CITY OF ELKHORN COMMON COUNCIL MEETING ......2020/05/18  · CITY OF ELKHORN COMMON COUNCIL MEETING...

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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 Join Zoom Meeting https://us02web.zoom.us/j/89861283698?pwd=UXorQ3YxNVA1YU4xZmp6KzhTZkNmUT09 Meeting ID: 898 6128 3698 Password: 984083 One tap mobile +13126266799,,89861283698#,,1#,984083# US (Chicago) +19292056099,,89861283698#,,1#,984083# US (New York) Dial by your location +1 312 626 6799 US (Chicago) +1 929 205 6099 US (New York) +1 301 715 8592 US (Germantown) +1 346 248 7799 US (Houston) +1 669 900 6833 US (San Jose) +1 253 215 8782 US (Tacoma) Meeting ID: 898 6128 3698 Password: 984083 Find your local number: https://us02web.zoom.us/u/kbCz1WglPD 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

Transcript of CITY OF ELKHORN COMMON COUNCIL MEETING ......2020/05/18  · CITY OF ELKHORN COMMON COUNCIL MEETING...

Page 1: CITY OF ELKHORN COMMON COUNCIL MEETING ......2020/05/18  · CITY OF ELKHORN COMMON COUNCIL MEETING AGENDA May 18, 2020 ~ 5:30 p.m. Council Chambers, City Hall, 9 S. Broad St., Elkhorn,

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

Join Zoom Meeting

https://us02web.zoom.us/j/89861283698?pwd=UXorQ3YxNVA1YU4xZmp6KzhTZkNmUT09

Meeting ID: 898 6128 3698 Password: 984083

One tap mobile +13126266799,,89861283698#,,1#,984083# US (Chicago)

+19292056099,,89861283698#,,1#,984083# US (New York)

Dial by your location +1 312 626 6799 US (Chicago)

+1 929 205 6099 US (New York) +1 301 715 8592 US (Germantown)

+1 346 248 7799 US (Houston) +1 669 900 6833 US (San Jose) +1 253 215 8782 US (Tacoma)

Meeting ID: 898 6128 3698 Password: 984083

Find your local number: https://us02web.zoom.us/u/kbCz1WglPD

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

Page 2: CITY OF ELKHORN COMMON COUNCIL MEETING ......2020/05/18  · CITY OF ELKHORN COMMON COUNCIL MEETING AGENDA May 18, 2020 ~ 5:30 p.m. Council Chambers, City Hall, 9 S. Broad St., Elkhorn,

P a g e | 2

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.

Page 3: CITY OF ELKHORN COMMON COUNCIL MEETING ......2020/05/18  · CITY OF ELKHORN COMMON COUNCIL MEETING AGENDA May 18, 2020 ~ 5:30 p.m. Council Chambers, City Hall, 9 S. Broad St., Elkhorn,

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

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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.

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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)

Page 6: CITY OF ELKHORN COMMON COUNCIL MEETING ......2020/05/18  · CITY OF ELKHORN COMMON COUNCIL MEETING AGENDA May 18, 2020 ~ 5:30 p.m. Council Chambers, City Hall, 9 S. Broad St., Elkhorn,

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

Page 7: CITY OF ELKHORN COMMON COUNCIL MEETING ......2020/05/18  · CITY OF ELKHORN COMMON COUNCIL MEETING AGENDA May 18, 2020 ~ 5:30 p.m. Council Chambers, City Hall, 9 S. Broad St., Elkhorn,

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:

Page 8: CITY OF ELKHORN COMMON COUNCIL MEETING ......2020/05/18  · CITY OF ELKHORN COMMON COUNCIL MEETING AGENDA May 18, 2020 ~ 5:30 p.m. Council Chambers, City Hall, 9 S. Broad St., Elkhorn,

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

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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.

Page 10: CITY OF ELKHORN COMMON COUNCIL MEETING ......2020/05/18  · CITY OF ELKHORN COMMON COUNCIL MEETING AGENDA May 18, 2020 ~ 5:30 p.m. Council Chambers, City Hall, 9 S. Broad St., Elkhorn,

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.

Page 11: CITY OF ELKHORN COMMON COUNCIL MEETING ......2020/05/18  · CITY OF ELKHORN COMMON COUNCIL MEETING AGENDA May 18, 2020 ~ 5:30 p.m. Council Chambers, City Hall, 9 S. Broad St., Elkhorn,

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.

Page 12: CITY OF ELKHORN COMMON COUNCIL MEETING ......2020/05/18  · CITY OF ELKHORN COMMON COUNCIL MEETING AGENDA May 18, 2020 ~ 5:30 p.m. Council Chambers, City Hall, 9 S. Broad St., Elkhorn,

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

Page 13: CITY OF ELKHORN COMMON COUNCIL MEETING ......2020/05/18  · CITY OF ELKHORN COMMON COUNCIL MEETING AGENDA May 18, 2020 ~ 5:30 p.m. Council Chambers, City Hall, 9 S. Broad St., Elkhorn,

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

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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

Page 15: CITY OF ELKHORN COMMON COUNCIL MEETING ......2020/05/18  · CITY OF ELKHORN COMMON COUNCIL MEETING AGENDA May 18, 2020 ~ 5:30 p.m. Council Chambers, City Hall, 9 S. Broad St., Elkhorn,

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

Page 16: CITY OF ELKHORN COMMON COUNCIL MEETING ......2020/05/18  · CITY OF ELKHORN COMMON COUNCIL MEETING AGENDA May 18, 2020 ~ 5:30 p.m. Council Chambers, City Hall, 9 S. Broad St., Elkhorn,

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)

Page 17: CITY OF ELKHORN COMMON COUNCIL MEETING ......2020/05/18  · CITY OF ELKHORN COMMON COUNCIL MEETING AGENDA May 18, 2020 ~ 5:30 p.m. Council Chambers, City Hall, 9 S. Broad St., Elkhorn,

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

Page 18: CITY OF ELKHORN COMMON COUNCIL MEETING ......2020/05/18  · CITY OF ELKHORN COMMON COUNCIL MEETING AGENDA May 18, 2020 ~ 5:30 p.m. Council Chambers, City Hall, 9 S. Broad St., Elkhorn,

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.

Page 19: CITY OF ELKHORN COMMON COUNCIL MEETING ......2020/05/18  · CITY OF ELKHORN COMMON COUNCIL MEETING AGENDA May 18, 2020 ~ 5:30 p.m. Council Chambers, City Hall, 9 S. Broad St., Elkhorn,

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.

Page 20: CITY OF ELKHORN COMMON COUNCIL MEETING ......2020/05/18  · CITY OF ELKHORN COMMON COUNCIL MEETING AGENDA May 18, 2020 ~ 5:30 p.m. Council Chambers, City Hall, 9 S. Broad St., Elkhorn,

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

Page 21: CITY OF ELKHORN COMMON COUNCIL MEETING ......2020/05/18  · CITY OF ELKHORN COMMON COUNCIL MEETING AGENDA May 18, 2020 ~ 5:30 p.m. Council Chambers, City Hall, 9 S. Broad St., Elkhorn,

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.

Page 22: CITY OF ELKHORN COMMON COUNCIL MEETING ......2020/05/18  · CITY OF ELKHORN COMMON COUNCIL MEETING AGENDA May 18, 2020 ~ 5:30 p.m. Council Chambers, City Hall, 9 S. Broad St., Elkhorn,

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

Page 23: CITY OF ELKHORN COMMON COUNCIL MEETING ......2020/05/18  · CITY OF ELKHORN COMMON COUNCIL MEETING AGENDA May 18, 2020 ~ 5:30 p.m. Council Chambers, City Hall, 9 S. Broad St., Elkhorn,

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

Page 24: CITY OF ELKHORN COMMON COUNCIL MEETING ......2020/05/18  · CITY OF ELKHORN COMMON COUNCIL MEETING AGENDA May 18, 2020 ~ 5:30 p.m. Council Chambers, City Hall, 9 S. Broad St., Elkhorn,

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

Page 25: CITY OF ELKHORN COMMON COUNCIL MEETING ......2020/05/18  · CITY OF ELKHORN COMMON COUNCIL MEETING AGENDA May 18, 2020 ~ 5:30 p.m. Council Chambers, City Hall, 9 S. Broad St., Elkhorn,

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 26: CITY OF ELKHORN COMMON COUNCIL MEETING ......2020/05/18  · CITY OF ELKHORN COMMON COUNCIL MEETING AGENDA May 18, 2020 ~ 5:30 p.m. Council Chambers, City Hall, 9 S. Broad St., Elkhorn,

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)

Page 27: CITY OF ELKHORN COMMON COUNCIL MEETING ......2020/05/18  · CITY OF ELKHORN COMMON COUNCIL MEETING AGENDA May 18, 2020 ~ 5:30 p.m. Council Chambers, City Hall, 9 S. Broad St., Elkhorn,

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

Page 28: CITY OF ELKHORN COMMON COUNCIL MEETING ......2020/05/18  · CITY OF ELKHORN COMMON COUNCIL MEETING AGENDA May 18, 2020 ~ 5:30 p.m. Council Chambers, City Hall, 9 S. Broad St., Elkhorn,

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.

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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.

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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

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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.

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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.

Page 33: CITY OF ELKHORN COMMON COUNCIL MEETING ......2020/05/18  · CITY OF ELKHORN COMMON COUNCIL MEETING AGENDA May 18, 2020 ~ 5:30 p.m. Council Chambers, City Hall, 9 S. Broad St., Elkhorn,

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

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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

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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

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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.

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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.

Page 38: CITY OF ELKHORN COMMON COUNCIL MEETING ......2020/05/18  · CITY OF ELKHORN COMMON COUNCIL MEETING AGENDA May 18, 2020 ~ 5:30 p.m. Council Chambers, City Hall, 9 S. Broad St., Elkhorn,

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.

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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.***

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