CAFR 2016

Special Obligation Bonds Debt Service Requirements to Maturity are:

Business-Type Activities Annual Requirements

Fiscal Year

Principal

Interest

Total

2016-17 2017-18 2018-19 2019-20

$

680,000 715,000 750,000 785,000

$

146,500 112,500 76,750 39,249 374,999

$

826,500 827,500 826,750 824,249

$

2,930,000

$

3,304,999 $

8. Combined Enterprise System Revenue Bonds The City has participated in the capital markets by issuing over $200 million Combined Enterprise System Revenue Bonds since 1995, to fund the on-going capital improvement program of the City’s water and sanitary sewer utility. Certain maturities of the debt through 2007 have been defeased, by placing the proceeds of the new bonds in an irrevocable trust to provide for all future debt service payments on the old debt. Accordingly, the trust account assets and the liability for the defeased bonds are not reflected in the City’s financial Statements. At June 30, 2016, $181,890,000 of Combined Enterprise System Revenue Bonds is considered defeased. The Combined Enterprise System is currently comprised of only the City’s water and sanitary sewer system. Principal and interest requirements will be provided by an appropriation in the year in which they become due. On April 14, 2016, the City entered into an agreement with Bank of America, N.A. for a Combined Enterprise System Revenue Bond Anticipation Note drawdown program in the amount of $50,000,000. As of June 30, 2016, $18,496,701 has been draw down for improvements to the City’s water and sewer systems. This agreement committed funds for water and sewer improvements for 2016-2018 capital projects. The notes bear variable interest at 70% of 1 Month LIBOR plus 33 basis points and mature in 2020. On February 1, 2016, the City issued $29,310,000 Series 2016 Refunding Combined Enterprise System Revenue Bonds payable semiannually at a fixed rate ranging from 2.0% - 5.0% on June 1 and December 1, with a final maturity in 2045. This bond was issued to redeem in whole the City’s Combined Enterprise System Revenue Bond Anticipation Note Series 2014 which had an outstanding principal amount of $30,000,000 and has been removed from the Water Resources Fund. On June 23, 2015, the City issued $33,985,000 Series 2015 Refunding Combined Enterprise System Revenue Bonds payable semiannually at a fixed rate ranging from 3.0% - 5.0% on June 1 and December 1, with a final maturity in 2029. This bond was issued to defease $35,810,000 of certain Series 2007A and 2014A Combined Enterprise System Revenue Bonds. The aggregate difference in debt service between the refunded debt net cash flow of $36,783,650 and the refunding debt net cash flow of $34,459,828 was $2,323,822. The net proceeds of $37,983,527 (after payment of $439,177 in underwriting fees and other issuance cost) were placed in escrow in an irrevocable trust to provide for all future debt service payments on the old certificates. As a result, a portion of the liability for the 2007A and 2014A Series Revenue Bonds has been removed from the Water Resources Fund. The net present value savings as a result of the refunding was $1,986,402. In 2012, the City issued $35,185,000 Series 2012A Refunding Combined Enterprise System Revenue Bonds payable semiannually at a fixed rate ranging from 3.0% - 5.0% on June 1 and December 1, with a final maturity in 2027. This bond was issued to defease $40,885,000 of certain Series 2005A and 2005B Combined Enterprise System Revenue Bonds. The aggregate difference in debt service between the refunded debt net cash flow of $52,897,408 and the refunding debt net cash flow of $50,868,670 is $2,028,738. The net proceeds of $41,599,354 (after payment of $482,377 in underwriting fees and other issuance cost) were placed in escrow in an irrevocable trust to provide for all future debt service payments on the old certificates. As a result, a portion of the liability for the 2005 Series Revenue Bonds has been removed from the Water Resources Fund. The proceeds of these bonds, along with the $3,200,000 received from the origination of Series 2012B federally taxable Combined Enterprise System Revenue Refunding Bonds, were used to terminate the associated 2005B interest rate swap agreement. The net present value savings as a result of the refunding was $1,790,610.

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