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Home My WebLink AboutMinutes - December 18, 2001 SSCITY OF LODI INFORMAL INFORMATIONAL MEETING "SHIRTSLEEVE" SESSION CARNEGIE FORUM, 305 WEST PINE STREET TUESDAY, DECEMBER 18, 2001 An Informal Informational Meeting ("Shirtsleeve" Session) of the Lodi City Council was held Tuesday, December 18, 2001 commencing at 7:02 a.m. A. ROLL CALL Present: Council Members — Hitchcock, Howard, Land, Nakanishi (arrived at 7:03 a.m.), and Mayor Pennino Absent: Council Members — None Also Present: City Manager Flynn, City Attorney Hays, and City Clerk Blackston B. CITY COUNCIL CALENDAR UPDATE City Clerk Blackston reviewed the weekly calendar (filed). C. TOPIC(S) C-1 "Discussion regarding the sale of approximately $57,300,000 Electric Revenue Certificates of Participation (COP) to refund the current Electric Revenue COPs and to raise $10,000,000 in working Capital for the Electric Utility' City Manager Flynn distributed a press release from Fitch IBCA, Duff & Phelps (filed) who rated the Lodi $30,470,000 Certificates of Participation (2002 Public Improvement Financing Project) as an A+. George Wolf of Salomon Smith Barney stated that based on current market conditions, the proposal is to issue $46 million of Electric Utility revenue Certificates of Participation (COP) at a cost of 4.5%. Approximately $52 million would be required to refund the existing series 1999 COP and generate that amount of savings; however, the Utility estimates it has $6 million of construction funds in the 1999 issue that are not needed for its original purpose and will be contributed to the issue, which would reduce the borrowing size and enable the Utility to issue approximately $46 million and lower its expected debt service requirements. In the current market, the savings are about $1 million per year. The deal has been structured to take all of the savings after 2010, which will total $16 million. The present value of those savings in today's dollars is $3 million, which is over 8% of the refunded COPs. Mr. Wolf stated that this refunding is a very attractive option for generating savings and for managing the Utility's cash flow requirements. In response to Council Member Nakanishi, Mr. Wolf explained that by taking no cash flow savings before 2010, the Utility is shortening the average life of the loan and amortizing it more quickly. Electric Utility Director Vallow clarified that staff is advocating a taxable cash flow and borrowing to increase liquidity, not to pay for operating expenses. He reported that the majority of the Utility's costs occur early in the budget year. Revenue lags 90 days, and debt service is paid January 15 and July 15. He emphasized the importance of an operating reserve to cover business risk and cash flow. The Market Cost Adjustment (MCA) recovers extraordinary costs without raising base rates. He stated that projecting forward seven months, Electric Utility's revenues match its expenses. Restructuring existing power purchase contracts would allow the Utility to meet seasonal load variations and help match the cash flow. The cash infusion would permit the Utility to address volatility and allow policy and planning alternatives. It would also provide an opportunity to lower the MCA in July. He stated that the net cost of doing the borrowing is zero. Continued December 18, 2001 Alex Burnett of Public Financial Management stated that if the money were drawn down for operating expenses it would put more pressure on the Utility. It should be used for liquidity. In response to Council Member Land, Mr. Vallow stated that the funds from the 1999 COPs could not be used for liquidity. Council Member Nakanishi spoke in favor of the proposal and noted that it would: 1) keep rates down; 2) preserve the $4 million Electric Utility transfer to the General Fund; and, 3) give the needed cash flow to the Utility, which would increase in 2010. In reply to Mayor Pro Tempore Hitchcock, Mr. Wolf stated that due to low long-term interest rates, refinancing the 1999 issue is very favorable. Mr. Burnett concurred and reiterated that $6 million would be contributed to the refunding to downsize the deal. The total projection is $15 to $16 million in savings. He confirmed that it would be changed from a variable rate to a fixed rate. In answer to questions posed by Mayor Pro Tempore Hitchcock, Finance Director McAthie reported that 'Operating Transfers Out' are usually transfers to the benefits funds for employee medical, dental, etc. Mr. Vallow explained that 'Debt Service Coverage Transfer' is deemed to have come from reserves. The'2001-02 Transfer In' is capitalized interest. The acronym 'PILOT' stands for payment in -lieu of taxes. Mayor Pro Tempore Hitchcock expressed concern about financing short-term operating costs with long-term debt financing. She was only in favor of raising the $10 million in working capital for the Utility if it were not intended to be used, other than for 'matching the cash flow' as described earlier by Mr. Vallow. Mr. Vallow emphasized that the $10 million would not finance an operating expense, but rather, a reserve threshold. He stated that cost overruns are recovered through rates. Mayor Pro Tempore Hitchcock suggested that the Electric Utility General Fund transfer be reviewed and stated that she was opposed to taking a percentage of the MCA for this purpose. Mayor Pennino requested that monthly financial reports from Electric Utility be provided to the Council. D. COMMENTS BY THE PUBLIC ON NON -AGENDA ITEMS None. E. ADJOURNMENT No action was taken by the City Council. The meeting was adjourned at 8:20 a.m. ATTEST: Susan J. Blackston City Clerk 2 Mayor's & Council Member's Weekly Calendar WEEK OF IDECEMBER 18, 2001 Tuesday, December 18, 2001 Reminder Pennino. LCC Annual Conference, Sacramento, 12/18 - 12/20/01. 7:00 a.m. Shirtsleeve Session 1) Discussion regarding the sale of approximately $57,300,000 Electric Revenue Certificates of Participation (COP) to refund the current Electric Revenue COPS and to raise $10,000,000 in working Capital for the Electric Utility (CM) 5:00 - 7:00 p.m. Family Resource & Referral Center public forum regarding Governor's mandate to reform child care funding, Stockton Civic Auditorium, South Hall. Wednesday, December 19, 2001 Reminder Pennino. LCC Annual Conference, Sacramento, 12/18 - 12/20/01. 12 Noon Lodi Area Crime Stoppers Annual Christmas Luncheon, Pietro's Trattoria. 7:00 p.m. City Council meeting 4 dosed Session items (NOTE: 5:45 g -m.) One Presentation 21 Consent Calendar items 3 Public Hearings 5 Regular Calendar items Adjourn to various agency meetings One Ordinance Thursday, December 20, 2001 Reminder Pennino. LCC Annual Conference, Sacramento, 12118 - 12/20/01. 12 Noon Christmas Luncheon hosted by Jeffrey and Carol Kirst Tokay Development, Inc., Hutchins Street Square - Crete Hall. Friday, December 21, 2001 3:30 - 6:30 p.m. Ribbon cutting and grand opening of Gaddy Ward & Co. Insurance Brokers, 66 W. Walnut Street, Lodi. Saturday, December 22, 2001 Sunday, December 23, 2001 Monday, December 24, 2001 Reminder City Hall will be closed y day. Disclaimer. This calendar contains only information that was provided to the City Clerk's office counciNnisOnicalndr.doc �J OFA CITY OF LODI COUNCIL/ 1 /FOS AGENDA TITLE: Discussion regarding the sale of approximately $57,300,000 Electric Revenue COPs to refund the current Electric Revenue COPs and to raise $10,000,000 in working capital for the Electric Utility MEETING DATE: December 18, 2001 PREPARED BY: City Manager, Electric Utility Director and Finance Director RECOMMENDED ACTION: That the City Council direct staff regarding the sale of approximately $57,300,000 Electric Revenue COPs to refund the current Electric Revenue COPS and to raise $10,000,000 in working capital for the Electric Utility BACKGROUND INFORMATION: As discussed at the December 0 shirtsleeve session, the current low interest rate environment, gives the City an opportunity to issue new Electric Revenue Certificates of Participation (COPS) to legally defease the approximately $43,900,000 1999 COP'S to their call date and generate debt service savings. At current rates, the present value savings from an optimally structured refunding issue would be in excess of $5 million. In addition, the Electric Utility currently believes that approximately $6 million in the existing construction fund is no longer needed for its original purpose, and could be contributed to the refunding escrow. This contribution would reduce the size of the refunding issue (to approximately $47,100,000), but would not affect the savings. Annual debt service after 2010 would be reduced by approximately $1,160,000. In addition, the Electric Utility proposes to issue approximately $10,200,000 of taxable Electric Revenue COPs to raise working capital. This will provide additional flexibility to meet cashflow needs stemming from the unusual power market conditions of the past 12 months. Debt service on this taxable issue would be a level annual amount of approximately $1,600,000, with a final maturity in eight years. The proceeds from this issue are not intended to be used for budgeted O&M expenses. Budgeted O&M costs are paid for out of revenues. At this time, projected annual revenues will slightly exceed budgeted costs. The combined issue size would be $57,300,000. The COPS would be secured by net revenues from the Electric Utility. George Wolf from Salomon Smith Barney, Alex Burnett from Public Financial Management, and City staff will be in attendance at the shirtsleeve meeting. FUNDING: None required at this time. . Dixon Flynn City Manager Presentation to: City of Lodi on Proposed Series 2002 Electric Revenue COPs December 18, 2001 SALOMON SM ITH BARNEY A memberof atgm 7 Proposed Series 2002 Electric Revenue COPs Series A: Refunding of Series 1999 COPs Series B: Taxable Cashflow Borrowing SALOMON SMITH BARNEY Amemberof abgroup? Series 2002A: Refunding of Series 1999 COPs • $45.9 million par amount • 4.54% all -in cost of borrowing • $3.0 million NPV savings in current market (8.5% of refunded COPs) • $1.0 million annual cashflow savings after 2010 • $15.6 million total debt service savings • $6.0 million excess construction funds contributed from Series 1999 proceeds • Fixed rate structure recommended SALOMON SMITH BARNEY Amemberof cFtgraLO' Electric Utility Debt Service After Refunding Annual $6,000,000 Savings: $1.0 Million $5,000,000 --------- _---- - - - - -- $4,000,000 , Total Debt $3,000,000 Service $2,000,000- Savings: $15.6 Million $1,000,000 $0 2003 2006 2009 2012 2015 2018 2021 2024 2027 2030 Series 2002 Debt Service - - - - Refunded Series 1999 Debt Service SALOMON SMITH BARNEY Amemberof CitigrClqr Series 2002B: Taxable Cashflow Borrowing • $10.2 million paramount • 5.51 % all -in cost of borrowing • 8 -year term • $1.6 million approximate annual debt service • $10 million proceeds will be deposited into Rate Stabilization Fund • Proceeds are not expected to be spent based upon current operating projections • Series 2002B will reduce possibility of need for higher electric rates SALOMON SMITH BARNEY A memberof atigrmr Historic Operating Results How 2001 affected the Lodi Electric Utility. Operating Expenditures City Administration Charges Bulk Power Total Operating Expenses Net Operating Revenues Series 199912002A Debt Service Series 2002B Debt Service less Earnings on COP Proceeds Net Debt Service Net Debt Service Coverage Other Revenues (Expenses) Series 1999 Proceeds (Reimburse) Change in Receivables Operating Transfer Out DS Coverage Transfer Transfer In PILOT Change in Fund Balance Fund Balance 8,395,120 7,268,261 1,398,735 1,697,136 27,722,088 40,358,176 37,515,943 49,323,573 4,024,659 1,392,399 1,329,594 1,391,435 0 0 0 0 1,329,594 1,391,435 303% 100% 6,000,000 0 (1,861,510) 1,467,695 (879,321) (270,167) 0 (5,670,000) 0 0 (4,367,000) (4,637,165) 1,587,234 (9,108,673) 15,895,762 6,787,089 SALOMON SMITH BARNEY Amemberof ctbgroup FY1999-00 FY2000-01 Actual Actual Investment/Property Revenues 2,896,347 4,916,476 Rate Revenue 38,643,042 39,859,072 Market Cost Adjustment 0 256,009 Transfers from Reserves 0 5,670,000 Other Revenue 1,213 14,415 Total Revenue 41,540,602 50,715,972 Operating Expenditures City Administration Charges Bulk Power Total Operating Expenses Net Operating Revenues Series 199912002A Debt Service Series 2002B Debt Service less Earnings on COP Proceeds Net Debt Service Net Debt Service Coverage Other Revenues (Expenses) Series 1999 Proceeds (Reimburse) Change in Receivables Operating Transfer Out DS Coverage Transfer Transfer In PILOT Change in Fund Balance Fund Balance 8,395,120 7,268,261 1,398,735 1,697,136 27,722,088 40,358,176 37,515,943 49,323,573 4,024,659 1,392,399 1,329,594 1,391,435 0 0 0 0 1,329,594 1,391,435 303% 100% 6,000,000 0 (1,861,510) 1,467,695 (879,321) (270,167) 0 (5,670,000) 0 0 (4,367,000) (4,637,165) 1,587,234 (9,108,673) 15,895,762 6,787,089 SALOMON SMITH BARNEY Amemberof ctbgroup Key Changes to Business Plan The following key changes in business strategy will insulate the Lodi Electric Utility from further market volatility and further rate increases: • Market Cost Adjustment recovers extraordinary costs without raising base rates • Restructuring existing power purchase contracts to match seasonal load variations Electric Utility now plans for no more than 2% market purchases or 5% surplus capacity • Cashflow borrowing to increase liquidity SALOMONSMITH BARNEY A member of atigrour Projected Operating Results 8,395,120 7,268,261 4,455,568 4,801,679 4,676,592 5,548,126 6,416,197 6,544,521 6,875,412 6,808,920 6,945,098 City Administration Charges FY1999-00 FY2000-01 FY2001-02 FY2002-03 FY2003-04 FY2004-05 FY2005-06 FY2006-07 FY2007-08 FY2008-09 FY2009.10 Bulk Power ActualActual 40 358 176 Projection Projection Projection Projection Projection Projection Projection Projection Projection InvestmenUProperty Revenues 2,896,347 4,916,476 1,843,484 1,569,656 1,391,735 883,800 585,936 525,997 426,268 442,445 502,494 Rate Revenue 38,543,042 39,859.072 39,928,900 41,126,767 42,360,570 43,631,387 44,940,329 46,288,539 47,677,195 49,107,511 50,580,736 Market Cost Adjustment 0 256,009 8,645,580 0 0 2,000,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 Transfers from Reserves 0 5,670,000 0 0 0 0 0 0 0 0 0 Other Revenue 1,213 14,415 1,500,000 0 0 0 0 0 0 0 0 Total Revenue 41,640,602 50 715 972 51,717,964 42 696,423 43,752,305 46,515,187 48,526,285 49,814,536 51,103,463 52,549,956 54,083 230 Operating Expenditures 8,395,120 7,268,261 4,455,568 4,801,679 4,676,592 5,548,126 6,416,197 6,544,521 6,875,412 6,808,920 6,945,098 City Administration Charges 1,398,735 1,697,136 2.200,000 2,244,000 2,288,880 2,334,658 2,381,351 2,428,978 2,477,557 2,527,108 2,577,651 Bulk Power 27,722,088 40 358 176 40 500,000 31 000,300 32 000 000 33 000,000 33,000,000 33 000 000 33 000 000 33,000,000 33,000,000 Total Operating Expenses 37,515,843 49 323, 3 4 ,1 8 38,045,979 _38_,865,472 40, 82,783 1, 97,548 41,973,499 42,152,969 42, 028 42,522,749 Not Operating Revenues 4,024,659 1,392,399 4,582,396 4,650,445 4,786,833 5,632,404 6,728,717 7,841,037 8,950,494 10,213,927 11,560,481 Series 1999/2002A Debt Service 1,329,594 1,391,435 1,391,435 1,391,435 1,391,435 1,391,435 1,391,435 1,391,435 1,391,435 1,391,435 1,391,435 Series 20028 Debt Service 0 0 800,000 1,600,000 1,600,000 1,600,000 1,600,000 1,600,000 1,600,000 1,600,000 1,600,000 less Earnings on COP Proceeds 0 0 1 391 435 1 391 435 7 391 435 695 718 0 0 0 0 0 Net Debt Service 1,329,594 1,391.433 800,000 _ 1, 1, 2,295,718 2,991,4_ 21991,435 2,991,435 2,991,435 35 9938 Net Debt Service Coverage 303% 100% 570% 291% 299% 245% 225% 262% 299% 341% 388% Other Revenues (Expenses) Series 1999 Proceeds (Reimburse 8,000,000 0 0 0 0 0 0 0 0 0 0 Serbs 20028 Proceeds 0 0 10,000,000 0 0 0 0 0 0 0 0 Change In Receivables (1,861,510) 1,467,695 0 0 0 0 0 0 0 0 0 Operating Transfer Out (679,321) (270,167) (350,000) (357,000) 0 0 0 0 0 0 0 DS Coverage Transfer 0 (5,670,000) 0 0 0 0 0 0 0 0 0 Transfer In 0 0 2,875,000 0 0 0 0 0 0 0 0 PILOT (4 367 000) (4 637 165) (4,783,089) (4,791,468) (4 835,212) (5,083,206) (5,235,766) (5,392,839) (5,554,625) _ X5,721 263) (5,892,901) Change in Fund Balance 1,58/�T34 (8,108,673) 11,604,30 (2,098,024) (1,748,379) (1,746,582) (1,498,484) (543,238) 404,434 1,501,229 2,676,145 Fund Balance 15,896,762 6,787,089 18,291,396 16,193,373 14,444,994 12,698,412 11,199,928 10,656,690 11,061,124 12,562,353 18,238,498 NCPA GOR Balance 8,490,470 2,360,610 2,360,610 2,360,610 2,360,610 2,360,610 2,360,610 2,360,610 2,360,610 2,360,610 2,360,610 N .Q co COO O CLO /2 vJ U .0 _W W O tRl y co N ^` _W N -Q co CLO. CO Cl) o E 61 Tit � � ��'r •b' S" S'�`h� V O �F- 9 r- 3 �r� 0 cc �al aG 3.�;. 0- O� 90 0, 91 Y 9 s ` r 0NO ON � m Oc V 'J`(,�� {; QTY i�•t ,.t..j`^ s s,..; s':�:,,, a fir'" r �. �_l1� O 0 O O O O `OQ� , O O O O O O D C IT --to � �sy fo (WW$) GOUBIO8 yseO i r� 1� 12 :1`: BS --> TO :Vicky i)cAth i e Page BB1 t,;L -( FiT(V PressRelease r7rcxt [B A, gl1FF n rMlIJS FITCH One State Street Plaza New York, NY 10004 (212) 909-0010 www.fitchratings.com Fitch Rts Lodi, California $30.514M Certificates of Participation 'A+' G-e—ri FV h Q `A4Y Fitch -NY -December 17, 2001: City of Lodi, California, $30,470,000 certificates of participation (2002 Public Improvement Financing Project), are rated 'A+' by Fitch, Inc. The certificates are scheduled to sell via negotiation by Salomon Smith Barney in or around the week of Jan. 14. The 'A+' rating reflects Lodi's (the city) good financial position, low debt burden, and healthy though somewhat concentrated economy. The rating also incorporates the solid lease structure and the city's excellent management policies and practices. The city's financial position is characterized by adequate reserve levels, diverse general fund revenues, and conservative, multi- year budgeting along with prudent long-term planning. The local area economy is heavily reliant on agriculture, with some concentration in its established and growing wine -grape industry. However, recent industrial and residential development should continue to benefit the city's overall economic position. Lodi is located in California's Central Valley approximately 34 miles south of Sacramento and 90 miles east of San Francisco. The regional economy is based primarily in agricultural products including wine -grapes, nuts, fruit, and milk; the Lodi area is one of the largest and most productive wine -grape regions in the U.S. As a result, the city economy includes a substantial food processing industry in addition to other basic local services. Population growth is considerably slower than the county and surrounding communities given city growth control ordinances. Unemployment rates have declined steadily from over 10% in the early 1990's to 6.5% in 2000, well below the county's 8.8% but above state and national averages. Assessed valuations have risen moderately during the past decade, with somewhat larger gains in recent years including a 6.9% rise in 2001. Approximately $16.8 million of certificate proceeds will be used along with $4.5 million in city contributions and $4.2 million from state grants to finance a new public safety facility, renovations and improvements to the city's old public safety center, a park, and a new parking structure. The projects are all strategically located around the city's revitalized central downtown district. Construction on all projects is expected to be completed by 2005. The remaining $13.7 million will be used to refund the city's only outstanding bonded debt. Certificates are secured via a standard lease -leaseback transaction between the city and the Lodi Public Improvement Corporation (the corporation). The leased assets securing the certificates are essential city facilities with a combined value slightly exceeding certificate par. The city has covenanted to budget and appropriate lease payments equal to debt service, subject to abatement. The city's financial position is good with adequate reserve levels and diverse sources of general fund revenue. Prudent long-term planning along with strong .12:13;58 Press Re/ease TO:Vicky McAthie Page 882 FiT(V HTLH II A. I)UP► h rhlLA (ITCH One State Street Plaza Now York, NY 10004 (212) 908-0810 www.firchratings.com management policies and practices also protect the city's fiscal health. In fiscal 2001, the general fund ended with a $3.9 million fund balance including a $3.4 million unreserved undesignated balance equal to 10% of spending. General fund revenues are diverse and include property, sales and use, and in -lieu franchise taxes from the city's electric utility. Annually, the city adopts a two-year financial plan/budget along with a rolling seven-year capital plan. Debt levels remain low though somewhat higher as a result of this certificate sale. Capital improvements are financed through pay-as-you-go, partially from a 30% set-aside of the city's share of property taxes, and one-time revenues. Major additional capital needs are minimal. Contact: Mark J. Capell 1-415-732-5622 or Scott A. Andreson 1-415-732-5620, San Francisco. Projected Operating Results FY1999-00 FY2000-01 FY2001-02 FY2002-03 FY2003-04 FY2004-05 FY2005-06 FY2006-07 FY2007-08 FY2008-09 Operating Expenditures Actual Actual Projection Projection Projection Projection Projection Projection Projection Projection Investment/Property revenues 2,896,347 4,916,476 1,654,531 1,668,477 1,630,252 1,230,045 980,557 906,858 779,404 753,192 Rate Revenue 38,643,042 39,859,072 39,928,900 41,126,767 42,360,570 43,631,387 44,940,329 46,288,539 47,677,195 49,107,511 Market Cost Adjustment 0 256,009 8,645,580 3,000,000 2,000,000 2,000.000 2,000,000 2,000,000 2,000,000 2,000,000 Transfers from Reserves 0 5,670,000 0 0 0 0 0 0 0 0 Other Revenue 1,213 14,415 1,500,000 0 0 0 0 0 0 0 Total Revenue 41,540,602 50,715,972 51,729,011 45,795,244 45,990,822 46,861,432 47,920,886 49,195,397 50,456,599 51,860,703 Operating Expenditures 8,395,120 7,268,261 4,272,289 4,408,396 4,547,759 5,690,468 6,836,619 6,973,351 7,112,818 7,255,075 City Administration Charges 1,398,735 1,697,136 2,200,000 2,244,000 2,288,880 2,334,658 2,381,351 2,428,978 2,477,557 2,527,108 Bulk Power 27,722,088 40,358,176 40,500,000 31,000,000 31,310,000 31,623,100 31,939,331 32,258,724 32,581,312 32,907,125 Total Operating Expenses 37,515,943 49,323,573 46,972,289 37,652,396 38,146,639 39,648,225 41,157,301 41,661,053 42,171,687 42,689,308 Net Operating Revenues 4,024,659 1,392,399 4,756,722 8,142,848 7,844,183 7,213,207 6,763,585 7,534,344 8,284,912 9,171,395 Series 1999/2002A Debt Service 1,329,594 1,391,435 1,391,435 1,391,435 1,391,435 1,391,435 1,391,435 1,391,435 1,391,435 1,391,435 Series 20026 Debt Service 0 0 800,000 1,600,000 1,600,000 1,600,000 1,600,000 1,600,000 1,600,000 1,600,000 less Earnings on COP Proceeds 0 0 (1,391,435) (1,391,435) (1,391,435) (695,718) 0 0 0 0 Net Debt Service 1,329,594 1,391,435 800,000 1,600,000 1,600,000 2,295,718 2,991,435 2,991,435 2,991,435 2,991,435 Net Debt Service Coverage 303% 100% 595% 509% 490% 314% 226% 252% 277% 307% Other Revenues (Expenses) Series 1999 Proceeds (Reimburse) 6,000,000 0 0 0 0 0 0 0 0 0 Series 20028 Proceeds 0 0 10,000,000 # 0 0 0 0 0 0 0 Change in Receivables (1,861.510) 1,467,695 0 0 0 0 0 0 0 0 Operating Transfer Out (879.321) (270,167) (350.000) (357,000) (364,140) (371,423) (378,851) (386,428) (394,157) (402.040) DS Coverage Transfer 0 (5,670,000) 0 0 0 0 0 0 0 0 Transferin 0 0 4,875,000 # 0 0 0 0 0 0 0 PILOT (4,367,000) (4,360,975) (4,783,089) (4.791,468) (4.935.212) (5,083,268) (5,235,766) (5,392,839) (5,554,625) (5,721,263) Change in Fund Balance 1,587,234 (8,832,483) 13,698,634 1,394,380 944,831 (537,202) (1,842.468) (1,236,359) (655,305) 56,656 Fund Balance 15,895,762 7,063,279 20,761,913 22,156,292 23,101,123 22,563,922 20,721,454 19,485,095 18,829.790 18.886.446 Reimbursement from bond trustee: $2,875,000 for prior 2 years' excess construction earnings, and $2,000,000 for prior 1 year's capital expenditures SALOMON SMITH BARNEY A memberof atgr-j j Projected Operating Results Projected Operating Results 8,395,120 7,268,261 4,455,568 4,801,679 4,676,592 5,548,126 6,416,197 6,544,521 6,675,412 6,808,920 City Administration Charges FY1999-00 FY2000-01 FY2001-02 FY2002-03 FY2003-04 FY2004-05 FY2005-06 FY2006-07 FY2007-08 FY2008-09 Bulk Power Actual Actual Projection Projection Projection Projection Projection Projection Projection Projection Investment/Property Revenues 2,896,347 4,916,476 1,643,484 1,569,656 1,391,735 883,800 585,936 525,997 426,268 442,445 Rate Revenue 38,643,042 39,859,072 39,928,900 41,126,767 42,360,570 43,631,387 44,940,329 46,288,539 47,677,195 49,107,511 Market Cost Adjustment 0 256,009 8,645,580 0 0 2,000,000 3,000,000 3.000,000 3,000,000 3,000,000 Transfers from Reserves 0 5,670,000 0 0 0 0 0 0 0 0 Other Revenue 1,213 14,415 1,500,000 0 0 0 0 0 0 0 Total Revenue 41,540,602 50,715,972 51,717,964 42,696,423 43,752,305 46,515,187 48,526,265 49,814,536 51,103,463 52,549,956 Operating Expenditures 8,395,120 7,268,261 4,455,568 4,801,679 4,676,592 5,548,126 6,416,197 6,544,521 6,675,412 6,808,920 City Administration Charges 1,398,735 1,697,136 2,200,000 2,244,000 2,288,880 2,334,658 2,381,351 2,428,978 2,477,557 2,527,108 Bulk Power 27,722,088 40,358,176 40,500.000 31,000,300 32,000,000 33,000,000 33,000,000 33,000,000 33,000,000 33,000,000 Total Operating Expenses 37,515,943 49,323,573 47,155,568 38,045,979 38,965,472 40,882,783 41,797,548 41,973,499 42,152,969 42,336,028 Net Operating Revenues 4,024,659 1,392,399 4,562,396 4,650,445 4,786,833 5,632,404 5,728,717 7,841,037 8,950,494 10,213,927 Series 199912002A Debt Service 1,329,594 1,391,435 1,391,435 1,391,435 1,391,435 1,391,435 1,391,435 1,391,435 1,391,435 1,391,435 Series 20026 Debt Service 0 0 800,000 1,600,000 1,600,000 1,600,000 1,600,000 1,600,000 1,600,000 1,600,000 less Earnings on COP Proceeds 0 0 (1,391,435) (1.391,435 1.391.435' i695.718 0 0 0 0 Net Debt Service 1,329,594 1,391,435 800,000 1,600,000 1,600,000 2,295,718 2,991,435 2,991,435 2,991,435 2,991,435 Net Debt Service Coverage 303% 100% 570% 291% 299% 245% 225% 262% 299% 341% Other Revenues (Expenses) Series 1999 Proceeds (Reimburse 6,000,000 0 0 0 0 0 0 0 0 0 Series 20026 Proceeds 0 0 10,000,000 0 0 0 0 0 0 0 Change in Receivables 1.861.5101 1,467,695 0 0 0 0 0 0 0 0 Operating Transfer Out (879.321) (270.1671 1350,0001 1357.000 0 0 0 0 0 0 DS Coverage Transfer 0 (5.670.0001 0 0 0 0 0 0 0 0 Transfer In 0 0 2,875,000 0 0 0 0 0 0 0 PILOT (4.367.000) (4,637,1651 x4.783.089'. (4,791,468! 14.935.212 (5.081268' (5,235,766 15.392.839 )5.554.625 5 721,263. Change in Fund Balance 1,567,234 (9,108.673 11,504,307 (2.098.0241 (1.748,379) (1,746.5821 (1,498.484; 1543.2381 404,434 1,501,229 Fund Balance 15,895,762 6,787,089 18,291,396 16,193,373 14,444,994 12,698,412 11,199,928 10,656,690 11,061,124 12,562,353 NCPA GOR Balance 8,490,470 2,360,610 2,360,610 2,360,610 2,360,610 2,360,610 2,360,610 2,360,610 2,360,610 2,360,610 SALOMON SMITH BARNEY 4 memberot crtigroun