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The table below summarizes the refunding results after making these assumptions in the current market. Please note that for summary purposes rounding has been applied. REFUNDING SAVINGS ANALYSIS Principal Amount of 2001 Bonds Outstanding $ 124,740,000 Principal Amount of 2011 Bonds to be Issued $ 104,600,000 Average Coupon on 2001 Bonds 5.03% True Interest Cost of 2011 Bonds 4.06% Total Nominal Savings $ 31,150,000 Average Annual Nominal Savings $ 1,560,000 Total Net Present Value Savings $ 11,800,000 Percentage of Savings of 2001 Bonds 9.70% Legal Structure and Financing Documents The refinancing is secured by the Amended and Restated Sewer Service Contract. An Indenture of Trust by and between LAVWMA and US Bank, trustee for the 2011 Bonds, will be administered so that payments from LAVWMA will be directed to investors. The Indenture establishes the pledge of LAVWMA net revenues to investors as well as allows for the issuance of additional parity lien debt payable from net revenues. In 2001 when LAVWMA issued the 2001 Series A Bonds the member agencies thought that additional bonds (Series B) might have to be issued to finance the entire project. Based on the Engineer's Estimate the project was thought to cost approximately $209 million. Due to design changes (a single pipeline from Castro Valley to San Leandro instead of a new pipe and repairing the old pipe and aggressive construction bids, the project came in within the Series A bonds of $142 million. The 2011 Bond documents allow for the issuance of additional bonds payable from net revenues on parity with the 2011 Bonds, if it were to be determined in the future. However, bonds can only be issued by LAVWMA with the unanimous approval of the member agencies. The resolution that the Council is being asked to adopt will approve the following documents: • Amended and Restated Sewer Service Contract • City's portions of the Official Statement • City's agreement to provide Continuing Disclosure annually to the market after the sale of the 2011 Bonds. In addition to the above, the resolution that is to be approved by the LAVWMA Board will also approve the Indenture and the terms of sale of the 2011 Bonds -- no extension of maturity and minimum net present value savings of at least 6% of the 2001 Bonds outstanding. Staff met with Council members Thorne and McGovern (members of the DSRSD Liaison Committee) to review the documents and the transaction that Council is being asked to approve by Resolution. They were in agreement with staff that the refinancing was favorable for all the member agencies and should be approved. A draft copy of the Preliminary Official Statement, Amended and Restated Sewer Service Contract, and the Page 3 of 5