HomeMy WebLinkAboutPP-SRF Loan Discussion May 2019MWMC Regional Wastewater Program
MWMC State Revolving Fund (SRF) Loan Discussion
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7/13/2018
Revenue Bonds
May, 2016:
Paid off 2006 Revenue bond $31,400,000
Refinanced 2008 Revenue Bond $37,975,000
Replaced with 2016 Bond for $32,725,000
Savings of approximately $15.3M
State Revolving Fund (SRF) Loans
December 1, 2018
Paid off R64842 $2,196,656 original payoff date 5/1/2030
Paid off R64843 $3,161,300 original payoff date 12/1/2032
Saving approximately $1.2M in future interest expense
Review of Debt Actions:
Just a quick review of the past actions we have taken on our debt
We were able to apply what was previously held as revenue bond reserves $4.1M and $4.0 million toward principal in the payoff and refinance.
Original bond debt was $47.3M (2006) and $50.7M (2008) for a total of $98M that is now down to $24.5M with a payoff date of 11/1/26. Previously it would have not been paid until 11/1/28.
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SRF Loans – as of 6/30/19
Interest on loan remaining $1,017,250
In pool account $ 931,212
Savings 86,038
When we decided to pay off the other loans, we were making about 1.5% on our investments.
We originally had $18.5M in SRF loans going out through calendar 2032. We now are down to $6.8M and if we pay off R64840, the next one drops off in December of 2020 leaving only one
left at a ridiculously low rate that is just the admin fee of .5%
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Reserves 3/31/2019
The current capital reserve is $53M which is significantly higher than the $35M we projected our reserves to be at this point when we looked at this in December of 2015. Cash flow estimates
have been revised, pushed out as the permit continues to be on hold.
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Cash flow effect on reserve
In FY2020 we payoff the balance of $4.9 above what was already budgeted in FY20.
We did a projection of reserves similar to this when we talked about paying off the Bonds. The numbers based on cash flow projections have consistently been conservative.
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Options:
Leave all remaining SRF Loans as they are, retiring 4/1/2031
Retire R64840 early, with an additional $4.9 million budget allocation
Let R64840 ride for the current period, until MWMC investment interest rates change and savings become larger.
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Input, Questions and Comments
Discussion
The MWMC and the regional partners are committed to
providing these services in a manner that will achieve, sustain,
and promote balance between community, environmental,
and economic needs while meeting customer service expectations
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FY18 Reserve Funds
Meg
On 12/31/17 and EOY 6/30/18
$87.7 Million combined Total – EOY $64.7 Million ($23 M less) Total
$52.8 M Capital - EOY $37.5 M
$11.8 M Equipment Replacement – EOY $12 M
$11.2 M Operating – EOY $5 M
$5.8 M System Development Charge (SDC) – EOY $4 M
$4.0 M Includes $2 M in Rate Stability Reserve and $2 M in Rate Stabilization Reserve – same EOY $4 M
$2.1 M Includes $900,000 in Working Capital Reserve ($700 k EUG and $200 k SPR) – same EOY $2.1 M, $671,000 in SRF Loan Reserve, and $515,000 Insurance Reserve
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2017-18 Budgeted EOY
Katherine
Shows that the biggest component of our reserves is capital, followed by equipment replacement and operating.
This shows how we budgeted to END the year. That is if we spend every dime budgeted which will not happen, especially in capital.
When combining operating reserves represent 17% or about $11 M
Combined capital reserves represent 83% or $53.6 M
Total reserve $64.6 M
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Meg
This is the graph in their packets.
Basically shows that all reserves are funded directly or indirectly from user and septage fees except SDC reserves which are funded by reimbursement and improvement SDCs
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Equipment Replacement
Meg
$26.5 Million total replacement value on list
$21.9 Million scheduled by 2029 (10 years)
$13.2 Million scheduled by 2024 ( 5 years)
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ER Reserve Trend
Meg
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Department
City
Email address
Phone number
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