Water Debt Service Fund

Water Debt ServiceFund• Debt Service

CITY OF BEAVERTON, OREGON FISCAL YEAR 2021-22 BUDGET

WATER DEBT SERVICE FUND (MAJOR FUND) SUMMARY OF REVENUES AND EXPENDITURES

AND OTHER FINANCING SOURCES & USES

FY 2018-19 FY 2019-20 FY 2020-21 FY 2020-21

Actual Actual Budgeted Estimated

Revenues:

Interest on investments $674 $2,558 $52 $1 ,200

Miscellaneous 0 0 0 0

Sub Total Revenues $674 $2,558 $52 $1 ,200

Expenditures:

Materials & services 0 0 0 0

Sub Total Expenditures $0 $0 $0 $0

Revenues Over/Under Expenditures $674 $2,558 $52 $1 ,200

Other financing sources (uses): Transfers in $2, 184,994 $2,185,648 $4,432,135 $4,432,135

Transfers out 0 0 0 0

Debt Service - Principal (1 ,502,350) (1 ,503,860) (3 ,751 ,387) (3 ,751,387)

Debt Service - Interest (682,644) (681 ,788) (680,748) (680,748)

Debt Service Fees 0 0 0 0

Total Other Financing Sources

(Uses): $0 $0 $0 $0

Net Change in Fund Balance $674 $2,558 $52 $1 ,200

Fund Balance/Working Capital

Beginning of Year 69,298 69,972 72,530 72,530

Fund Balance (Contingency)/Working

Capital End of Year $69,972 $72,530 $72,582 $73 ,730

FY 2021-22 Adopted

$100

0

$100

0

$0

$100

$4,930,059

0

(3 ,745 ,160)

(I , 184,899)

0

$0

$100

73,730

$73,830

Funding for debt service is provided from transfers from the Water Operating Fund and fluctuates from year to year depending upon debt service requirements.

432

I FUND: 504 WATER DEBT SER VICE

MISSION STATEMENT:


DEPARTMENT: FINANCE

DEPARTMENT HEAD: PATRICK O' CLAIRE

Amounts budgeted in this fund are for payment of maturing principal and interest of water revenue bonds and loans from the state and federal governments to finance the water capital improvement program. Currently, three water revenue bond obligations are outstanding: Water Revenue and Refunding Bond Series 2016, Series 2018 Water Revenue Bond, and Series 2020 Water Revenue Bond. Additionally, the City secured a $5 million loan from the State of Oregon Infrastructure _Financing Authority (Drinking Water Revolving Fund) and is working to close an additional $20 million with the IFA. In January of 2021, the City closed on an $81 million loan with the federal Environmental Protection Agency, through their WIFIA loan program (Water Infrastructure Finance and Innovation Act). In FY 2021-22, the City intends to issue an additional water revenue bond, for at least $25 million, to help finance the buy-in to the Willamette Water Supply System and other capital improvements. The size of the bond will be determined in the spring of 2022.

This fund receives transfers from the Water Operating Fund in order to pay the debt service on the outstanding obligations.

FY 2018-19 FY 2019-20 FY 2020-21 FY 2021-22 FY 2021-22 REQUIREMENTS ACTUAL ACTUAL BUDGETED PROPOSED ADOPTED

DEBT SERVICE $2,184,994 $2,185,648 $4,432,135 $4,930,059 $4,930,059 TRANSFERS CONTINGENCY 0 0 72,582 73,830 73,830

TOTAL $2,184,994 $2,185,648 $4,504,717 $5,003,889 $5,003,889

Funding Sources: FY 2018-19 FY 2019-20 FY 2020-21 FY 2021-22 FY 2021-22 Beginning Working Capital $69,298 $69,972 $72,530 $73 ,730 $73,730 Miscellaneous Revenue 673 2,558 52 100 100 Transfers from Water Fund 2,184,994 2,185,648 4,432,135 4,930,059 4,930,059

WATER BONDS Water Revenue and Refunding Bonds Series 2016 were issued in November 2016, with an interest rate of 1.84% in an original amount of $5,615,000. The refunding resulted in net present value savings of approximately $611,104. The proceeds of the initial series 2006 Water Revenue Bond were used to finance the costs of additions, replacements, expansions and/or improvements to the City's Water System, and the acquisition of all real and personal property necessary, useful or convenient thereto and the City's share of the Joint Water Commission capital expansion project. The remaining principal and interest payments for Water Revenue and Refunding Bonds Series 2016 are as follows:

Water Revenue and Refunding Bonds Series 2016 FISCAL YEAR PRINCIPAL INTEREST TOTAL

2021-2022 625,000 59,524 684,524 2022-2023 635,000 48,024 683 ,024 2023-2024 645,000 36,340 681,340 2024-2025 660,000 24,472 684,472 2025-2026 670,000 12,328 682,328

Total $3,235,000 $180,688 $3 ,415,688

In June 2018, the City issued $18,125,000 in Water Revenue Bonds at a premium of approximately $3 million, at an interest cost of 3.2%. The bond proceeds are being used to finance the costs of infrastructure construction in the new South Cooper Mountain area: a second 5.5mg reservoir at the existing Cooper Mountain Reservoir site with associated transmission and distribution lines and opportunity projects with other jurisdictions that would result in savings to the City based on the timing of construction .

433

I FUND: 504 WATER DEBT SERVICE

FISCAL YEAR 2021-22 2022-23 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30 2030-31 2031-32 2032-33 2033-34 2034-35 2035-36 2036-37 2037-38

Total

CITY OF BEAVERTON, OREGON FISCAL YEAR 2021 -22 BUDGET

DEPARTMENT: FINANCE

DEPARTMENT HEAD: PATRICK O'CLAIRE

Water Revenue Bonds Series 2018 PRINCIPAL INTEREST TOTAL

625,000 810,250 1,435,250 660,000 779,000 1,439,000 690,000 746,000 1,436,000 725,000 71 1,500 1,436,500 760,000 675,250 1,435,250 800,000 637,250 1,437,250 840,000 597,250 1,437,250 885,000 555,250 1,440,250 925,000 511,000 1,436,000 975,000 464,750 1,439,750

1,020,000 416,000 1,436,000 1,075,000 365,000 1,440,000 1, 125,000 311,250 1,436,250 1,185,000 255,000 1,440,000 1,240,000 195,750 1,435,750 1,305,000 133,750 1,438,750 1,370,000 68,500 1,438,500

$16,205,000 $8,232,750 $24,437,750

In April of 2020, the City issued $28,485,000 in Water Revenue Bonds at a premium of approximately $3 million. The bond proceeds are being used to finance the costs of Beaverton' s share of the Willamette Water Supply System (WWSS), equating to 5 million gallons per day (MGD) of the approximate I 00 MGD total capacity of WWSS. Other projects financed include improvements and capacity expansions to pumps, aquifer storage and recovery (ASR) wells, and pipelines.

Water Revenue Bonds Series 2020

FISCAL YEAR PRINCIPAL INTEREST TOTAL 2021-22 940,000 1,304,800 2,244,800 2022-23 990,000 1,257,800 2,247,800 2023-24 1,040,000 1,208,300 2,248,300 2024-25 1,090,000 1,156,300 2,246,300 2025-26 1,115,000 1,134,500 2,249,500 2026-27 1,170,000 1,078,750 2,248,750 2027-28 1,225,000 1,020,250 2,245,250 2028-29 1,290,000 959,000 2,249,000 2029-30 1,350,000 894,500 2,244,500 2030-3 1 1,380,000 867,500 2,247,500 2031-32 1,450,000 798,500 2,248,500 2032-33 1,520,000 726,000 2,246,000 2033-34 1,595,000 650,000 2,245,000 2034-35 1,675,000 570,250 2,245,250 2035-36 1,760,000 486,500 2,246,500 2036-37 1,850,000 398,500 2,248,500 2037-38 1,940,000 306,000 2,246,000 2038-39 2,040,000 209,000 2,249,000 2039-40 2,140,000 107,000 2,247,000

Total $ 27,560,000 $ 15,133,450 $ 42,693,450

434


$3.50

$3.00

VI C 0

$1.50

~ $1.00

so.so $0.00


DEPARTMENT: FINANCE


Water Revenue Bonds

Combined Debt Service Obligations (2016, 2018 and 2020 Series)

The following graph illustrates the principal amounts due on the three outstanding water revenue bonds.

Principal Only, By Series

$3.50

$3.00 -52.50 -

VI -C S2.00 0 ~

2 S1.50

S1.00 ,;

so.so

S0.00

■ Se-es 2016 ■ Se-t:S 2018 ■ Se-es 2020

435


STATE OF OREGON

CITY OF BEA YERTON, OREGON FISCAL YEAR 2021-22 BUDGET

DEPARTMENT: FINANCE


The City entered into a financing contract with the State of Oregon, acting by and through the Oregon Infrastructure Finance Authority (IF A), for the fmancing of the Aquifer Storage and Recovery Well Number 5. The loan is federal fmancial assistance under Capitalization Grants for Drinking Water State Revolving Funds and is pass-thru financing from the State. The IFA provides the City with a 20 year non-revolving loan with an interest rate of 2.96% in the amount of $5,000,000 of which $750,000 is a forgivable loan, leaving a remaining loan of $4,250,000 . The allowance of a $750,000 "forgivable" portion of the loan brings the net interest rate to nearly zero.

Repayment stmts 90 days after the project completion date and are due and payable each December 1. Repayment is expected to begin in FY 22-23 , and the schedule is dependent on the rate of expenditure and draw-down of funds. Future budgets will contain detail on these obligations.

During FY 20-21, the IFA Board approved an additional $10 million loan for the City from the Safe Drinking Water Revolving Loan Fund, as well as a $10 million loan from the Special Public Works Fund. These loans are to help finance the capital improvement project of the North Transmission Intertie. The $10 million from the Safe Drinking Water Revolving Loan Fund carries an interest rate of 1.97%, and $130,000 is forgivable . The $10 million loan from the Special Public Works Fund carries an interest rate of2%. Payback on these loans is estimated to begin in FY 2024-25 .

FEDERAL ENVIRONMENTAL PROTECTION AGENCY - Water Infrastructure and Innovation Act (WIFIA) The City closed on a loan agreement in January of 2021 for approximately $81 million from the federal Environmental Protection Agency for series of water system improvements, including the South Cooper Mountain non-potable system, Cooper Mountain Reservoir #2, aquifer storage and recovery (ASR) wells, the North Transmission Intertie and its various connections, and the East Transmission Intertie in pmtnership with the WWSS. The WIFIA program can be used to finance 49% of projects, and the City must fmd other resources for the 51 %, including revenue bonds, IF A loans, system development charges, and payas-you-go transfers from the water operating fund ..

Performance Measures:

Water Revenue Bond Debt Service Ratio Coverage

FY 2018-19 Actual 3.33

436

FY 2019-20 Actual

3.35

FY 2020-21 Budgeted/Revised

1.92 I 1.81

FY 2021-22 Adopted

2.07

Documents

Water Debt Service Fund