chroeder Financial, Inca and Piper Jaffray Inc.
because they provided the bid, with rationale, which recognized the advantages of a
variable rate bond structure. The t o firms have the underwriting capacity to sell
and remarket the bonds. They are eputable and respected in the financial
community. Their negotiated bid p ice of $4.25 a bond ($1,000) is within today's
market rates, if not better than co • etitive sale prices.
.. II
Peter Hames g I 0
1994 Water Revenue Bonds
September 15, 1994
Page 3
1
In summary, favorable short -term iiterest rates, flexibility of a negotiated sale
format, and the probability of repaying debt with cheaper federal and state money
form the basis for my recommendations.
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Section 2.0
Project Descriptions
2.1 Introductio
This section provid a detailed description of the recommended projects.
Each of the projects e described, along with corresponding objectives, scope
of work, and an es . • ated cost.
All of the projects be done in an interactive mode with the Water Utility
staff, continuing the •recedence set by the McCarron's Water Treatment Plant
Planning Study. Th:'refore, several of the projects may be reduced in cost
because the Utility s - f has knowledge of existing conditions, through prior or
ongoing investigatio . The scope for each of the projects is annotated to
indicate potential ar :L s of staff involvement.
The cost estimates fo the studies and design/construction
1994 dollars and do of include a contingen projects are given in
r
ne.a-ao .Kz CDM Camp Dresser & M Kee
Ma y 7 . 1 2 -1
2 -4
' I
Section 2
Project Descriptions
• gq- l 3
2.11 Filtration Improvements - Phase I
Purpose:
The Filtration Improvements - Phase I project will rebuild Filter Nos. 1 -12 with
new media, air scour and backwash controls to establish a 115 mgd firm
filtration capacity, and install the Floc Basin No. 3 bypass line.
Objectives:
The objectives of this ,roject are to achieve regulatory compliance, enhance
customer satisfaction, improve treatment reliability and efficiency. The bypass
will allow annual mai_Ztenance to be performed on Floc Basin No. 3 without
sacrificing treated wat -,.r quality.
Scope:
• Preparation of contact docurnents (plans & specifications). •
■ Coordination with site regulatory agencies.
Estimated Cost
$4,350,000 - Constructi )nm & Design Engineering
x'" CDM Camp Dresser & McKee
May 4. 1994 2-11
2 -5
Section 2
Project Descriptions
oq ,3(03
2.12 Process a d Hydraulic Improvements - Phase I
Purpose:
The Process and Hy. - ulic Improvements - Phase I will implement the new
rapid mix basin, pro de a new 72 -inch raw water conduit from the existing
terminal building to e new rapid mix basin, extend the existing lime
building, add additio al lime storage and rehabilitate lime slaking equipment,
and add sludge recyc I - flow improvements.
Objectives:
The objectives of the ' provements are to increase potential for regulatory
compliance, enhance o • erator safety and customer satisfaction, increase
treatment reliability . '. efficiency.
• The potential impact o these improvements are a reduction in lime dosage by
15 percent, or appro • • ately $100,000.per year (based on 1993 chemical.costs),
plus reduced sludge • '. posal costs.
The 'additional line. st • - ge will increase the available capacity from three days •
• to approximately one l eek and replace the existin
- � ra id mix bin will g lime feeder and Making
systems. The additio
• p provide redundancy and the •
ability to perform main enance in the rapid mix equipment.
Scope:
■ Preparation of contra t documents (plans & specifications)
■ Coordination with s - to regulatory agencies
Estimated Cost
$3,250,000 - Constructio & Design Engineering
R t4O4 7sec2 CDM Camp Dresser & McK -
May 4. 1994 2 -12
2 -6
Section 2
• qq-IA/3
Project Descriptions
2.13 Solids H. ndling and Disposal Improvements
Purpose:
• The Solids Han. • and Disposal Improvements Project will implement the
ultimate dewaterin', means and disposal methods recommended by the Solids
Handling and Dis • "sal Study.
Objectives:
The improvements • enhance the reliability and efficiency of the treatment
process. Further, .lids loading from sludge dewatering operations to the
existing lagoons • be eliminated.
The potential reduc on in sludge disposal costs is estimated at $150,000 per
year.
Scope:
•
• ■ Preparation of co tract documents (plans & specifications) •
• Coordination wit state regulatory agencies
•
Estimated Cost:
$3.800,000 - Constru.: on & Design Engineering
110 •
' "404.0034 CDM Camp Dresser & cKee
May 4. 1994 2 -13
2 -7
•
' Section 2
Project Descriptions
qy - /
2.15 Chemical Handling and Storage Improvements
Purpose:
The purpose of the Chemical Handling and Storage Improvements Project is to
consolidate the existing facilities, provide additional storage capacity, provide
secondary containment for chemical spills, protect staff and local residents,
enhance control and application capabilities, and realign the railroad access to
the treatment plant
Objectives:
The objectives of these improvements are to achieve regulatory compliance and
operator safety, enhance customer satisfaction and treatment process reliability,
and increase operating efficiency. The existing risks to the Utility from liability
exposure will be recuced, and badly need rehabilitation will be accomplished.
In addition, the railnpad realignment will provide the option of lime delivery
by rail.
Scope:
• Preparation of co tract.docum n
�} a is (plans & specifications)
■ Coordination with state regulatory agencies
Estimated Cost:
$9,000,000 - Construction & Design Engineering
I
•
a1404-0031sec2 CDM Camp Dresser & McKee
May 4, 1994 2 -15
2 -8
Section 2
Project Descriptions
Ot
2.16 Process -nd Hydraulic Improvements - Phase II
Purpose:
•
The Process and H • - ulic Improvements - Phase II Project will implement
head reduction imp � ovements to facilitate more efficient flow splits between
the clarifiers, and e. - ce the reliability and efficiency of Floc Basin No. 3 and
the Recarbonation : = in.
Objectives:
The objectives of ' project are to enhance regulatory compliance and
treatment reliability and increase treatment and operating efficiency. The new
recarbonation basin ' provide process redundancy and increase process
performance.
The proposed proj - • will potentially reduce carbon dioxide usage by 10
percent, or $10,000 • -r year (based on. 1993 operating costs).
•
.Scope:
• Preparation of co ' tract documents (lans& s ecificati
P p ons) •
• Coordination wi state regulatory agencies
Estimated Cost
$3,300,000 - Constru • :on & Design Engineering
it1404-0031“«2 CDM Camp Dresser & cKee 2 - 16
_ May 4, 1994
2 -9
Section 2
Protect Descriptions
• gq 43(03
2.17 Non -Proc - ss Area Improvements
Purpose:
The Non - Process • -a Improvements Project will implement the additional
space as identified ' the Bonestroo report, and improve and rehabilitate the
general process ar -
Objectives: •
The objectives of • project are to increase operator safety, enhance customer
satisfaction, and inc - operator's efficiency. The facilities will be upgraded
to ultimately suppo adequate quarters for a 144 mgd treatment plant.
Scope:
IN Preparation of co • - ct documents (plans & specifications)
•
•
■ .Coordination wit state regulatory agencies ' • •
• Estimated Cost •
$2,750,000 Constru !'on & Design Engineering
•
•
"' CDM Camp Dresser & Kee
may 4. 1994 2-17
2 -10
• Section 2
Protect Descriptions
0
• 2.18 Filtration mprovements Phase II
Purpose:
The Filtration Improvements - Phase II Project will rebuild Filter Nos. 13-24
with air scour and backwash controls to establish an additional 115 mgd firm
filtration capacity. this project will be executed at the option of the Water
Utility.
Objectives:
The objectives of this project are to achieve regulatory compliance, enhance
customer satisfaction, enhance treatment reliability and efficiency.
Scope:
• Preparation of contract documents (plans & specifications)
• Coordination witk state regulatory agencies . •
Estimated Cost: •
•
•
•$3,150,000 - Construction & Design Engineering
•
ia - 0 ans«z CDM Camp Dresser & rlcKee 2 - 18
May 4, 1994
2 -11
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OLI II
SAFE DRIN ., G WATER ACT
111 ARE i NTS
COMNIITT E PRINT
1 SECTION 1. SHORT TITLE.
This Act may be cite. as the "Safe Drinking Water
3 Act Amendments of 1994 ". •
4 SEC..2. REFERENCES TO S • DRINKING WATER ACT.
5 Except as otherwise . i.ressly provided, whenever in
6 this Act an amendment or repeal is expressed in terms
- 7 of an .amendment too, or rep:. of, a section or other provi-
8 sion, the. reference shall be considered to be made to a
9 section or. other provision of ' tle XIV of the Public Health
10 Service Act (the Safe D ' • :•1 Water Act) (42 U.S.C.
10 11 300f and following). .
12 SEC. 3. DEFINITION OF PIPED WATER.
13 Section 1401 is amend d by adding at the end the
14 following:
15 "(15) The term `p ped water' means, in addi-
16 lion to water carried in pipes, water carried in cul-
17 •verts, canals, or similar onveyances. Such term does
18 not include irrigation ater provided to incidental
19 nonagricultural users if the primar3- agency deter- •
20 mines that alternative . • • . • .1 water to achieve the
21 equivalent level of health protection as is provided by
22 . . the applicable natio p imary drinking water re
dri w gu_ •
•
. .•
KIM 19.1994
3 -1
J \MPBMPB.53O H.L.C.
5• I31.D
1 primary drinking water re ; onsibility, to the public as re-
2 quired by this Act, or to t I Administrator a violation of
3 a maximum contaminant evel or treatment technique
4 shall be subject to a fine o not more than $10,000, im-
5 prisonment for not more • . 2, years, or both, except that
6 failure to comply with the exact form and context of a
7 notice shall not be consid . ed a failure to report which
8 is penalized under this subs tion.
9 "(f) FALSE STATEI E TS. —For purposes of section
10 1001. of title 18, United states Code, requirements of
11 States for public water sys : ms or requirements of the Ad-
12 ministrator under this Ac respecting statements, rep -
13 resentations, writings, or I ocuments shall be subject to
• 14 such section and treated . a matter within the jurisdic-
15 tion of a department or . ncy of the United States and
16 for that purpose the State shall be treated as a Federal
17 agency. ".
-�` 18 SEC. 18. STATE REVOLVIN I FUNDS FOR SAFE DRINKING
19 WATER. .
20 • (a) STATE REVOLOI a FUNDS.— Section 1443 is
21 amended by redesignating subsection (c) as (d) and by
22 adding the following new bsection of to subsection (b) :
23 "(c) STATE REVOLVIN FUNDS.— •
24 "(1) GENERAL AI THORITY.—
. .
August 19. 1994
3 -2
•
F:\MPB1MPB.530
H.L.C.
oi-/-1 155
1 "(A) G- • TS TO STATES TO ESTABLISH
REVOLVING FU • s.- -The Administrator shall
3 enter into agr- ments with States having pri-
4 merry enforce . - nt responsibility for public
5 . water systems t ■ make capitalization grants, in-
6 eluding letters f credit, to the States under
7 • this subsection further the health protection
8 objectives of thiH Act. The grants shall be allot-
- 9 ted to the States in accordance with this section
10 and deposited • • drinking water treatment re-
11 volving funds es blished by the State.
12 - • "(B) USE 0 FUNDS. Amounts deposited
• 13 in such revol '
vin_ funds, including loan repay -
14 ments and inter st earned on such amounts,
15 shall be used onl'7 for providing loans or other
16 financial assistan e of any kind or nature that
17 the State deems appropriate to public water
18 systems. Such • , , cial assistance may be used
19 by a public water system only for expenditures
20 - (not including cling mo i 'toring, operation, and main -
21 tenance expendi es) of a type or category
o
22 which the Aclm nistrator has determined,
•
23 through guidance, • facilitate compliance with
24 •
national run • P m3' _water regulations • ap-
25 plicable to such -m under section 1411 or
3 -3
august 19. 1994
I
F:% MPB1MPB.530 H.L.C. q 13103
5
1 otherwise signific tly further the health pro -
2 tection objectives f this title. 15 percent of the
3 amount credited • any revolving fund estab-
4 fished under this eetion in any fiscal year shall
5 be available solel for providing loan assistance
6 to public water tens which regularly serve
7 - less than 10,000 r dividuals. Such financial as-
8 sistance may be used for acquisition at fair
. 9 market value of r property or interests there -
10 • in which are in al to. construction of such
11 systems.
•
12 "(C) FUND MANAGEMENT.—Each State
• 13 revolving fund un•!' -r this subsection 1
g shall be -es-
14 tablished, mainta' ed, and credited with repay -
15 ments and intere - . The fund corpus shall be
16 available in perpe 'ty for providing financial.
17 assistance under • section. To the extent
•
18 amounts in each s eh fund are not required for
19 current obligation r expenditure such amounts
20 shall be invested ' interest bearing obligations
21 of the State or of the. United States. The Ad-
l
22 ministrator and th: s States shall take such steps
23 as may be nece to insure that amounts
•
24 made available un • -r this subsection are depos-
25 ited in State revol I I • g funds and earning inter-
3 -4
ugust 19. 1994
\ \Y
F:1MPB 1MPB.530 4.\13. H.L.C.
7 • • 1 est as promptly as practicable after the com-
mencement of •• a fiscal year in which such
3 funds are made . Bailable.
4 "(D) GRAN I S FROM REVOLVING FUNDS. -
5 A State may not provide assistance in the form
6 of grants from State revolving fund estab-
7 • lished under thi. subsection in an
aggregate
8 amount which ex eeds the sum of the interest
9 collected on dep . in such State revolving
10 fund plus amour deposited in such fund by
11 the State pursu. • t to paragraph (3). Such
12 • grants may only ►e made to public water sys-
13 tems owned by a overnmental or inter-govern-
14 .mental agency, a • •n -profit organization, an In- .
•
15 dian tribe, or an, combination thereof which
16 the State finds I be experiencing financial
17 hardship.
•
18 "(E) INVEST •R -OWNED PUBLIC WATER
19 SYSTEMS. In the e of any public water sys-
20 • tem not owned by governmental or inter-gov-
ernmental agency, non -profit organization, an
22 Indian tribe, or . i v combination thereof, the
23 State may provide z istance from a State re- •
24 volving fund under • subsection only to those
25 systems having the
�g eatest public health needs
,_5
oust 19. 1994
F:1MPB 1MPB.530
H.L.C. qL
l - 1363
5:1
1 and financial nee The State may provide loan
2 assistance to an such system from such a
3 State revolving d only after making a deter -
4 urination that th: system has the ability to
5 . repay the loan ace rding to its terms and condi-
6 lions. States are a thorized to require such sys-
tems to identify a dedicated source for repay -
8 ment of the loans • d to impose such other re-
9 quirements as ma be necessary to assure loan
10 • repayment.
11 "(2) SPECIFIC RE ' r MENTS. —The Adminis-
12 trator shall enter into • agreement with a State
. 13 u n d e r this subsection o • y after the State has estab-
14 fished to the satisfaction of the Administrator that
15 "(A) the , Sta will deposit all grants re-
16 ceived from the A inistrator under this sub -
17 section, together wi • all repayments and inter-
18 est on such grants, j in a drinking water treat -
19 ment revolving fun.. established by the State in
20 accordance with subsection; and
21 "(B) no loan • other financial assistance
22 will be provided to public water system from
23 such revolving fund • be used for any eapendi-
24 tare that could be :voided or significantly re-
2 5 duced by a ro ria Y PP P consolidation of that pub-
-6
VS 19. 1994
F: MPB \ MPB.530
H.L.C. 4 >4
oq- ao
1 lic water sys m with any other public water
2 systenn, excep that in such cases such assist-
3 ance may be rovided from the revolving fiend
4 for such conso dation.
5. The Administrator, in consultation with the Sta
• States
6 and public water s3 • ms, shall establish criteria to
7 • be applied in dete , • • • . g when the consolidation of
8 public water syste •. is appropriate.
• 9 "(3) STATE C NTRIBUTION. —in the case of
10 grants made after fi cal year 1994, each agreement
11 under this subsectio •' shall require that the State de-
12 posit in the fund I om State moneys an amount
13 equal to at least 20 ercent of the total amount
of
14 the .grant to be mad: to the State on or before the
15 date on which the ant payment is made to the
16 State.
17 "(4) COMBINED NANCIAL ADMINISTRATION.—
Notwithstanding sub aragraph (A) of paragraph •
19 (2), a State may co ine the financial administra-
2 0 ' tion of a revolving • d established under this sub -
21 section with the . • • . ,. cial administration of any
�?
other revolving fund - tablished by the State if the
23 Administrator de • •. ' . -s thaw
•
24 "(A) the : : • is under this subsection, to-
, 25 gether with loan
.P a yments and interest, will
3 -7
ugust 19. 1994
' I
0 %MPB.530 H.L.C. qq-
?...
60
1 be separately accounted for and used solely for
2 the purposes specified in paragraph (1); and
3 "(B) the authority • to establiRh assistance
4 priorities and carry out oversight and related •
5 . activities (other trin :financial administration)
6 with respect to such assistance remains with
7 the State agency liaving primary responsibility
8 for administration of the State program under
9 this part.
10 • "(5) FUND ADMIN',tsT'RATION. —(A) Each State
11 may use up to 4 percent of the grants in a revolving
12 fund' established under this subsection to cover the
13 reasonable costs of administration of the assistance
14 program under this .bsection and of providing •
15 technical assistance to public water systems within •
16 the State. For fiscal year 1994, each State may use .
17 up to 2 percent of the grants in any such revolving
18 fund for public water system .supervision if the State
19 - matches such expenditures with at least an equal
20 ' amount of non - Federal funds (additional to the
21 amount expended by tie State for public water su-
•
22 pervision in fiscal year 1993). An additional 1 per -
23 cent of the grants in such fund shall be used by each •
10 24 State to provide techni�al assistance to public water •
25 systems in such State.
3 -8
F: \ MPB \MPB.530 4'
H.L.C. O
• 1 "(B) The A. •i''. • trator shall publish such
guidance and promul : • to such regulations as may be
3 necessary to carry ou the provisions of this section,
4 including-
5 "(i) provisi • Is to ensure that each State
6 commits and e sends funds from revolving
7 • funds establishe • under this subsection in ac-
8 cordance with • Act and applicable Federal
9 and State laws,
10 "(ii) guidanc • to prevent waste, fraud, and
11 abuse, and
12 - • "(iii) guidan e to avoid the use of funds
13 made available •'. er this subsection to finance
14 the expansion of • y public water system in an-
15 ticipation of futur: population growth. •
16 Such guidance and re. ations shall also insure that •
17 the States, and public water systems receiving as-
18 sistance under this sub • ection, use accounting, audit, •
19 . and fiscal procedures s • t conform to generally ac-
20 ' cepted accounting star • ds.
1 "(C) Each State •• • • 'stering a revolving fund
22 and assistance pro: • •• under this subsection shall
23 publish and submit to the Administrator a report
24 every 2 years on its ac•vities under this subsection,
- 25 including the findings f the most recent audit of
-9
gust 19. 1994
g:1 MPB \ MPB.530 H.L.C. 014-IVC3
62
• 1 the fund. The Adminis .tor shall eriodicall T audit
P 3
2
all revolving funds e : • lished under this subsection
3 in accordance with p • cedures established by the
4 Comptroller General.
5 "(6) NEEDS SUR Y. —The Administrator shall
6 conduct an assessment • f financial needs of all pub-
7 -lie water systems in • e United States and submit
8 a report to the Congr ss containing the results of
9 such assessment within 2 years after the date of the
10 enactment of this subs- tion.
11 "(7) INDIAN T - . ES. -1 1 /2 percent of the
12 amounts appropriated • carry out this subsection
• 13
may be used by the • • •• ' • ' trator to make grants
14 to Indian Tribes and askan Native Villages which
15 are not eligible to recei e either capitalization grants
16 from the Administrato under this subsection or as-
17 sistance from State evolving funds established
•
18 under this subsection. ' uch grants shall be used for
19 expenditures by such • bes and villages for public
20 water system expendi es referred to in paragraph
21 (1)(B).
22 "(8j AUTHORIZA ON OF APPROPRIATIONS. -
23 There is authorized to • e appropriated to carry out
•
24 the purposes of this su• ection $599,000,000 for the
25 fiscal year 1994 and $ ',000,000,000 for each of the
3 -10
luoust 19. 1994
4 `
F: l MPB 1 MPB.530 4' .N4;1
H.L.C. Q(� 1 A03
6
1 fiscal years 1995, 19' 6, and 1997, and such sums
2 as may be necessary ereafter. ".
3 (b) REPORT. —Not la, -r than 18 months after the
4 date of the enactment of fa ' Act, the Administrator of
5 the Environmental Protect* .n A shall report to the
6 Congress after notice and ;ublic comment on the use of
7 State revolving funds unde section 1443(c) of the Public
8 Health Service Act for acq ition of real property or in-
. 9 terests therein which is um: ertaken in addition to or as
10 an alternative to facility co • P ction as a means of com-
11 plying with national prim • drinking water regulations.
12 The review of the use of s ch funds shall examine any
13 cost savings and enviro
� nme benefits for safe drinking
14 water and any problems rela, -d thereto.
15 (c) TECHNICAL ASSIS ! ANCE. —The Administrator
•
16 may provide technical assists ce to small public water sys-
17 terns to enable such systems o achieve and maintain com-
18 pliance with applicable national primary drinldng water
•
19 regulations. There is au . I • rized to be appropriated
20 $15,000,000 for such to I • : assistance. None of the
21 funds earmarked under for the State revolving funds
22 under section 1443(c) of the Public Health Service Act
23 or the funds authorized tin& r this section may be used
24 either directly or indirectly fo lobbying expenses.
-11
(lust 19. 1994
co- 6)3
4
1
0 'NO
CITY OF SAINT PAUL
DECISION CRITERIA FOR ARIABLE VS. FIXED INTEREST RATE FINANCING
• Prepared by
pringsted Incorporated
August 17,1994
Objectives of Financing:
1. Stabilization and m. • est growth in utility user rate levels.
2. Minimize life -cycle • 'mowing costs.
Criteria Variable Rate Fixed Rate
1. Initial Interest Rate Cost Short-term Long -term
(7 -30 days) (0 -20 years)
(3.25 %- M &S /P) (5.877 %- M &S /P)
2. Interest Rate Volatility Ris I High None
(See Footnote A)
[Eat or sleep decision]
3. Up -front Marginal Costs (F otnote B) Base
• Legal (Under /Bond ounsel Marginal Higher)
(Liquidity C. unsel $10,000 - 25,000)
• Trustee $1,500 -2,000
• Letter -of- credit (inc des liquidity counsel 0.50 %)
• 4. Ongoing Marginal Costs (' nnual) Base
• g Liquidi y Instrumen 0.20%
• Remarketing 0.125%
• Rating Review $2,000
• Trustee $1,500 -2,000
5. Prepayment Provision Any week/month 8 -10 years par call
(A) Interest Rate Volatility Risk
• Mitigation Measures
1. Ten -year history of 20 ear BBI and variable interest rate attached.
2. Budget for fixed (high: r) rate debt service; build an interest rate
stabilization reserve; .e to mitigate spikes or repay principal.
3. Interest rate cap (little omfort).
4. Potential take -out by 1 , ' , w interest, fixed rate State program in 2 -4 years.
(B) Up -Front Marginal Costs I
• City anticipates proposals to con' - ert variable to fixed by underwrite rs at future dates.
•
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•
5
• ,1 1 31-3
•
•
I
$10,000,000
City • saint Paul, Minnesota
Water Revenue Bonds, Series 1994
(Var able Rate - Current)
DEBT SERVIC COMPARISON FROM 10/01/1994
DATE PRINCIPAL INT REST VARIABLE FIXED SAVINGS
10/01/1994 - - -
10/01/1995 250,000.00 357,501.00 607,500.00 840,912.50 233,412.50
10/01/1996 350,000.00 348,56 .50 698,562.50 930,537.50 231,975.00
• 10/01/1997 75,000.00 336,051.00 411,050.00 639,612.50 2 28 , 562.50
10/01/1998 - 333,36..76 333,368.76 <` 560,975.00 `!' :227,606.24
10/01/1999 75,000.00 333,36;.76 408,368.76 635,975.00 227,606.24
10/01/2000 475,000.00 330,68 .50 805,687.50 1,032,075.00 226,387.50
10/01/2001 300,000.00 313,70 613,706.26 831,900.00 218,193.74
10/01/2002 375,000.00 302,98 .26 677,981.26 890,700.00 212,718.74
10/01/2003 775,000.00 289,5 .00 1,064,575.00 1,270,075.00 205,500.00
10/01/2004 875,000.00 261,8.;.76 1,136,868.76 1,326,675.00 189,806.24
10/01/2005 850,000.00 230,58 .50 1,080,587.50 1,251,800.00 171,212.50
10/01/2006 600,000.00 200,20 800,200.00 952,500.00 152,300.00
10/01/2007 725,000.00 178,751.00 903,750.00 1,042,100.00 138,350.00
10/01/2008 850,000.00 152,83 .26 1,002,831.26 1,123,600.00 120,768.74
• 10/01/2009 500,000.00 122,44 .76 622,443.76 719,200.00 96,756.24
82,631.24
10/01/2010 650,000.00 104,56;.76 754,568.76 837,200.00
10/01/2011 780,000.00 81,33 .26 861,331.26 925,600.00 64,268.74
10/01/2012 415,000.00 53,44..26 468,446.26 510,680.00 42,233.74
10/01/2013 510,000.00 38,611.00 548,610.00 579,120 00 ;, 30,510.00
10/01/2014 570,000.00 20,37 .50 590,377.50 606,480.00 16,102.50
TOTAL 10,000,000.00 4,390,81 14,390,815.10 17,507,717.50 3,116,902.40
GROSS PRESENT VALUE DEBT S RVICE SAVINGS S2,392,854.01
41111
5 -1
*4 •
•
$10,000,000
City of saint Paul, Minnesota
Water Re Bonds, Series 1994
(Vari ble Rate - Current)
OURCES AND USES
Dated 10/01/1994 Delivery 10/01/1994
Par Amount of Bonds $10,000,000.00
Cash Contribution 1,000,000.00
Total Sources $11,000,000.00
Total Underwriter's Discoun.j(0.425%) $42,500.00
Costs of Issuance 80,000.00
Deposit to Debt Service Res ve Fund (DSRF) 1,000,000.00
Deposit to Project Construct on Fund 9,877,500.00
Total Uses $11,000,000.00
Miller and Schroeder Financi 1, Inc. FILE = WR9410VC
9/ 8/1994 12:32 PM
•
•
5 -2
of -13
•
110,000,000
City o saint Paul, Minnesota
Water Re enue Bonds, Series 1994
(Var Rate - Current)
DE T SERVICE SCHEDULE
DATE PRINCIPAL ! COUPON INTEREST DEBT SERVICE
10/01/1994 - - -
10/01/1995 250,000.00 3.57500% 357,500.00 607,500.00
10/01/1996 350,000.00 3.57500% 348,562.50 698,562.50
10/01/1997 5,000.00 3.57500% 336,050.00 411,050.00
10/01/1999 75,000.00 3.5 500% 3 408,368.76
10/01/2000 475,000.00 3.57500% 330,687.50 805,687.50
10/01/2001 300,000.00 3.57500% 313,706.26 613,706.26
10/01/2002 375,000.00 3.57500% 302,981.26 677,981.26
10/01/2003 775,000.00 3.57500% 289,575.00 1,064,575.00
10/01/2004 875,000.00 1 3.5500% 261,868.76 1,136,868.76
10/01/2005 850,000.00 3.57500% 230,587.50 1,080,587.50
10/01/2006 600,000.00 3.57500% 200,200.00 800,200.00
10/01/2007 725,000.00 3.57500% 178, 50.00 903, 50.00
10/01/2008 850,000.00 3.5500% 152,831.26 1,002,831.26
10/01/2009 500,000.00 3.5500% 122,443.76 622,443.76
10/01/2010 650,000.00 3.57500% 104,568.76 754,568.76
10/01/2011 780,000.00 3.57500% 81,331.26 861,331.26
10/01/2012 415,000.00 3.57500% 53,446.26 468,446.26
10/01/2013 510,000.00 3.5500% 38,610.00 548,610.00
• 10/01/2014 570,000.00 3.57500% 20,377.50 590,377.50
TOTAL 10,000,000.00 4,390,815.10 14,390,815.10
Miller and Schroeder Financial, Inc. FILE = WR9410VC
1 9/ 8/1994 10:25 AM
YIELD STATISTICS
Accrued Interest from 10/01/ 994 to 10/01/1994 -
Average Life 12.282 YEARS
Bond Years 122,820.00
Average Coupon 3.5750000%
Net Interest Cost (NIC) 3.6116390%
Bond Yield for Arbitrage Pur ses 3.5750001%
True Interest Cost (TIC) 3.6220164%
Effective Interest Cost (EIC)11 3.7063132%
•
5 -3
qi-i- 13493
.•
1 510,000,000
City o saint Paul, Minnesota
Water R Bonds, Series 1994
(Var able Rate - Current)
NET EBT SERVICE SCHEDULE
DATE DEBT SE VICE EXISTING D/S NEW NET D/S
10/01/1994 2,181,860.00 -
10/01/1995 607,50 .00 2,187,300.00 2,794,800.00
10/01/1996 698,56 .50 2,179,215.00 2,877,777.50
10/01/1997 411,05 .00 2,070,865.00 2,481,915.00
10/01/1998 333,3• .76 1,984,860.00• 2,318,228.76
10/01/1999 408,3. .76 1,989,432.00 2,397,800.76
10/01/2000 805,68 .50 986,895.00 1,792,582.50
10/01/2001 613,70 .26 985,855.00 1,599,561.26
10/01/2002 677,98.26 987,000.00 1,664,981.26
10/01/2003 1,064,5 .00 1,064,575.00
10/01/2004 1,136,86..76 - 1,136,868.76
10/01/2005 1,080,58 - 1,080,587.50
10/01/2006 800,201.00 - 800,200.00
10/01/2007 903,75 - 903,750.00
10/01/2008 1,002,83 1.26 1,002,831.26
10/01/2009 622,44.76 - 622,443.76
10/01/2010 754,56.76 - 754,568.76
10/01/2011 861,33 .26 - 861,331.26
10/01/2012 468,44. - 468,446.26
10/01 /2013 548,616.00 548,610.00
• 10/01/2014 590,3 .50 - 590,377.50
TOTAL 14,390,81 15,553,282.00 27,762,237.10
Miller and Schroeder Financi Inc. FILE = WR9410VC
9/ 8/1994 10:27 AM
1
•
5 -4
( )LI-156-3
•
510,000,000
City of Paul, Minnesota
Water Re enue Bonds, Series 1994
(Fixed Rate)
OURCES AND USES
Dated 10/01/1994 Delivery 10/01/1994
Par Amount of Bonds 510,000,000.00
Total Sources 510,000,000.00
Total Underwriters Discoun. (0.850%) S85,000.00 •
Costs of Issuance 80,000.00
Deposit to Project Construcl'on Fund 9,835,000.00
Total Uses 510,000,000.00
Miller and Schroeder Financi.l, Inc. FILE = WR9410F
9/ 8/1994 1:02 PM
•
•
5 -5
1
1 01-1- I33_
0
510,000,000
City o'saint Paut, Minnesota
Water Re nue Bonds, Series 1994
(Fixed Rate)
DE: SERVICE SCHEDULE
DATE PRINCIPAL COUPON INTEREST DEBT SERVICE
10/01/1994 - - - -
10/01/1995 250,000.00 4.15000% 590,912.50 840,912.50
10/01/1996 350,000.00 4.55000% 580,537.50 930,537.50
10/01/1997 75 000.00 4.85000% 564 612.50 639,612.50
10/01/1998 5.00000% 560,97 560,975:00
10/01/1999 75,000.00 15.20000% 560,975.00 635,975.00
10/01/2000 475,000.00 15.30000% 557,075.00 1,032,075.00
10/01/2001 300,000.00 5.40000% 531,900.00 831,900.00
10/01/2002 375,000.00 5.50000% 515,700.00 890,700.00
10/01/2003 775,000.00 '5.60000% 495,075.00 1,270,075.00
10/01/2004 875,000.00 5.70000% 451,675.00 1,326,675.00
10/01/2005 850,000.00 15.80000% 401,800.00 1,251,800.00
10/01/2006 600,000.00 5.90000% 352,500.00 952,500.00
10/01/2007 725,000.00 6.00000% 317,100.00 1,042,100.00
10/01/2008 850,000.00 6.40000% 273,600.00 1,123,600.00
10/01/2009 500,000.00 X6.40000% 219,200.00 719,200.00
10/01/2010 650,000.00 16.40000% 187,200.00 837,200.00
10/01/2011 780,000.00 6.40000% 145,600.00 925,600.00
10/01/2012 415,000.00 ,6.40000% 95,680.00 510,680.00
10/01/2013 .510,000.00 6.40000% 69,120.00 '` 379,120.00
• 10/01/2014 570,000.00 6.40000% 36,480.00 606,480.00
TOTAL 10,000,000.00 7,507,717.50 17,507,717.50
Miller and Schroeder Financial,linc. FILE = WR9410VH
9/ 8/1994 12:30 PM
YIELD STATISTICS
Accrued Interest from 10/01 994 to 10/01/1994... -
Average Life 12.282 YEARS
Bond Years 122,820.00
Average Coupon h 6.1127809%
Net Interest Cost (NIC) 6.1494199%
Bond Yield for Arbitrage Pur—ses 6.0742450%
True Interest Cost (TIC) 6.1288379%
Effective Interest Cost (EIC) 6.2267738%
I
III
I
5 -6
qq--1240
411
610,000,000
City of saint Paul, Minnesota
Water Re enue Bonds, Series 1994
(Fixed Rate)
NET D BT SERVICE SCHEDULE
DATE DEBT SERVICE EXISTING D/S NEW NET D/S
10/01/1994 2,181,860.00 -
10/01/1995 840,912 50 2,187,300.00 3,028,212.50
10/01/1996 930,537,50 2,179,215.00 3,109,752.50
10/01/1997 639,612 50 2,070,865.00 2,710,477.50
10/01/1998 .560,9751X0 1,984,860.00 2,545,835.00
10/01/1999 635,975,00 1,989,432.00 2,625,407.00
10/01/2000 1,032,075.00 986,895.00 2,018,970.00
10/01/2001 831,900.00 985,855.00 1,817,755.00
10/01/2002 890,700.00 987,000.00 1,877,700.00
10/01/2003 1,270,07500 1,270,075.00
10/01/2004 1,326,675!00 - 1,326,675.00
10/01/2005 1,251,800,00 - 1,251,800.00
10/01/2006 952,500.00 - 952,500.00
10/01/2007 1,042,100.00 - 1,042,100.00
10/01/2008 1,123,600,00 - 1,123,600.00
10/01/2009 719,200,00 - 719,200.00
10/01/2010 837,200.00 - 837,200.00
10/01/2011 925,600 0 - 925,600.00
10/01/2012 510,6800 - 510,680.00
10/01/2013 579,120.00 579,120.00
• 10/01/2014 606,480,00 - 606,480.00
TOTAL 17,507,717 50 15,553,282.00 30,879,139.50
Miller and Schroeder FinanciaU, Inc. FILE = WR9410VH
9/ 8/1994 12:30 PM
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