1. Presented to: Stockton City Council October 4, 2005
2005 Water Revenue Bonds
Presented to:
Stockton City Council
October 4, 2005

2. Background
On Nov. 30, 2004 Council adopted the South Stockton Water Master Plan
Water System Connection Fee Report concluded that existing water connection fee was inadequate to fund infrastructure needs
On July 19, 2005 Council approved increasing the water connection fee
1. This with other master water plans described future water infrastructure needs
2. Concerns developed as the ability to fund infrastructure with existing connection fee
3. Fee increased from $430 to $1,665; additional revenue will fund infrastructure required due to new development

3. Present Situation
Water connection fee revenue will fund $34.2 million of water system projects
$21.5 million needed in next three years
$12.7 million for future projects
The following table summarizes these projects

4. Connection Fee Cost Share
Project Name
Connection Fee Cost Share
South Stockton Aqueduct
$4,425,000
SR99 Frontage Road Waterline Extension
360,000
Frontier Way to Aqueduct Waterline Connection
212,400
Newcastle Road Waterline Loop
867,600
Newcastle Waterline Extension, North of Arch Road
93,600
Arch Road Waterline Extension
190,800
Newcastle to Austin Road Extensions, North
202,104
Newcastle to Austin Road Extensions, South
McKinley Avenue Waterline Extension
330,084
Lower Sacramento Road Waterline
220,664
Holman Road Waterline
144,000
Railroad Crossing (8-Mile Road & UPRR)
660,000
Henry Long Loop
94,176
SR99 Crossing at Hammer Lane
1,229,200
Seven Water Wells
7,000,000
Northwest Reservoir (1 tank)
3,200,000
Weston Ranch Reservoir (1 tank)
Northeast Reservoir (2 tanks)
7,400,000
French Camp Reservoir (1 tank)
4,200,000
Total
34,200,428

5. Proposed Financing
For the projects needed over the next few years, revenue bonds are recommended
Given current low interest rates, the credit worthiness of the City, and the immediate need of capital, revenue bonds are the most efficient method to meet the needs of the citizens
Average annual debt service of $1.5 million will be paid by connection fee revenues of the Water Enterprise system

6. Financial Summary
All costs related to this bond issue are paid for with bond proceeds
The City will receive an administrative fee of ¼ of 1% of the par amount of the bonds
1. Administrative fee estimated at $65,000

7. Recommended Action Adopt resolutions as follows…
approving the issuance of the 2005 Water Revenue Bonds in aggregate principal amount not-to-exceed $26 million
authorizing the execution and delivery of the Bond Indentures and approving related agreements

8. Financing Team Bond Counsel Disclosure Counsel Financial Advisor
Best, Best & Krieger, LLP
Disclosure Counsel
The Law Office of Robert M. Haight
Financial Advisor
Del Rio Advisors, LLC