Utility Committee Agenda and Packet 2020 10 13

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get to a decision where we can choose a final path. Mr. Manire agreed and said we will continue modeling for comparison. Mr. Kowar added that staff is recommending the Group Financing where with the information we have we think the risks are well mitigated for default and the ability to move water if it comes to us. Councilmember Lipton thinks we need an expanded table for that so this is more flushed out so we can then make a good decision. Mayor Stolzmann added that what she is hearing is that we need to bring a decision to Council after this meeting. Councilmember Lipton said that he finds that unacceptable as he doesn't think this is fully understood. Mayor Stolzmann agreed that we don't have enough information to go with the Group Financing and stated what she has heard was the benefit is that the debt service won't count against us so we'll have more rate flexibility going forward. Then everything else stays the same and the risk and unknown makes it impossible for her to say we should go with the Group Financing. She continued saying that we have not hit our debt coverage in the last 10 years so that's not a compelling argument. So she's not for the Group Financing because of the lack of information. Mayor Pro Tern Councilmember Maloney thanked Mr. Manire for his input and continued with the next chart. Page 21 — Minor Issues. Mr. Manire explained what the term selection is (used 20-30 year term). Mayor Pro Tern Councilmember Maloney added that we don't have enough information to make a decision on these issues today and he would like to dive into the number more. Mr. Kowar said that we would run a model for a 20 and 30 year for each estimate for the City and the Pool Financing so that would be four schedules for the Committee to review. Mr. Kowar stated we are trying to get to the specifics and to give Utility the most options without being overwhelming. He continued by listing the outstanding issues: 0 4 Cost Schedules for 20 and 30 year o City vs Pool Financing o Allotment Contract o Debt Coverage Analysis o Minor Issues — Add Debt Capacity Mr. Kowar continued suggesting that staff will attempt to add more detail but we have run eight scenarios and we did narrow it down to a couple. Mr. Kowar sought direction from the Utility Committee on the cash down versus not. Mr. Kowar stated that Public Works staff's opinion is the Group Financing the interest rate won't be significantly different and the cash down piece we'd use our cash to set up the various funds required and do the actual loan amount for the project on the financing. Mr. Kowar asked the committee if they agree with using our cash for setting up our various reserve liquidity funds and let the cost of the project go into the loan. Mayor Pro Tern Councilmember Maloney stated that if we have the available cash that it makes sense to do but what's the effect on rates and what's the impact if we do a down payment to cover those things.