UNDERWRITING SERVICES\n\nWASTEWATER REVENUE BONDS

"CITY OF HAILEY\nBLAINE COUNTY, IDAHO\n\nREQUEST FOR PROPOSAL FOR UNDERWRITING SERVICES\n\nWASTEWATER REVENUE BONDS, SERIES 2023\n" "City of Hailey\n\nRequest for Proposals: Underwriting\nWastewater Revenue Bonds, Series 2023\nPage 2\n\nPURPOSE:\n\nThe City of Hailey (the \u201cCity\u201d) seeks to retain the services of a qualified underwriting firm to\nprepare and market Wastewater Revenue Bonds, Series 2023 (the \u201c2023 Bonds\u201d) in an amount\nof approximately $6 million. The 2023 Bonds are being issued to (i) finance the costs of design,\nacquisition and construction of improvements to the wastewater treatment system and\nfacilities of the City (the \u201cImprovements\u201d), and (iii) finance the Costs of Issuance of the 2023\nBonds. The 2023 Bonds were approved at a May 16, 2023 election held in the City, receiving\n89.29% approval of the 850 votes that were cast.\n\nThe underwriter will work closely with the City\u2019s core financing team, which includes the\nfollowing

individuals and firms \u2014\n\nCity of Hailey \u2014 Lisa Horowitz, City Administrator\nBecky Stokes, Treasurer\nBrian Yeager, Public Works Director\n\nBond Counsel /Disclosure Counsel -Hawley Troxell Ennis & Hawley\nMichael Stoddard, Chelsea Porter & Brandon Helgeson\n\nMunicipal Advisor - Eric Heringer; Piper Sandler & Co.\n\nDUE DATE: 4:00 p.m. (Mountain Time) on August 23, 2023\n" "City of Hailey\n\nRequest for Proposals: Underwriting\nWastewater Revenue Bonds, Series 2023\nPage 3\n\nSECURITY FOR THE BONDS\n\nThe 2023 Bonds will be issued on parity with the City\u2019s outstanding wastewater system debt\nthat is evidenced by a 2014 Loan Agreement with the Idaho Bond Bank Authority (the \u201cIBBA\nLoan Agreement\u201d or the \u201c2014 Debt\u201d). Current debt outstanding under the IBBA Loan\nAgreement is $5,495,000 with a final maturity in 2034. The 2014 Loan Agreement with the\nIBBA is included with this RFP package. Provisions of the 2014 Loan Agreement include:\n\ne Standard System Net Revenue pledge (however hook-on fees are not included in the\ndefinition of Revenues)\n\ne Debt Service Reserve Fund (DSRF) requirement if coverage is less than 1.5x\n\ne Additional Bonds Test (ABT) - see section 4.3 of the IBBA Loan Agreement\n\ne Rate Stabilization Fund\n\nHISTORICAL COVERGE\n\nThe table below outlines historic debt service coverage from System Net Revenues for the past\n5 years.\n\nActual Actual Actual Actual Actual\n\n2018 2019 2020 2021 2022\nOPERATING REVENUES\nTotal Operating Revenues 2,007,893 1,973,676 2,179,656 2,192,452 2,439,202\n\nOPERATING EXPENSES\nSalaries and Benefits 355,591 611,865 652,429 666,398 869,752\nAdministrative and supplies 703,740 464,390 601,780 626,527 608,178\nDepreciation 484,196 675,639 493,443 494,327 518,258\n\nTotal Operating Expenses 1,543,527 1,751,894 1,747,652 1,787,252 1,996,188\n\nNET OPERATING INCOME 464,366 221,782 432,004 405,200 443,014\nAdd: Investment/Interest income 63,189 109,899 79,383 16,117 28,503\nAdd: Depreciation expense 484,196 675,639 493,443 494,327 518,258\n\nAVAILABLE FOR DEBT SERVICE 1,011,751 1,007,320 | 1,004,830 915,644 989,775\n\nDEBT SERVICE\nSeries 2014C Wastewater Revenue Bonds 297,175 295,875 298,925 295,425 566,925\n\nSeries 2012D Wastewater Revenue Bonds 269,700 270,000 270,400 270,400 -\n\nSeries 2023 Wastewter Revenue Bonds - - - - -\nTotal Debt Service 566,875 565,875 569,325 565,825 566,925\n\nDEBT SERVICE COVERAGE (Recurring Revenues) 1.78 1.78 1.76 1.62 1.75\n\nHookups, connections, and fees 101,050 107,534 179,168 352,935 483,066\nGrant Revenue - - - - -\nDEBT SERVICE COVERAGE (Including Non-recurring Revenues) 1.96 1.97 2.08 2.24 2.60\n\n" "City of Hailey\n\nRequest for Proposals: Underwriting\nWastewater Revenue Bonds, Series 2023\nPage 4\n\nOTHER RELEVANT FINANICAL INFORMATION\n\nThe City plans to adopt a wastewater system user fee rate increase that will be effective\nOctober 1, 2023 (beginning of FY 2024 fiscal year). The City has historically included a bond\npayment component as part of its monthly Base Fee for the Wastewater System.\n\nThe DSRF is cash funded with a current balance of 5632,512.\nThe City has established a Rate Stabilization Fund (RSF) with a current balance of 5868,303.\nThe DSRF will be increased from available funds of the City (not financed).\n\nPROPOSED DEBT STRUCTURE\n\nThe City intends to wrap the Series 2023 Bond payment around the existing 2014 Debt with a\n20-year final maturity. It is likely that the Series 2023 Bonds will be interest only through the\n2034 final maturity ofthe 2014 Debt. The following is an illustration of the preliminary\nstructure for the Series 2023 Bonds:\n\nCity of Hailey\nWastewater Debt Profile\n\nu Existing Bonds (2014) m Proposed Bonds (2023)\n\n9 \u201e6\nNER N\n\nPIE Sg S Ko LEN\n\nSg a a Sa, Sog ia. So\nFiscal Year\n\n$1,400,000\n$1,200,000\n\n$1,000,000\n$800,000\n$600,000\n$400,000\n$200,000\n0\n\nHd\n\nBASIC DOCUMENTATION\nHawley Troxell (Bond & Disclosure Counsel) will draft the Preliminary and Final Official\nStatement, Bond Ordinance and ancillary financing documents.\n\nDebt Service\n\nN\n\nEEE\n" "City of Hailey\n\nRequest for Proposals: Underwriting\nWastewater Revenue Bonds, Series 2023\nPage 5\n\nCALENDAR OF EVENTS\n\nThe following calendar will generally be adhered to for the selection process. The City, however,\nreserves the right to alter this calendar as it deems necessary.\n\nJuly 24, 2023 Circulate RFP\n\nAugust 23, 2023 RFP responses due\n\nAugust 24-25, 2023 Evaluate RFP responses\n\nAugust 28, 2023 Make selection of underwriting firm (City Council)\nOctober 17, 2023 Anticipated Pricing\n\nOctober 31, 2023 Close Financing\n\nPROPOSAL SUBMISSION REQUIREMENTS\n\nAll responses and any questions and/or requests for information should be submitted to both:\n\nLisa Horowitz Eric Heringer\n\nCity Administrator Municipal Advisor\n\nEmail: lisa.horowitz@haileycityhall.org Email: eric.heringer@psc.com\nPhone: (208) 788-4221 Phone: (208) 344-8561\n\nPlease deliver an electronic PDF copy by email to Lisa Horowitz and Eric Heringer no later than\n4:00 p.m. (Mountain Time) on August 23, 2023. Please provide any questions regarding the RFP\nby no later than August 16, 2023 to allow adequate time to respond. Late proposals may not\nbe accepted.\n\nThe City and its Municipal Advisor, Piper Sandler & Co. (\u201cPSC\u201d), are familiar with the general\ncapabilities of your firm. This Request for Proposals (the \u201cRFP\u201d) has been designed to solicit\nspecific responses to the questions asked. Brief, to the point, responses are preferred and\ntherefore we request that responses be limited to succinct responses to the questions that are\nbeing asked.\n"