HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 03/01/2022 - FIRST READING OF ORDINANCE NO. 034, 2022, APPROPRI Agenda Item 14
Item # 14 Page 1
AGENDA ITEM SUMMARY March 1, 2022
Utilities-Broadband
STAFF
Chad Crager, Connexion Executive Director
Travis Storin, Chief Financial Officer
David Lenz, FP&A Director
Lance Smith, Utilities Strategic Finance Director
John Duval, Legal
SUBJECT
First Reading of Ordinance No. 034, 2022, Appropriating Prior Year Reserves from the Light and Power Fund
for Use in the Connexion Account to Complete the Connexion System Construction and Customer Ramp Up
and Providing for Future Cost Recovery.
EXECUTIVE SUMMARY
The purpose of this item is to request appropriation of prior year reserves from the Light & Power Fund for use
in completing the Connexion system construction and customer ramp up. Updated construction cost and
timing estimates were completed in late 2021 which indicated a funding need of approximately $20 million to
build out the network by mid-2022. Staff has evaluated the financing options available to meet this funding
need and proposes to use $20 million from available Light & Power reserves to allow for completion of the
network buildout. These funds will be reimbursed to the Light & Power Fund (including interest) from the cash
flows generated by the Connexion operations. Staff met with the Council Finance Committee on February 4,
2022 and received support for this proposal.
STAFF RECOMMENDATION
Staff recommends adoption of the Ordinance on First Reading.
BACKGROUND / DISCUSSION
Assumptions Update
The Connexion team, along with Atlantic Engineering Group (AEG), and O n Trac, continue to build and install
Connexion fiber throughout the community. With initial construction starting in 2019, it is anticipated that AEG
will be complete with construction by summer 2022 and that the project will remain on target with fiber
available to all premises by the end of 2022.
New neighborhoods continue to be offered Connexion service on a weekly basis. To date, Connexion is seeing
a 31% residential take rate (measured in neighborhoods with service available for at least 90 -days.) This
penetration is above the 28% previously noted in the original business plan to achieve timely bond payback.
While build progress and residential take rate are at or above target, previous financial modeling was overly
aggressive on multiple dwelling unit (MDU) build-out and commercial availability. Connexion has steady
interest from these business types, and each brings a challenge for implementation. For 2022, Connexion has
secured Colorado Boring as a dedicated resource to provide fiber to MDUs. Fort Collins has over 500 MDUs
and Connexion has set a target of installing at least 150 in 2022.
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The updated modeling includes additional boring costs on the fiber network, the dedicated costs for MDU
buildouts, additional premises to be served in the market and updated operating and installation costs
reflecting actual results to date. The primary assumption changes also include an increase in residential take
rate to 35% from 28%, a decrease in commercial take rate from 45% to 28% and full absorption of the market
by end of 2024 versus by the end of 2022 previously.
Funding Requirements and Financing Options
The current project estimate to complete is $143 million. Spending through December 2021 totals $115 million.
The Connexion project currently has $123 million available ($117 million appropriated plus a re -deployment of
operating budget funds of approximately $6 million). The resulting funding need is approximately $20 million.
Staff has evaluated various financing options available to provide the sour cing for the $20 million requirement.
The primary options considered were using Light and Power (L&P) reserves with reimbursement, additional
bond issuances (either stand-alone Connexion needs or combined with L&P needs), or combinations of the
two. Other options initially considered were utilization of L&P reserve balances without reimbursement, bank
financing, General Fund backfill, and a do-nothing approach. The primary options considered (including the
benefits and drawbacks of each alternative) are shown below.
Debt Overview
Although Connexion and L&P maintain separate financial books of record for management and transparency
purposes, they are legally a single Electric Utility Enterprise. The existing bonding is issued under this
structure and ultimately L&P revenues provide financial backing if Connexion cash flows are insufficient to pay
back its’ obligations (this is similar in structure to other regional municipalities’ broadband operations –
Longmont, Loveland, Estes Park). Therefore, utilization of L&P reserves must consider the financial needs,
capacity, and outlook of the L&P entity in order to avoid negatively impacting L&P ratepayers.
The table below highlights the anticipated L&P rate increases, capital improvement plan (CIP) and de bt
issuance needs of L&P over the next ten years. Proposed rate increases are driven to a large degree by the
need to cover increased wholesale power costs. The capital plan includes a new substation, replacement
billing system and a potential East Mulberry annexation. L&P contemplates a debt issuance of $41 million as
part of their planning in 2023. L&P currently has no debt outstanding for their own purposes.
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L&P had $23 million in available reserves (after required and appropriated amounts were deducted) at the end
of 2020. 2021 reserve increases are expected to be approximately $19 million, which will leave them with
approximately $42 million of current reserve availability.
Connexion has $130 million in outstanding debt from the bonds issued in 2018 by the Electric Utility
Enterprise. The terms of the bonds provided for semi -annual payments in June and December of each year.
The payments are interest only until December 2022 when the first principal repayment begins. The
repayment schedule was structured to increase the payments over time to align with the construction phase of
the project and ramp-up of customer acquisition. $20 million of available borrowing capacity remains under the
original voter approved initiative amount of $150 million.
Financing Recommendation
Staff is recommending financing Option 1 - using available L&P Reserves. The pursuit of this funding solution
best balances the needs and timing of Connexion funding requirements, maintains flexibility for future L&P
financing requirements, and enables the ability to move forward at full speed with the network buildout and
sales/marketing efforts. It best maintains the ability for Connexion to meet its future debt obligations and
provide security for L&P ratepayers in the longer term. The interest rate paid to L&P for the use of reserve
balances will be the greater of the current investment earnings rate on existing reserve balances or the 10 -year
AA- bond rate.
Specifics of the funding arrangement will include:
• Draw down as needed to meet cash requirements
• Reimbursement of L&P reserves w/ all excess available cash from Connexion operations
• Interest paid into L&P reserves (computed on outstanding carrying balance)
Reserve Borrowing Draws:
• 1st draw required: Q2 2022
• December 2022 projected balance: $11 million
• Maximum estimated need: $20 million by Dec 2024
• Reimbursement: Completed on or by Jan 2029
• Total Interest incurred: $3 million
CITY FINANCIAL IMPACTS
The updated results of the financial modeling of Connexion operations, including the utilization of Option 1 –
using L&P Reserves, for the ten-year period out to 2031 are detailed below. Of note are the ramp-up of total
revenues in the 2022-25 timeframe, the significant cash flow before financing beginning in 2025, and the
accumulation of cash (total cash flow per year) starting in 2029 after paying back the reserves used. Also
highlighted is the maximum reserve use of $20 million at year -end 2024.
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A major consideration of our evaluation of financing options for the additional $20 million capital need was the
impact to our overall debt position and bonding capability. Two key measures in this regard are the debt
coverage ratio (DCR) and Debt Capacity. Debt coverage ratio is a measure of our ability to pay back our
annual debt service, expressed as ratio of net pledged revenues (essentially net operating cash flows) divided
by debt service payments. The combined Connexion/L&P ratio at year end 2022 is projected to be 3.5. This
indicates we have 3.5 times the net revenues to cover our debt payments.
Debt capacity is a measure of how much additional debt we could “afford” at various DCR’s and bond terms
(years). There is sufficient room to take on additional potential debt (above the existing Connexi on bond
borrowings and planned L&P $41 million needs) to fund other potential projects or initiatives. The table below
reflects combined L&P/Connexion data.
A number of scenarios and sensitivities were analyzed as part of the financial evaluation. T he table below
shows our current estimate and three alternative views: the original business plan take -rates, a breakeven
bond payback scenario and an additional capital overrun case. The estimated funding need, reimbursement
timeframe, cumulative cash in 2042 (when original bonds are paid off) and the interest expense incurred on the
new funding are the key measures evaluated. Long-term cash position is most sensitive to long-term take-
rates and the underlying costs of providing services at those levels.
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The following is a summary of the project funding:
Prior Appropriated Funds $122,808,249
Funds to be Appropriated with this Action $20,000,000
Total Available Project Funds $142,808,249
The Interim City Manager has also determined that this appropriation is available and previously
unappropriated from the Light and Power Fund and will not cause the total amount appropriated in the Fund to
exceed the current estimate of actual and anticipated revenues and all other funds to be recei ved in the Fund
during this fiscal year.
BOARD / COMMISSION RECOMMENDATION
Staff met with Council Finance Committee (CFC) on February 4, 2022. CFC provided their support for the
recommended action.
Staff also met with the Energy Board (EB) on February 10, 2022. The planned appropriation request was
reviewed and the EB voted 6-1-1 in support of the proposal.
ATTACHMENTS
1. Energy Board Minutes (excerpt) (PDF)
2. Council Finance Committee Minutes (excerpt) (PDF)
3. Powerpoint Presentation (PDF)
ENERGY BOARD
REGULAR MEETING: DRAFT – ABRIDGED FOR CONNEXION FUNDING
NEEDS
February 10, 2022 – 5:30 pm
Remote – Zoom
ROLL CALL
Board Members Present: Bill Becker, Jeremy Giovando, Alan Braslau, Steve Tenbrink, Dan Gould,
Marge Moore, Sidra Aghabibian, Emilio Ramirez
Board Members Absent: John Fassler
OTHERS PRESENT
Staff Members Present: Marisa Olivas, Adam Bromley, Cyril Vidergar, John Phelan, Theresa Connor,
Lance Smith, Chad Crager, Travis Storin, Molly Reeves, Amanda Newton, Carolyn Conant , Cody
Snowdon, Councilmember Tricia Canonico
Members of the Public: Eric Sutherland, Thomas Loran, Rick Coen
Connexion Funding Needs
Chad Crager, Broadband Executive Director
Travis Storin, Chief Financial Officer
Molly Reeves, Manager, Financial Planning & Assets
Lance Smith, Director, Financial Planning & Assets
(Attachments available upon request)
Mr. Crager introduced himself and Ms. Reeves and explained how Connexion’s funding needs are partly
a result of the design-build contract, which made exact cost estimates hard to pinpoint.
Mr. Crager reviewed and compared the 2017 business plan assumptions versus current project estimates
(current estimates through 2024). A major difference reflected in the comparison was the original
assumption of vacant conduit availability from Light & Power (L&P), which was thought to be 72%
availability but after L&P proofed (checked) the conduit availability was closer to 48%. This created an
increased need for boring, the most expensive aspect of the build (a zero-dollar assumption for premise
boring to a current $8.5 million estimate). Installation costs to the contractor, OnTrac, were assumed to be
$592 per install, but current project estimates are closer to $705 per install.
Mr. Crager explained the take rate estimates for residential (28% by end of 2022) and commercial (45%
by end of 2022) were expected to meet full absorption by Q4 2022. Those take rates are now projected to
be 35% (residential by end of 2022) and 28% (commercial by end of 2024), wit h the full absorption in Q4
of 2024. Work on Multiple Dwelling Units (MDUs) requires property-owner-approval and pushes the
timeline for commercial take rates back more than residential. Mr. Crager believes that Connexion will
accede the new take rates, as the city is currently at 31% take rate. Chairperson Tenbrink asked if the
35% take rate reflected current installations or all of Fort Collins. Mr. Crager replied that the take rates are
based on all of Fort Collins.
Capital project spending updates showed the total capital budget estimate at $143 million, a raise from
the 2017 assumption of $117 million. The total capital budget estimate included the network build
(primarily Atlantic Engineering Group “AEG”), installations (OnTrac and boring), equipment/all other, and
a contingency appropriation from September 2021. Mr. Crager noted that about $4 million of the network
ATTACHMENT 1
ENERGY BOARD
REGULAR MEETING
build’s new estimate is based on new development, which Connexion is partnering with L&P and paying
L&P to place Connexion infrastructure, including vacant conduit to avoid ripping up new sod when
residents move in.
Mr. Crager shared that $6 million has been redeployed from the Operating Budget, making current
available funding $123 million. To go forward and reach the new $143 million estimate, Connexion has a
$20 million funding request. The Board was reminded that the bond originally approved Connexion for
$150 million, so the funding request falls within the bond approval amount.
Ms. Reeves reviewed the financing options that Connexion has considered the four options for funding
were displayed alongside each options’ pros and. The first discussed was borrowing from L&P Reserves,
a low-cost and readily available capital option with a con of impacting potential opportunity cost for L&P.
This is the option that Connexion is purposing as a first choice, but other options listed were: borrow from
L&P Reserves, then deferred bonding offering (package with L&P in 2023-2024 budget); deferred bond
offering only (package with L&P in 2023-2024 budget); or 2022 dedicated Connexion bond offering only.
Speaking the consideration of borrowing from L&P, it was noted that L&P and Connexion are legally a
single “Electric and Telecommunications” enterprise, but staff maintains separate sets of books for
management and purposes of transparency. Additionally, Ms. Reeves purposed that Connexion would
pay interest [ a revolving interest rate – based on interest at the time] on L&P Reserves used and would
pay the higher of current actual investment earning rate or 10-year AA-bond rates ensuring L&P rate
payers receive at least the rate they would have on investment earning for their excess reserves.
Ms. Reeves reviewed L&P Rates looking to 2031 and explained that most of the retail rate increases are
due to Platte River Power Authority’s (Platte River) wholesale rate increase. L&P reserve position is
around $42 million available at the end of 2021. A major consideration when deciding the best option was
the impact to L&P’s overall debt position, and L&P’s debt cover ratio shows the ability to pay back debt.
Key takeaways for the purposed borrowing structure are the draw down as needed to meet cash
requirements, payback with all excess available cash from Connexion operations, and interest will be
computed on outstanding carrying balance. If option one is approved the first draw would be required in
Q2 of 2022 (May/June) with a maximum estimate need of $20.5 million by December of 2024 and
payback completed by January 2029. This brings the interest i ncurred to $3.2 million.
Mr. Crager and Ms. Reeves are recommending option one as they had done last week to City Council
Finance. They are in the process of drafting an ordinance for Council to support borrowing L&P Reserves
for the March 2022 Council Meeting.
Board Member Becker feels it is not the Energy Board’s position to debate the merits and challenges of
Connexion. He expressed heartache to pull from reserves and reminded the group of L&P’s history of low
reserves that had to be built up in the past. Mr. Becker feels that Connexion funding is an inappropriate
use of L&P Reserves, and there are too many unknowns.
Board Member Braslau noted that he does not associate himself with the public comments made earlier
in the meeting, but he is critical of how “we” (Connexion) has got here. Mr. Braslau is not sure to believe
that there will not be an impact on L&P when in fact it already has impacted L&P. Mr. Braslau understand
that some of L&P’s issues are not entirely Connexion’s making, but the financial assumptions, that are
now proving to be shortcomings, were made known prior. With finances changing over time, Mr. Braslau
believes that the proposed interest rate is insufficient to pay back L&P and noted that there is not a
proposal for future funding of the opportunity costs. Mr. Braslau shared that he wants Connexion to be
ENERGY BOARD
REGULAR MEETING
successful and he is glad there has been more transparency from the department. Mr. Braslau also noted
that he believes the lagging take rate is due to marketing failures of Connexion. Mr. Braslau does not feel
he has enough information to fully support the funding request.
Board Member Giovando wondered what the largest risk is to the proposed need for funding and asked if
there are plans to mitigate the risk. Mr. Crager responded that the biggest risk is not getting to all the
premises, which will impact the take rate for revenue. Mr. Crager acknowledged Connexion’s past issues,
of which several have been addressed and fixed. Mr. Crager is looking forward to getting the construction
done (expected to be complete by the end of 2022).
Vice Chairperson Moore asked what the exposures are to L&P if less funds are available in the reserves.
Mr. Smith answered that there is a risk to L&P rate payers that will need to be kept in mind when
discussing opportunity costs [opportunity costs are investment opportunities that could make the
community better, i.e., investing in land for a new substation]. Mr. Smith added that there are not service
level metrics and weights to quantify what the investment opportunity cost is. Mr. Smith shared that in
November he presented to Council Finance Committee an exhaustive list of capital investments, which
showed with modest rate increases could be achieved within 10 years. Since November, revenues came
in $7 million over budget on the operating side and $3 million over budget on the development side. On
the expense side, the overall operating costs were below budget around $7 million. This adds up to about
$20 million that was unanticipated when Mr. Smith presented to Finance Council in November.
Mr. Becker asked Mr. Smith to clarify if the reserves cover unexpected items (i.e., major substation fire).
Mr. Smith explained that while this is correct, there is a minimum reserve that is intended to cover such
items. Connexion’s funding request would not draw down L&P reserves completely, and it should be kept
in mind that Connexion is not asking for the money tomorrow but over time as needed.
Mr. Tenbrink agrees with the others’ concerns, and he shared his experience while living in Tacoma.
Tacoma struggled since they could not offer services beyond what Comcast was able to provide. As a
Connexion customer the past year, Mr. Tenbrink is pleased with the quality. Mr. Tenbrink said considering
the last two years, with the pandemic, has shown how critical network capabilities are for people. Mr.
Tenbrink noted the importance of supporting Connexion while also not hurting L&P’s ability to fund
needed projects.
Mr. Becker and Mr. Giovando asked what L&P’s thoughts were regarding the funding request and if it has
changed L&P’s plans. Mr. Bromley answered that this does not change the plans that L&P has. Mr.
Bromley shared that with L&P Capital Improvement Plan (CIP), which provides a 10-year plan of project
expenses, they were able to hand the CIP to Mr. Smith for financial forecasting and modeling. Mr. Smith’s
forecast has shown that L&P’s plans do not have to change due to Connexion’s funding request.
Ms. Moore asked if the repayment period would change if the take rate fell short. Ms. Reeves shared that
they ran a break-even bond payback period, dropping the take rate a couple percentage points, and in
that case, everything including the $20 million borrowed would not be paid back until 2042, like the
original bond. Mr. Crager noted that one of the presentation slides list the sensitivities to speak to Ms.
Moore’s question. Additionally, Mr. Crager spoke to the importance of Connexion’s ability to provide the
upload speeds required for remote work and school. Connexion’s pricing will not raise and will continue to
offer a $60 a month, no-contract, plan for internet services.
Regarding Connexion’s marketing plan, Mr. Crager said they have not focused on marketing so far to
avoid pushing a product that could not be delivered on at the time, but there is an amazing marketing plan
in place through Old Town Media
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REGULAR MEETING
Board Member Ramirez wondered how the original projections, which did not meet Connexion’s goals,
are different from the current cost assumptions.
Board Member Gould shared his surprise of how light the presentation was on speaking to L&P concerns.
Mr. Gould shares Mr. Becker’s concern, and he is at a juncture of conservatism for L&P and keeping a
good funding level for L&P.
Ms. Moore asked Mr. Smith what his consideration is for a fully funded L&P Reserve. Mr. Smith said he
was suggesting that there is $20 million of unanticipated funds in L&P Reserves. Mr. Smit explained that
the difference between something like HOA reserve use and the electric utility is the balance of using
reserves and using debt. There will be an L&P debt issuance of about $40M over the next ten years.
Considering the plans to make $178 million worth of capital improvements, the vast majority will be paid
through existing rates or on-going development fees. Mr. Smith confirmed that the reserve level would be
considered “good” as it is certainly above the minimum reserve required. Mr. Smith reminded the Board
that to finance Connexion initially, L&P revenues were issued. It could put L&P at risk to not use their
revenues to pay the debt service, essentially communicating to the bond market that the City is not doing
what they said they would do.
Mr. Tenbrink asked if L&P was planning on using Connexion network. Mr. Bromley answered that L&P is
overhauling a section of the AMI backend system to utilize fiber instead of wireless routing and using the
same backhaul of fiber for distributed automation. Mr. Phelan added that Energy Services is also using
fiber for water heater speed and responsiveness.
Ms. Connor commented on Mr. Smith’s work to mature Utilities’ financing, in addition to the work put in by
L&P’s department directors towards CIP planning.
Vice Chairperson Moore moved for the Energy Board to support the proposal to borrow from L&P
Reserves to support Connexion’s funding needs.
Board Member Giovando seconded the motion.
Discussion:
Mr. Braslau said there is a significant need to have L&P support Connexion but believes the Board does
not have enough information to recommend the best approach.
Mr. Giovando said he has the same sentiments and with his time on the Board he has learned to trust Mr.
Smith. Mr. Giovando said that if Mr. Smith is behind then he is willing to support the funding request. Ms.
Moore agrees and appreciates that the presentation showed the various options.
Mr. Becker shared that he still disagrees from the point of view of an Energy Board member, because of
the risks at hand for L&P.
Vote on the motion: It passed, 6 in favor-1 opposed-1 abstention
Board Member Becker proposed for the Energy Board to express its concern via a letter to City
Council, through Chairperson Tenbrink, notwithstanding the Board’s support for this budget
matter, regarding the risks such a decision could have on the Energy Board and L&P, in addition
to potential risks to the Energy Policy in support of Our Climate Future.
Board Member Braslau seconded the motion.
ENERGY BOARD
REGULAR MEETING
Vote on the motion: It passed unanimously, 8-0
Finance Administration
215 N. Mason
2nd Floor
PO Box 580
Fort Collins, CO 80522
970.221.6788
970.221.6782 - fax
fcgov.com
Finance Committee Meeting Minutes
February 4, 2022, 3-5 pm
Zoom
Council Attendees: Julie Pignataro, Kelly Ohlson, Emily Francis, Susan Gutowsky, Shirley Peel
Staff: Kelly DiMartino, Travis Storin, John Duval, Tyler Marr, Ginny Sawyer, Blaine
Dunn, Amanda Newton, Chad Crager, Dave Lenz, Jo Cech, Molly Reeves,
Javier Echeverria Diaz, John Phelan, Lance Smith, Carolyn Conant, Gerry Paul,
Victoria Shaw,Monica Martinez, Erik Martin, Zack Mozer, SeonAh Kendall,
Carolyn Koontz
Others: Eric Sutherland, Kevin Jones (Chamber), Sarah Hunt
______________________________________________________________________________
Meeting called to order at 3:01 pm
Approval of minutes from the January 6, 2022, Council Finance Committee Meeting. Emily Francis moved for
approval of the minutes as presented. Kelly Ohlson seconded the motion. Minutes were approved unanimously via
roll call by; Julie Pignataro, Kelly Ohlson and Emily Francis.
A.Connexion Financing Update
Chad Crager, Connexion Executive Director
Dave Lenz, Director, Financial Planning & Analysis
EXECUTIVE SUMMARY:
During 2021, the Connexion team continued with the buildout of the fiber network and significantly ramped up
the acquisition of customers for Connexion service offerings. Updated construction cost and timing estimates
were completed in late 2021 which indicated a funding need of approximately $20 million to build out the
network by mid-2022. Staff has evaluated the financing options available to meet this funding need and is
proposing borrowing $20 million from available Light & Power reserves to allow for completion of the network
buildout.
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED:
1.What questions does Council Finance Committee have on the identified financing options?
2.Does Council Finance Committee staff-recommended next steps?
BACKGROUND/DISCUSSION:
Assumptions Update:
ATTACHMENT 2
The Connexion team, along with Atlantic Engineering Group (AEG), and On Trac, continue to build and install
Connexion fiber throughout the community. With initial construction starting in 2019, it is anticipated that AEG
will be complete with construction by summer 2022 and that the project will remain on target with fiber
available to all premises by the end of 2022.
New neighborhoods continue to be offered Connexion service on a weekly basis. To date, Connexion is seeing a
31% residential take rate (measured in neighborhoods with service available for at least 90-days.) This
penetration is above the 28% previously noted to achieve timely bond payback.
While build progress and residential take rate are at or above target, previous financial modeling was overly
aggressive on multiple dwelling unit (MDU) build-out and commercial availability. Connexion has steady interest
from these business types, and each brings a challenge for implementation. For 2022, Connexion has secured
Colorado Boring as a dedicated resource to provide fiber to MDUs. Fort Collins has over 500 MDUs and
Connexion has set a target of installing at least 150 in 2022.
The updated modeling includes additional boring costs on the fiber network, the dedicated costs for MDU
buildouts, additional premises to be served in the market and updated operating and installation costs reflecting
actual results to date. These primary assumption changes are highlighted below.
Funding Requirements and Financing Options:
The current project estimate is currently $143 million. Spending through December 2021 totals $115 million.
The Connexion project currently has $123 million available ($117 million appropriated plus a re-deployment of
operating budget funds of approximately $6 million). The resulting funding need is approximately $20 million.
Staff has evaluated various financing options available to provide the sourcing for the $20 million requirement.
The primary options considered were borrowing from L&P reserves, additional bond issuances (either stand-
alone Connexion needs or combined with L&P needs), or combinations of the two. Other options initially
considered were utilization of L&P reserve balances, bank financing, General Fund backfill, and a do-nothing
approach. The table below highlights the primary options considered including the benefits and drawbacks of
each alternative.
Although Connexion and Light & Power (L&P) maintain separate financial books of record for management and
transparency purposes, they are legally a single “Electric and Telecommunications” enterprise. The existing
bonding is issued under this structure and ultimately L&P revenues provide financial backing if Connexion cash
flows are insufficient to pay back its’ obligations. Therefore, additional borrowing or utilization of L&P reserves
must consider the financial needs, capacity, and outlook of the L&P entity in order to avoid negatively impacting
L&P ratepayers.
Debt Overview:
The table below shows the anticipated L&P rate increases, capital improvement plan (CIP) and debt issuance
needs of L&P over the next ten years. Proposed rate increases are driven to a large degree by the need to cover
increased wholesale power costs. The capital plan includes a new substation, replacement billing system and a
potential E. Mulberry annexation. L&P contemplates a debt issuance of $41 million as part of their planning in
2023. L&P currently has no debt outstanding for their own purposes.
L&P had $23.4 million in available reserves (after required and appropriated amounts were deducted) at the end
of 2020. 2021 reserve increases are expected to be approximately $19 million, which will leave them with
approximately $42 million of availability.
An overview of the existing bonds is highlighted below for the debt issued in 2018. The terms of the bonds
provided for semiannual payments in June and December of each year. The payments are interest only until
December 2022 when the first principal repayment begins. The repayment schedule was structured to increase
the payments over time to align with the construction phase of the project and ramp-up of customer
acquisition. $20 million of available borrowing capacity remains under the original voter approved initiative
amount of $150 million.
New Proposed Borrowing Structure/Mechanics:
Staff is recommending financing Option 1 – Borrowing from available L&P Reserves. The pursuit of this financing
solution best balances the needs and timing of Connexion funding requirements, maintains flexibility for future
L&P financing requirements, and enables the ability to move forward at full speed with the network buildout
and sales/marketing efforts. It best maintains the ability for Connexion to meet its future debt obligations and
provide security for L&P ratepayers in the longer term.
Specifics of the borrowing arrangement will include:
Draw down as needed to meet cash requirements
Payback w/ all excess available cash from Connexion operations
Interest paid to L&P (computed on outstanding carrying balance)
Reserve Borrowing Draws:
1st draw required: Q2 2022 (May/June)
December 2022 projected balance: $11M
Maximum estimated need: $20.5 M by Dec 2024
Payback: Completed on or by Jan 2029
Total Interest incurred: $3.2M
Financial Outlook Summary:
The updated results of the financial modeling, including the utilization of Option 1 - L&P Reserve borrowing, are
highlighted below for the ten-year period out to 2031. Of particular note are the ramp-up of total revenues in
the 2022-25 timeframe, the significant cash flow before financing beginning in 2025, and the accumulation of
cash (total cash flow per year) starting in 2029 after paying back the reserve borrowings. Also highlighted is the
maximum reserve borrowing of $20.5 million at year-end 2024.
A major consideration of our evaluation of financing options for the additional $20 million capital need was the
impact to our overall debt position and bonding capability. Two key measures in this regard are the debt
coverage ratio (DCR) and Debt Capacity. Debt coverage ratio is a measure of our ability to pay back our annual
debt service, expressed as ratio of net pledged revenues (essentially net operating cash flows) divided by debt
service payments. In the table below, the combined Connexion/L&P ratio in 2022 is 3.5. This indicates we have
3.5 times the net revenues to cover our debt payments.
Debt capacity is a measure of how much additional debt we could “afford” at various DCR’s and bond terms
(years). There is sufficient room to take on additional potential debt (above the existing Connexion bond
borrowings and planned L&P $41M needs) to fund other potential projects or initiatives. (The table below
reflects combined L&P/Connexion data).
Sensitivities:
A number of scenarios and sensitivities were analyzed as part of the financial evaluation. The table below shows
our current estimate and three alternative views – the original business plan take rates, a breakeven bond
payback scenario and an additiuonal capital overun case. Presented are the esimate funding need, payback
timeframe, cummulative cash in 2042 (when original bonds are paid off) and the interest expense incurred othe
new financing. Long term cash postion is most sensistive to long-term take rates and the underlying costs of
providing services at those levels.
DISCUSSION / NEXT STEPS;
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED:
What questions does Council Finance Committee have on the identified financing options?
Does Council Finance Committee staff-recommended next steps?
Kelly Ohlson; Council was usually told a much rosier picture than actually existed for both Connexion projected
costs and projected revenues. How confident are we that we have these projections nailed down / that the
numbers are more accurate?
Travis Storin; I do think we have learned quite a bit along the way since the original business plan was developed
under previous leadership. I don’t think that necessarily anything wrong or rosy was put out – some things you
can’t necessarily determine in advance when working underground. The resident email that you reference –
one of the linchpin assumptions that we have built into all of the above is the revenue - in order to meet the
obligations of this utility from a debt servicing standpoint, we need to sell the product and acquire customers.
Assumptions would imply about 1,000 new customers per month on average in 2022. Not a steady 1,000 per
month due to the pattern of the build. The question you are asking is; How confident are we in the 1,000
customers per month in 2022? I will turn this over to Chad to answer from an operations and strategic view.
Chad Crager; we have already started releasing more than double what we were releasing in the second half of
2021 as far as the number of residents that are available every week. This is substantial because that is what
will make the revenue – the more we release that take rate will go up. We have developed processes for
premise boring – really start to focus on commercial - we have a billing system that works, people can sign up
online - so now staff can focus on gaining customers and building a great experience and getting that revenue
overall. Now that we are done with design, I have a massive amount of confidence in our capital budget, our
construction numbers – the inputs to the financial model are appropriate and somewhat conservative as they
should be. I am confident in the model, and we will be holding ourselves accountable so we will know and can
let others know how we are doing – committing to transparency.
Kelly Ohlson; And if we just did the straight borrowing from L&P which will tie up some of their money – does
anything of significance from a resident / utility rate payer viewpoint get delayed?
Lance Smith; no, that wouldn’t impact any of the anticipated capital work - it may cause the debt issuance we
are talking about needing to happen – we are not diverting any physical resources and we do have the debt
capacity to support this.
Emily Francis; I think I was confused on the take rates - Do MDUs fit in residential or commercial?
Chad Crager; MDUs are part of residential but they look more like commercial which can sound confusing.
We consider them residential because that is where people’s homes are, but they are different in the fact that
we have to get permission and follow the process. Our 35% take rate for residential includes MDUs by the end
of 2024.
Emily Francis; why did our commercial take rate go down so much?
Chad Crager: Our commercial take rate was 45% in the original business plan, and we now see as 28%. Part of
that is based on our history and experience in working with commercial businesses. We did not want to be too
aggressive with our take rates. I hope to be able to tell you in 6 months that we expect it to be much higher as
we have more conversations and form more relationships with our commercial businesses. We are not going to
settle for 28% - but based on the complexities so far whether it is the installs or that folks are not returning to
commercial businesses because folks are working remotely / virtually.
Emily Francis; I did not see language around the change in the commercial take rate in the materials.
Dave Lenz; it was not brought out specifically other than noting that it did change
Emily Francis; I hope we can change that – that is a big change going from 45% to 28%.
I do agree with staff’s approach and thank you for the information which was super helpful.
Julie Pignataro; great news on the look up updates on the website which will be super helpful for my
constituents and for those where we don’t have a ton of availability yet.
Larger question - when it was just 4 utilities - have we ever done something like this before between the wet
utilities and L&P or is that not a possibility?
Travis Storin; I do recall somewhat parallel types of agreements between the wet utilities and the URA around
the Innosphere development. I would need to get reacquainted with those details. In this case, it is a bit more
prescriptive because in the legal sense L&P and Connexion are really one utility. It was set up to be a combined
electric and telecom utility underneath the city’s charter. That is what we did when we went back to the voters
and what that allowed us to do was to issue bonds at a much lower rate backed by the full faith and credit of the
L&P utility which benefitted a startup environment. One of the downsides of that is it comes with a pledge, as
part of the bond convenance, to be treating it as one utility before seeking outside support from the other
utilities or the general fund.
Julie Pignataro; so, is this kind of a blueprint as well for the future? If and when Connexion is ragingly successful
as we hope it is - could it help L&P someday with rates. Could it go that far or are we not allowed to do that?
Travis Storin; we very much would be allowed to do that because of the charter and the way it is set up. Maybe
Chad or Lance could speak to how they did that in Longmont given the financial success they have seen from
their utility on the telecom side. A future council would have the option to essentially buy down electric rates in
a matter of speaking – in the singular legal enterprise, it is a bit of moving from the left pocket to the right
pocket in the eyes of an attorney.
Chad Crager; I am not quite sure of how Longmont has done that. I do know that because of their take rate
being much higher than they anticipated, they have been able to pay back their bonds sooner. We can find out
and follow-up with that information.
Julie Pignataro; I think that would be helpful in terms of what we are looking at
ACTION ITEM
Travis Storin; we can incorporate our findings in the agenda materials when this comes forward to the full
Council. We can outline the options – as it starts to generate margin, does that mean that we lower internet
rates? We will include what we are allowed to do on the electric side and the whole spectrum.
ACTION ITEM
Julie Pignataro; in the spirit of regionalism and our partners at the PRPA. Are Loveland and Estes Park with their
broadband efforts - Are those in a similar state – around the L&P utility being married with that?
Chad Crager; I am unsure of that but will find out and include that in the materials for the full Council.
Julie Pignataro; similar to what Kelly said, I don’t know if it was that that we were being painted a rosier picture
or there were too many unknowns at that point, but I do appreciate the transparency you are bringing forward
now and that we are having these discussions. Appreciate the financial judo that you are doing to not impact our
rate payers.
Susan Gutowsky; I enjoyed listening to the presentation and understanding why some of the delays – it is not
always what you anticipate when you get into the project.
If you would review again the look up process again so I can be clear on that and I can convey that so
folks can find out when their service might be provided.
Chad Crager; our address look-up tool is on our main Connexion web site; https://fcconnexion.com/ was actually
updated this morning - before then you could only see if your address was in design / construction / or service
available phase. There is no longer a design phase and now under construction includes a timeline where you
can see if you are within the next two months or a season through the end of 2022 - we will constantly be
updating this - our main issue is not being able to get service fast enough for folks. Now at least we can provide
more information.
Susan Gutowsky; there is some confusion in my neighborhood as we are apparently not getting service for a bit
yet there are Connexion yard signs in our neighborhood that say “we are gig powered”
Chad Crager: what is difficult it that our fiber areas we refer to do not follow neighborhood lines. Part of the
reason if that there are about 225 homes per fiber area, but it didn’t line up with neighborhoods.
I personally don’t have it, but I have neighbors 2 blocks away who do. That is the nature of our fiber areas
Our hope is very soon – we will not have this issue. When your service is available, you will receive an email as
well as a postcard that you can sign up for service and the fastest way to sign up is online.
Connexion Appropriation Request
March 1, 2022
ATTACHMENT 3
Business Plan vs. Current Project Estimates
2
Description 2017 Business Plan
Assumptions Current Project Estimate
Premises 70k 78k
Conduit Availability 72%48%
Installation Cost $592 per install $705 per install
Premise Boring $0 $8.5M
Full absorption 100% by Q4 2022 100% by Q4 2024
Residential Take Rate 28% by end of 2022 35% by end of 2022
Commercial Take Rate 45% by end of 2022 28% by end of 2024
Capital Project Spending Update
Description
2017
Business Plan
Assumptions
12/31/2021
LT D Spent
Current Project
Estimate thru
Dec 2024
Network Build (Primarily AEG )$84M $97M $102M
Installations (On Tr ac, boring)$13M $9M $30M
Equipment & All Other $12M $9M $11M
Contingency Appropriation –Sept. 2021 $8M
To tal Capital Budget $117M $115M $143M
3
Funding Requirement
Description To tal
Current Project Estimate $143M
To tal Capital Budget $117M
Re-Deployed Operating Budget $6M
To tal Currently Av ailable $123M
Funding Need $20M
4
Connexion has a $20M capital funding need based on current estimate
Connexion -Existing Bond Overview
5
Description Existing Connexion Bonds
Amount $129.6 M
Maturity -Ye ar 2042
Payments Semi-Annual in June and December
Rate / Yi eld-to-Maturity 4.1%
Av g. Annual Debt Service $6.7M
Max Annual Debt Service $10.2M
Earliest call date (Series A o nly: $84.9M)6/1/2028
Connexion has $20M available remaining capacity under the original voter
approved initiative.
Considerations for Use of Light and Power Reserves
•L&P and Connexion are legally a single Electric and Te lecommunications
Enterprise. However, staff maintains separate sets of books for management
purposes and transparency.
•Connexion will pay interest for the use of L&P Reserves.
•Interest rate will be the higher of current actual investment earnings rate or 10-year
AA-bond rates; thereby ensuring that L&P rate payers receive “at least” the rate
they would have on investment earnings for their excess reserves.
6
Staff Recommendation
•Staff recommends use of $20 million from existing L&P reserves
•Supported by Council Finance Committee
•Draw down as needed to meet cash requirements
•Reimbursement of L&P reserves with all excess available cash from Connexion operations
•Interest paid into L&P reserves (computed on outstanding carrying balance)
•Reserve Draws:
•1st draw required: Q2 2022
•December 2022 projected balance:$11M
•Maximum estimated need:$20M by Dec 2024
•Reimbursement:Completed on or by Jan 2029
•To tal Interest incurred:$3M
7
Key Ta keaways
•Sufficient debt capacity
•Maintains current debt ratings
•Does not impact L&P Ratepayers or L&P Construction Improvement Plan (CIP)
•Provides sufficient funding to fully transition from “Build” mode to “Deliver” mode
•Ensures our commitment to provide broadband service to all Fort Collins residents
and businesses
•Provides flexibility to coordinate with L&P on timing and magnitude of a potential
joint bond offering during 2023/24 BFO cycle
8
Appendix
Primary Connexion Funding Options
10
Options Pros Cons
1.) Use of L&P Reserves –with
reimbursement
•Low-cost, readily available capital •Opportunity cost
2.) Use of L&P Reserves –with
reimbursement, then deferred bond
offering (package with L&P in ‘23-24)
•Low-cost, readily available capital
•Allows time to right-size bond offering
and coordinate messaging
•Opportunity cost
3.) Deferred bond offering only (package
with L&P in ‘23-24)
•Allows time to right-size bond offering
and coordinate messaging
•Funds needed sooner than feasible
timeline
•Connexion needs funds prior to L&P
4.) 2022 dedicated Connexion bond
offering only
•Continued separation of L&P and
Connexion financials
•Cost-ineffective to do Connexion offering in
2022 and L&P in ‘23-24
Other Connexion Financing Options Considered
11
Options Pros Cons
5.) Use of L&P reserves –without
reimbursement
•Simple •Likely negative impact to L&P rate payers
6.) Bank Financing •Speed •Subordinated debt / collateral questions
•Rates
7.) General Fund Backfill •Availabilit y •Bond covenants require L&P revenue pledge
8.) Do-nothing •None •Insufficient liquidity w/o significant operational
and market impacts
Summary Cash Flow -10 Year Projection
12
($ thousands)2022 2023 2024 2025 2026 2027 2028 2029 2030 2031
Total Revenue $ 13,716 $ 21,620 $ 26,204 $ 29,658 $ 30,315 $ 30,441 $ 30,567 $ 30,695 $ 30,823 $ 30,953
COGS $ (1,998)$ (3,082)$ (3,555)$ (3,954)$ (4,035)$ (4,044)$ (4,052)$ (4,060)$ (4,068)$ (4,077)
OpEx $ (7,027)$ (8,021)$ (9,067)$ (9,453)$ (9,683)$ (9,899)$ (10,120)$ (10,346)$ (10,578)$ (10,816)
Total Expenses $ (9,025)$ (11,103)$ (12,622)$ (13,407)$ (13,718)$ (13,943)$ (14,172)$ (14,406)$ (14,646)$ (14,893)
Net Operating Cash $ 4,691 $ 10,517 $ 13,582 $ 16,251 $ 16,597 $ 16,498 $ 16,395 $ 16,289 $ 16,177 $ 16,060
Capital $ (17,091)$ (7,498)$ (5,748)$ (2,257)$ (701)$ (693)$ (694)$ (694)$ (695)$ (695)
Cash Flow before Financing $ (12,400)$ 3,019 $ 7,834 $ 13,994 $ 15,896 $ 15,805 $ 15,701 $ 15,595 $ 15,482 $ 15,365
Debt/Interest/Draw Inflows $ 11,213 $ 8,490 $ 8,299 $ 7,660 $ 7,699 $ 7,648 $ 2,202 $ 4 $ 8 $ 12
Debt/Interest/Draw Outflows $ (7,211)$ (11,509)$ (16,134)$ (21,654)$ (23,596)$ (23,453)$ (17,904)$ (11,566)$ (10,194)$ (10,194)
Net Financing $ 4,002 $ (3,019)$ (7,835)$ (13,994)$ (15,897)$ (15,805)$ (15,702)$ (11,562)$ (10,186)$ (10,182)
Total Cash Flow $ (8,398)$ -$ (1)$ -$ (1)$ -$ (1)$ 4,033 $ 5,296 $ 5,183
Reserve Utilization $ 11,211 $ 17,915 $ 20,481 $ 17,268 $ 12,116 $ 6,796 $ 1,368 $ -$ -$ -
Debt Capacity –Combined L&P / Connexion
13
Includes existing Connexion debt service and projected L&P debt service on
of $41M of additional borrowing in 2023
Ye ar 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031
Debt Coverage Ratio
(DCR):3.50 2.74 3.04 3.32 3.46 3.64 3.82 4.00 4.19 4.41
(Net pledged revenues divided by
debt service)
Debt Capacity ($M):
(Available debt capacity at different
assumed debt coverage ratios and
borrowing terms)
@ 2.0x DCR:
10 Year Debt $ 106 $ 140 $ 161 $ 181 $ 192 $ 202 $ 212 $ 222 $ 232 $ 244
20 Year Debt $ 185 $ 243 $ 281 $ 317 $ 335 $ 351 $ 369 $ 387 $ 405 $ 426
@ 1.25x DCR:
10 Year Debt $ 170 $ 223 $ 258 $ 290 $ 307 $ 322 $ 338 $ 355 $ 372 $ 391
20 Year Debt $ 296 $ 389 $ 450 $ 506 $ 536 $ 562 $ 590 $ 618 $ 648 $ 682
Sensitivities
Scenario Maximum
Funding
Reimbursement Cumulative
Cash in 2042
Ad ditional
Interest Expense
Current Project Estimate
35% Residential / 28% Commercial
$20.5 M Dec 2024 Jan 2029 $63 M $3 M
Business Plan Take Rates
28% Residential / 45% Commercial
$22.5 M Dec 2024 April 2030 $47 M $4 M
Breakeven Bond Payback:
95% of Current Project Estimate take
rate
$21.8 M Dec 2028 Jan 2042 $0 $10 M
Additional Capital Spend
$5M on remaining buildout estimate
$25.8 M Dec 2024 Feb 2030 $56 M $5 M
14
Light & Power Rate, CIP and Debt Forecasts
15
•Debt issuance necessary for electric infrastructure (irrespective of Connexion) is projected in 2023
•Use of Available Reserves could defer this issuance for a year or possibly two
•Current Capital Improvement Plan includes large-scale projects including potential E. Mulberry
Annexation, Billing System Replacement, and additional Substation
Ye ar 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031
Anticipated PRPA Wholesale Rate
Increase 3.0%3.0%3.0%3.0%2.0%2.0%2.0%2.0%2.0%2.0%
L&P Retail Rate Increase from
Wholesale Increase 2.0%2.0%2.0%2.0%1.4%1.4%1.4%1.4%1.4%1.4%
L&P Total Retail Rate Increase 2.0%3.0%4.1%3-4%3-4%3-4%2-3%2-3%2-4%2-4%
L&P Capital Improvement Plan ($M)$17.3 $28.8 $21.9 $25.2 $21.3 $19.5 $21.1 $23.7 $21.2 $21.2
L&P Debt Issue ($M)$41.0
Description To tal
Ye ar-end 2020 To tal Reserves $48.7 M
Minimum Required per Policy ($8.0 M)
Previously Appropriated ($17.1 M)
Ye ar-end 2020 Reserves Av ailable $23.4 M
2021 Reserve Increase ~ $19 M
Ye ar-end 2021 Reserves Av ailable ~ $42 M
16
Light & Power Reserve Position
Light & Power added approximately $19M to their reserve base during 2021 –
this provides sufficient liquidity for accessing these funds prior to any debt
offering contemplated in 2023.
Progress and Take Rate
1717
Updated Schedule
Service Available to all premises
18
Financial Summary –Project Life to Date
19
Bond Proceeds 142.2$ Debt/Interest Pymts (20.2)$
Operating Revenue 7.6$ Cost of Sales (0.9)$
Interest 7.2$ Operating Expenses (13.0)$
Total Revenue 14.8$ Total Expense (13.9)$
Total Inflows 157.0$ Capital Project (114.1)$
Total Outflows (148.2)$
$8.8
Connexion - a s of Decem ber 31, 2021 ($M) - Prelim ina ry, Unaudited
Inf lows:Outflow s:
Current Ba la nc e
-1-
ORDINANCE NO. 034, 2022
OF THE COUNCIL OF THE CITY OF FORT COLLINS
APPROPRIATING PRIOR YEAR RESERVES FROM
THE LIGHT AND POWER FUND FOR USE IN THE
CONNEXION ACCOUNT TO COMPLETE THE CONNEXION
SYSTEM CONSTRUCTION AND CUSTOMER RAMP UP AND
PROVIDING FOR FUTURE COST RECOVERY
WHEREAS, the City is currently in the fourth year of building and installing fiber-optic
based telecommunication facilities throughout Fort Collins (the “Project”) to be operated by
Connexion, the City’s telecommunication services division within the City’s Electric Utility as
established in Article VIII in Chapter 26 of the City Code (“Connexion”); and
WHEREAS, Connexion has already begun to provide and will continue to provide
telecommunication services to the City’s residents who subscribe to such services, which
services include broadband Internet, telephone and cable television services; and
WHEREAS, the City Council has previously appropriated almost $123 million to fund
the construction of the Project; and
WHEREAS, the current estimate of the total cost to complete the Project is
approximately $143 million, and based on this an additional $20 million is needed to complete
the Project; and
WHEREAS, this Ordinance appropriates this additional $20 million from the prior year
reserves available in the Light and Power Fund for use in the Connexion Account, a subdivision
of the Light and Power Fund, to be expended from the Connexion Account to complete the
Project ; and
WHEREAS, this appropriation benefits the public health, safety and welfare of the
residents of Fort Collins and serves the utility purpose of completing the Project to provide
telecommunication services throughout Fort Collins; and
WHEREAS, Article V, Section 9 of the City Charter permits the City Council, upon the
recommendation of the City Manager, to make supplemental appropriations by ordinance at any
time during the fiscal year such funds for expenditure as may be available from reserves
accumulated in prior years, notwithstanding that such reserves were not previously appropriated;
and
WHEREAS, the Interim City Manager has recommended the appropriation described
herein and determined that this appropriation is available and previously unappropriated from the
prior year reserves in the Light and Power Fund and will not cause the total amount appropriated
in the Light and Power Fund to exceed the current estimate of actual and anticipated revenues
and all other funds to be received in the Fund during this fiscal year.
-2-
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF
FORT COLLINS as follows:
Section 1. That the City Council hereby makes and adopts the determinations and
findings contained in the recitals set forth above.
Section 2. That there is hereby appropriated from prior year reserves in the Light and
Power Fund the sum of TWENTY MILLION DOLLARS ($20,000,000.00) for use in the
Connexion Account, a subdivision of the Light and Power Fund, to be expended from the
Account for the completion of the Project.
Section 3. That it is City Council’s intent, and direction to the City Manager and the
City’s Financial Officer, that this amount appropriated be reimbursed annually to the Light and
Power Fund in the amount the Connexion revenues collected exceed Connexion’s expenses and
debt obligations for that fiscal year, together with an interest factor which is the greater of the
Light and Power Fund’s average investment earnings for its reserve balance for that year or the
average ten-year AA bond rate for that year, until this appropriated amount with such interest has
been paid in full, which payment in full is to be completed on or before January 1, 2029. In
addition, when the City Manager is setting under City Code Section 26-573 Connexion’s rates,
fees and charges for furnishing telecommunication facilities and services to its subscribers, the
City Manager shall do so taking into consideration this reimbursement of the Light and Power
Fund as provided in this Section 3.
Section 4. That it is also the City Council’s intent that, in the event the Ci ty or the
Electric Utility Enterprise hereafter issues any bonds or incurs any other financial obligation to
be used to reimburse the Light and Power Fund for the Connexion’s expenditure of this
appropriation for the Project, this Ordinance is intended to be a declaration of “official intent” to
reimburse these expenditures within the meaning of Treasury Regulation §1.150-2.
Introduced, considered favorably on first reading, and ordered published this 1st day of
March, A.D. 2022, and to be presented for final passage on the 5th day of April, A.D. 2022.
__________________________________
Mayor
ATTEST:
_______________________________
City Clerk
-3-
Passed and adopted on final reading on the 5th day of April, A.D. 2022.
__________________________________
Mayor
ATTEST:
_______________________________
City Clerk