8.1. SR 07-16-2018 - Laserfiche WebLink

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Page 5 STRUCTURING SUMMARY: In consultation with the Utility, the initial principal amount of the Bonds is set at $10 million and the Bonds have been structured to provide for approximately level annual debt service over a term of 30 years. The principal amount of $10 million will produce approximately $9,490,155 of Bond proceeds available for the final payment to the MMPA. On July 12, 2018 the Utility is expected to receive the near final estimate of the final buy-in amount from the MMPA. After receipt of the near final buy-in amount from MMPA, the Utility will decide if any adjustment is required to the principal amount of the Bonds. If the dollar amount due to the MMPA is greater than the estimated proceeds that can be generated from a $10 million issue, the Utility has the option to either use available Electric System funds to fund the additional costs or increase the principal amount of the Bonds. We would advise that such decision be made on or before August 8, 2018; the date on which the Preliminary Official Statement is scheduled to be posted. SCHEDULES ATTACHED: Schedules attached include: • Sources and uses of funds • Debt service requirements, given the current interest rate environment • Proof of reserve fund requirement • Coverage ratio including the Bonds • Aggregate electric parity debt service including the Bonds RISKS/SPECIAL CONSIDERATIONS: The outcome of this financing will rely on the market conditions at the time of the sale. Any projections included herein are estimates based on current market conditions. The Bonds are payable solely from net revenues of the City’s Electric Fund. The City and Utility will need to continually review the Electric Fund budget, and user fees and charges, to ensure annual net revenues of the Electric Fund are not less than 110% of the average annual debt service on the Bonds and the Parity Bonds. SALE TERMS AND MARKETING: Variability of Issue Size: A specific provision in the sale terms permits modifications to the issue size and/or maturity structure to customize the issue once the price and interest rates are set on the day of sale. Prepayment Provisions: Bonds maturing on or after February 1, 2029 may be prepaid at a price of par plus accrued interest on or after February 1, 2028. Bank Qualification: A determination of whether the Bonds will be bank qualified or not will be made after July 12, 2018 when a near final estimate of the Utility’s final buy-in cost is provided by MMPA. This issue represents the City’s only tax-exempt borrowing in calendar year 2018. Therefore, if the principal amount of this issue is not more than $10 million, the Bonds will be designated as bank qualified.