COG Comprehensive Annual Financial Report

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. On June 1, 2009, the City issued $43,180,000 Series 2009A Enterprise System Revenue Bonds payable semiannually at a fixed rate ranging from 3.5% to 5.0% on June 1 and December 1, with a final maturity in 2031. In addition, the City issued $10,000,000 in 2009B variable rate Combined Enterprise System Revenue Bonds with interest payable monthly through 2034. The original issue premium amounted to $1,547,280. The proceeds of these bonds have been used for improvements to the City of Greensboro’s water system. Also, refer to the 2017 Refunding Bonds. In June 2007, the City issued $38,040,000 2007A Combined Enterprise System Revenue Bonds payable semiannually at a fixed rate ranging from 4.0% to 5.0% on June 1 and December 1, with a final maturity in 2029. The City also issued $10,000,000 in 2007B variable rate Combined Enterprise System Revenue Bonds with interest payable monthly through 2032. The original issue premium amounted to $536,101. The proceeds of these bonds have been used for improvements to the City’s water and sanitary sewer system. Also, refer to the 2015 Refunding Bonds. On December 7, 2006, the City issued $49,480,000 Series 2006 Refunding Combined Enterprise System Revenue Bonds at a fixed rate of 4.0% to 5.25% with a final maturity in 2025. These bonds were issued to defease a portion of Combined Enterprise System Bond Series 1998A, 2001A and 2003A. The amounts were refunded at $13,820,000, $19,290,000 and $19,150,000, respectively for a total defeasance of $52,260,000. The aggregate difference in debt service between the refunded debt net cash flow of $84,860,919 and the refunding debt net cash flow of $81,028,550 is $3,832,369. The net proceeds of $54,971,117 (after payment of $506,736 in underwriting fees, accrued interest, call premium and other issuance cost) were placed in escrow in an irrevocable trust to provide for all future debt service payments on the old certificates. The net present value interest savings as a result of the refunding was $2,557,141. As a result, the liabilities for a portion of the 1998A, 2001A and 2003A Series Revenue Bonds have been removed from the Water Resources Fund. The proceeds of these bonds were used for improvements to the City’s water and sanitary sewer system and other issue costs. The City has pledged 100% of future water and sewer customer revenues, net of specified operating expenses to the payment of and as security for the Revenue Bonds in the amounts shown below specifically to cover annual debt service through 2047. This pledge relates to all Combined Enterprise Revenue bonds outstanding, issued for the purpose of making water and sewer system improvements. Certain financial covenants are contained in the revenue bond order, among the most restrictive of which provide that the City maintain a long-term debt service coverage ratio, as defined, of not less than 1.50. Pledged revenues exceeded operating expenses by $52,729,671 to provide a coverage ratio of 2.25 at June 30, 2018. The City was in compliance with all such covenants during Fiscal Year 2017-18

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