[BoulderCouncilHotline] Water and sewer revenue bonds

[Wallach, Mark]

As I suspect that no one, ever, has wanted to discuss water and sewer revenue bonds (despite their critical importance), I thought it might be preferable for me to ask my questions in writing concerning Tuesday’s consent agenda item, so that we do not have to spend time on this subject at next week’s busy meeting.  At the outset, let me state that I am entirely supportive of the bond issue and the purposes for which it is intended. Nevertheless, I am hoping the following few questions can be answered prior to our meeting:

1) Authority is sought to issue bonds subject to an interest rate cap of 4.5%. With interest rates rising rapidly (at least with respect to mortgages), how much clearance does this give us in terms of where bond rates are today? How close are we cutting it with that cap?

2) The memo states that the City reserves the right to spend the proceeds on different or additional projects. Please explain. If we are approving a specific set of expenditures (and they are good ones), what, exactly is the discretion to use bond proceeds for purposes not enumerated in this memo? Would it not be appropriate to submit to Council for approval any changes from the authorized expenditures?

3) Do we know the S&P rating for the prospective bond issuance?

4) Will this issuance have an impact on our capacity to issue bonds for CU South?

5) Can someone explain the pro forma debt service coverage chart on page 106 of the memo? Surely, we are not showing a net profit of $37.7MM in 2020? At that level of profitability, it would be reasonable to ask whether we require a bond issuance at all. I know that I am not reading this correctly, but an explanation would be helpful.

6) I know that this information has been provided to us previously, but could the sewer and stormwater rate increases projected for the next few years be provided again? Are those projections inclusive of both this bond issuance and the CU South project? Increases in both percentages and dollar amounts would be useful. I apologize for the redundancy of the request.

Thank you in advance for any information you can provide to my colleagues and myself.



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