M E M O R A N D U M To: From: Summit County Council Scott Green, CFO Date: October 23, 2014 Subject: Bond Parameters Resolution The MRW Control Board recommends the Summit County Council adopt the attached parameters resolution for the issuance of the Series 2014 revenue bonds. The District requires an estimated $8.0 million for critical capital projects. When issuance costs and one year of capitalized interest are included, the total amount of the bonds needed is around $8.4 to $8.5 million. The projects are broken out as follows: Promontory Special Assessment Area Projects MRW Projects $4.25 M $3.75 M The Promontory project debt service will be funded with special assessment paid by the Promontory developer. The MW projects are consistent with the impact fee facilities plan adopted by the Council this past summer. The debt service for these projects will be funded with impact fees and wholesale water sales. Each of the projects is discussed below. The engineering for these projects will begin as soon as the bonds are issued, and construction for all the projects is expected to be completed by the fall of 2015. However, depending upon the length of the construction season and other factors, some projects may not be completed until 2016. The construction season varies significantly, as the District is located at a high elevation. Promontory Storage Expansion Budget: Construction & Engineering $ 3,750,000 Contingency 375,000 Inspection & Plan Review Fees 125,000
Total $4,250,000 Promontory (a master planned resort community) intends to expand and open subdivisions in the southern end of the development. In order to provide water service and fire flow to this new area, a water storage tank and the related booster station and pipelines are required. The new water tank will provide 1.0 million gallons of storage. This project will be repaid through the proceeds of a Special Assessment Area within the Promontory development and will be collateralized through liens on the individual lots and other property owned by the Promontory developer. Further, all District net revenues will be pledged for the related bonds. Well 15C Budget: Construction & Engineering $ 1,500,000 Contingency 272,500 Total $1,772,500 In 2001, Mountain Regional drilled a very successful test well (Well 15B) in anticipation of placing a permanent Well 15C on the site in the future. This test pump has been a reliable source of water and is still being used with the test pumps. Mountain Regional recently entered into a regionalization agreement whereby it can provide wholesale water to other water companies in the area, including emergency backup and fire flow. Constructing Well 15C is an important component of making Mountain Regional s water system more redundant and resilient in its commitment to provide water to its customers and other water companies. This well will also provide a strong backup to Mountain Regional s other water sources. Summit Park / Timberline Storage Expansion Budget: Construction & Engineering $ 650,000 Contingency 97,500 Total $ 747,500 This project consists of a 500,000 gallon concrete storage tank to replace aging metal tank infrastructure feeding the Timberline and Summit Park service areas. It will also provide additional needed storage solutions for the lower zone (Tank 1) of Summit Park and Timberline. This tank and would benefit these areas as well as the new Discovery subdivision and other projects located in the area. Pumping Upgrades Budget: Construction & Engineering $ 500,000 Contingency 75,000
Total $ 575,000 Mountain Regional annexed Silver Springs Water Company in 2001 after it failed both operationally and financially. Since then, Mountain Regional has installed interconnects, developed wells and other water sources, and acquired water rights to serve this area. Currently, two old booster stations that provide water to the Bear Hollow area, including the Olympic Park, need to be upgraded. The upgrade of the Silver Springs and Bear Hollow booster stations will provide a more reliable water source to the growing area. There are two important safety issues that will be addressed by upgrading these two booster stations. First, fire flow protection will be enhanced and be more reliable. Second, Olympic Park stores a very large quantity of ammonia, which is used to make ice for the bobsled and luge track. If there were ever an ammonia leak, the most effective way to neutralize the ammonia is to apply large amounts of water. The booster station upgrades will provide the required water pressure to help mitigate any damages from ammonia leaks. Atkinson Air Break Tank Budget: Construction & Engineering $ 200,000 Contingency 30,000 Total $ 230,000 This project consists of a second small reservoir of rectangular construction, being constructed alongside and south of the Palisades subdivision at Promontory. This will help to develop a rapid and more interim equalization storage on the District s primary Atkinson supply zone, which serves the Silver Creek and East Canyon basins. This reservoir will be controlled by an altitude valve and/or possible an energy recovery system. Water feeding this tank would be provided by the Signal Hill Tank(s) at the Treatment Plant and the storage would be derived from their capacity. This small tank would act as a very large PRV station and would essentially reduce water pressure as it comes down the hill. Old Ranch Road Pipeline Expansion (Willow Creek to Silver Springs) Budget: Construction & Engineering $ 200,000 Contingency 30,000 Total $ 230,000 This project consists a short section of pipe between Lower Silver Springs and the Willow Creek development. This pipeline expansion will provide additional fire flow to the Lower Silver Springs development as well as reduce energy and pumping costs between the zones. Promontory Land Purchase Budget: Purchase Price $ 195,000
Total $ 195,000 This land was purchased to provide a site for a future Mountain Regional shop and storage facility. Currently Mountain Regional does not have a central location to store equipment and supplies. It is anticipated this shop will be constructed within five years.
Coalville, Utah October 29, 2014 A regular meeting of the County Council of Summit County, Utah (the Council ), acting as governing body of the Mountain Regional Water Special Service District, Summit County, Utah (the Issuer ) was held on Wednesday, October 29, 2014, at the hour of 3:30 p.m. at its regular meeting place, at which meeting there were present and answering roll call the following members who constituted a quorum: Christopher Robinson Kim Carson Roger Armstrong Claudia McMullin David Ure Chair Vice Chair Councilmember Councilmember Councilmember Also present: Kent Jones County Clerk Absent: After the meeting had been duly called to order and after other matters not pertinent to this resolution had been discussed, the County Clerk presented to the Council a Certificate of Compliance with Open Meeting Law with respect to this October 29, 2014, meeting, a copy of which is attached hereto as Exhibit A. The following resolution was then introduced in written form, was fully discussed, and pursuant to motion duly made by Councilmember and seconded by Councilmember, was adopted by the following vote: AYE: NAY: The resolution is as follows: DMWEST #11385771 v1 1
RESOLUTION NO. MRW A RESOLUTION OF THE COUNTY COUNCIL OF SUMMIT COUNTY, UTAH, ACTING AS THE GOVERNING AUTHORITY OF THE MOUNTAIN REGIONAL WATER SPECIAL SERVICE DISTRICT, SUMMIT COUNTY, UTAH (THE ISSUER) AUTHORIZING THE ISSUANCE AND SALE OF NOT MORE THAN $8,800,000 AGGREGATE PRINCIPAL AMOUNT OF WATER REVENUE BONDS, SERIES 2014 (THE SERIES 2014 BONDS ) OF THE ISSUER, FIXING THE MAXIMUM AGGREGATE PRINCIPAL AMOUNT OF THE SERIES 2014 BONDS, THE MAXIMUM NUMBER OF YEARS OVER WHICH THE SERIES 2014 BONDS MAY MATURE, THE MAXIMUM INTEREST RATE WHICH THE SERIES 2014 BONDS MAY BEAR, AND THE MAXIMUM DISCOUNT FROM PAR AT WHICH THE SERIES 2014 BONDS MAY BE SOLD; PROVIDING FOR THE PUBLICATION OF A NOTICE OF PUBLIC HEARING AND SERIES 2014 BONDS TO BE ISSUED; PROVIDING FOR THE PREPARATION AND DISTRIBUTION OF A PRELIMINARY OFFICIAL STATEMENT; PROVIDING FOR THE RUNNING OF A CONTEST PERIOD; AND RELATED MATTERS. WHEREAS, pursuant to the provisions of the Local Government Bonding Act, Title 11, Chapter 14, Utah Code Annotated 1953, as amended (the Act ), County Council of Summit County, Utah (the Council ), acting as governing body of the Mountain Regional Water Special Service District, Summit County, Utah (the Issuer ) the County Council of Summit County, Utah (the Issuer ), has authority to issue its (a) Water Revenue Bonds, Series 20144 (the Series 2014 Bonds ) for the municipal purposes set forth therein; and WHEREAS, subject to the limitations set forth herein, the Issuer desires to issue its Series 2014 Bonds to (a) finance the acquisition, construction, and installation of water system and other related improvements (collectively, the Project ) and (b) pay costs of issuance; and WHEREAS, the Act provides for the publication of a Notice of Public Hearing and Bonds to be Issued, and the Issuer desires to publish such a notice at this time in compliance with the Act with respect to the Series 2014 Bonds; NOW, THEREFORE, it is hereby resolved by the Council, acting as the Governing Authority of the District, as follows: Section 1. The Council hereby finds and determines that it is in the best interests of the Issuer and the residents located in the Issuer, for the Issuer to issue (a) not more than Eight Million Eight Hundred Thousand Dollars ($8,800,000) aggregate principal amount of its Water Revenue Bonds, Series 2014, to bear interest at a rate of not to exceed five percent (5.0%) per annum on the unpaid principal balance, to mature in not more than twenty-one (21) years from their date or dates, and to be sold at a price not less than ninety-eight percent (98%) of the total principal amount thereof for the purpose DMWEST #11385771 v1 2
of financing the Project and paying costs of issuance. The Series 2014 Bonds will be issued pursuant to this Resolution, final resolutions in substantially the form attached hereto as Exhibit B to be adopted by the Council authorizing and confirming the issuance and sale of the Series 2014 Bonds (each referred to as the Final Bond Resolution ) attached as Exhibit B, a General Indenture of Trust (the General Indenture ) dated as of June 1, 2001, and Supplemental Indentures of Trust each in substantially the form attached as Exhibit C (the Supplemental Indenture and collectively with the General Indenture the Indenture ). The Council hereby declares its intention to issue the Series 2014 Bonds according to the provisions of this Section, the Final Bond Resolution and the Indenture, when adopted. Section 2. The Issuer hereby directs officers and staff of the Issuer to proceed with the preparation of a Preliminary Official Statement relating to the Series 2014 Bonds or other offering material, if needed, for the sale of the Series 2014 Bonds and to make other necessary preparations for sale of the Series 2014 Bonds and hereby approves the distribution of such Preliminary Official Statement. Section 3. The Issuer hereby authorizes and approves the issuance and sale of the Series 2014 Bonds pursuant to the provisions of this resolution, the Final Bond Resolution, the General Indenture, and the Supplemental Indenture to be adopted by the Issuer authorizing and confirming the issuance and sale of the Series 2014 Bonds, with such changes thereto as shall be approved by the Issuer upon the adoption of the Final Bond Resolution, provided that the principal amount, interest rate or rates, maturity and discount shall not exceed the maximums set forth in Section 1 hereof. Section 4. The Issuer shall hold a public hearing on November 19, 2014, to receive input from the public with respect to (a) the issuance of the Series 2014 Bonds, and (b) the potential economic impact that the improvements to be financed with the proceeds of the Series 2014 Bonds will have on the private sector, which hearing date shall not be less than fourteen (14) days after notice of the public hearing is first published (i) once a week for two consecutive weeks in the Park Record, a newspaper of general circulation in the Issuer and (ii) on the Utah Public Notice Website created under Section 63F-1-701 Utah Code Annotated 1953, as amended, no less than fourteen (14) days before the public hearing date. The County Clerk shall cause a copy of this Resolution (together with all exhibits hereto) to be kept on file in the office of Summit County Utah, for public examination during the regular business hours of the County until at least thirty (30) days from and after the date of publication thereof. The Issuer directs its officers and staff to publish a Notice of Public Hearing and Bonds to be Issued in substantially the following form: DMWEST #11385771 v1 3
NOTICE OF PUBLIC HEARING AND BONDS TO BE ISSUED NOTICE IS HEREBY GIVEN pursuant to the provisions of the Local Government Bonding Act, Title 11, Chapter 14, Utah Code Annotated 1953, as amended, that on October 29, 2014, the County Council of Summit County, Utah (the Council ), acting as governing body of the Mountain Regional Water Special Service District, Summit County, Utah (the Issuer ) adopted a resolution (the Resolution ) in which it authorized the issuance of the Issuer s Water Revenue Bonds, Series 2014 (the Series 2014 Bonds ) and the calling of a public hearing to receive input from the public with respect to (i) the issuance of the Series 2014 Bonds and (ii) any potential economic impact that the Project described herein to be financed with the proceeds of the Series 2014 Bonds may have on the private sector. TIME, PLACE AND LOCATION OF PUBLIC HEARING The Issuer shall hold a public hearing on November 19, 2014, at the hour of 6:00 p.m. or as soon thereafter, in the County Council Chambers at 60 North Main, Coalville, Utah. The purpose of the hearing is to receive input from the public with respect to (a) the issuance of the Series 2014 Bonds and (b) any potential economic impact that the Project to be financed with the proceeds of the Series 2014 Bonds may have on the private sector. All members of the public are invited to attend and participate. PURPOSE FOR ISSUING THE SERIES 2014 BONDS The Series 2014 Bonds will be issued for the purpose of financing the construction and installation of water system, and other related improvements (collectively, the Project ) and paying costs of issuance of the Series 2014 Bonds. PARAMETERS OF THE SERIES 2014 BONDS The Issuer intends to issue not more than Eight Million Eight Hundred Thousand Dollars ($8,800,000) aggregate principal amount of its Water Revenue Bonds, Series 2014, to bear interest at a rate of not to exceed five percent (5.0%) per annum on the unpaid principal balance, to mature in not more than twenty-one (21) years from their date or dates, and to be sold at a price not less than ninety-eight percent (98%) of the total principal amount thereof. The Series 2014 Bonds are to be issued and sold by the Issuer pursuant to the Resolution, including as part of said Resolution the draft of a Final Bond Resolution and Supplemental Indenture which were before the Council and attached to the Resolution in substantially final form at the time of the adoption of the Resolution and a Final Bond Resolution and Supplemental Indenture are to be adopted by the Council in such form and with such changes thereto as shall be approved by the Council; provided that the principal amount, interest rate, or rates, maturity, and discount of the Series 2014 Bonds will not exceed the maximums set forth above. A copy of the Resolution, the Final Bond Resolution, the General Indenture and the Supplemental Indentures are on file in the office of the County Clerk of Summit DMWEST #11385771 v1 4
County, 60 North Main, Coalville, Utah, where they may be examined during regular business hours of the County Clerk from 8:00 a.m. to 5:00 p.m., Monday through Friday, for a period of at least thirty (30) days from and after the date of publication of this notice. NOTICE IS FURTHER GIVEN that a period of thirty (30) days from and after the date of the publication of this notice is provided by law during which any person in interest shall have the right to contest the legality of the Resolution, the Final Bond Resolution, the Supplemental Indenture or the Series 2014 Bonds, or any provision made for the security and payment of the Series 2014 Bonds, and that after such time, no one shall have any cause of action to contest the regularity, formality, or legality thereof for any cause whatsoever. DATED this October 29, 2014. /s/kent Jones County Clerk DMWEST #11385771 v1 5
Section 5. All resolutions or parts thereof in conflict herewith are, to the extent of such conflict, hereby repealed and this Resolution shall be in full force and effect immediately upon its approval and adoption. Section 6. The County Council hereby declares its intention and reasonable expectation to use proceeds of tax-exempt bonds to reimburse itself for initial expenditures for costs of the Project, in an amount not to exceed $8,800,000. The Series 2014 Bonds are to be issued, and the reimbursements made, by the later of 18-months after the payment of the costs or after the Project is placed in service, but in any event, no later than three years after the date the original expenditure was made. APPROVED AND ADOPTED this October 29, 2014. (SEAL) By: Chair ATTEST: By: County Clerk DMWEST #11385771 v1 6
(Other business not pertinent to the foregoing appears in the minutes of the meeting.) Upon the conclusion of all business on the Agenda, the meeting was adjourned. (SEAL) By: Chair ATTEST: By: County Clerk DMWEST #11385771 v1 7
STATE OF UTAH ) : ss. COUNTY OF SUMMIT ) I, Kent Jones, the duly appointed and qualified County Clerk of Summit County, Utah, do hereby certify according to the records of said Issuer in my official possession that the foregoing constitutes a true and correct excerpt of the minutes of the meeting of the County Council held on October 29, 2014, including a resolution (the Resolution ) adopted at said meeting as said minutes and Resolution are officially of record in my possession. I further certify that the Resolution, with all exhibits attached, was deposited in my office on October 29, 2014, and pursuant to the Resolution a Notice of Public Hearing and Bonds to be Issued was published: (a) once each week for two consecutive weeks in the Park Record, a newspaper having general circulation in Summit County, Utah, with the affidavit of such publication being hereby attached upon availability; (b) on the Utah Public Meeting Notice Website (http://pmn.utah.gov) no less than fourteen (14) days prior to said hearing; and (c) on the Utah Legal Notices website (www.utahlegals.com) created under Section 45-1-101, Utah Code Annotated 1953, as amended, no less than fourteen (14) days prior to said hearing. IN WITNESS WHEREOF, I have hereunto subscribed my signature and impressed hereon the official seal of said County, this October 29, 2014. (SEAL) By: County Clerk DMWEST #11385771 v1 8
EXHIBIT A CERTIFICATE OF COMPLIANCE WITH OPEN MEETING LAW I, Kent Jones, the undersigned County Clerk of Summit County, Utah (the County ), do hereby certify, according to the records of the County in my official possession, and upon my own knowledge and belief, that in accordance with the requirements of Section 52-4-6(2), Utah Code Annotated, 1953, as amended, I gave not less than twenty-four (24) hours public notice of the agenda, date, time and place of the October 29, 2014, public meeting held by the County Council of Summit County, Utah (the Issuer ) as follows: (a) By causing a Notice, in the form attached hereto as Schedule 1, to be posted at the principal offices of the County on, 2014, at least twenty-four (24) hours prior to the convening of the meeting, said Notice having continuously remained so posted and available for public inspection until the completion of the meeting; and (b) By causing a copy of such Notice, in the form attached hereto as Schedule 1, to be delivered to the Park Record on December, 2014, at least twenty-four (24) hours prior to the convening of the meeting; and (c) By causing a copy of such Notice to be posted on the Utah Public Notice Website (http://pmn.utah.gov) at least twenty-four (24) hours prior to the convening of the meeting. In addition, the Notice of 2014 Annual Meeting Schedule for County Council (attached hereto as Schedule 2) was given specifying the date, time, and place of the regular meetings of the County Council to be held during the year, by causing said Notice to be (a) posted on, at the principal office of the Council, (b) provided to at least one newspaper of general circulation within the County on, and (c) published on the Utah Public Notice Website (http://pmn.utah.gov) during the current calendar year. IN WITNESS WHEREOF, I have hereunto subscribed my official signature this October 29, 2014. (SEAL) By: County Clerk DMWEST #11385771 v1 A-1
SCHEDULE 1 NOTICE OF MEETING DMWEST #11385771 v1 A-2
SCHEDULE 2 ANNUAL MEETING SCHEDULE DMWEST #11385771 v1 A-3
DMWEST #11385771 v1 (attach Proof of Publication of Notice of Bonds to be Issued)
EXHIBIT B FORM OF FINAL BOND RESOLUTION (See Transcript Document No. ) DMWEST #11385771 v1 B-1
EXHIBIT C FORM OF INDENTURE (See Transcript Document No. ) DMWEST #11385771 v1 B-1