TO: Mayor and City Council
FROM: Kevin Sing, Director of Finance
SUBJECT:
title
Ordinance Approving One or More Supplemental Indentures and Authorizing the Issuance of Not To Exceed $145,000,000 Waterworks and Sewerage Senior Lien Revenue Bonds of the City of Joliet, Illinois
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BACKGROUND:
As part of our project to accept Lake Michigan Water, the City must complete certain capital improvements. The financing plan includes the use of WIFIA loans through the U.S. EPA and revenue bonds. The total cost of the improvements is estimated to be $184,463,665. If approved, we anticipate WIFIA loans totaling $86,926,000 and revenue bonds totaling $97,537,665 ($86,915,199 included in the proposed 2025 Revenue Bond)
The current proposed 2025 revenue bond will fund the following capital costs:
• Joliet system improvements to accept Lake Michigan Water - $86,915,199
• Joliet required Alternative Water Supply Program Development Costs -$36,146,766
• Debt Service Reserve and closing costs - approximately $11,000,000
The Ordinance for the revenue bond allows for the issuance of bonds not to exceed $145,000,000. This ordinance also approves the second supplemental indenture to incorporate the issuance of the bond in our Sewer and Water Trust Indenture. As a reminder, the Trust Indenture controls our flow of funds securing the debt. The ordinance approves the issuance of the bonds provided the following occur.
• Interest rate less than 6%
• Term 30 years or less
• Redemption premium not to exceed 3% of the principal . We are currently anticipating a call date on January 1, 2035 at par.
• Bonds can be sold with a discount if not more than 2%
• Underwriter compensation not to exceed 0.5% of the principal amount of the bond.
CONCLUSION:
Approval of this item will allow the financing team to secure the financing necessary to complete the improvements.
RECOMMENDATION:
recommendation
It is recommended that the Finance Committee recommend an Ordinance Approving One or More Supplemental Indentures and Authorizing the Issuance of Not to Exceed $145,000,000 Waterworks and Sewerage Senior Lien Revenue Bonds of the City of Joliet, Illinois to the City Council for approval.
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