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HomeMy WebLinkAboutSupplemental Attachments - 6/2/2026 urSPEER FINANCIAL, INC. Established 954 INDEPENDENT MUNICIPAL ADVISORS June 2, 2026 The Honorable Dave Boesen, Mayor and Members of the City Council City of Waterloo 715 Mulberry Street Waterloo, IA 50703 Dear Mayor Boesen and Council Members: Bids were received today for the $10,300,000 General Obligation Bonds, Series 2026B. There were five bids received, which are listed at the bottom of this letter. Upon examination, it is our opinion that the bid of FHN Financial Capital Markets, New York, New York, is the best bid received,and it is further our opinion that the bid is favorable to the City and should be accepted. We therefore recommend that the Series 2026B Bonds be awarded to that bidder at a price of$10,587,647.20, being at a true interest rate of 3.5903%. True Account Managers Interest Rate FHN Financial Capital Markets, New York, New York 3.5903% Robert W. Baird & Co., Inc., Milwaukee, Wisconsin 3.5997% R. Seelaus& Co., Inc., Chatham, New Jersey 3.6131% Hilltop Securities Inc., Dallas, Texas 3.6311% Brownstone Investment Group, LLC,New York, New York 3.6322% Respectfully submitted, SPEER FINANCIAL, INC. ( U "(ra7"- Maggie Burger, Sr. Vice President MB/eg Enclosures 230 W Monroe Street, 1 531 Commercial St, Suite 2630 Suite 608 Chicago,Illinois 60606 WWW.SPEERFINANCIAL.COM 1 1 Waterloo,IA 50701 (312)346-3700 (319)291-2077 MOODY'S RATINGS Rating Action: Moody's Ratings assigns Aa2 to Waterloo, IA's GO bonds 28 May 2026 New York, May 28, 2026--Moody's Ratings(Moody's) has assigned Aa2 ratings to the City of Waterloo, IA's General Obligation Bonds, Series 2026B,with a proposed par amount of$10.3 million, and Taxable General Obligation Bonds, Series 2026C,with an estimated par amount of$1.7 million.We maintain the city's Aa2 issuer rating and the Aa2 rating on its outstanding general obligation unlimited tax(GOULT)debt. Post-sale,the city will have about$275 million in total debt outstanding, including development agreement obligations. RATINGS RATIONALE The Aa2 issuer rating reflects the city's role as a regional economic hub and solid but below median full value per capita and resident income of$88,000 and 82%, respectively. The city benefits from a diverse economic and tax base and building permit activity has been significantly higher in fiscals 2025 and 2026 than in prior years. The city closed fiscal 2025(June 30 year end)with available fund balance equivalent to about 23%of operating revenue. Cash was much stronger at about 74%of revenue, reflecting funds categorized as restricted in the audit. Year-to-date results for fiscal 2026 point to a$4.7 million use of reserves in the general fund,$1 million use of reserves in the proprietary funds, and relative stability across other funds. The fiscal 2027 budget includes a further$4.1 million use of reserves in the general fund,$11.8 million use in the special revenue fund, and a$2 million use in the proprietary funds, though the city has a history of outperforming budgeted expectations. Despite the planned draws,we expect available fund balance to remain around 20%and cash to remain above 55%. Recent state legislation will cap most of the city's property tax revenue growth to 2%net of new construction beginning in fiscal 2028, but the city retains some financial flexibility, including an untapped portion of the utilities franchise fees that could generate about$1 million annually. In addition, voters approved a change to the local option sales tax allocation, allowing 20%to be dedicated to property tax relief beginning in fiscal 2026. The city has annual debt plans of up to$18 million in the coming years, including state revolving fund borrowing,to finance regular capital improvements and enterprise projects.We expect the long-term liabilities ratio to be just under 200%post-sale. Given revenue growth and amortization of existing debt,we do not expect future debt plans to meaningfully increase the ratio. The Aa2 rating on the GOULT bonds is the same level as the city's Aa2 issuer rating because the city has pledged its full faith, credit and taxing power for repayment of the bonds. RATING OUTLOOK We do not assign outlooks to local governments with this amount of debt outstanding. FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS -Long-term liabilities ratio consistently near 100% -Cash ratio approaching 100% - Resident income ratio and full value per capita above 100%and$100,000, respectively FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS -Cash ratio below 50% - Long-term liabilities ratio approaching 350% PROFILE The City of Waterloo is the county seat of Black Hawk County, located in northeastern Iowa roughly 89 miles northeast of Des Moines and 50 miles northwest of Cedar Rapids.The city provides standard municipal services to a population of over 67,000 residents. METHODOLOGY The principal methodology used in these ratings was US Cities and Counties published in December 2025 and available at https://ratings.moodys.com/rmc-documents/455983.Alternatively, please see the Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology. 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For the purposes of this disclaimer, "PRC"refers to the mainland of the People's Republic of China, excluding Hong Kong, Macau and Taiwan. f urSPEER FINANCIAL, INC. Gstab►[shed 1954 INDEPENDENT MUNICIPAL ADVISORS Investment Rating: Moody's Investors Service ... Aa2 $10,300,000 CITY OF WATERLOO,IOWA General Obligation Bonds,Series 2026B Date of Sale:June 2, 2026 Average Life: 8.143 Years (Based on TIC) True Bidders* Price Maturities Rate Interest** FHN Financial Capital Markets 102.792% 2027-2041 4.000% 3.5903% New York,New York $10,587,647.20 $3,067,108 Morgan Stanley Raymond James&Associates,Inc. Fidelity Capital Markets Ramirez&Co.,Inc. Advisors Asset Management Zeus Financial LLC Robert W. Baird&Co.,Inc. 102.727% 2027 -2041 4.000% 3.5997% Milwaukee,Wisconsin $10,580,896.51 $3,073,859 R. Seelaus&Co., Inc. 102.634% 2027-2041 4.000% 3.6131% Chatham,New Jersey $10,571,312.45 $3,083,443 Hilltop Securities Inc. 102.509% 2027-2041 4.000% 3.6311% Dallas,Texas $10,558,518.80 $3,096,237 Brownstone Investment Group,LLC 102.502% 2027 -2041 4.000% 3.6322% New York,New York $10,557,707.80 $3,097,048 *Syndicate information is provided by the underwriter. The information contained in this report is the most current available. **The true interest rate reflects the time value of money where dollars spent in early years have a greater weight than dollars spent in later years. Speer Financial, Inc. CITY OF WATERLOO,IOWA $10,300,000 General Obligation Bonds, Series 2026B *** FINAL *** Debt Service Schedule Date Principal Coupon Interest Total P+I Fiscal Total 06/29/2026 - - - - - 12/01/2026 - - 173,955.56 173,955.56 - 06/01/2027 210,000.00 4.000% 206,000.00 416,000.00 589,955.56 12/01/2027 - - 201,800.00 201,800.00 - 06/01/2028 615,000.00 4.000% 201,800.00 816,800.00 1,018,600.00 12/01/2028 - - 189,500.00 189,500.00 - 06/01/2029 665,000.00 4.000% 189,500.00 854,500.00 1,044,000.00 12/01/2029 - - 176,200.00 176,200.00 - 06/01/2030 695,000.00 4.000% 176,200.00 871,200.00 1,047,400.00 12/01/2030 - - 162,300.00 162,300.00 - 06/01/2031 720,000.00 4.000% 162,300.00 882,300.00 1,044,600.00 12/01/2031 - - 147,900.00 147,900.00 - 06/01/2032 750,000.00 4.000% 147,900.00 897,900.00 1,045,800.00 12/01/2032 - - 132,900.00 132,900.00 - 06/01/2033 775,000.00 4.000% 132,900.00 907,900.00 1,040,800.00 12/01/2033 - - 117,400.00 117,400.00 - 06/01/2034 810,000.00 4.000% 117,400.00 927,400.00 1,044,800.00 12/01/2034 - - 101,200.00 101,200.00 - Call 06/01/2035 845,000.00 4.000% 101,200.00 946,200.00 1,047,400.00 12/01/2035 - - 84,300.00 84,300.00 - 06/01/2036 880,000.00 4.000% 84,300.00 964,300.00 1,048,600.00 12/01/2036 - - 66,700.00 66,700.00 - 06/01/2037 915,000.00 4.000% 66,700.00 981,700.00 1,048,400.00 12/01/2037 - - 48,400.00 48,400.00 - 06/01/2038 950,000.00 4.000% 48,400.00 998,400.00 1,046,800.00 12/01/2038 - - 29,400.00 29,400.00 - 06/01/2039 490,000.00 4.000% 29,400.00 519,400.00 548,800.00 12/01/2039 - - 19,600.00 19,600.00 - 06/01/2040 490,000.00 4.000% 19,600.00 509,600.00 529,200.00 12/01/2040 - - 9,800.00 9,800.00 - 06/01/2041 490,000.00 4.000% 9,800.00 499,800.00 509,600.00 Total S I 0,300,000.00 - 53,354,755.56 513,654,755.56 - Yield Statistics Bond Year Dollars S83,868.89 Average Life 8.143 Years Average Coupon 4.0000000% Net Interest Cost(NIC) 3.6570275% True Interest Cost(TIC) 3.5903133% Bond Yield for Arbitrage Purposes 3.5184512% All Inclusive Cost(AIC) 3.7171509% IRS Form 8038 Net Interest Cost 3.5223551% Weighted Average Maturity 8.111 Years 261E1 Waterloo 10.3m GO TE I SINGLE PURPOSE I 6/2/2026 I 11:15 AM Speer Financial, Inc. Registered Municipal Advisor urSPEER FINANCIAL, INC. Established 1954 INDEPENDENT MUNICIPAL ADVISORS June 2, 2026 The Honorable Dave Boesen, Mayor and Members of the City Council City of Waterloo 715 Mulberry Street Waterloo, IA 50703 Dear Mayor Boesen and Council Members: Bids were received today for the $1,700,000 Taxable General Obligation Bonds, Series 2026C. There were four bids received, which are listed at the bottom of this letter. Upon examination, it is our opinion that the bid of Piper Sandler & Co., Minneapolis, Minnesota, is the best bid received,and it is further our opinion that the bid is favorable to the City and should be accepted. We therefore recommend that the Series 2026C Bonds be awarded to that bidder at a price of$1,693,110.85, being at a true interest rate of 4.7696%. True Account Managers Interest Rate Piper Sandler& Co., Minneapolis,Minnesota 4.7696% Robert W. Baird& Co., Inc., Milwaukee, Wisconsin 4.7765% UMB Bank, n.a., Kansas City, Missouri 4.8794% Bernardi Securities, Inc., Northfield, Illinois 4.9345% Respectfully submitted, SPEER FINANCIAL, INC. -11).kaCiu. 0410r Maggie Burger, Sr. Vice President MB/eg Enclosures 230 W Monroe Street, 531 Commercial St, Suite263o WWW.SPEERFINANCIAL.COM suite6o8 Chicago,Illinois 60606 Waterloo,IA 50701 (312)346-3700 (319)291-2077 firl SPEER FINANCIAL, INC. Established 1954 INDEPENDENT MUNICIPAL ADVISORS Investment Rating: Moody's Investors Service ... Aa2 $1,700,000 CITY OF WATERLOO,IOWA Taxable General Obligation Bonds, Series 2026C Date of Sale: June 2, 2026 Average Life: 6.866 Years (Based on TIC) True Bidders Price Maturities Rate Interest* Piper Sandler&Co. 99.594% 2027 4.000% 4.7696% Minneapolis,Minnesota $1,693,110.85 2028-2032 4.500% $556,326 2033 4.550% 2034 4.650% 2035 4.700% 2036 4.750% 2037 4.850% 2038 4.950% Robert W. Baird&Co., Inc. 99.524% 2027-2033 4.500% 4.7765% Milwaukee, Wisconsin $1,691,916.55 2034 4.600% $556,728 2035 4.700% 2036 4.800% 2037 4.850% 2038 4.900% UMB Bank,n.a. 99.428% 2027-2032 4.500% 4.8794% Kansas City,Missouri $1,690,285.80 2033 4.550% $568,706 2034 4.700% 2035 4.750% 2036-2038 5.000% Bernardi Securities, Inc. 99.411% 2027-2036 4.750% 4.9345% Northfield, Illinois $1,689,992.75 2037-2038 5.000% $574,186 *The true interest rate reflects the time value of money where dollars spent in early years have a greater weight than dollars spent in later years. Speer Financial, Inc. CITY OF WATERLOO,IOWA $1,700,000 Taxable General Obligation Bonds, Series 2026C *** FINAL *** Debt Service Schedule Date Principal Coupon Interest Total P+I Fiscal Total 06/29/2026 - - - - - 12/01/2026 - - 33,048.39 33,048.39 - 06/01/2027 120,000.00 4.000% 39,136.25 159,136.25 192,184.64 12/01/2027 - - 36,736.25 36,736.25 - 06/01/2028 120,000.00 4.500% 36,736.25 156,736.25 193,472.50 12/01/2028 - - 34,036.25 34,036.25 - 06/01/2029 120,000.00 4.500% 34,036.25 154,036.25 188,072.50 12/01/2029 - - 31,336.25 31,336.25 - 06/01/2030 125,000.00 4.500% 31,336.25 156,336.25 187,672.50 12/01/2030 - - 28,523.75 28,523.75 - 06/01/2031 130,000.00 4.500% 28,523.75 158,523.75 187,047.50 12/01/2031 - - 25,598.75 25,598.75 - 06/01/2032 135,000.00 4.500% 25,598.75 160,598.75 186,197.50 12/01/2032 - - 22,561.25 22,561.25 - 06/01/2033 145,000.00 4.550% 22,561.25 167,561.25 190,122.50 12/01/2033 - - 19,262.50 19,262.50 - 06/01/2034 150,000.00 4.650% 19,262.50 169,262.50 188,525.00 12/01/2034 - - 15,775.00 15,775.00 - Call 06/01/2035 155,000.00 4.700% 15,775.00 170,775.00 186,550.00 12/01/2035 - - 12,132.50 12,132.50 - 06/01/2036 160,000.00 4.750% 12,132.50 172,132.50 184,265.00 12/01/2036 - - 8,332.50 8,332.50 - 06/01/2037 165,000.00 4.850% 8,332.50 173,332.50 181,665.00 12/01/2037 - - 4,331.25 4,331.25 - 06/01/2038 175,000.00 4.950% 4,331.25 179,331.25 183,662.50 Total $1,700,000.00 - $549,437.14 $2,249,437.14 - Yield Statistics Bond Year Dollars $11,672.78 Average Life 6.866 Years Average Coupon 4.7069956% Net Interest Cost(NIC) 4.7660146% True Interest Cost(TIC) 4.7696393% Bond Yield for Arbitrage Purposes 4.6599677% All Inclusive Cost(AIC) 5.0077428% IRS Form 8038 Net Interest Cost 4.6711130% Weighted Average Maturity 6.860 Years 26C Waterloo 1.7m Taxable I SINGLE PURPOSE I 6/2/2026 I 11:34 AM Speer Financial, Inc. Registered Municipal Advisor LirSPEER FINANCIAL, INC. Established 1954 INDEPENDENT MUNICIPAL ADVISORS June 2,2026 The Honorable Dave Boesen, Mayor and Members of the City Council City of Waterloo 715 Mulberry Street Waterloo, IA 50703 Dear Mayor Boesen and Council Members: Regions Bank, Indianapolis, Indiana, in association with Piper Sandler & Co., Des Moines, Iowa, acting as placement agent,has submitted a proposal for the purchase of the$3,500,000 Sewer Revenue Capital Loan Notes, Series 2026A being sold by the City of Waterloo. Upon examination,it is our opinion that the proposal is favorable to the City and should be accepted. We therefore recommend that the Notes be awarded to the proposer at a price of$3,500,000.00, being at a true interest cost of 4.1003%. The amounts and rates for each year are as follows: Year Principal Rate 2027 $160,000 4.100% 2028 170,000 4.100% 2029 175,000 4.100% 2030 185,000 4.100% 2031 195,000 4.100% 2032 205,000 4.100% 2033 215,000 4.100% 2034 230,000 4.100% 2035 240,000 4.100% 2036 250,000 4.100% 2037 265,000 4.100% 2038 280,000 4.100% 2039 295,000 4.100% 2040 310,000 4.100% 2041 325,000 4.100% Respectfully submitted, SPEER FINANCIAL, INC. v'(\l rt(9(s, -vr Z47- Maggie Burger, Sr. Vice President MB/eg Enclosures 230 W Monroe Street, I 531 Commercial St, Suite 2630 Suite 608 Chicago,Illinois 60606 i Waterloo,IA 50701 (312)346-3700 (319)291-2077 WWW.SPEERFINANCIAL.COM Summary of Bids Received Waterloo, Iowa $3,500,000 Sewer Revenue Capital Loan Notes,Series 2026(La CITYized to ) ITj OF Sale Date:Monday,June 01,2026 at 12:00 PM k�<< TER'LOO Not Bank Qualified WINNING PROPOSAL Terms of Offering Additional Proposal Provisions&Notes Financial Institution: Location: Final Par Amount: Interest Cost($): Net Proceeds: Interest Rate: All-in-TIC: Call Date: Proposals Received (Standard) Financial Institution Location Net Proceeds Interest Cost Avg Interest Rate TIC Call date Final maturity Term Amount Regions' Indianapolis, IN 3,476,250 1,272,139 4.10% 4.20% 6/1/33 6/1/2041 Full $3,500,000 Zions Bank2 Denver, CO 3,480,750 1,340,400 4.32% 4.40% Anytime 6/1/2041 Full $3,500,000 Webster Bank4 Columbus,OH 3,477,250 1,345,054 4.34% 4.43% 6/1/28 6/1/2041 Full $3,500,000 JP Morgan Chase-Option B3 Chicago, IL 3,470,750 1,374,220 4.43% 4.55% 6/1/33 6/1/2041 Full $3,500,000 Huntington Bank' Cincinnati, OH 3,477,750 1,461,408 4.71% 4.80% 6/1/28 6/1/2041 Full $3,500,000 CapitalOneb Litchfield,CT 3,480,750 1,495,539 4.82% 4.90% 6/1/33 6/1/2041 Full $3,500,000 First Interstate Bank' Cedar Falls, IA 3,480,750 1,887,730 6.08% 6.17% Anytime 6/1/2041 Full $3,500,000 Proposals Received (Non-Standard) Financial Institution Location Net Proceeds Interest Cost Avg Interest Rate TIC Call date Final maturity Term Amount JP Morgan Chase-Option A3 Chicago, IL 3,470,750 1,330,781 4.29% 4.41% N/A 6/1/2041 Full $3,500,000 '$4,500 of additional costs for purchaser's counsel,optional redemption in part or in whole on 6/1/33 2 No additional costs for purchaser's counsel,interest rate fixed through 6/1/36 before resetting anually to the then 1-YR FHLB+90 bps,callable anytime with 30 days notice,audited financials to be provided within 270 days of fiscal year end 3$10,000 of additional costs for purchaser's counsel,call feature is determined by the option,interest rate subject to refresh after 4:30 PM EST 6/1/26,audited financials to be provided within 180 days of fiscal year end,ABT of 1.10x 453,500 of additional costs for purchaser's counsel,optional redemption in whole but not in part on 6/1/31 5$3,000 of additional costs for purchaser's counsel,optional redemption in whole but not in part on 6/1/28 6No additional costs for purchaser's counsel,optional redemption in part or in whole with 30 days notice 7No additional costs for purchaser's counsel,optional redemption in part or in whole with 30 days notice PIPER I SANDLER CITY OF WATERLOO,IOWA $3,500,000 Sewer Revenue Capital Loan Notes, Series 2026A *** FINAL NUMBERS *** Fiber Backbone Debt Service Schedule Date Principal Coupon Interest Total P+1 Fiscal Total 06/29/2026 - - - - - 12/01/2026 - - 60,588.89 60,588.89 - 06/01/2027 160,000.00 4.100% 71,750.00 231,750.00 292,338.89 12/01/2027 - - 68,470.00 68,470.00 - 06/01/2028 170,000.00 4.100% 68,470.00 238,470.00 306,940.00 12/01/2028 - - 64,985.00 64,985.00 - 06/01/2029 175,000.00 4.100% 64,985.00 239,985.00 304,970.00 12/01/2029 - - 61,397.50 61,397.50 - 06/01/2030 185,000.00 4.100% 61,397.50 246,397.50 307,795.00 12/01/2030 - - 57,605.00 57,605.00 - 06/01/2031 195,000.00 4.100% 57,605.00 252,605.00 310,210.00 12/01/2031 - - 53,607.50 53,607.50 - 06/01/2032 205,000.00 4.100% 53,607.50 258,607.50 312,215.00 12/01/2032 - - 49,405.00 49,405.00 - call 06/01/2033 215,000.00 4.100% 49,405.00 264,405.00 313,810.00 12/01/2033 - - 44,997.50 44,997.50 - 06/01/2034 230,000.00 4.100% 44,997.50 274,997.50 319,995.00 12/01/2034 - - 40,282.50 40,282.50 - 06/01/2035 240,000.00 4.100% 40,282.50 280,282.50 320,565.00 12/01/2035 - - 35,362.50 35,362.50 - 06/01/2036 250,000.00 4.100% 35,362.50 285,362.50 320,725.00 12/01/2036 - - 30,237.50 30,237.50 - 06/01/2037 265,000.00 4.100% 30,237.50 295,237.50 325,475.00 12/01/2037 - - 24,805.00 24,805.00 - 06/01/2038 280,000.00 4.100% 24,805.00 304,805.00 329,610.00 12/01/2038 - - 19,065.00 19,065.00 - 06/01/2039 295,000.00 4.100% 19,065.00 314,065.00 333,130.00 12/01/2039 - - 13,017.50 13,017.50 - 06/01/2040 310,000.00 4.100% 13,017.50 323,017.50 336,035.00 12/01/2040 - - 6,662.50 6,662.50 - 06/01/2041 325,000.00 4.100% 6,662.50 331,662.50 338,325.00 Total S3,500,000.00 - $1,272,138.89 S4,772,138.89 - Yield Statistics Bond Year Dollars _ $31,027.78 Average Life 8.865 Years Average Coupon 4.1000000% Net Interest Cost(NIC) 4.1000000% True Interest Cost(TIC) 4.1003786% Bond Yield for Arbitrage Purposes 4.1003786% All Inclusive Cost(AIC) 4.3072595% IRS Form 8038 Net Interest Cost 4.1000000% Weighted Average Maturity 8.865 Years 26A Sewer Rev Fiber Final I SINGLE PURPOSE I 6/2/2026 I 11 28 AM Speer Financial, Inc. Registered Municipal Advisors