Title
Resolution Regarding Approval of Series Ordinance Authorizing Issuance and Sale of Sewage Disposal System Revenue and Refunding Bonds in a Principal Amount Not to Exceed $1,600,000,000 (Ordinance 2023-06)
Body
Agenda of: September 27, 2023
Item No.: 2023-337
Amount: Not to Exceed $1,600,000,000
TO: The Honorable
Board of Directors
Great Lakes Water Authority
FROM: Suzanne R. Coffey, P.E.
Chief Executive Officer
Great Lakes Water Authority
DATE: September 27, 2023
RE: Resolution Regarding Approval of Series Ordinance Authorizing Issuance and Sale of Sewage Disposal System Revenue and Revenue Refunding Bonds in a Principal Amount Not to Exceed $1,600,000,000 (Ordinance 2023-06)
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 regarding the Approval of Series Ordinance Authorizing Issuance and Sale of Sewage Disposal System Revenue and Refunding Bonds in a Principal Amount Not to Exceed $1,600,000,000 as presented, and authorizes the CEO to take such other action as may be necessary to accomplish the intent of this vote.
BACKGROUND
In order for the Great Lakes Water Authority (“GLWA”) to proceed with the issuance of new money bonds to support regional capital plan improvements and refunding of various outstanding sewage disposal system bonds for the purpose of achieving annual debt service savings, potentially including by effecting the tender and/or exchange of certain outstanding bonds, the GLWA Board must approve the included resolution approving the Series Ordinance.
The Series Ordinance sets forth the guidelines for the New Money and Refunding Bonds and authorizes the Chief Executive Officer or the Chief Financial Officer to execute the final terms of the Bonds, paying issuance costs and signing of the Bond Purchase Agreement, within the parameters set forth in the Series Ordinance.
JUSTIFICATION
New Money Portion: The authorized amount for the New Money Bonds is for an aggregate principal amount not to exceed $200,000,000 for the regional sewage disposal system.
Refunding Portion: The authorized amount for the Refunding Bonds is for an aggregate principal amount of not to exceed $1,400,000,000. The final par amount of the Refunding Bonds will be determined at the time of pricing and is based on current bond market pricing levels, tender pricing levels and investor participation in any tender offer, issuance costs and the par amount of the bonds to be refunded or solicited for tender by GLWA as determined by the savings level achieved.
Key Provisions:
• Not to Exceed Par Amount: $1.6 billion ($200 million for new money, $1.4 billion for refunding)
• Maximum Coupon Rate: 6.00%
• Minimum Purchase Price: 98% of principal amount of bonds
• Maximum Underwriter Discount: 0.40% of principal amount of bonds
• Present Value Savings: Greater than 2.50% of principal amount of bonds to be refunded
BUDGET IMPACT
Savings resulting from the potential Sewer Refunding Bonds has not been included in the FY 2024 budget or ten-year financial plan. If savings are achieved as a result of the potential refunding, a budget amendment may be required for FY 2024 depending on the final pricing and savings structure on the bonds. Savings may not be achieved in every fiscal year.
COMMITTEE REVIEW
This matter was reviewed by the GLWA Audit Committee at its meeting on September 22, 2023. The Audit Committee recommended the Great Lakes Water Authority Board approve the resolution regarding the Series Ordinance Authorizing Issuance and Sale of Sewage Disposal System Revenue and Revenue Refunding Bonds in a Principal Amount Not to Exceed $1,600,000,000 as presented. It should be noted that the recommendation was unanimous among the two Committee members present. The third Committee member was absent, excused.
SHARED SERVICES IMPACT
This item does not impact the shared services agreement between GLWA and DWSD.