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CASE STUDY– WIFIA FINANCING OF A P3 LIKE INFRASTRUCTURE PROJECT Aurel Arndt Chief Executive Officer Lehigh County Authority P-3 Connect: Defining the Future.

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Presentation on theme: "CASE STUDY– WIFIA FINANCING OF A P3 LIKE INFRASTRUCTURE PROJECT Aurel Arndt Chief Executive Officer Lehigh County Authority P-3 Connect: Defining the Future."— Presentation transcript:

1 CASE STUDY– WIFIA FINANCING OF A P3 LIKE INFRASTRUCTURE PROJECT Aurel Arndt Chief Executive Officer Lehigh County Authority P-3 Connect: Defining the Future of P3 in the US July 29, 2014

2 LEHIGH COUNTY AUTHORITY / CITY OF ALLENTOWN CONCESSION LEASE A Public to Public Partnership (P2P)

3 What is it? A 50-year lease of the Allentown Water and Wastewater systems LEHIGH COUNTY AUTHORITY / CITY OF ALLENTOWN CONCESSION LEASE

4

5 SOURCES:TOTAL 2013 Bonds (Net of OID)$ 296,760,141 USES: Up front Lease Payment$ 211,332,217 Capital Improvement Fund$ 31,850,565 Debt Service Reserve Fund$ 28,090,273 Capitalization Interest Account$ 3,450,000 Operations and Maintenance Reserve Fund$ 9,199,515 Major Maintenance Reserve Fund$ 7,500,000 Cost of Issuance$ 5,337,569 TOTAL:$ 296,760,141 Sources and Uses of Funds CONCESSION FINANCING

6 Overview – Bonds sold July 31, 2013 Three Series - $307,684,000 $ 245,590,000 – 2013 A Bonds – Fixed Rate Bonds $ 43,359,000 – 2013 B Bonds – Capital Appreciation Bonds $ 18,735,000 – 2013 C Bonds – Taxable Bonds Series A & B Summary only Average Life – 28.7 years Yield – %

7 CONCESSION FINANCING Series 2013A - $245,590,000 MATURITYPRINCIPAL AMOUNTYIELD % 2038$ 14,265, $132,335, $ 98,990, MATURITYPRINCIPAL AMOUNTYIELD % $368,001-$3,454, Series 2013B - $ 43,359,000 Series 2013C - $ 18,735,000 MATURITYPRINCIPAL AMOUNTYIELD % 2018$ 18,735,

8 CONCESSION FINANCING Other Market Rates (July 31, 2013) 30-yr Treasury Bond – 3.64%

9 HYPOTEHTICAL WIFIA FINANCING Finance Immediate Capital Improvements $ 31,850,000 Assume 30-year life (or longer) WIFIA Annual Interest Costs: 49% of $ 31,850,000 at 3.64% = $ 568,077 Replacing 2013 A Bonds Annual Interest Cost 49% of $ 31,850,000 at 5.28% = $ 824,023 Annual Savings $ 255,946 (31%)

10 HYPOTEHTICAL WIFIA FINANCING Other WIFIA Possibilities a. Replace 2013B Series Bonds 2038 Maturity % Annual Savings $27,644 (61%) b. Include Portion (10.35%) of Debt Service Revenue Fund Annual Savings $23,363 (31%) c. Increase WIFIA Funding of Capital Improvement Cost to 80% Annual Savings $161,925 (31%) d. Include portion (10.35%) of Issuance Costs Annual Savings $4,439 (31%) Total Enhanced Annual Savings: $ 217,371 (35%)

11 THANK YOU Questions…


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