CITY OF ELKHORN COMMON COUNCIL MEETING ......2020/05/18 · CITY OF ELKHORN COMMON COUNCIL MEETING...
Transcript of CITY OF ELKHORN COMMON COUNCIL MEETING ......2020/05/18 · CITY OF ELKHORN COMMON COUNCIL MEETING...
CITY OF ELKHORN
COMMON COUNCIL MEETING AGENDA May 18, 2020 ~ 5:30 p.m.
Council Chambers, City Hall, 9 S. Broad St., Elkhorn, Wisconsin Online and VIA phone through Zoom
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1) Call to Order 2) Pledge of Allegiance 3) Roll Call 4) Public Comment Although the public may speak on any item that is not included on this agenda as a
“Public Hearing or Forum”, the Council may not respond or discuss the issue brought forward at this time. In accordance with open meeting laws the Council must notice an item on the agenda to allow discussion on that matter. Your comments will be considered and may be placed on a future agenda for further discussion.
5) Council Minutes a) Council Meeting Minutes: May 4, 2020
6) Bills Payable a) Consideration and recommendation to pay
7) Report of City Officers a) Mayor
i) Mayoral Appointment – City Attorney ii) Plan Commission iii) Extraterritorial Zoning Board iv) Board of Appeals
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b) City Administrator 8) Report on Liaison Committee Meetings
a) Fire Advisory b) Library c) Recreation Advisory d) Chamber e) Fire/EMS Advisory Steering
9) New Business a) Resolution No. 20-07 Providing for the Sale of Approximately $6,005,000 General Obligation
Promissory Notes, Series 2020A b) Resolution No. 20-08 Providing for the Sale of Approximately $1,805,000 Waterworks and
Sewer System Revenue Bonds, Series 2020B c) Resolution No. 20-09 Providing for the Sale of Approximately $1,805,000 Sewer System
Revenue Bonds, Series 2020C d) Awarding Contract for 2020 Elkhorn Street Improvement Projects e) Discussion on 2020 Fireworks Display f) Discussion and Decision on Public Pool Opening g) Discussion on Babe Mann Park usage h) Property Damage Claim for Traffic Signal Pole at Geneva and Lincoln i) Discussion and Decision in regards to Ongoing City Services j) Discussion and Decision about the Safer at Home Order as it relates to the City of Elkhorn
10) Adjourn into Closed Session: a) Pursuant to Wisconsin Statue 19.85(1)(g) “Conferring with legal counsel for the governmental
body who is rendering oral or written advice concerning strategy to be adopted by the body with respect to litigation in which it is or is likely to become involved.” i) CMD Litigation ii) New Beginnings Litigation
DATED at Elkhorn, Wisconsin, this 15th day of May 2020
Lacey L. Reynolds, City Clerk
Should you have any questions or comments regarding any items on this agenda, please contact the City Clerk’s office at 723-2219. Upon reasonable notice to the City Clerk, efforts will be made to accommodate the needs of disabled individuals through appropriate aids and services.
COMMON COUNCIL MEMO
Meeting Date: May 18, 2020 Agenda Item: All Report Prepared By: City Administrator
With the sudden change in our day to day status we are moving quickly to adapt to as much of a normal status as possible while still adhering to Walworth County Health Department’s recommendations to continue to be aware of social distancing and to limit any meeting to as small a size as possible.
Just a reminder that all Common Council members, Mayor, City Attorney, Attorney Dan O’Callaghan, City Administrator and City Clerk will be meeting in the Council Chambers for this meeting.
The agenda will include the following items:
The City solicited bids for Street projects for W. Court Street, Page Street and Getzen Street and received 4 bids. The low bidder was The Wanasek Corp. with a bid of $2,086,182.
As previously mentioned the financing plan for the City, Electric & Water Utility and Sanitary Sewer Utility are enclosed for Common Council review and approval. They are broke down in three separate resolutions to represent General Operation Debt (mostly city, with a small amount of sanitary sewer utility) and Revenue Debt (Utility Debt). The various City and Utility projects we have previously discussed in detail are incorporated into the debt issues. Dawn Gunderson, Ehlers, will be available to discuss the financing plan put together for 2020.
Karl Sorvick, Recreation Director, has included memos outlining the fireworks display and a pending decision that will need to be made on that event along with a similar decision about opening the public pool.
The Council has decided that we will deal with adjustments to schedules and fees for facilities and services on a case by case basis. The Ski Team that utilizes Babe Mann Park has made a request similar to the soccer issue of paying only for dates that they are actually allowed to use. The ski team has also inquired about being allocated more weekend dates than what is allowed to one group. Based on all the improvements we are planning for Babe Mann Park to make it more resident friendly, it would seem that allowing the ski team more weekend dates would detract from the general public usage. While some people enjoy watching the ski team, others are reluctant to rent the shelter if the ski team is practicing or holding an event. The limitations
on the amount a single user can rent a location is to keep it available for many to use. If we are also planning on encouraging canoe/kayak usage and fishing, those would be restricted during times that the ski team is using the location.
There is some information enclosed about damage to a traffic signal and a pending invoice for those repairs that the insurance carrier has disputed. The City Attorney has reviewed the claim and talked to the claims person about the issue.
After discussion with the Mayor, we have decided to reopen City Hall on Monday, May 18, 2020 to allow public access for City services. All employees that were working remotely will return to City facilities. This includes all departments, except for the Public Library which is still preparing its facility for public interaction. They will continue to provide curbside service, which I have been informed is quite robust and are planning to make computer service available to the public by the end of the month.
The past practice we have followed during this pandemic is to take our lead from the Walworth County Division of Public Health to keep continuity. In staying with that practice they have decided to take no action with the re-opening of business as usual with no restrictions. The Council has the option to implement your own restrictions to what you feel is appropriate or maintain the present status of taking our lead from the Walworth County Division of Public Health. They have recommended maintaining social distancing and limiting meeting sizes.
The two closed session items will be continuing discussion about ongoing litigation issues.
QB\63095245.1
Resolution No. 20-07
RESOLUTION PROVIDING FOR THE SALE OF APPROXIMATELY $6,005,000 GENERAL OBLIGATION PROMISSORY NOTES, SERIES 2020A
WHEREAS the City of Elkhorn, Walworth County, Wisconsin (the "City") is presently in need of approximately $6,005,000 for public purposes, including paying the cost of city hall projects, street improvement projects, park improvement projects and purchasing capital equipment; and
WHEREAS it is desirable to borrow said funds through the issuance of general obligation
promissory notes pursuant to Section 67.12(12), Wisconsin Statutes; NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City that: Section 1. The Notes. The City shall issue its General Obligation Promissory Notes, Series 2020A
in the approximate amount of $6,005,000 (the "Notes") for the purposes above specified. Section 2. Sale of Notes. The Common Council hereby authorizes and directs that the Notes be
offered for public sale. At a subsequent meeting, the Common Council shall consider such bids for the Notes as may have been received and take action thereon.
Section 3. Notice of Note Sale. The City Clerk (in consultation with, Ehlers & Associates, Inc.
("Ehlers")) be and hereby is directed to cause notice of the sale of the Notes to be disseminated in such manner and at such times as the City Clerk may determine and to cause copies of a complete Notice of Sale and other pertinent data to be forwarded to interested bidders as the City Clerk may determine.
Section 4. Official Statement. The City Clerk shall cause an Official Statement concerning this
issue to be prepared by Ehlers. The appropriate City officials shall determine when the Official Statement is final for purposes of Securities and Exchange Commission Rule 15c2-12 and shall certify said Official Statement, such certification to constitute full authorization of such Official Statement under this resolution.
Adopted, approved and recorded May 18, 2020.
_____________________________ Bruce Lechner Mayor
ATTEST:
____________________________ Lacey Reynolds City Clerk
(SEAL)
May 18, 2020
Pre-Sale Report for City of Elkhorn, Wisconsin $6,005,000 General Obligation Promissory Notes, Series 2020A
Prepared by:
Dawn Gunderson Schiel, CPFO, CIPMA
Senior Municipal Advisor
Joe Murray, CIPMA
Senior Municipal Advisor
Presale Report City of Elkhorn, Wisconsin
May 18, 2020 Page 1
Executive Summary of Proposed Debt
Proposed Issue: $6,005,000 General Obligation Promissory Notes, Series 2020A
Purposes: The proposed issue includes financing for Street projects, Municipal Building
including sewer portion of facility, Parks projects and capital equipment. Debt
service will be paid from ad valorem property taxes and sewer utility revenues.
Authority: The Notes are being issued pursuant to Wisconsin Statutes, Section 67.12(12).
The Notes will be general obligations of the City for which its full faith, credit
and taxing powers are pledged.
The Notes count against the City’s General Obligation Debt Capacity Limit of
5% of total City Equalized Valuation. Following issuance of the Notes, the
City’s total General Obligation debt principal outstanding will be $30.1 million,
which is 74.2% of its limit. Remaining General Obligation Borrowing Capacity
will be approximately $10.4 million.
Term/Call Feature: The Notes are being issued for a term of 10 years. Principal on the Notes will
be due on May 1 in the years 2022 through 2030. Interest is payable every six
months beginning May 1, 2021.
The Notes will be subject to prepayment at the discretion of the City on May 1,
2027 or any date thereafter.
Bank Qualification: Because the City is expecting to issue no more than $10,000,000 in tax exempt
debt during the calendar year, the City will be able to designate the Notes as
“bank qualified” obligations. Bank qualified status broadens the market for the
Notes, which can result in lower interest rates.
Rating: The City’s most recent bond issues were rated by Moody’s Investors Service.
The current ratings on those bonds are “Aa3”. The City will request a new rating
for the Notes.
If the winning bidder on the Notes elects to purchase bond insurance, the rating
for the issue may be higher than the City's bond rating in the event that the bond
rating of the insurer is higher than that of the City.
Basis for Recommendation: Based on our knowledge of your situation, your objectives communicated to us,
our advisory relationship as well as characteristics of various municipal
financing options, we are recommending the issuance of Notes as a suitable
option based on:
Presale Report City of Elkhorn, Wisconsin
May 18, 2020 Page 2
• The expectation this form of financing will provide the overall lowest
cost of funds while also meeting the City’s objectives for term,
structure and optional redemption.
• The City having adequate General Obligation debt capacity to undertake
this financing.
• The City’s current Capital Improvements Plan which identified issuance
of General Obligation Notes to finance these projects.
Method of Sale/Placement: We will solicit competitive bids for the purchase of the Notes from underwriters
and banks.
We will include an allowance for discount bidding in the terms of the issue. The
discount is treated as an interest item and provides the underwriter with all or a
portion of their compensation in the transaction.
If the Notes are purchased at a price greater than the minimum bid amount
(maximum discount), the unused allowance may be used to reduce your
borrowing amount.
Premium Pricing: In some cases, investors in municipal bonds prefer “premium” pricing
structures. A premium is achieved when the coupon for any maturity (the
interest rate paid by the issuer) exceeds the yield to the investor, resulting in a
price paid that is greater than the face value of the bonds. The sum of the
amounts paid in excess of face value is considered “reoffering premium.” The
underwriter of the bonds will retain a portion of this reoffering premium as their
compensation (or “discount”) but will pay the remainder of the premium to the
City. For this issue of Notes, any premium amount received that is in excess of
the underwriting discount and any capitalized interest amounts must be placed
in the debt service fund and used to pay a portion of the interest payments due
on the Notes.
The amount of premium allowed can be restricted in the bid
specifications. Restrictions on premium may result in fewer bids, but may also
eliminate large adjustments on the day of sale and unintended results with
respect to debt service payment impacts. Ehlers will identify appropriate
premium restrictions for the Notes intended to achieve the City’s objectives for
this financing.
Other Considerations: The Notes will be offered with the option of the successful bidder utilizing a
term bond structure. By offering underwriters the option to “term up” some of
the maturities at the time of the sale, it gives them more flexibility in finding a
market for your Notes. This makes your issue more marketable, which can
result in lower borrowing costs. In the event that the successful bidder utilizes
a term bond structure, we recommend the City retain a paying agent to handle
Presale Report City of Elkhorn, Wisconsin
May 18, 2020 Page 3
responsibility for processing mandatory redemption/call notices associated with
term bonds.
Review of Existing Debt: We have reviewed all outstanding indebtedness for the City and find that there
are no refunding opportunities at this time.
We will continue to monitor the market and the call dates for the City’s
outstanding debt and will alert you to any future refunding opportunities.
Continuing Disclosure: Because the City has more than $10,000,000 in outstanding debt (including this
issue) and this issue is over $1,000,000, the City will be agreeing to provide
certain updated Annual Financial Information and its Audited Financial
Statement annually, as well as providing notices of the occurrence of certain
reportable events to the Municipal Securities Rulemaking Board (the “MSRB”),
as required by rules of the Securities and Exchange Commission (SEC). The
City is already obligated to provide such reports for its existing bonds, and has
contracted with Ehlers to prepare and file the reports.
Arbitrage Monitoring: Because the Notes tax-exempt obligations, the City must ensure compliance
with certain Internal Revenue Service (IRS) rules throughout the life of the
issue. These rules apply to all gross proceeds of the issue, including initial bond
proceeds and investment earnings in construction, escrow, debt service, and any
reserve funds. How issuers spend bond proceeds and how they track interest
earnings on funds (arbitrage/yield restriction compliance) are common subjects
of IRS inquiries. Your specific responsibilities will be defined in the Tax
Exemption Certificate prepared by your Bond Attorney and provided at closing.
We recommend that you regularly monitor compliance with these rules and/or
contract with Ehlers to assist you.
Investment of Note Proceeds: To maximize interest earnings we recommend using an SEC registered
investment advisor to assist with the investment of bond proceeds until they are
needed to pay project costs. Ehlers is a registered investment advisor, and can
assist the City in developing an appropriate investment strategy if needed.
Risk Factors: GO with Planned Abatement: The City expects to abate a portion of the City
debt service with sewer utility revenues. In the event these revenues are not
available, the City is obligated to levy property taxes in an amount sufficient to
make all debt payments.
Presale Report City of Elkhorn, Wisconsin
May 18, 2020 Page 4
Other Service Providers: This debt issuance will require the engagement of other public finance service
providers. This section identifies those other service providers, so Ehlers can
coordinate their engagement on your behalf. Where you have previously used
a particular firm to provide a service, we have assumed that you will continue
that relationship. For services you have not previously required, we have
identified a service provider. Fees charged by these service providers will be
paid from proceeds of the obligation, unless you notify us that you wish to pay
them from other sources. Our pre-sale bond sizing includes a good faith estimate
of these fees, but the final fees may vary. If you have any questions pertaining
to the identified service providers or their role, or if you would like to use a
different service provider for any of the listed services please contact us.
Bond Counsel: Quarles & Brady LLP
Paying Agent: Bond Trust Services Corporation
Rating Agency: Moody's Investors Service, Inc.
Presale Report City of Elkhorn, Wisconsin
May 18, 2020 Page 5
Proposed Debt Issuance Schedule
Pre-Sale Review by Common Council: May 18, 2020
Due Diligence Call to review Official Statement: Week of June 1, 2020
Conference with Rating Agency: Week of June 1, 2020
Distribute Official Statement: Week of June 8, 2020
Common Council Meeting to Award Sale of the Notes: June 15, 2020
Estimated Closing Date: July 9, 2020
Attachments
Estimated Sources and Uses of Funds
Estimated Proposed Debt Service Schedule
Bond Buyer Index
Ehlers Contacts
Municipal Advisors: Dawn Gunderson Schiel (262) 796-6166
Joe Murray (262) 796-6196
Disclosure Coordinator: Brendan Leonard (262) 796-6169
Financial Analyst: Kathy Myers (262) 796-6177
The Preliminary Official Statement for this financing will be sent to the Common Council at their home or email
address for review prior to the sale date.
Total 2020
Projects
Tax Exempt Water Rev Sewer Rev
Notes, 2020A Bonds, 2020B Bonds, 2020C
City Hall Projects:
General Fund 2,475,000 2,475,000
Electric Utility 1,012,500 1,012,500
Water Utlity 506,250 506,250
Sanitary Sewer Utlity 506,250 506,250
Street Projects: -
General Fund 1,910,289 1,910,289
Sanitary Sewer Utlity 570,972 570,972
Water Utlity 80,954 80,954
Parks: -
Babe Mann Park (General Fund) 350,000 350,000
Capital Equipment -
General Fund 657,000 657,000
Electric/Utility Remote Meter Read Project -
Water Utlity 363,171 363,171
Sanitary Sewer Utility 363,171 363,171
Sanitary Sewer Projects 677,300 677,300
Total Projects to Be FinanceSubtotal Capital Projects 5,898,539 1,962,875 1,611,443 9,472,857
Bond Premium
Bond Premium Received
Deposit to Debt Service Fund
Balance Applied to Reduce Issue Size
Existing DSR (678,558)$
Estimated Issuance Expenses
Ehlers (Municipal Advisor) 33,800$ 25,400$ 25,400$
Rating (Moody's) 17,000 13,500$
Bond Counsel 12,500 15,000 15,000
Disclosure Counsel (if engaged) 7,500 9,000 9,000
Paying Agent 850 850 850
Maximum Discount (Bid Item)2 60,050 24,368 24,368
Capitalized Interest - - -
Debt Service Reserve Fund - 436,754 122,713
TOTAL TO BE FINANCED 6,030,239$ 1,809,189$ 1,808,773$
Estimated Interest Earnings3 (25,806) (8,588) (7,050)
Rounding 567 4,399 3,277
NET BOND OR NOTE SIZE 6,005,000$ 1,805,000$ 1,805,000$
NOTES:2Maximum allowable discount of 1.25% (Bonds), 1.0% (Notes)3Assumes temporary investment of available new money proceeds at 1.75% for 90 days.
9,615,000$
Projects
Levy 5,392,289 91.42% 5,489,613 5,490,000
Streets (Sewer) - 0.00%
Sewer Projects 506,250 8.58% 515,387 515,000
Parks - 0.00%
100.00% 6,005,000 6,005,000
City of Elkhorn2020 Capital Financing Plan
2020
Prepared by Ehlers
Leaders in Public FinanceMay 18, 2020
Page 6
Allocation of General Obligation Notes, Series 2020A
Year Principal (5/1) Rate Interest Total Principal (5/1) Rate Interest Total Principal Interest Total
2021 138,017 138,017 12,819 12,819 - 150,837 150,837
2022 50,000 1.35% 104,930 154,930 $20,000 1.35% 9,643 29,643 70,000 114,573 184,573
2023 100,000 1.45% 103,868 203,868 $30,000 1.45% 9,290 39,290 130,000 113,158 243,158
2024 100,000 1.55% 102,368 202,368 $35,000 1.55% 8,801 43,801 135,000 111,169 246,169
2025 700,000 1.65% 95,818 795,818 $40,000 1.65% 8,200 48,200 740,000 104,018 844,018
2026 880,000 1.75% 82,343 962,343 $50,000 1.75% 7,433 57,433 930,000 89,775 1,019,775
2027 890,000 1.85% 66,410 956,410 $70,000 1.85% 6,348 76,348 960,000 72,758 1,032,758
2028 920,000 1.95% 49,208 969,208 $80,000 1.95% 4,920 84,920 1,000,000 54,128 1,054,128
2029 925,000 2.10% 30,525 955,525 $90,000 2.10% 3,195 93,195 1,015,000 33,720 1,048,720
2030 925,000 2.25% 10,406 935,406 $100,000 2.25% 1,125 101,125 1,025,000 11,531 1,036,531
- -
5,490,000$ 783,891$ 6,273,891$ 515,000$ 71,773$ 586,773$ 6,005,000$ 855,664$ 6,860,664$
Rates based on "Aa2" NON BQ sale of 5/5/20 + .25
TOTAL General Fund Sanitary Sewer Utility
Ehlers Proposed Financing Plan 05-12-20Allocation 2020A Notes
May 18, 2020 Page 7
Less Abatements Impact on a
$ 170,000 Home
Change in
Equalized
Value
Taxes Change
YEAR YEAR Prin (5/1) Rate Interest Total YEAR
2019 768,220,500 5.80% 3,185,813 (193,299) (111,547) (247,267) (203,524) (755,638) 2,430,176 3.16 2019 0 2,430,176 3.16 537.78 3.16 2019
2020 807,934,300 5.17% 3,120,028 (175,278) (35,769) (237,288) (218,115) (666,451) 2,453,577 3.04 2020 0 0 0 0 2,453,577 23,401 3.04 516.26 (21.51) 3.10 2020
2021 818,033,479 1.25% 2,959,943 (374,548) (33,098) (224,765) (632,411) 2,327,532 2.85 2021 150,837 150,837 0 0 (12,819) 138,017 2,465,549 11,972 3.01 512.38 (3.89) 3.03 2021
2022 828,258,897 1.25% 2,954,848 (414,393) (18,299) (221,216) (653,908) 2,300,939 2.78 2022 70,000 1.350% 114,573 184,573 0 0 (29,643) 154,930 2,455,869 (9,680) 2.97 504.07 (8.31) 2.93 2022
2023 838,612,133 1.25% 2,861,310 (417,876) (18,231) (222,175) (658,283) 2,203,027 2.63 2023 130,000 1.450% 113,158 243,158 0 0 (39,290) 203,868 2,406,895 (48,974) 2.87 487.92 (16.15) 2.78 2023
2024 849,094,785 1.25% 2,870,595 (420,995) (18,269) (222,699) (661,963) 2,208,632 2.60 2024 135,000 1.550% 111,169 246,169 0 0 (43,801) 202,368 2,411,000 4,105 2.84 482.71 (5.20) 2.71 2024
2025 859,708,470 1.25% 2,239,773 (423,598) (205,200) (628,798) 1,610,975 1.87 2025 740,000 1.650% 104,018 844,018 0 0 (48,200) 795,818 2,406,793 (4,207) 2.80 475.92 (6.79) 2.62 2025
2026 870,454,826 1.25% 1,367,640 (429,640) (61,850) (491,490) 876,150 1.01 2026 930,000 1.750% 89,775 1,019,775 0 0 (57,433) 962,343 1,838,493 (568,300) 2.11 359.06 (116.86) 1.95 2026
2027 881,335,511 1.25% 1,384,973 (435,073) (65,250) (500,323) 884,650 1.00 2027 960,000 1.850% 72,758 1,032,758 0 0 (76,348) 956,410 1,841,060 2,568 2.09 355.12 (3.94) 1.89 2027
2028 892,352,205 1.25% 1,373,185 (439,885) (63,450) (503,335) 869,850 0.97 2028 1,000,000 1.950% 54,128 1,054,128 0 0 (84,920) 969,208 1,839,058 (2,003) 2.06 350.35 (4.77) 1.83 2028
2029 903,506,608 1.25% 1,128,704 (445,254) (67,100) (512,354) 616,350 0.68 2029 1,015,000 2.100% 33,720 1,048,720 0 0 (93,195) 955,525 1,571,875 (267,183) 1.74 295.76 (54.60) 1.52 2029
2030 914,800,440 1.25% 1,123,523 (445,010) (65,600) (510,610) 612,913 0.67 2030 1,025,000 2.250% 11,531 1,036,531 0 0 (101,125) 935,406 1,548,319 (23,556) 1.69 287.73 (8.03) 1.46 2030
2031 926,235,446 1.25% 1,131,710 (453,960) (68,975) (522,935) 608,775 0.66 2031 0 0 0 0 608,775 (939,544) 0.66 111.73 (175.99) 0.56 2031
2032 937,813,389 1.25% 1,148,598 (462,098) (67,188) (529,285) 619,313 0.66 2032 0 619,313 10,538 0.66 112.26 0.53 0.55 2032
2033 949,536,056 1.25% 1,143,993 (469,430) (70,400) (539,830) 604,163 0.64 2033 0 604,163 (15,150) 0.64 108.17 (4.10) 0.52 2033
2034 961,405,257 1.25% 1,142,444 (485,856) (68,450) (554,306) 588,138 0.61 2034 0 588,138 (16,025) 0.61 104.00 (4.17) 0.49 2034
2035 973,422,823 1.25% 1,169,575 (505,963) (66,500) (572,463) 597,113 0.61 2035 0 597,113 8,975 0.61 104.28 0.28 0.48 2035
2036 985,590,608 1.25% 1,223,544 (573,656) (69,550) (643,206) 580,338 0.59 2036 0 580,338 (16,775) 0.59 100.10 (4.18) 0.46 2036
2037 997,910,490 1.25% 1,267,725 (637,313) (67,275) (704,588) 563,138 0.56 2037 0 563,138 (17,200) 0.56 95.93 (4.17) 0.43 2037
2038 1,010,384,372 1.25% 433,606 (433,606) (433,606) 0 0.00 2038 0 0 (563,138) 0.00 0.00 2038
2039 1,023,014,176 1.25% 2039 0 0 0 0.00 0.00 2039
2040 1,035,801,853 1.25% 2040 0 0 0 0.00 0.00 2040
2041 1,048,749,377 1.25% 2041 0 0 0 0.00 0.00 2041
2042 1,061,858,744 1.25% 2042 0 0 0 0.00 0.00 2042
2043 1,075,131,978 1.25% 2043 0 0 0 0.00 0.00 2043
2044 1,088,571,128 1.25% 2044 0 0 0 0.00 0.00 2044
TOTALS 35,231,526 (8,636,728) (147,317) (572,453) (2,319,282) (11,675,780) 23,555,746 TOTALS 6,005,000 855,664 6,860,664 0 0 6,273,891 29,829,637 TOTALS
Less Sewer
Revenues
Equalized Value
Projection
General Obligation Notes, Series 2020A
Total
Payment
(P&I)
Less Other
Revenues
Debt
Service Tax
Rate
Total Less
Non Levy
Revenues
Net Debt
Service Levy
Less TID
Revenues
Less Water
Revenues
Projected Debt Service
Total Projected
Debt Service
less
abatements
$6,005,000
Dated 7-9-2020
Electric
Revenues
Water
Revenues
Sewer
Revenues
Debt
Service Tax
Rate @ 3%
Growth
Projected Impact of Proposed Projects
Debt
Service Tax
Rate
@1.25%
Growth
Net Debt
Service Levy
Levy
Change
Prepared by Ehlers
Leaders in Public Finance May 18, 2020 Page 8
1 YEAR TREND IN MUNICIPAL BOND INDICES
Source: The Bond Buyer
The Bond Buyer “20 Bond Index” (BBI) shows average yields on a group of municipal bonds that mature in 20 years and have an average rating equivalent to Moody’s Aa2 and S&P’s AA.
May 18, 2020 Page 9
QB\63098622.1
Resolution No. 20-08
RESOLUTION PROVIDING FOR THE SALE OF APPROXIMATELY $1,805,000 WATERWORKS AND ELECTRIC SYSTEM REVENUE BONDS, SERIES 2020B
WHEREAS the City of Elkhorn, Walworth County, Wisconsin (the "City") is presently in need of approximately $1,805,000 for the public purpose of paying the cost of additions, extensions and improvements to the City's waterworks and electric system; and
WHEREAS it is desirable to borrow said funds through the issuance of waterworks and electric
system revenue bonds pursuant to Section 66.0621, Wisconsin Statutes; NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City that: Section 1. The Bonds. The City shall issue its Waterworks and Electric System Revenue Bonds,
Series 2020B in the approximate amount of $1,805,000 (the "Bonds") for the purpose above specified. Section 2. Sale of Bonds. The Common Council hereby authorizes and directs that the Bonds be
offered for public sale. At a subsequent meeting, the Common Council shall consider such bids for the Bonds as may have been received and take action thereon.
Section 3. Notice of Bond Sale. The City Clerk (in consultation with, Ehlers & Associates, Inc.
("Ehlers")) be and hereby is directed to cause notice of the sale of the Bonds to be disseminated in such manner and at such times as the City Clerk may determine and to cause copies of a complete Notice of Sale and other pertinent data to be forwarded to interested bidders as the City Clerk may determine.
Section 4. Official Statement. The City Clerk shall cause an Official Statement concerning this
issue to be prepared by Ehlers. The appropriate City officials shall determine when the Official Statement is final for purposes of Securities and Exchange Commission Rule 15c2-12 and shall certify said Official Statement, such certification to constitute full authorization of such Official Statement under this resolution.
Adopted, approved and recorded May 18, 2020.
_____________________________ Bruce Lechner Mayor
ATTEST:
____________________________ Lacey Reynolds City Clerk
(SEAL)
May 18, 2020
Pre-Sale Report for City of Elkhorn, Wisconsin $1,805,000 Waterworks and Electric System Revenue Bonds, Series 2020B
Prepared by:
Dawn Gunderson Schiel, CPFO, CIPMA
Senior Municipal Advisor
Joe Murray, CIPMA
Senior Municipal Advisor
Presale Report City of Elkhorn, Wisconsin
May 18, 2020 Page 1
Executive Summary of Proposed Debt
Proposed Issue: $1,805,000 Waterworks and Electric System Revenue Bonds, Series 2020B
Purposes: The proposed issue includes financing for Water & Electric utility projects. Debt
service will be paid from electric and water revenues.
Authority: The Bonds are being issued pursuant to Wisconsin Statutes, Section 66.0621.
The Bonds are not general obligations of the City but are payable only from and
secured by a pledge of income and revenue to be derived from the operation of
the Waterworks and Electric System.
Term/Call Feature: The Bonds are being issued for a term of 20 years. Principal on the Bonds will
be due on May 1 in the years 2021 through 2040. Interest is payable every six
months beginning May 1, 2021.
The Bonds will be subject to prepayment at the discretion of the City on May 1,
2029 or any date thereafter.
Bank Qualification: Because the City is expecting to issue no more than $10,000,000 in tax exempt
debt during the calendar year, the City will be able to designate the Bonds as
“bank qualified” obligations. Bank qualified status broadens the market for the
Bonds, which can result in lower interest rates.
Rating: The City’s most recent combined utility bond issues were rated by Moody’s
Investors Service. The current ratings on those bonds are “Aa3”. The City will
request a new rating for the Bonds.
If the winning bidder on the Bonds elects to purchase bond insurance, the rating
for the issue may be higher than the City's bond rating in the event that the bond
rating of the insurer is higher than that of the City.
Basis for Recommendation: Based on our knowledge of your situation, your objectives communicated to
us, our advisory relationship as well as characteristics of various municipal
financing options, we are recommending the issuance of Bonds as a suitable
option based on:
• Net system revenues available for debt service that provide sufficient
coverage for the estimated principal and interest payments of the
proposed Bonds and existing parity debt.
• The City’s past practice of using revenue bonds to finance enterprise
system improvements.
Presale Report City of Elkhorn, Wisconsin
May 18, 2020 Page 2
• The City’s current Capital Improvements Plan which identified issuance
of revenue bonds to finance these projects.
Method of Sale/Placement: We will solicit competitive bids for the purchase of the Bonds from underwriters
and banks.
We will include an allowance for discount bidding in the terms of the issue. The
discount is treated as an interest item and provides the underwriter with all or a
portion of their compensation in the transaction.
If the Bonds are purchased at a price greater than the minimum bid amount
(maximum discount), the unused allowance may be used to reduce your
borrowing amount.
Premium Pricing: In some cases, investors in municipal bonds prefer “premium” pricing
structures. A premium is achieved when the coupon for any maturity (the
interest rate paid by the issuer) exceeds the yield to the investor, resulting in a
price paid that is greater than the face value of the bonds. The sum of the
amounts paid in excess of face value is considered “reoffering premium.” The
underwriter of the bonds will retain a portion of this reoffering premium as their
compensation (or “discount”) but will pay the remainder of the premium to the
City. For this issue of Bonds, any premium amount received may: be retained;
used to reduce the issue size; or combination thereof. These adjustments may
slightly change the true interest cost of the original bid, either up or down. We
anticipate using any premium amounts received to reduce the issue size.
The amount of premium allowed can be restricted in the bid
specifications. Restrictions on premium may result in fewer bids, but may also
eliminate large adjustments on the day of sale and unintended results with
respect to debt service payment impacts. Ehlers will identify appropriate
premium restrictions for the Bonds intended to achieve the City’s objectives for
this financing.
Other Considerations: The Bonds will be offered with the option of the successful bidder utilizing a
term bond structure. By offering underwriters the option to “term up” some of
the maturities at the time of the sale, it gives them more flexibility in finding a
market for your Bonds. This makes your issue more marketable, which can
result in lower borrowing costs. In the event that the successful bidder utilizes
a term bond structure, we recommend the City retain a paying agent to handle
responsibility for processing mandatory redemption/call notices associated with
term bonds.
Review of Existing Debt: We have reviewed all outstanding indebtedness for the City and find that there
are no refunding opportunities at this time.
We will continue to monitor the market and the call dates for the City’s
outstanding debt and will alert you to any future refunding opportunities.
Presale Report City of Elkhorn, Wisconsin
May 18, 2020 Page 3
Continuing Disclosure: Because the City has more than $10,000,000 in outstanding debt (including this
issue) and this issue is over $1,000,000, the City will be agreeing to provide
certain updated Annual Financial Information and its Audited Financial
Statement annually, as well as providing notices of the occurrence of certain
reportable events to the Municipal Securities Rulemaking Board (the “MSRB”),
as required by rules of the Securities and Exchange Commission (SEC). The
City is already obligated to provide such reports for its existing bonds, and has
contracted with Ehlers to prepare and file the reports.
Arbitrage Monitoring: Because the Bonds tax-exempt obligations, the City must ensure compliance
with certain Internal Revenue Service (IRS) rules throughout the life of the
issue. These rules apply to all gross proceeds of the issue, including initial bond
proceeds and investment earnings in construction, escrow, debt service, and any
reserve funds. How issuers spend bond proceeds and how they track interest
earnings on funds (arbitrage/yield restriction compliance) are common subjects
of IRS inquiries. Your specific responsibilities will be defined in the Tax
Exemption Certificate prepared by your Bond Attorney and provided at closing.
We recommend that you regularly monitor compliance with these rules and/or
contract with Ehlers to assist you.
Investment of Bond Proceeds: To maximize interest earnings we recommend using an SEC registered
investment advisor to assist with the investment of bond proceeds until they are
needed to pay project costs. Ehlers is a registered investment advisor, and can
assist the City in developing an appropriate investment strategy if needed.
Risk Factors: Utility Revenue: The City expects to pay the Bond debt service with:
• Electric and Water Revenues
In the event utility revenues are insufficient to pay debt service, the Common
Council is committing to consider appropriating funds from any other available
sources in an amount sufficient to cover the shortfall. If it chooses to do so, the
City may levy a tax to make up a shortfall. Any amount levied for this purpose
is exempted from levy limits. While the City is not required to appropriate the
funds necessary to remedy any shortfall in revenues needed to pay debt service,
failure to do so would result in either a lack of access to capital markets in the
future, or access at a substantially higher cost.
Other Service Providers: This debt issuance will require the engagement of other public finance service
providers. This section identifies those other service providers, so Ehlers can
coordinate their engagement on your behalf. Where you have previously used
a particular firm to provide a service, we have assumed that you will continue
that relationship. For services you have not previously required, we have
identified a service provider. Fees charged by these service providers will be
paid from proceeds of the obligation, unless you notify us that you wish to pay
them from other sources. Our pre-sale bond sizing includes a good faith estimate
Presale Report City of Elkhorn, Wisconsin
May 18, 2020 Page 4
of these fees, but the final fees may vary. If you have any questions pertaining
to the identified service providers or their role, or if you would like to use a
different service provider for any of the listed services please contact us.
Bond Counsel: Quarles & Brady LLP
Paying Agent: Bond Trust Services Corporation
Rating Agency: Moody's Investors Service, Inc.
Proposed Debt Issuance Schedule
Pre-Sale Review by Common Council: May 18, 2020
Due Diligence Call to review Official Statement: Week of June 1, 2020
Conference with Rating Agency: Week of June 1, 2020
Distribute Official Statement: Week of June 8, 2020
Common Council Meeting to Award Sale of the Notes: June 15, 2020
Estimated Closing Date: July 9, 2020
Attachments
Estimated Sources and Uses of Funds
Estimated Proposed Debt Service Schedule/estimated debt service coverage
Bond Buyer Index
Ehlers Contacts
Municipal Advisors: Dawn Gunderson Schiel (262) 796-6166
Joe Murray (262) 796-6196
Disclosure Coordinator: Brendan Leonard (262) 796-6169
Financial Analyst: Kathy Myers (262) 796-6177
The Preliminary Official Statement for this financing will be sent to the Common Council at their home or email
address for review prior to the sale date.
May 18, 2020 Page 5
Total 2020
Projects
Tax Exempt Water Rev Sewer Rev
Notes, 2020A Bonds, 2020B Bonds, 2020C
City Hall Projects:
General Fund 2,475,000 2,475,000
Electric Utility 1,012,500 1,012,500
Water Utlity 506,250 506,250
Sanitary Sewer Utlity 506,250 506,250
Street Projects: -
General Fund 1,910,289 1,910,289
Sanitary Sewer Utlity 570,972 570,972
Water Utlity 80,954 80,954
Parks: -
Babe Mann Park (General Fund) 350,000 350,000
Capital Equipment -
General Fund 657,000 657,000
Electric/Utility Remote Meter Read Project -
Water Utlity 363,171 363,171
Sanitary Sewer Utility 363,171 363,171
Sanitary Sewer Projects 677,300 677,300
Total Projects to Be FinanceSubtotal Capital Projects 5,898,539 1,962,875 1,611,443 9,472,857
Bond Premium
Bond Premium Received
Deposit to Debt Service Fund
Balance Applied to Reduce Issue Size
Existing DSR (678,558)$
Estimated Issuance Expenses
Ehlers (Municipal Advisor) 33,800$ 25,400$ 25,400$
Rating (Moody's) 17,000 13,500$
Bond Counsel 12,500 15,000 15,000
Disclosure Counsel (if engaged) 7,500 9,000 9,000
Paying Agent 850 850 850
Maximum Discount (Bid Item)2 60,050 24,368 24,368
Capitalized Interest - - -
Debt Service Reserve Fund - 436,754 122,713
TOTAL TO BE FINANCED 6,030,239$ 1,809,189$ 1,808,773$
Estimated Interest Earnings3 (25,806) (8,588) (7,050)
Rounding 567 4,399 3,277
NET BOND OR NOTE SIZE 6,005,000$ 1,805,000$ 1,805,000$
NOTES:2Maximum allowable discount of 1.25% (Bonds), 1.0% (Notes)3Assumes temporary investment of available new money proceeds at 1.75% for 90 days.
9,615,000$
Projects
Levy 5,392,289 91.42% 5,489,613 5,490,000
Streets (Sewer) - 0.00%
Sewer Projects 506,250 8.58% 515,387 515,000
Parks - 0.00%
100.00% 6,005,000 6,005,000
City of Elkhorn2020 Capital Financing Plan
2020
Prepared by Ehlers
Leaders in Public FinanceMay 18, 2020
Page 6
S
e
Water & Electric Revenue Bonds, Series 2020
System Revenues Debt Service Coverage Ratios
Existing Revenue DebtWater & Electric System Revenue Bond, Series 2020
Dated 7/9/2020
Revenue DebtTotal Rev &
GO Debt
All in
Coverage
2018 4,475,137 4,475,137 961,857 311,298 1,273,154 1,273,154 254,492 1,527,646 3.51 2.93 2018
2019 4,475,137 4,475,137 988,565 287,483 1,276,048 1,276,048 247,267 1,523,315 3.51 2.94 2019
2020 4,475,137 4,475,137 1,015,386 262,956 1,278,342 1,278,342 237,288 1,515,630 3.50 2.95 2020
2021 4,475,137 4,475,137 1,047,321 237,640 1,284,961 60,000 1.60% 54,321 114,321 1,399,282 33,098 1,432,380 3.20 3.12 2021
2022 4,475,137 4,475,137 1,069,371 211,608 1,280,979 75,000 1.65% 40,219 115,219 1,396,198 18,299 1,414,497 3.21 3.16 2022
2023 4,475,137 4,475,137 1,106,540 184,782 1,291,322 75,000 1.75% 38,944 113,944 1,405,266 18,231 1,423,498 3.18 3.14 2023
2024 4,475,137 4,475,137 1,143,828 156,937 1,300,766 80,000 1.78% 37,576 117,576 1,418,341 18,269 1,436,610 3.16 3.12 2024
2025 4,475,137 4,475,137 1,166,238 128,295 1,294,534 80,000 1.83% 36,132 116,132 1,410,665 0 1,410,665 3.17 3.17 2025
2026 4,475,137 4,475,137 958,773 105,029 1,063,802 80,000 1.88% 34,648 114,648 1,178,449 0 1,178,449 3.80 3.80 2026
2027 4,475,137 4,475,137 656,433 90,462 746,894 85,000 1.94% 33,071 118,071 864,965 864,965 5.17 5.17 2027
2028 4,475,137 4,475,137 674,221 78,766 752,987 85,000 2.00% 31,397 116,397 869,384 869,384 5.15 5.15 2028
2029 4,475,137 4,475,137 482,139 68,840 550,980 85,000 2.07% 29,667 114,667 665,646 665,646 6.72 6.72 2029
2030 4,475,137 4,475,137 490,190 60,782 550,972 90,000 2.18% 27,806 117,806 668,778 668,778 6.69 6.69 2030
2031 4,475,137 4,475,137 498,375 52,589 550,964 90,000 2.35% 25,768 115,768 666,732 666,732 6.71 6.71 2031
2032 4,475,137 4,475,137 506,698 44,259 550,956 90,000 2.35% 23,653 113,653 664,609 664,609 6.73 6.73 2032
2033 4,475,137 4,475,137 515,159 35,789 550,948 95,000 2.50% 21,408 116,408 667,356 667,356 6.71 6.71 2033
2034 4,475,137 4,475,137 523,762 27,178 550,940 95,000 2.50% 19,033 114,033 664,973 664,973 6.73 6.73 2034
2035 4,475,137 4,475,137 532,509 18,423 550,932 100,000 2.65% 16,520 116,520 667,452 667,452 6.70 6.70 2035
2036 4,475,137 4,475,137 541,402 9,521 550,923 100,000 2.65% 13,870 113,870 664,793 664,793 6.73 6.73 2036
2037 4,475,137 4,475,137 50,347 471 50,818 105,000 2.80% 11,075 116,075 166,893 166,893 26.81 26.81 2037
2038 4,475,137 4,475,137 110,000 2.80% 8,065 118,065 118,065 118,065 37.90 37.90 2038
2039 4,475,137 4,475,137 110,000 2.90% 4,930 114,930 114,930 114,930 38.94 38.94 2039
2040 4,475,137 4,475,137 115,000 2.90% 1,668 116,668 116,668 116,668 38.36 38.36 2040
14,929,114 2,373,108 17,302,222 1,805,000 509,766 2,314,766 19,616,988
NOTES:
2020 Rates based upon NON BQ revenue sale 4/20/20 plus .35
Interest TotalTotal Revenue
Debt PaymentsYEAR
Preliminary Planning
Total Principal 5/1 Rate GO DebtTotal Rev & GO
Debt
Tax
EquivalentYEAR Total Net Principal Interest
Prepared by Ehlers
Leaders in Public FinanceMay 18, 2020
Page 7
1 YEAR TREND IN MUNICIPAL BOND INDICES
Source: The Bond Buyer
The Bond Buyer “20 Bond Index” (BBI) shows average yields on a group of municipal bonds that mature in 20 years and have an average rating equivalent to Moody’s Aa2 and S&P’s AA.
May 18, 2020 Page 8
QB\63098459.1
Resolution No. 20-09
RESOLUTION PROVIDING FOR THE SALE OF APPROXIMATELY $1,805,000 SEWER SYSTEM REVENUE BONDS, SERIES 2020C
WHEREAS the City of Elkhorn, Walworth County, Wisconsin (the "City") is presently in need of approximately $1,805,000 for the public purpose of paying the cost of additions, extensions and improvements to the City's sewer system; and
WHEREAS it is desirable to borrow said funds through the issuance of sewer system revenue
bonds pursuant to Section 66.0621, Wisconsin Statutes; NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City that: Section 1. The Bonds. The City shall issue its Sewer System Revenue Bonds, Series 2020C in the
approximate amount of $1,805,000 (the "Bonds") for the purposes above specified. Section 2. Sale of Bonds. The Common Council hereby authorizes and directs that the Bonds be
offered for public sale. At a subsequent meeting, the Common Council shall consider such bids for the Bonds as may have been received and take action thereon.
Section 3. Notice of Bond Sale. The City Clerk (in consultation with, Ehlers & Associates, Inc.
("Ehlers")) be and hereby is directed to cause notice of the sale of the Bonds to be disseminated in such manner and at such times as the City Clerk may determine and to cause copies of a complete Notice of Sale and other pertinent data to be forwarded to interested bidders as the City Clerk may determine.
Section 4. Official Statement. The City Clerk shall cause an Official Statement concerning this
issue to be prepared by Ehlers. The appropriate City officials shall determine when the Official Statement is final for purposes of Securities and Exchange Commission Rule 15c2-12 and shall certify said Official Statement, such certification to constitute full authorization of such Official Statement under this resolution.
Adopted, approved and recorded May 18, 2020.
_____________________________ Bruce Lechner Mayor
ATTEST:
____________________________ Lacey Reynolds City Clerk
(SEAL)
May 18, 2020
Pre-Sale Report for City of Elkhorn, Wisconsin $1,805,000 Sewer Utility Revenue Bonds, Series 2020C
Prepared by:
Dawn Gunderson Schiel, CPFO, CIPMA
Senior Municipal Advisor
Joe Murray, CIPMA
Senior Municipal Advisor
Presale Report City of Elkhorn, Wisconsin
May 18, 2020 Page 1
Executive Summary of Proposed Debt
Proposed Issue: $1,805,000 Sewer Utility Revenue Bonds, Series 2020C
Purposes: The proposed issue includes financing for sewer utility projects. Debt service
will be paid from sewer revenues.
Authority: The Bonds are being issued pursuant to Wisconsin Statutes, Section 66.0621.
The Bonds are not general obligations of the City but are payable only from and
secured by a pledge of income and revenue to be derived from the operation of
the Sewer System.
Term/Call Feature: The Bonds are being issued for a term of 20 years. Principal on the Bonds will
be due on May 1 in the years 2021 through 2040. Interest is payable every six
months beginning May 1, 2021.
The Bonds will be subject to prepayment at the discretion of the City on May 1,
2029 or any date thereafter.
Bank Qualification: Because the City is expecting to issue no more than $10,000,000 in tax exempt
debt during the calendar year, the City will be able to designate the Bonds as
“bank qualified” obligations. Bank qualified status broadens the market for the
Bonds, which can result in lower interest rates.
Rating: We recommend selling this issue non-rated as the cost of the rating would not
be expected to be offset by the potential lower interest rates resulting from
obtaining a rating. The coverage for all debt service based upon historical
revenues would not support a meaningful rating outcome.
Basis for Recommendation: Based on our knowledge of your situation, your objectives communicated to us,
our advisory relationship as well as characteristics of various municipal
financing options, we are recommending the issuance of Bonds as a suitable
option based on:
• Net system revenues available for debt service that provide sufficient
coverage for the estimated principal and interest payments of the
proposed Bonds.
• The City’s goal of restricting its General Obligation borrowing.
• The City’s current Capital Improvements Plan/ which identified
issuance of revenue bonds to finance these projects.
Presale Report City of Elkhorn, Wisconsin
May 18, 2020 Page 2
Method of Sale/Placement: We will solicit competitive bids for the purchase of the Bonds from underwriters
and banks.
We will include an allowance for discount bidding in the terms of the issue. The
discount is treated as an interest item and provides the underwriter with all or a
portion of their compensation in the transaction.
If the Bonds are purchased at a price greater than the minimum bid amount
(maximum discount), the unused allowance may be used to reduce your
borrowing amount.
Premium Pricing: In some cases, investors in municipal bonds prefer “premium” pricing
structures. A premium is achieved when the coupon for any maturity (the
interest rate paid by the issuer) exceeds the yield to the investor, resulting in a
price paid that is greater than the face value of the bonds. The sum of the
amounts paid in excess of face value is considered “reoffering premium.” The
underwriter of the bonds will retain a portion of this reoffering premium as their
compensation (or “discount”) but will pay the remainder of the premium to the
City. For this issue of Bonds, any premium amount received may: be retained;
used to reduce the issue size; or combination thereof. These adjustments may
slightly change the true interest cost of the original bid, either up or down. We
anticipate using any premium amounts received to reduce the issue size.
The amount of premium allowed can be restricted in the bid
specifications. Restrictions on premium may result in fewer bids, but may also
eliminate large adjustments on the day of sale and unintended results with
respect to debt service payment impacts. Ehlers will identify appropriate
premium restrictions for the Bonds intended to achieve the City’s objectives for
this financing.
Other Considerations: The Bonds will be offered with the option of the successful bidder utilizing a
term bond structure. By offering underwriters the option to “term up” some of
the maturities at the time of the sale, it gives them more flexibility in finding a
market for your Bonds. This makes your issue more marketable, which can
result in lower borrowing costs. In the event that the successful bidder utilizes
a term bond structure, we recommend the City retain a paying agent to handle
responsibility for processing mandatory redemption/call notices associated with
term bonds.
Review of Existing Debt: We have reviewed all outstanding indebtedness for the City and find that there
are no refunding opportunities at this time.
We will continue to monitor the market and the call dates for the City’s
outstanding debt and will alert you to any future refunding opportunities.
Presale Report City of Elkhorn, Wisconsin
May 18, 2020 Page 3
Continuing Disclosure: Because the City has more than $10,000,000 in outstanding debt (including this
issue) and this issue is over $1,000,000, the City will be agreeing to provide
certain updated Annual Financial Information and its Audited Financial
Statement annually, as well as providing notices of the occurrence of certain
reportable events to the Municipal Securities Rulemaking Board (the “MSRB”),
as required by rules of the Securities and Exchange Commission (SEC). The
City is already obligated to provide such reports for its existing bonds, and has
contracted with Ehlers to prepare and file the reports.
Arbitrage Monitoring: Because the Bonds tax-exempt obligations, the City must ensure compliance
with certain Internal Revenue Service (IRS) rules throughout the life of the
issue. These rules apply to all gross proceeds of the issue, including initial bond
proceeds and investment earnings in construction, escrow, debt service, and any
reserve funds. How issuers spend bond proceeds and how they track interest
earnings on funds (arbitrage/yield restriction compliance) are common subjects
of IRS inquiries. Your specific responsibilities will be defined in the Tax
Exemption Certificate prepared by your Bond Attorney and provided at closing.
We recommend that you regularly monitor compliance with these rules and/or
contract with Ehlers to assist you.
Investment of Bond Proceeds: To maximize interest earnings we recommend using an SEC registered
investment advisor to assist with the investment of bond proceeds until they are
needed to pay project costs. Ehlers is a registered investment advisor, and can
assist the City in developing an appropriate investment strategy if needed.
Risk Factors: Utility Revenue: The City expects to pay the Bond debt service with Sewer
Revenues.
In the event utility revenues are insufficient to pay debt service, the Common
Council is committing to consider appropriating funds from any other available
sources in an amount sufficient to cover the shortfall. If it chooses to do so, the
City may levy a tax to make up a shortfall. Any amount levied for this purpose
is exempted from levy limits. While the City is not required to appropriate the
funds necessary to remedy any shortfall in revenues needed to pay debt service,
failure to do so would result in either a lack of access to capital markets in the
future, or access at a substantially higher cost.
Other Service Providers: This debt issuance will require the engagement of other public finance service
providers. This section identifies those other service providers, so Ehlers can
coordinate their engagement on your behalf. Where you have previously used
a particular firm to provide a service, we have assumed that you will continue
that relationship. For services you have not previously required, we have
identified a service provider. Fees charged by these service providers will be
paid from proceeds of the obligation, unless you notify us that you wish to pay
them from other sources. Our pre-sale bond sizing includes a good faith estimate
of these fees, but the final fees may vary. If you have any questions pertaining
Presale Report City of Elkhorn, Wisconsin
May 18, 2020 Page 4
to the identified service providers or their role, or if you would like to use a
different service provider for any of the listed services please contact us.
Bond Counsel: Quarles & Brady LLP
Paying Agent: Bond Trust Services Corporation
Rating Agency: This issue will not be rated.
Presale Report City of Elkhorn, Wisconsin
May 18, 2020 Page 5
Proposed Debt Issuance Schedule
Pre-Sale Review by Common Council: May 18, 2020
Due Diligence Call to review Official Statement: Week of June 1, 2020
Distribute Official Statement: Week of June 8, 2020
Common Council Meeting to Award Sale of the Notes: June 15, 2020
Estimated Closing Date: July 9, 2020
Attachments
Estimated Sources and Uses of Funds
Estimated Proposed Debt Service Schedule/ Estimated Debt Service Coverage
Bond Buyer Index
Ehlers Contacts
Municipal Advisors: Dawn Gunderson Schiel (262) 796-6166
Joe Murray (262) 796-6196
Disclosure Coordinator: Brendan Leonard (262) 796-6169
Financial Analyst: Kathy Myers (262) 796-6177
The Preliminary Official Statement for this financing will be sent to the Common Council at their home or email
address for review prior to the sale date.
Total 2020
Projects
Tax Exempt Water Rev Sewer Rev
Notes, 2020A Bonds, 2020B Bonds, 2020C
City Hall Projects:
General Fund 2,475,000 2,475,000
Electric Utility 1,012,500 1,012,500
Water Utlity 506,250 506,250
Sanitary Sewer Utlity 506,250 506,250
Street Projects: -
General Fund 1,910,289 1,910,289
Sanitary Sewer Utlity 570,972 570,972
Water Utlity 80,954 80,954
Parks: -
Babe Mann Park (General Fund) 350,000 350,000
Capital Equipment -
General Fund 657,000 657,000
Electric/Utility Remote Meter Read Project -
Water Utlity 363,171 363,171
Sanitary Sewer Utility 363,171 363,171
Sanitary Sewer Projects 677,300 677,300
Total Projects to Be FinanceSubtotal Capital Projects 5,898,539 1,962,875 1,611,443 9,472,857
Bond Premium
Bond Premium Received
Deposit to Debt Service Fund
Balance Applied to Reduce Issue Size
Existing DSR (678,558)$
Estimated Issuance Expenses
Ehlers (Municipal Advisor) 33,800$ 25,400$ 25,400$
Rating (Moody's) 17,000 13,500$
Bond Counsel 12,500 15,000 15,000
Disclosure Counsel (if engaged) 7,500 9,000 9,000
Paying Agent 850 850 850
Maximum Discount (Bid Item)2 60,050 24,368 24,368
Capitalized Interest - - -
Debt Service Reserve Fund - 436,754 122,713
TOTAL TO BE FINANCED 6,030,239$ 1,809,189$ 1,808,773$
Estimated Interest Earnings3 (25,806) (8,588) (7,050)
Rounding 567 4,399 3,277
NET BOND OR NOTE SIZE 6,005,000$ 1,805,000$ 1,805,000$
NOTES:2Maximum allowable discount of 1.25% (Bonds), 1.0% (Notes)3Assumes temporary investment of available new money proceeds at 1.75% for 90 days.
9,615,000$
Projects
Levy 5,392,289 91.42% 5,489,613 5,490,000
Streets (Sewer) - 0.00%
Sewer Projects 506,250 8.58% 515,387 515,000
Parks - 0.00%
100.00% 6,005,000 6,005,000
City of Elkhorn2020 Capital Financing Plan
2020
Prepared by Ehlers
Leaders in Public FinanceMay 18, 2020
Page 6
S
e
Sewer Revenue Bonds, Series 20120
System Revenues Debt Service Coverage Ratios
Existing Revenue DebtSewer System Revenue Bond, Series 2010 Dated
7/9/2020
Revenue
Debt
2018 171,351 171,351 0 0 191,417 191,417 0.90 2018
2019 198,709 198,709 0 0 203,524 203,524 0.98 2019
2020 198,709 198,709 0 0 218,115 218,115 0.91 2020
2021 198,709 198,709 0 60,000 1.90% 61,425 121,425 121,425 237,585 359,009 1.64 0.55 2021
2022 198,709 198,709 0 75,000 1.95% 45,413 120,413 120,413 250,859 371,272 1.65 0.54 2022
2023 198,709 198,709 0 75,000 2.05% 43,913 118,913 118,913 261,465 380,378 1.67 0.52 2023
2024 198,709 198,709 0 75,000 2.08% 42,364 117,364 117,364 266,500 383,864 1.69 0.52 2024
2025 198,709 198,709 0 80,000 2.13% 40,732 120,732 120,732 253,400 374,132 1.65 0.53 2025
2026 198,709 198,709 0 80,000 2.18% 39,008 119,008 119,008 119,283 238,291 1.67 0.83 2026
2027 198,709 198,709 0 80,000 2.24% 37,240 117,240 117,240 141,598 258,838 1.69 0.77 2027
2028 198,709 198,709 0 85,000 2.30% 35,367 120,367 120,367 148,370 268,737 1.65 0.74 2028
2029 198,709 198,709 0 85,000 2.37% 33,382 118,382 118,382 160,295 278,677 1.68 0.71 2029
2030 198,709 198,709 0 90,000 2.48% 31,259 121,259 121,259 166,725 287,984 1.64 0.69 2030
2031 198,709 198,709 0 90,000 2.65% 28,950 118,950 118,950 68,975 187,925 1.67 1.06 2031
2032 198,709 198,709 0 90,000 2.65% 26,565 116,565 116,565 67,188 183,753 1.70 1.08 2032
2033 198,709 198,709 0 95,000 2.80% 24,043 119,043 119,043 70,400 189,443 1.67 1.05 2033
2034 198,709 198,709 0 100,000 2.80% 21,313 121,313 121,313 68,450 189,763 1.64 1.05 2034
2035 198,709 198,709 0 100,000 2.95% 18,438 118,438 118,438 66,500 184,938 1.68 1.07 2035
2036 198,709 198,709 0 105,000 2.95% 15,414 120,414 120,414 69,550 189,964 1.65 1.05 2036
2037 198,709 198,709 0 105,000 3.10% 12,238 117,238 117,238 67,275 184,513 1.69 1.08 2037
2038 198,709 198,709 110,000 3.10% 8,905 118,905 118,905 0 118,905 1.67 1.67 2038
2039 198,709 198,709 115,000 3.20% 5,360 120,360 120,360 0 120,360 1.65 1.65 2039
2040 198,709 198,709 110,000 3.20% 1,760 111,760 111,760 0 111,760 1.78 1.78 2040
00 0 0 1,805,000 573,085 2,378,085 2,378,085
NOTES:1Equalized value shown for 2017 is actual.
2020 Rates based upon NON BQ 4/20/20 revenue sale plus .65
Rate Interest Total YEAR
Total Revenue
Debt Payments
GO Debt
Payments
Total GO &
Revenue Debt
Total Revenue
& GO Debt
Payments
Preliminary Planning
YEAR Total Net Principal Interest Total Principal 5/1
Prepared by Ehlers
Leaders in Public FinanceMay 18, 2020
Page 7
1 YEAR TREND IN MUNICIPAL BOND INDICES
Source: The Bond Buyer
The Bond Buyer “20 Bond Index” (BBI) shows average yields on a group of municipal bonds that mature in 20 years and have an average rating equivalent to Moody’s Aa2 and S&P’s AA.
May 18, 2020 Page 8
Page 1
Kapur & Associates, Inc. ~ 1224 South Pine Street ~ Burlington, WI 53105 ~ Phone 262.767.2747 ~ Fax 262.767.2750 www.kapurengineers.com D:\Walworth_Co\Elkhorn_City\Gov\190490_2020 Elkhorn Street Improvement Program\Bids\Recommendation\MemBidApproval_2020_Street Program.doc
MMEEMMOORRAANNDDUUMM TTOO TTHHEE CCIITTYY OOFF EELLKKHHOORRNNTo: Jim Heilman
From: Greg Calhoun
CC: Matt Lindstrom
Date: April 30, 2020
Re: Bid Approval and Recommendation for 2020 Elkhorn Street Improvement Program
Four bids were received on Thursday April 16, 2020 for the 2020 Elkhorn Street Improvement Program. The apparent low bidder was the Wanasek Corporation, from Burlington, Wisconsin. Bids ranged from $2,086,182 to $2,542,084.75. The bids were reviewed and the General Bid Tab is attached for your review. Below lists the three lowest bidders.
2020 Streets Program
Low Bidder – Wanasek 2nd Low Bidder – Payne & Dolan
3rd Low Bidder - Willkomm
BASE BID AS OPENED $ 2,086,182.00 $ 2,160,915.17 $ 2,217,900.35
BASE BID AS COMPUTED $ 2,086,182.00 $ 2,160,915.17 $ 2,217,900.35
BASE BID DIFFERENCE $ - $ - $ -
Pre-qualification submitted or on file YES YES YES
Bid Bond YES YES YES
Addendum #1 Acknowledgement YES YES YES
Based on the review of the bids and of the bidder’s qualification statement, it is my recommendation to award the 2020 Elkhorn Street Improvement Program contract to The Wanasek Corporation for the base bid total cost of $2,086,182.00.
Memo
To: City Council
From: Karl Sorvick, Recreation Director
Date: May 11th, 2020
Re: July 3rd Firework Display
Over the past several weeks we have had many inquiries to the Elkhorn Recreation Department and the Elkhorn Chamber about the status of the firework display set for July 3rd of 2020. At this time, the event itself would have to take place in Phase 3 of the Badger Bounce Back Plan.
For reference, below are Wisconsin municipalities that have cancelled their displays for 2020.
- Appleton - Wauwatosa - Ashland - Milwaukee - Beaver Dam
Many other local municipalities are having this same discussion and are hoping to make a decision sometime in the next several weeks. Given the information available to us now, it is my recommendation that we make a decision on holding the event or cancelling the event on or before June 3rd.This target date will allow for proper time to inform the community and businesses/service groups that are involved with putting on the event.
Memo
To: City Council
From: Karl Sorvick, Recreation Director
Date: May 15th, 2020
Re: Sunset Pool Operations 2020 Pool Season
Below is the Walworth County Blue Print Plan for Outdoor Pools
Amusement Parks, Waterparks, Pools
- Limit admission to 25% of capacity
- Maintain physical distancing protocols
Anticipated Opening Date: Monday, June 15th
- Allows for time to properly train pool staff & lifeguards
- Allows time for DPW crew to clean, fill and test pool machinery
Elkhorn Rec. Dept. has determined our 25% capacity is 75 patrons (this includes the entire pool, green
space and fenced in area)
Memberships & Daily Passes:
Due to the uncertainty of the pool season:
- We have not sold any season memberships to date.
- We do not recommend selling season long memberships due to the adjustments for safety,
limiting number of patrons and the unknown of what the future may hold regarding restrictions.
- Daily Passes only – (first come first served) patrons would sign up via online for 4 hour time
blocks to be allowed into Sunset Pool. Day OF passes will be sold, but will not exceed 75 people
at one time. It is recommended that you sign up via online to guarantee your spot
- Two, 4 hour time blocks will be offered each day. After the first block, the pool will close to the
public. During this time, staff will clean all areas of pool and a staff shift change will be
performed to limit social interactions.
Concessions:
- Sunset Pool concession stand will only sell prepackaged food items, such as but not limited to:
Soda, Water, Chips, Candy and Candy Bars. Items that need to be heated or cooled to a certain
temperature that requires handling by staff will not be sold until it is deemed safe to do so.
- The concession stand has two windows for serving. One window will be utilized to place an
order, the other window will be utilized as a pickup window. Food items will be placed on
counter for patron to pick up, no physical contact between staff/patron will be made.
Additional Operations:
- Due to limited staff time, pool chairs will be removed from Sunset Pool. Patrons will have the
option to bring in their own lawn chairs. This will reduce the cleaning time for our staff and keep
the pool safer.
- Programs Outside of time blocks will include: Water Aerobics, Lap Swim, Aqua Zumba, Staff
Training and Private Lessons.
- Plans will be in place to utilize the main entrance as enter only and the exit will be the gate
closest to the concession stand.
**Additional efforts will be made to ensure staff & patron safety in regards to bathroom, showers, staff
break areas and common use areas.***