Rialto Utility Authority: RWS Financial Coverage and Capital Raising Plan May 25,2022
Presentation Outline
Overview
Draft Water & Wastewater Capital Requirements
Draft Capital Structure (SRF, WIFIA, RWS)
Transaction Resources
Capital Raising Plan Scope & Timing
Key Structuring Considerations/Application Deliverables Budget Expenses
Subcommittee Actions
RWS is addressing two needs:- Financial coverage requirements- Raising capital for next gen FIP/CIP 5 –year plan In fiscal 2019-20, 2020-21 and 2021-22, reserves were needed to meet coverage and fund operating expenses in the water utility.
Looking forward over the next five years FY 2023-2028, the need intensifies in the water utility.
The wastewater utility is adequately funded. An inflation adjustment is recommended over the next 5 years.
The financing process is raising $35 MM for water and $27.4 MM wastewater core projects 2022-2028. And up to $75 MM for Special Projects.
5-Year CIP PlanCore CIP +Special Projects ($ MM’s)
Reflects coordinated paving and water line replacement
Sources of Funds-Repayment
Use of WIFIA and SRF is optimized to achieve lowest cost of capital WIFIA 5-10 year deferral option offers important economic advantages Looking back to October presentation, water utility requires a 2.5% to 3.0% annual rate increase over 5 years to support coverage and capital projects Wastewater financials are stable . inflation adjustment recommended Special projects are addressed separately from non-discretionary Core Infrastructure Total size of program matches WIFIA application noting discretionary nature of Special Projects Prioritization process for Special Projects continues through November to a final decision point Focus on funding sources for Special Projects
RWS sources completes funding
Transaction Resources
RWS LLC (Leads process, is the principal in the borrowing process) Black & Veatch (Advisor for WIFIA & SRF Loan Applications) Orrick (Legal counsel/documentation)
NEPA/CEQA (consultant t.b.d very soon)
Dopudja/Wells (completes Master Plan to support loan applications) City/RUA (Review and approval approaching year end)
Key Structuring Considerations/ Application Deliverables Prioritization of Special Projects
Final project deadline Fall 2022
WIFIA Loan 49% deferment options 5 and 10 years
Use of Lease Payment to support cash flow
Need for selective public outreach required by the SRF process Timeliness of NEPA/CEQA Reviews
Timely completion of Master Plan Revision by Dopudja Wells
Third Party Cost Reimbursement
Cost reimbursement of third-party costs during the capital raising process
SubcommitteeAction Items
Approve process timing, scope and content as proposed
Approve 3rd Party Cost Reimbursement Budget
Provide guidance on use of WIFIA deferrals
Provide guidance on use of lease payment to support cash flow Confirm completion of Master Plan timing
Concur NEPA/CEQA process
Concur on need for public outreach to support SRF process