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CASE STUDY– WIFIA FINANCING OF A P3 LIKE INFRASTRUCTURE PROJECT

CASE STUDY– WIFIA FINANCING OF A P3 LIKE INFRASTRUCTURE PROJECT. P-3 Connect: Defining the Future of P3 in the US July 29, 2014. Aurel Arndt Chief Executive Officer Lehigh County Authority. LEHIGH COUNTY AUTHORITY / CITY OF ALLENTOWN CONCESSION LEASE. A Public to Public Partnership (P2P).

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CASE STUDY– WIFIA FINANCING OF A P3 LIKE INFRASTRUCTURE PROJECT

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  1. CASE STUDY– WIFIA FINANCING OF A P3 LIKE INFRASTRUCTURE PROJECT P-3 Connect: Defining the Future of P3 in the US July 29, 2014 Aurel Arndt Chief Executive Officer Lehigh County Authority

  2. LEHIGH COUNTY AUTHORITY / CITY OF ALLENTOWNCONCESSION LEASE • A Public to Public Partnership (P2P)

  3. LEHIGH COUNTY AUTHORITY / CITY OF ALLENTOWNCONCESSION LEASE What is it? • A 50-year lease of the Allentown Water and Wastewater systems

  4. LEHIGH COUNTY AUTHORITY / CITY OF ALLENTOWNCONCESSION LEASE

  5. CONCESSION FINANCING Sources and Uses of Funds

  6. CONCESSION FINANCING Overview – Bonds sold July 31, 2013 Three Series - $307,684,000 $ 245,590,000 – 2013 A Bonds – Fixed Rate Bonds $ 43,359,000 – 2013 B Bonds – Capital Appreciation Bonds $ 18,735,000 – 2013 C Bonds – Taxable Bonds Series A & B Summary only Average Life – 28.7 years Yield – 5.4486%

  7. CONCESSION FINANCING Series 2013A - $245,590,000 Series 2013B - $ 43,359,000 Series 2013C - $ 18,735,000

  8. CONCESSION FINANCING Other Market Rates (July 31, 2013) 30-yr Treasury Bond – 3.64%

  9. HYPOTEHTICAL WIFIA FINANCING Finance Immediate Capital Improvements $ 31,850,000 Assume 30-year life (or longer) WIFIA Annual Interest Costs: 49% of $ 31,850,000 at 3.64% = $ 568,077 Replacing 2013 A Bonds Annual Interest Cost 49% of $ 31,850,000 at 5.28% = $ 824,023 Annual Savings $ 255,946 (31%)

  10. HYPOTEHTICAL WIFIA FINANCING Other WIFIA Possibilities a. Replace 2013B Series Bonds 2038 Maturity - 6.21% • Annual Savings $27,644 (61%) b. Include Portion (10.35%) of Debt Service Revenue Fund • Annual Savings $23,363 (31%) c. Increase WIFIA Funding of Capital Improvement Cost to 80% • Annual Savings $161,925 (31%) d. Include portion (10.35%) of Issuance Costs • Annual Savings $4,439 (31%) Total Enhanced Annual Savings: $ 217,371 (35%)

  11. THANK YOU • Questions…

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