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

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

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

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

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

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

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

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