TC Res. No. 2009-28 CONSENTING TO UPPER EAGLE REGIONAL WATERTOWN OF AVON, COLORADO
RESOLUTION NO. 09 -28
SERIES OF 2009
A RESOLUTION CONSENTING TO UPPER EAGLE REGIONAL WATER
AUTHORITY INCREASE IN BASE RATE
WHEREAS, Town of Avon ( "Town ") is a Participating Member in the Upper
Eagle Regional Water Authority ( "Water Authority "), via the Establishing Agreement,
dated September 18, 1984, and the Amended and Restated Master Service Contract
("Service Contract "), dated January 1, 1998; and
WHEREAS, the Board of Directors of the Water Authority have proposed a Base
Rate Increase to accommodate the payment of Debt Service on the proposed Series 2009
Revenue Bonds; and
WHEREAS, the intent of the Debt Service Base Rate is to appropriately distribute
the cost of needed improvements among the customers benefitting from these
improvements, and to allow a reliable and readily calculable revenue source as security
for the Bonds, thus lowering the risk contained within the Bonds and lowering the
interest rate cost of the Bonds.
NOW, THEREFORE, the Town Council of the Town of Avon does consent to
the proposed Base Rate Increase as intended for implementation as of January 1, 2010;
and as may be required to be adjusted in future years subject to the following conditions:
The proceeds from the Debt Service Base Rate shall be used solely for debt
service payments on the Series of 2009 Revenue Bonds.
2. Water Authority staff, in preparing each annual budget, shall determine the
Debt Service Base Rate for the subsequent calendar and budget year by
dividing the subsequent years' debt service by the current number of Single
Family Equivalent Units ( "SFE's ") being actively billed; further divided by
12 months, to establish the amount of the monthly Debt Service Base Rate
per SFE to be effective the following year.
00173584 Doc eljk
ADOPTED this day of �T , 2009, by a vote of in favor and
O opposed.
Town of Avon
�+ 4
vY 4 By:
ay Ronald C. Wolfe, Mayor
Attest:
P y M envy, Tgwn Jerk
{ 00 t 73584. DOC /}
Town of Avon
Resolution Consenting to Upper Eagle
Regional Water Authority Increase in Base Rate
Page 2
UPPER EAGLE REGIONAL WATER AUTHURITY
846 Forest Road ♦ Vail, Colorado 81657 ♦ (970) 476 -7480
FAX (970) 476 -4089 ♦ erwsd @erwsd.org ♦ www.erwsd.org
October 22, 2009
Ronald C. Wolfe, Mayor, and
Members of the Avon Town Council
Post Office Box 975
Avon, Colorado 81620
Re: Debt Service Base Rate
Dear Mayor Wolfe and Members of Council:
In the presentation of the proposed Debt Service Base Rate increase for the upcoming
Bond Issue, the Question may not have been framed as well as it might have been. The point of
this letter is to request that consent to the proposed new charge be either given or rejected at an
early date, so that we can proceed to take advantage of favorable Bond rates and favorable
construction bids.
We believe the most salient points are as follows:
1. Normally the UERWA Board would not request consent, as the Debt Service costs
would simply be added to the Service Charge (water usage). Changes to the
Service Charge do not require consent — simply a notice. A combination increase
to the Base Rate and Service Charge will be implemented to pay the Debt Service
if this Base Rate alternative does not have unanimous consent.
2. Our counsel has determined that this Debt Service Base Rate constitutes a "Base
Charge " under the Service Contract; and, therefore, since it exceeds the increase
in the Consumer Price Index, does require consent of each of our six Participating
Members.
3. The concept of this Base Rate for Debt Service was developed by Stan Bernstein
as he reviewed the original direction, which was to calculate the increase in the
Service Charge needed to pay for the upcoming Revenue Bonds.
WATER OPERATIONS
Arrowhead Metropolitan District ♦ Town of Avon ♦ Bachelor Gulch Metropolitan District A\ Beaver Creek Metropolitan District ♦ Berry Creek Metropolitan District
Cordillera Metropolitan District * Eagle -Vail Metropolitan District ♦ Edwards Metropolitan District
P \30UER \1ADMIN \LETTERSW0N LETTER.000
Ronald C. Wolfe, Mayor
Member of the Avon Town Council
October 22, 2009
Page 2
4. Stan accurately concluded that the Bonds would be more secure, and assumedly
the market would give us a better interest rate, if each year we could guarantee that
the Debt Service would be raised through a flat fee; rather than by estimating the
expected water usage and raising the debt service amount through the Service
Charge.
S. Accordingly, this alternative method of assessing the Debt Service gained favor as
allowing savings in our Bond Issue, without any significant effect on our
customers.
6. Now is the time to issue Bonds. Savings are expected from acting now. The Bond
documents are currently being drafted.
7. Now also is the time to construct improvements. We have been receiving very
favorable bids on recent construction projects.
8. All other Participating Members have given Consent, and we need to finalize our
Budget and Financing Plan on November 19.
9. The capital improvements proposed through the Bond Issue have been approved
by our Board. The question comes down simply to how the Debt Service is paid
on these Revenue Bonds.
We appreciate the Avon Town Council's interest in our operations, and we have enclosed
a copy of the 2010 Budget for your review. Becky Bultemeier and Stan Bernstein will be happy
to answer any questions you may have. In the immediate future, however, we need a decision
one way or the other on consent to the Debt Service Base Rate. if we need to finance Debt
Service through the Base Rate and Service Charge combination, we must have the Bond
documents reflect that. Thank you for your consideration.
Respectfully submitted,
MEMBERS OF THE BOARD OF DIRECTORS:
f �n
II 1
Doris 156wton, Chair
(Berry Creek Metro)
F:00UEW I ADM INA Fr1- ER9,AV0N LFTTFR.DOC
By�_.w
Brian Sipes, Director
(Town of Avon)
n
Ronald C. Wolfe, Mayor
Member of the Avon Town Council
October 22, 2009
Page 3
i
By; -
Thomas Allender, Director William Simmons, Vice Chair
(Eagle -Vail Metro)
By: By:
Jam . P we Director
Director
(B aver reek Metro)
Enclosures 2010 Budget
Proposed Consent Resolution
F:',30UER' I ADM KUTTERS,AVQN LETTER TW
(Edwards Metro)
Thomas C. I
(Arrowhead
TOWN OF AVON 0
RESOLUTION CONSENTING TO UPPER EAGLE REGIONAL WATER
AUTHORITY INCREASE IN BASE RATE
WHEREAS, Town of Avon ( "Town ") is a Participating Member in the Upper
Eagle Regional Water Authority ( "Water Authority "), via the Establishing Agreement,
dated September 18, 1984, and the Amended and Restated Master Service Contract
( "Service Contract "), dated January 1, 1998; and
WHEREAS, the Board of Directors of the Water Authority have proposed a Base
Rate Increase to accommodate the payment of Debt Service on the proposed Series 2009
Revenue Bonds, and possibly other future bonds (the "Bonds "); and
WHEREAS, the intent of the Debt Service Base Rate is to appropriately distribute
the cost of needed improvements among the customers benefitting from these
improvements, and to allow a reliable and readily calculable revenue source as security
for the Bonds, thus lowering the risk contained within the Bonds and lowering the
interest rate cost of the Bonds.
NOW, THEREFORE, the Town Council of the Town of Avon does consent to
the proposed Base Rate Increase as intended for implementation as of January 1, 2010;
and as may be required to be adjusted in future years subject to the following conditions:
1. The proceeds from the Debt Service Base Rate shall be used solely for debt
service payments.
2. Water Authority staff, in preparing each annual budget, shall determine the
Debt Service Base Rate for the subsequent calendar and budget year by
dividing the subsequent years' debt service by the current number of Single
Family Equivalent Units ( "SFE's ") being actively billed; further divided by
12 months, to establish the amount of the monthly Debt Service Base Rate
per SFE to be effective the following year.
ADOPTED this day of , 2009, by a vote of in favor and
opposed.
Town of Avon
LIZ
Ronald C. Wolfe, Mayor
t00173584.DOC I} 0
r�
u
UPPER EAGLE REGIONAL WATER AUTHORITY
2010 BUDGET
OPERATING REVENUE:
Water Service Fees per 1.000 gal, - Tier 1
Water Service Fees per 1,000 gal. - Tier 2
Water Service Fees per 1,000 gal. - Tier 3
SFE Base Charge
Debt Service Base Fee - 2009 Bonds
One Time Water Credit for excessive use
Watering Fines
Total Operati" Revenue
OPERATING EXPENDITURES:
DRAFT 10107/09
Public Hearing 10/22/09
2008 2009 2009 2010
Actual Su et Estimate Budget Note:
2,906,080
3,061,381
2,503,982
2,762,799
1,684,868
1,713,239
1,497,378
1,652,150
367,875
285,606
320,501
353,629
2,603,252
2,805,134
2,813,670
2,832,853
8,825
6,100
3,912
734,725 (3)
(37,033)
(30,000)
(30,000)
(27,628) (1)
770
-
7,527,811
7,835,360
7,105,531
8,328,528
WATER TREATMENT
General Treatment:
Communications and Controls
44,908
45,000
40,299
45,000
Treatment Contract
808,558
836,499
977,501
977,500
Phone - Telemetry
8,825
6,100
3,912
4,000
Supplies
5,283
6,000
12,086
8,000
Avon Drinking Water Facility:
Chemicals
201,648
207,000
205,685
217,000
Electricity in plant
226,146
257,000
256,263
306,000
Natural Gas
23,657
26,400
26,299
26,000
Outside Services
25,933
29,700
29,524
32.000
LT2, STG II DDBP & UCMR2 Outside Labs
13,165
23,740
23,555
25,000
Repairs
77,526
95,000
94,376
95,000
Sewer
33,559
60,000
73,603
62,400
Edwards Drinking Water Facility:
Chemicals
32,769
25,200
22,025
26,800
Electricity in plant
114,614
135,000
104,917
141,750
outside Services
11,616
15,000
14,433
15,000
Repairs
43,810
27,500
25,616
30,000
Sewer
37,116
38,000
42,764
40,000
(2)
System Wells:
Wells Electricity
31,211
45,000
41,048
40,000
wellChemicals - Treatment
5,785
7,300
6,678
8,800
Repairs
2,974
7,000
7,125
10,000
Total Water Treatment
1,749,104
1,892,439
2,007,711
2,110,250
WATER DISTRIBUTION
Electricity
302,024
345,600
339,877
340,000
Distribution Contract
696,462
784,507
757,179
760,000 (2)
Phone - Telemetry
2,977
3,500
3,500
3,500
Repair- Distribution System
250,669
60,000
81,146
85,000
BPS/TANKS Repairs - Equipment
40,037
40,000
35,340
40,000
BP&Tanks Building & Grounds
6,132
101000
7,500
10,000
Total Water Distribution
1,298,300
1,243,807
1,224,542
1,238,500
OTHER OPERATING EXPENSES
17,000
17,000
18,000
11,839
Consumer Confidence Report
15,000
18,000
21,215
50,000
Eagle Park Reservoir Operating Expense
95,829
2,800
11,600
11,725
Fiattops Ops Agreement
186,080
88,000
92,856
95 000
Gauging Station Maintenance
7,713
55,000
100,733
Green Mountain Augmentation
53,320
35,000
53,320
64,320
Woiford Mtn Augmentation Water
26,840
28,200
28,200
35,000
Eagle Park Augmentation Water
310,288
22,000
182,000
182,000
Regulatory Compliance
884,974
9,020
9.020
9,020
Radio Tuning System wide
754
5,000
4,968
5,000
Security for the drinking water facilities
21,895
3,211
8,826
10,000
10,000
State Fees
2,039,965
2,000
1,993
4,000
Tank Overflow Protection
9,011
5,500
5,367
5,000
Water Tank Cleaning
-
1,000
1,000
1,000
Diversion Intake Cleaning /Maintenance
5,440
12,000
20,000
12,000
Meter Replacement
21,700
25,000
25,000
25,000
Contingency • Ops., Repairs, & Legal
38,153
-
40,000
100,000
150,000
Total Other Operating Expenses
283,865
330,520
523,714
597,340
Total Operating Expenditures
31331,269
3,466,766
3,755,967
3,946,090
GROSS INCOME FROM OPERAT10Ns
4,196,542
4,368,594
3,349,564
4,382,438
GENERAL & ADMIN. EXPENSES
Audit
Communications
Consulting
Directors' Fees and Expenses
Engineering (Edw Disinfection By- product rule evaluation)
Corrosive Soil Study
Master Plan of Water System
Insurance
Legal - General
Legat - Water Rights
Administration, Customer Service & Accounting Contract
Life Cycle allocation from ERWSD
Miscellaneous
Water Conservation
Total General & Admin. Exp.
Total Operating and G & A Expenditures
INCOME FROM OPERATIONS
NON - OPERATING REVENUE
Plant Investment Fee
Holy Cross Refunds
Interest Traer Crk EMD LLC
Interest Income
Interest Income - Construction Escrow
Contributed Assets from Developers (cash only)
Cash from Developments in lieu of Storage/Water Rights
Other Income
Bond Proceeds
EM LLC Traer Creek
Total Non-operating Revenue
13,900
17,000
17,000
18,000
11,839
15,000
15,000
18,000
21,215
50,000
30,000
25,000
11,593
11,600
11,725
12,100
186,080
150,000
50,000
100,000
456
-
100,733
70,000
-
78,957
95,000
95,000
95,000
39,323
35,000
35,000
35,000
310,288
200,000
336,658
265,000
979,055
884,974
1,239,118
1,240,000
276,627
390,000
530,190
400,000
1,075
2,000
8,600
8,600
8,826
10,000
10, 000
15,000
2,039,965
1,860,574
2,448,291
2,231,700
5,371,235
5,327,340
6,204,258
6,177,790
2,156,577 2,508,020 901,273 2,150,738
1,062,251
368,882 494,052
84,310
51,105
60,000 65,597
65,500
8,036
7,770
7,546
187,870
131,988 76,050
158,667
187,635
-
(183,700)
9,615
2,000
2,000 2,000
11,700,000
14,743,063 -
8,939
3,500
4,110 42335
1,515,451
12,266,370
15,208,942 322,357
(5)
(2)
(2)
v
NON-OPERATING EXPENDITURES
Eagle River Watershed Council Support
Eagle River Study by USGS
Eagle River Ground Water Study USES
Vail Valley Forest Health
Total Non - operating Expenditures
Net Non- operating Revenue less Expenses
income Available for Debt & Capital
DEBT SERVICE & CAPITAL EXPENDITURES
Bond Principal
Bond Interest
Bond Issue Casts
Paying Agent Fees
Total Debt Service
Water System Improvements :
Life Cycle Maintenance, (Repair & Replacement
Capital Construction Plan
Water Rights Purchases
Total Capital Expenditures
SURPLUS/(DEFICIT)
SUMMARY OF REVENUE & EXPENSE
TOTAL REVENUES
TOTAL EXPENDITURES
TOTAL SURPLUSI(DEFICM
Beginning Funds Available
Ending Funds Available
20,000 25,000
25,000
25,000
18,200 15,000
24,200
20,000
28,351 45,000
45,000
45,000
45,000
45,000
45,000
66,551
130,000
139,200
135,000
941,383
1,253,978
898,811
851,850
1,448,901
12,136,370
15,069,742
187,357
3,605,477
14,644,390
15,971,015
2,338,095
1,472,265
1,194.977
1,194,977
2,022,563
941,383
1,253,978
898,811
851,850
348.820
348,820
-
1,275
1,100
1,275
1,750
8,782,800
4,399,617
7,604,981
12,954,919
2,414,923
2,798,875
2,443,883
2,876,163
194,948
3,143,500
2,430,436
1,631,000
2,173,425
7,280,180
3,946,758
6,874,348
1,800,000
-
2,388,373
10,423,680
8,177,194
8405,348
8,782,800
4,399,617
7,604,981
12,954,919
(1,177,819)
1,421,835
5,349,938
(9,043,416)
91043,262
20,101,730
22,314,473
8,650,885
10,221,081
18,679,895
16,964,535
17,694,301
(1,177,819)
1,421,835
5,349,938
(9,043,416)
8,782,800
4,399,617
7,604,981
12,954,919
7,604,981
61821,452
12,954,919
3,911,503
Analysis of Ending Funds Available:
General Reserves
Cash in Lieu of Water Rights
Storage Fees for future tank
Debt Service - 1998 EPR Issue ( +1110 of annual each yr.)
Construction Escrow - Edwards Water Treat. Plant
Construction Bonds 2002 - E PR Expansion & Well upgrade
Construction Bonds 2005 - Tanks, One, pumps
Capitalized Interest - 2000 and 2001 issue
Debt Service - 1995, 2002 & 2003 Issues (1112 of next princi
Operating Reserve - 3 months
Unspent 2009 Bond Funds
Total Ending Fund Balance
Note:
4,521,960 4,335,780
1,208,455 -
291,070
151,671 121,337
9,568,729 631,930
1,583,455 1,483,455 (4)
151,671 151,671
f 99,990 - 100,000 100,000
1,331,835 1,364,335 1,551,065 1,544,448
9,550,348 1,200,000
7,804,981 5,821,452 12,954,919 3,911,503
dit,
0 i MaJor water leak service charge cre only granted once in your ownership period.
(2) Total Expense for the Treatment, Distribution,
Admin & Accounting, Life Cycle services:
Routine Operations Contract Estimate with ERWSO
Life Cycle Replacement Allocation
Vehicles Cost Allocation
Net Operations agreement cost on annual basis
Adjustment to final audited Amount
Annualized contract amount
- Check td(
2008 2009 2009 2010
Actual Bucluet Estimate Sudoet
2,400,871 2,395,980 2,898,378 2,897,500
276,627 390,000 530,190 400,000 Est
83,203 110,000 75,420 80,000
$2,760,701 $2,895,980 $3,503,988 $3,377,500
$4,354
$2,765,055 $2,895,980 $3,503,988 $3,377,500
3) A base fee, per SFE, established to fund the 2009 bends. The fee is set each year based on the next years annual debt service, divided by the SFE's.
(4) Held for future purchases of water rights or raw water facility expansions.
(5) Radio Tuning due to electronic drift. Radios need to be tuned or calibrated at least every two to three years.
The most efficient way to do this is all at once since most of them talk to a repeater type unit then pass forward.
dit,
0 i MaJor water leak service charge cre only granted once in your ownership period.
(2) Total Expense for the Treatment, Distribution,
Admin & Accounting, Life Cycle services:
Routine Operations Contract Estimate with ERWSO
Life Cycle Replacement Allocation
Vehicles Cost Allocation
Net Operations agreement cost on annual basis
Adjustment to final audited Amount
Annualized contract amount
- Check td(
2008 2009 2009 2010
Actual Bucluet Estimate Sudoet
2,400,871 2,395,980 2,898,378 2,897,500
276,627 390,000 530,190 400,000 Est
83,203 110,000 75,420 80,000
$2,760,701 $2,895,980 $3,503,988 $3,377,500
$4,354
$2,765,055 $2,895,980 $3,503,988 $3,377,500
3) A base fee, per SFE, established to fund the 2009 bends. The fee is set each year based on the next years annual debt service, divided by the SFE's.
(4) Held for future purchases of water rights or raw water facility expansions.
(5) Radio Tuning due to electronic drift. Radios need to be tuned or calibrated at least every two to three years.
The most efficient way to do this is all at once since most of them talk to a repeater type unit then pass forward.
3) A base fee, per SFE, established to fund the 2009 bends. The fee is set each year based on the next years annual debt service, divided by the SFE's.
(4) Held for future purchases of water rights or raw water facility expansions.
(5) Radio Tuning due to electronic drift. Radios need to be tuned or calibrated at least every two to three years.
The most efficient way to do this is all at once since most of them talk to a repeater type unit then pass forward.