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$525,000 a year for a 16% reduction in the debt service payment. The net present value savings is approximately $11.8 million which is equivalent to a 9.7% savings. In the industry, the rule of thumb is that the net present value savings needs to exceed 3% and if it does, refinancing should be taken advantage of. The LAVWMA Board will meet later this month and will consider adopting a resolution that proposes that refinancing will be predicated on a net present value savings of at least 6%. If savings exceed 6%, refinancing will move forward per authorization from the Board, and the lowest bid will be accepted. The LAVWMA Board's plan is to issue the bonds on or about October 8th with the same maturity as the 2001 bonds, which is in 2031. There will be no extension of debt and the reserve fund of $9 million will be used to reduce the amount of the 2011 bonds to be issued. Therefore, there will be no reserve fund for the new bonds. Ms. Wagner said staff met with Councilmembers Thorne and McGovern to review the refinancing savings and bond document agreements, certificate and resolution proposed for adoption, and approved moving the item forward for City Council approval. She briefly described the Amended and Restated Sewer Service Contract which amends the March 1, 2001 contract with minimal changes, the Preliminary Official Statement which is the public offering statement for the sale of the bonds and which describes all aspects of the bond issue as well as the economic, financial and social characteristics of LAVWMA and member agencies, and the Continuing Disclosure Certificate which satisfies the SEC's rules regarding annual disclosure to the secondary market on information regarding the City's sewer system. Staff is recommending the Council adopt the resolution authorizing the approval of the Amended and Restated Sewer Service Contract, approval of those sections of the Preliminary Official Statement that describe the City and approval of the Continuing Disclosure Certificate, and authorize the City Manager to sign the documents on behalf of the City. Councilmember Sullivan referred his question regarding the ability of LAVWMA to issue new bonds in addition to this without receiving member agency approval. He noted that the Executive Director and staff both responded that the LAVWMA Board could not issue new bonds that affected Pleasanton Council without also agreeing. Ms. Wagner stated that there is language regarding the issuance of parity debt because the bondholders must be notified that the collateral for their bonds could also be the collateral of future bonds. By doing so would preclude being able to issue anything for 20 years. She said normally the recommendation by advisors is to keep options open. The bond investors must be notified, and this does not necessarily mean bonds are being issued, but in the case of LAVWMA, any new bonds would require all six members unanimously approving it, including the Pleasanton City Council. Councilmember Sullivan noted that the two export pipelines are the limit on growth in the valley. Once capacity is reached, there is nowhere else to put sewage. He questioned whether increasing the amount of discharge through that system requires a vote of the individual jurisdiction as well as the LAVWMA Board. Ms. Wagner said in 2001, Pleasanton felt very strongly that in order for their two members to vote affirmatively to move forward with the expansion project, it required voter approval, and other jurisdictions did not elect to do this. They authorized through their Councils that their members vote affirmatively for the expansion project. Mr. Fialho clarified with Councilmember Sullivan that the Council would have the ability to reaffirm or put this to the voters through a ballot measure in the future if there were any proposal to expand the capacity. Councilmember Sullivan said when working on the Housing Element Update, the Council also discussed preparing an update to its Growth Management policies. He felt this issue should be part of that discussion and asked for its status. Mr. Fialho said the City knows what the City Council Minutes Page 13 of 16 September 6, 2011