Title
Resolution Regarding Approval of Alternate Debt Service Structure in Connection with the Issuance of Water Supply System Revenue and Revenue Refunding Bonds, Series 2026 (Ordinance 2026-NEW)
Body
Agenda of: April 22, 2026
Item No.: 2026-162
Amount: Not Applicable
TO: The Honorable
Board of Directors
Great Lakes Water Authority
FROM: Suzanne R. Coffey, P.E.
Chief Executive Officer
Great Lakes Water Authority
DATE: April 22, 2026
RE: Resolution Regarding Approval of Alternate Debt Service Structure in Connection with the Issuance of Water Supply System Revenue and Revenue Refunding Bonds, Series 2026 (Ordinance 2026-NEW)
MOTION
Upon recommendation of Nicolette N. Bateson, Chief Financial Officer\Treasurer, the Board of Directors (Board) of the Great Lakes Water Authority (GLWA), approves the resolution for the Approval of Alternate Debt Service Structure in Connection with the Issuance of Water Supply System Revenue and Revenue Refunding Bonds, Series 2026 (Ordinance 2026-NEW) as presented, and authorizes the CEO to take such other action as may be necessary to accomplish the intent of this vote.
BACKGROUND
The Great Lakes Water Authority (“GLWA”) has established an efficient and cost-effective annual cadence for debt issuance for to the purpose of 1) securing new money for its capital program for the upcoming fiscal year and 2) when appropriate, pursuing refunding opportunities to garner debt service savings. This effort begins soon after the budget, charges, and capital improvement plan are approved by the Board of Directors. For FY 2027, those approvals occurred on Wednesday, February 25, 2026.
There are two significant sets of events that occurred subsequent to adoption of the budget.
The first scenario was experiencing water main breaks that a) caused a disruption in service and b) resulted in proactive pipe replacement beyond the break location.
• On Tuesday, February 24, 2026 a utility contractor working in Chesterfield Township struck a 36-inch water transmission main causing a leak. After excavating the leak site, and cutting away the damaged pipe, GLWA began a proactive inspection of the nearly 2 miles of out of service transmission main. Two 20-foot sections of pipe were found to be in the early stages of failure. Those sections were replaced before the main was fully placed in service. While not an everyday occurrence, it is anticipated that main break repairs will occur throughout the year given the age of the system, and in this case, the amount of work being done by other utilities. Operating reserve and other sources of funding are included in the budget to address these scenarios.
• On Saturday, March 7, 2026 at 4:30 am, a 48-inch water transmission main break was detected on 14 Mile Road in Farmington Hills after a “pressure wave” following a power outage caused by severe weather on March 6, 2026. By Monday morning, March 9, 2026, a new 20-foot section of steel main was installed. Like the scenario above, GLWA began a proactive inspection of the adjacent main while it was out of service. This resulted in an additional 20-foot section of main near the break to be replaced.
The second scenario is related to significant market volatility as a result of word events. As an illustration of the impact, attached is an analysis prepared by GLWA’s financial advisor, PFM. The heat map highlights variance from a Public Finance standard of measure know as the Bloomberg AAA BVAL municipal is data source. This benchmark is based on real-time trades and other sources to reflect market movement.
JUSTIFICATION
Navigating changing capital program demands and market conditions is not something new for GLWA. A deliberate level of days cash on hand provides flexibility to address capital program needs as well as the flexibility to enter the bond market when debt management objectives can be met. Given the cumulative effect of these two scenarios, however, the GLWA Management team is evaluating multiple capital program and cost-effective financing options.
One such option is to potentially modify the debt structure from level debt structure to some alternative structure. This may be a way to secure funding for new projects as well as offset the decline in forecasted refunding savings. For the Board’s consideration, attached is a resolution that would authorize GLWA leadership to exercise reasonable judgement as we get closer to bond pricing day. The decision would be based on concurrent advice from the team of public finance professionals assigned to GLWA.
BUDGET IMPACT
Savings resulting from the potential Water Refunding Bonds are not included in the FY 2027 budget or ten-year financial plan. When savings are achieved, the financial plan will be revised if necessary.
COMMITTEE REVIEW
This matter was not reviewed by the GLWA Audit Committee. Given the urgency of these matters, this matter is being presented directly to the Board of Directors.
SHARED SERVICES IMPACT
This item does not impact the shared services agreement between GLWA and DWSD.