1	Dallas Water Utilities Revenue Refunding And Improvement Bonds Series 2006 Presented to Finance, Audit and Accountability Committee February 27, 2006
2	Purpose The purpose of this briefing is to provide information regarding a proposed bond sale required to provide funding for: Retirement of outstanding commercial paper Replacement of Customer Information, Accounting and Billing System (CIABS) Implementation of Automated Meter Reading (AMR) program
3	Bond Sale Overview Total bond sale estimated at $265.13M, not to exceed $266M The proposed bond sale will retire currently outstanding commercial paper of $238.67M and provide funds for CIABS replacement and AMR implementation. Bond issuance costs of $.55M to be paid from operating funds Callable bonds Issuance of additional debt does not adversely affect the bond rating, in the opinion of the City’s financial advisors Currently rated AA+ with Standard & Poor’s Ratings Services Currently rated Aa2 with Moody’s Investors Service
4	Bond Issuance Costs Estimated issuance costs: Total Bond Counsel $160,000 Co-Financial Advisors 196,000 Debt Analysis/Structuring 60,000 Official Statement Printing 8,000 Rating Agencies 105,000 Auditor 8,000 Other (filing fee, typing fee) 11,000 Total Estimated Issuance Cost $548,000* *To be paid from operating fund
5	Commercial Paper Refunding Commercial paper program provides short-term financing of capital projects refunded with issuance of thirty year revenue bonds Outstanding commercial paper balance of $238.67M as of February 8, 2006 Average commercial paper interest rate as of February 8, 2006 was 3.15% See Appendix Page 17 for background information
6	CIABS Replacement Replacement of Customer Information, Accounting and Billing System (CIABS) was originally briefed to the Finance and Audit Committee in March 22, 2004 Status update on project progress last provided to the Finance, Audit and Accountability Committee on October 24, 2005
7	CIABS Replacement (cont’d) The project will utilize a two step phase implementation, first phase is replacement of CIABS which is the current water, waste water, sanitation and storm water billing system, closely followed by a second phase implementation of a City-wide Centralized Billing System Estimated $18M for CIABS replacement and $2M for enhancement and inclusion of a Centralized Billing System
8	CIABS Replacement (cont’d) RFCSP advertised January 12, 2006 Vendor proposals due March 3, 2006 Project to be awarded August 2006 Project included in FY05-06 Capital Budget Ten year term
9	AMR Program Strategy for implementation of automated reading program briefed to: Finance and Audit Committee November 24, 2003 Health and Human Services Committee December 2, 2003 Status update provided to Finance and Audit Committee on May 24, 2004 Project to include Central Business District, Fair Park and Deep Ellum areas
10	AMR Program (Cont’d) Estimated project costs to be $5M Project expected to be awarded in June 2006 Project included in FY 05-06 Capital Budget Ten year term
11	Proposed Schedule February 27, 2006 Finance Committee briefing March 08, 2006 City Council authorization to prepare for bond sale March 31, 2006 Rating meetings with S&P and Moody’s April 05, 2006 Receive ratings from rating agencies April 07, 2006 Distribute POS & Representation Letters to City Council April 12, 2006 Receive and accept bids for bond sale May 11, 2006 Deliver bonds May 12, 2006 Official Statement and Representation Letters to City Council
12	Summary This presentation has outlined: DWU’s request to issue thirty-year revenue bonds to retire commercial paper DWU’s request to issue ten-year revenue bonds to replace CIABS and implement AMR program
13	Recommendation Authorize staff to proceed with the issuance of Waterworks and Sewer System Revenue Refunding and Improvement Bonds, Series 2006 Proceeds from the thirty year bonds will be used to retire $238.67M of outstanding commercial paper Proceeds from the ten year bonds to be used to fund replacement CIABS System and AMR project implementation cost Total combined par value of bonds not to exceed $266M Recommend approval of the March 8 Council Agenda Item authorizing staff to proceed with preparations for the bond sale
14	Appendix Page 15 Source and Use Statement Page 16 Debt Service Schedule Page 17 Commercial Paper program overview
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17	Commercial Paper Program Overview Commercial Paper is issued throughout the year as projects are awarded Program Benefits Provides interim capital funding for projects at a relatively low interest rate Can be issued in smaller amounts and later retired through scheduled revenue bond issues or available resources Program Authorized Series B limit was increased effective August 25, 2004 to $200M Series C limit was increased effective August 25, 2004 to $100M Total authorized maximum outstanding is $300M Program expires September 30, 2014