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Item 8 - Visual Slideshow provided by Staff at MeetingPROPOSED WATER REVENUE BOND FINANCING WATER INFRASTRUCTURE IMPROVEMENT PROGRAM PHASE 2: CLEARWELL REPLACEMENT PROJECT CITY COUNCIL MEETING AUGUST 15, 2023 •As discussed at numerous City Council meetings *Mar. 18, 2020 *Jun. 16, 2020 *Oct. 20, 2020 *Nov. 17, 2020 *Mar. 16, 2021 *Apr. 20, 2021 *Jun. 01, 2021 *Jul. 20, 2021 *Aug. 17, 2021 *Sept. 07, 2021 *Apr. 05, 2022 *Oct. 18, 2022 *Feb. 07, 2023 *May 16, 2023 •Three phases of projects •Phase 1 Clearwell Bypass (completed) •Phase 2 Clearwell Replacement (construction contract award on Sept. 19) •Phase 3 SDCWA Treated Water Connection projects •Funding provided by the four-year water utility rate plan adopted November 2021 for calendar years 2022 through 2025 Water Infrastructure Improvement Program Provide safe and reliable water service to Poway residents today and for generations to come Improve reliability and resiliency of Poway’s water supply Diversify the City’s water supply portfolio Improve redundancy and operational flexibility Satisfy requirements of the mutual agreement with the State Water Resources Control Board, Division of Drinking Water (DDW) Water Infrastructure Improvement Program Goals Clearwell Replacement Project Treated Water Facilities Projects Water Infrastructure Improvement Program Components Clearwell Bypass Project Clearwell Bypass Project •Enables the replacement of the existing 10-million-gallon water storage reservoir •Two 1.4 million-gallon bolted steel tanks are required for water storage •A pump station is required to pump water to the tanks •24 inch above-ground piping and pressure regulating station is required to move water to and from the tanks •36 inch below-ground pipeline is required to move water into the distribution system •Construction: Sept. 2021-Sept. 2022 •Construction Contact: $7.3M •Final Contract Amount: $7.6M •Project Savings: $1M Clearwell Replacement Project Treated Water Facilities Projects Water Infrastructure Improvement Program Clearwell Bypass Project Clearwell Replacement Project •Replace the existing Clearwell floating cover structure with two 4 million-gallon prestressed concrete tanks •Replace the original inlet and outlet valves and piping •Removal of the temporary bypass facilities and restoration of the softball field •Engineer’s Construction Estimate: $30M-$35M •Apparent Low Bidder: Gateway Pacific Contractors; $31,646,023 Status: •Advertisement for bids: 5/11/2023 •Bid opening: 6/15/2023 •Award of contract: 9/19/2023 •Construction Start: Fall 2023 •Completion and commissioning of Clearwell tanks: Early Spring 2026 •Construction completion and restoration of softball field: Fall 2026 Clearwell Replacement Project Treated Water Facilities Projects Water Infrastructure Improvement Program Clearwell Bypass Project •Issued in November 2021 •$12.9 million par value •$14.9 million in net project fund proceeds •Clearwell Bypass project design & construction •Clearwell Replacement project planning & design •Treated Water Facilities projects planning & design •Issued by the Poway Public Financing Authority •30-year term (final maturity June 2051) •Level annual debt service structure •S&P bond rating: AA (insured) AA- (underlying) •Average annual debt service: $753,700 •True interest cost 2.7634% Series 2021A Water Revenue Bonds •Not to exceed $38.0 million par value •$38.1 million in net project fund proceeds •Clearwell Replacement project construction •Treated Water Facilities projects final design costs •Issued by the Poway Public Financing Authority •30-year term (final maturity June 2053) •Level annual debt service structure •S&P bond rating: AA- (underlying) •Average annual debt service: $2.32 million (est.) •True interest cost 4.378% (est.) Proposed Series 2023A Water Revenue Bonds •City Staff/City Attorney •Bond Counsel/Disclosure Counsel (Stradling Yocca Carlson & Rauth) •Brian Forbath, Esq. (present this evening) •Cyrus Torabi, Esq. •Financial Advisor (Fieldman, Rolapp & Associates, Inc.) •Jim Fabian, Principal •Un Chu Reardon, Senior Vice President (present this evening) •Underwriter (Stifel, Nicolaus & Company, Incorporated) •Sara Brown, Managing Director (present this evening) •Program Management (Kennedy Jenks) •Andrew Webster, Senior Water Resources Manager Key Financing Team Participants •Resolutions •City and Poway Public Financing Authority (“PFA”) •Indenture of trust •PFA and U.S. Bank N.A., as trustee •Installment purchase agreement •PFA and City •Bond purchase agreement •PFA, City and Stifel, Nicolas and Company, Incorporated (underwriter) •Preliminary official statement •Bond offering document to potential investors •Continuing disclosure agreement Series 2023A Water Revenue Bonds Documents for August 15th City Council Meeting Timeline City Council Meeting to Authorize Financing August 15 Bond Pricing +/- August 24 Clearwell Replacement Project Contract Award September 19 Bond Transaction Closing By 2nd week of September •City Council – Adopt the Resolution approving the execution and delivery of an installment purchase agreement for the purpose of causing the issuance of not-to-exceed $38,000,000 aggregate principal amount of Water Revenue Bonds, Series 2023A and approving the execution and delivery of certain documents in connection therewith and certain other related matters •Poway Public Financing Authority Board of Directors – Adopt the Resolution approving the sale of its Water Revenue Bonds, Series 2023A, in an aggregate principal amount not to exceed $38,000,000 and approving the execution and delivery of certain documents in connection therewith and certain other matters Recommended Actions PUBLIC COMMENT and CITY COUNCIL DISCUSSION 15