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MINUTES OF MEETING

OHIO WATER DEVELOPMENT AUTHORITY

December 7, 2017

Chairman Stewart called the monthly meeting of the Ohio Water Development Authority to order at 10:30 a.m. on Thursday, December 7, 2017. The meeting was held at the Ohio Water Development Authority, 480 South High Street, Columbus, Ohio 43215. In attendance were; Jimmy Stewart, Chairman ; Sam Gerhardstein, Vice Chairman; Chris Whistler, Board Member; Michael Reese, Board Member; Andy Ware, representative for James Zehringer, Director of the Ohio Natural Resources (ODNR); and Laurie Stevenson, representative for Craig Butler, Director of the Ohio Environmental Protection Agency (OEPA). Others in attendance were Ryan Callender and David Goodman, Bond Counsel, Squire Patton Boggs (US) LLP; Matt Schnackenberg, Financial Advisors, PFM; Marty Sweterlitsch, General Counsel, Benesch, Friedlander, Coplan & Aronoff. Staff members included Steven Grossman, Executive Director; Scott Campbell, Secretary-Treasurer; Robyn McComb, Senior Accounting Manager; Todd Skruck, Senior Accounting Manager; Ken Heigel, Chief Program Officer; Kim Killian, Loan Analyst; Lisa Haid, Human Resources/Administrative Manager; and Mary Caleb, Administrative Secretary.

Visitors Included

Name Company Name

Gene Spinelli Bank of America Merrill Lynch

Tom Liu Bank of America Merrill Lynch

Mark Kamer Dinsmore

Tom Mead Drexel Hamilton

Fred Phelan Drexel Hamilton

Todd Caldrell Elford

Jon Honeck GOPC

Reagan Holliday Hilltop

Chris Collier Hilltop

Ryan Kuzak Huntington

Matt Couch JPM

Jim Hounshell K&D Group

Doug Price K&D Group

Karen Paganini K&D Group

Annie van Blaricom ODSA

Mary Oakley ODSA

Jerry Rouch OEPA

Ken Kalynchuk PMC - Cleveland

Bob Karl Porter Wright

Scott Stubbins Stifel

Patrick King Stifel

Joe Reidy WagenBrenner

Emmit Horne Wells Fargo

Rob Albert White Castle

Russ Meyer White Castle

Mr. Campbell reported that the notice of the Ohio Water Development Authority meeting had been posted in the Statehouse Pressroom (Legislative Correspondence Association) in compliance with the “Sunshine Law”.

I. APPROVAL OF MINUTES

****MOTION****

Chairman Stewart called for a motion to approve the October 26, 2017 regular Board Meeting minutes.

Moved by Mr. Whistler.

Seconded by Mr. Gerhardstein.

AYES: Gerhardstein, Reese, Stevenson, Stewart, Ware, Whistler

NAYS: None

II. GENERAL LOAN INFORMATION

The Board Summary Report and Economic Analysis documents were reviewed.

III. FRESH WATER LOAN FUND PROGRAM

Approval of Projects

Ms. Killian advised the Board of 10 Fresh Water Program loans this month, six for

construction and four for planning. The following projects were presented:

1. Village of Beach City requested $76,275.89 with an interest rate of 0.59% for 10 years for the replacement of failing sanitary sewer lift station.

2. Village of Cleves requested $221,027.13 with an interest rate of 2.75% for 30 years for the extension of a water line and improvements to a booster station in the Laurelwoods area.

3. Village of Lewisburg requested $55,000 with an interest rate of 2.59% for five years for a water well rehabilitation.

4. City of Logan requested $1,251,098.09 with an interest rate of 2.29% for 30 years for the relining of sewers and manholes to reduce inflow and infiltration.

5. Village of Martinsburg requested $44,400 with an interest rate of 3.09% for five years for the planning and design of water system improvements.

6. Medina County requested $600,000 with an interest rate of 3.09% for five years for the lining of 6,700 feet of eight-inch sewer, replacement of 2,300 feet of eight-inch sewer and replacement of eight manholes in the City of Brunswick and the City of Medina.

7. Village of Riverlea requested $1,685,108.50 with an interest rate of 2.79% for 26 years for the replacement of 14,000 feet of aging water mains with eight-inch water mains and storm water repairs and improvements.

8. Southern Perry County Water District requested $215,753 with an interest rate of 0.59% for 20 years for the purchase of the building located at 2075 State Route 13 SE in Crooksville for use as the district’s administration office and equipment storage. The loan also includes upgrades and repairs to the building.

9. City of Toronto requested $37,900 with an interest rate of 3.09% for five years for the planning and design of water and sewer extensions to serve new residential development.

10. Village of Washingtonville requested $70,122 with an interest rate of 0.59% for 10 years for the installation of a mixing and spray system inside the elevated storage tank to reduce disinfection byproducts. The Village has received Ohio EPA finding and orders for exceeding tribalomethanes.

****RESOLUTION****

For the Fresh Water Loan Fund Program, Chairman Stewart called for a motion to approve

Resolution 82-17 authorizing cooperative agreements for planning and construction of wastewater and water management facilities between certain named political subdivisions of the State of Ohio and the Ohio Water Development Authority.

Moved by Mr. Gerhardstein.

Seconded by Mr. Reese

AYES: Gerhardstein, Reese, Stevenson, Stewart, Ware, Whistler

NAYS: None

IV. UN-SEWERED AREA ASSISTANCE FUND

Ms. Killian advised the Board of one Un-Sewered Area Assistance Fund this month for construction. The following project was presented:

1. Perry County requested $500,000 as a Grant From the Other Projects Fund for construction of a wastewater treatment plant and 12,900 feet of sewer line in the un-sewered area of Moore’s Junction. This will provide sewer to 70 users.

****RESOLUTION****

For the Un-Sewered Area Assistance Fund, Chairman Stewart called for a motion to approve

Resolution 83-17 authorizing cooperative agreements for planning and construction of wastewater and water management facilities between certain named political subdivisions of the State of Ohio and the Ohio Water Development Authority.

Moved by Mr. Whistler

Seconded by Ms. Stevenson

AYES: Gerhardstein, Reese, Stevenson, Stewart, Ware, Whistler

NAYS: None

V. DRINKING WATER ASSISTANCE LOAN FUND PROGRAM

Approval of Projects

Ms Killian advised the Board of 11 Drinking Water Assistance Loan Fund Program loans this month, all for construction. The following projects were presented:

1. City of Cincinnati requested $1,615,445.49 with an interest rate of 1.34% for 20 years

for the replacement of 8,259 feet of aging eight-inch cast iron water main and 2,840 feet of lead service piping.

2. City of Cincinnati requested $1,860,450.54 with an interest rate of 1.34% for 20 years and for the replacement of 9,399 feet of aging six-inch cast iron water main.

3. Gallia Rural Water Association requested $1,351,875.50 ($681,634.78 with an interest rate of

0.00% for 30 years and $670,240.72 as Principal Forgiveness from the Drinking Water Fund) for the replacement of Kerr booster station and transmission main to Bandy Storage Tank to increase pumping capacity in the distribution system.

4. Village of Georgetown requested $15,954 ($5,954 with an interest rate of 0.00% for five years and $10,000 as Principal Forgiveness from Drinking Water Fund) for the completion of an asset management plan and rate study.

5. Village of Glouster requested $2,510,148.00 ($1,265,652 with an interest rate of 0.00% for 30 Years and $1,244,496 as Principal Forgiveness from Drinking Water Fund) for the replacement of 42,000 feet of failing six inch and eight inch water lines.

6. Village of Grafton requested $1,142,418.00 with an interest rate of 1.34% for 20 years for the replacement of 100,000 gallon elevated storage tank that is past its useful life with a 200,000-gallon tank.

7. Village of Grafton requested $552,175.50 with an interest rate of 1.34% for 20 years for the replacement of 1,835 feet of six-inch water lines along Main Street with 12-inch water lines.

8. Village of Grafton requested $487,281.00 ($462,281.00 with an interest rate of 1.34% for 20 years and $25,000.00 as Principal Forgiveness from the Drinking Water Fund) for the replacement of booster pump station and installation of stand-by generator.

9. City of Lorain requested $536,243.00 with an interest rate of 1.34% for five years for the design of water lines to correct the low-pressure issues in the Red Hill district.

10. Village of Concord requested $20,170.00 ($10,170 with an interest rate of 0.00% for five years with $10,000 as Principal Forgiveness from Drinking Water Fund) for the completion of an asset management plan for the Villages’ water utility.

11. City of Toronto requested $20,170.00 ($10,170.00 with an interest rate of 0.00% for five years and $10,000 as Principal Forgiveness from Drinking Water Fund) for planning for the development of an asset management plan for the water utility.

****RESOLUTION****

For the Drinking Water Assistance Loan Fund Program, Chairman Stewart called for a motion to approve Resolution 84-17 authorizing Drinking Water Assistance Loan Fund agreements between certain named political subdivisions and persons, the Director of the Ohio Environmental Protection Agency, and the Ohio Water Development Authority, for financing

construction, operation and ownership of water facilities pursuant to Ohio Revised Code 6109.22.

Moved by Mr. Gerhardstein.

Seconded by Mr. Reese.

AYES: Gerhardstein, Reese, Stevenson, Stewart, Ware, Whistler

NAYS: None

VI. WATER POLLUTION CONTROL LOAN FUND PROGRAM

Approval of Projects

Ms. Killian advised the Board of 13 Water Pollution Control Loan Fund Program loans this

month, 10 for construction and three for planning. The following projects were presented:

1. City of Bowling Green requested $2,128,370.30 with an interest rate of 1.84% for 20 years for the replacement of Conneaut Avenue pump station and addition of a backup generator to increase capacity and eliminate flooding during storm events.

2. City of Bucyrus requested $70,000.00 with an interest rate of 0.00% for five years for the planning for new sanitary sewers along Sothern and Hopley Avenues to eliminate the combined sewers.

3. Village of Crooksville requested $35,250.00 with an interest rate of 0.00% for five years for the feasibility study for the creation of a storm water utility.

4. Village of Danville requested $2,217,657.50 with an interest rate of 0.00% for 20 years for the construction of improvements to the WWTP to reduce nitrogen and ammonia to meet proposed NPDES permit limits

5. City of Euclid requested $1,562,480.90 with an interest rate of 1.84% for 20 years for the

replacement of 1,300 feet of sanitary sewer on Effingham Boulevard to eliminate sanitary sewer overflow.

6. Hamilton County requested $5,745,270.30 with an interest rate of 1.74% for 20 years for the replacement of the dewatering polymer system at Mill Creek wastewater treatment plan in Cincinnati’s Lower Price Hill neighborhood.

7. Hamilton County requested $4,048,807.82 with an interest rate of 1.74% for 20 years for the construction of a control facility within the existing 10-feet by 15-feet trunk sewer to retain wet weather flow in excess of the sewer capacity.

8. City of Marietta requested $9,582,432.73 with an interest rate of 1.74% for 30 years for the decommissioning of the final clarifiers and UVV equipment. Construction of two final clarifiers, flow splitter box, return activated sludge pumps, and UV equipment.

9. City of Marion requested $2,370,600.10 with an interest rate of 0.00% for five years for the design of improvements to the influent flow equalization basin, pump station, and primary clarifiers to increase peak secondary treatment capacity.

10. Ottowa County requests $1,259,006.00 with an interest rate of 0.35% for 20 years for the improvements to the WQWTP including a new mechanical screen, aerated grit removal system, coating of the chlorine tank, and improvements to the influent pump station.

11. City of Youngstown requests $24,466,453.00 ($24,416,453 with an interest rate of 0.86% for 20 years and $50,000 as Principal Forgiveness) for the renovation of the existing trickling filters, activated sludge aeration system, and the final clarifiers.

12. City of Columbus requests $2,252,338.20 with an interest rate of 1.84% for 20 years for the rehabilitation of sanitary sewers and manholes in the Blueprint Fifth by Northwest project area utilized cured-in-place pipe to reduce sanitary sewer overflows as required by the consent order.

13. City of Columbus requests $6,163,893.36 with an interest rate of 1.84% for 20 years for the relining of sewers and manholes in the Blueprint West Franklinton project area utilizing cured-in-place pipe to reduce sanitary sewer overflows as required by the consent order.

****RESOLUTION****

For the Water Pollution Control Loan Fund Program, Chairman Stewart called for a motion to approve Resolution 85-17 authorizing Water Pollution Control Loan Fund agreements between certain named political subdivisions, the Director of the Ohio Environmental Protection Agency, and the Ohio Water Development Authority, for financing construction, operation and ownership of wastewater facilities pursuant to Ohio Revised Code 6111.036.

Moved by Mr. Gerhardstein

Seconded by Mr. Whistler

AYES: Gerhardstein, Reese, Stevenson, Stewart, Ware, Whistler

NAYS: None

****RESOLUTION****

For the Water Pollution Control Loan Fund Program, Chairman Stewart called for a motion to approve Resolution 86-17 authorizing Water Pollution Control Loan Fund agreements between certain named political subdivisions, the Director of the Ohio Environmental Protection Agency, and the Ohio Water Development Authority, for financing construction, operation and ownership of wastewater facilities pursuant to Ohio Revised Code 6111.036.

Moved by Mr. Whistler

Seconded by Mr. Gerhardstein

AYES: Gerhardstein, Stevenson, Stewart, Ware, Whistler

NAYS: None

ABSTAINS: Reese

VII. BROWNFILED LOAN FUND PROGRAM

Approval of Projects

Mr. Heigel advised the Board of two Brownfield Loan Fund Program loans this month. The following projects were presented:

1. 555 West Goodale New Community Authority requests $5,000,000.00 with an interest rate of $2.56% for 15 years for the environmental remediation of contaminated soil, asbestos and lead paint on the 18-acre site located at 555 West Goodale Street.

2. Marble Cliff Canyon, LLC requests $5,500,000.00 with an interest rate of 2.56% for 15 years for the remediation of 607 acres of the Marble Cliff Quarry to eliminate environmental risk associated with soil and groundwater contamination. Completion of the project will allow for the development of a mixed-use community and metro park.

****RESOLUTION****

Chairman Stewart called for a motion to approve Resolution 87-17 for 555 West Goodale New Community Authority.

Moved by Mr. Ware

Seconded by Ms. Stevenson

AYES: Stevenson, Reese, Stewart, Ware, Whistler

NAYS: None

ABSTAINS: Gerhardstein

****RESOLUTION****

Chairman Stewart called for a motion to approve Resolution 88-17 for Marble Cliff Canyon, LLC

Moved by Mr. Whistler

Seconded by Mr. Gerhardstein

AYES: Gerhardstein, Stevenson, Stewart, Ware, Whistler

NAYS: None

ABSTAINS: Reese

Presentation

Mr. Heigel stated that we have one Brownfield presentation today. KD Tower City, LLC located at 50 Public Square in Cleveland. Jim Hounshell from the K & D Group made the presentation.

The project will renovate asbestos from a portion of the building and develop the remediated floors into apartments and offices.

The requested amount is $5,000,000 for 10 years at the current Treasury rate, pending the January 2018 Board meeting.

VIII. ALTERNATIVE STORM WATER INFRASTRUCTURE LOAN PROGRAM

Approval of Projects

Mr. Heigel advised the Board of one Alternative Stormwater Infrastructure Loan Fund Program loan this month for construction.

1. 555 West Goodale New Community Authority requested $3,480,000.00 with an interest rate of 2.51% for 10 years for the construction of alternative stormwater improvements on the 18-acre site located at 555 West Goodale Street, Columbus, Ohio.

****RESOLUTION****

For the Alternative Stormwater Infrastructure Loan Fund Program, Chairman Stewart called for a motion to approve Resolution 89-17 authorizing an Alternative Stormwater Loan Fund agreement with the 555 West Goodale New Community Authority.

Moved by Mr. Ware

Seconded by Mr. Whistler

AYES: Stevenson, Reese, Stewart, Ware, Whistler

NAYS: None

ABSTAINS: Gerhardstein

IX. FINANCIALS

Update on Potential Changes to Tax-Exempt Financing

Mr. Campbell provided a brief review of the two tax reform bills that have passed the U.S. House of Representatives and the U.S. Senate. Changes to tax-exempt financing may reduce OWDA savings on Advanced Refund Bonds.

Mr. Ryan Callender explained the two versions of the tax reform bill that passed. The House bill proposed will eliminate the Private Activity Bonds; which are the tax-exempt bonds issued to a private non-profit or a private industrial development. This is the largest change in municipal securities since 1986. The House bill also eliminates the Advanced Refunding, which allows a refinancing of bonds. The elimination of the Advanced Refunding affects OWDA’s ability to refinance bonds in the future. This would indirectly affect OWDA’s outstanding bonds issued as Build America Bonds. The bonds were issued during the 2009-2010 stimulus period and were sold as taxable with a direct pay subsidy paid back to OWDA on the subsidy rate. During sequestration, the subsidy percentage has decreased and the new tax bill may continue to reduce the percentage. OWDA currently holds more than 300 million dollars in this type of bond. OWDA does have the option to execute the Extraordinary Call on the bonds if needed to break even. The interest rates would not be effected on new bonds issued; however, we would no longer capture savings when the rates go down until the 10-year park call is reached. This also would eliminate the ability to refund bonds earlier than 90 days before their call date.

Mr. Campbell stated the savings level could be reduced while waiting for the call date, which would cause less equity available for our loan programs. This will be something to factor into loan program models. Currently, our models do not factor in the savings from refunding. We have achieved savings over the years through advanced refunding but this was savings above what our models had shown for the program.

Mr. Campbell will speak to the tax division at Squire’s about the possibility to create a way for local governments to come to OWDA to get a loan to refund their outstanding bonds. This would require a change to the Ohio Revised Code because currently, OWDA is only able to finance bonds, and not re-finance bonds. The ability to provide this service would be a valuable tool to the local governments in the State of Ohio.

Monthly Financial Report

Mr. Campbell stated all loan programs are well capitalized. After today’s loans, the Fresh Water Loan Fund Program has $160,000,000 availble funds. Over time, the volume in the Fresh Water Loan Program has averaged $125,000,000 a year.

The Water Pollution Control Loan Fund Program has $780,000,000 in available funds, which is funding for approximately one year.

The Drinking Water Assistance Loan Fund Program has $128,000,000 in available funds. The Drinking Water Assistance Loan Fund Program will be our focus in 2018. We will evaluate adding a note purchase program, floating rates notes, or variable rate long-term bonds for additional funding options.

The Other Projects Fund has $64,000,000 in available funds. This has been an active fund in 2017 distributing $45,000,000 in loans, $6,000,000 in grants, totaling almost $51,000,000 on funds through the program.

There are no defaults in loan payments. During November, $270,000,000 in loan repayment notices were mailed to 678 clients representing 2,800 loans. The payments are due January 2, 2018. From the repayment amount, $180,000,000 will be paid to our bondholders, and approximately $94,000,000 will be redeposited back into the various loan programs to provide equity in the programs. Mr. Campbell will advise the Board during the January, February, and March Board Meetings of any loans that have not been repaid.

X. APPROVAL OF OWDA TO ENTER INTO STATE OF OHIO COOPERATIVE PURCHASE PROGRAM

Mr. Campbell explained OWDA’s current internet vendor has joined the State of Ohio Cooperative Purchase Program. In order for OWDA to take advantage of the great rates, we need to join the program. OWDA will receive significant savings on the monthly internet bill and receive twice the speed. This Resolution will allow Mr. Grossman to sign the agreement and states OWDA will pay the vendor.

****RESOLUTION****

Chairman Stewart called for a motion to approve Resolution 90-17 authorizing OWDA to enter into the State of Ohio Cooperative Purchase Program.

Moved by Mr. Reese

Seconded by Mr. Gerhardstein

AYES: Gerhardstein, Stevenson, Reese, Stewart, Ware, Whistler

NAYS: None

XI. APPROVAL OF THE 2018 BOARD MEETING DATES

Director Grossman presented the 2018 OWDA Board Meeting dates.

****MOTION****

Chairman Stewart called for a motion to approve the Motion to approve OWDA 2018 Board Meeting Dates.

Moved by Mr. Gerhardstein

Seconded by Mr. Reese

AYES: Gerhardstein, Stevenson, Reese, Stewart, Ware, Whistler

NAYS: None

XII. APPROVAL OF RESOLUTION HONORING CHAIRMAN JOYCE AND DIRECTOR GROSSMAN

MOTION – Chairman Joyce

Director Grossman announce the Resolution Honoring Chairman Joyce was read to him at his luncheon. OWDA will frame the Resolution and display it on the OWDA Resolution wall.

****MOTION****

Chairman Stewart called for a motion to approve the Motion to approve the Resolution honoring Chairman Joyce.

Moved by Mr. Whistler

Seconded by Mr. Gerhardstein

AYES: Gerhardstein, Stevenson, Reese, Stewart, Ware, Whistler

NAYS: None

MOTION – Director Grossman

Mr. Goodman read the Resolution honoring Director Grossman. OWDA will frame the Resolution and display it on the OWDA Resolution wall.

****MOTION****

Chairman Stewart called for a motion to approve the Motion to approve the Resolution honoring Director Grossman.

Moved by Mr. Gerhardstein

Seconded by Mr. Whistler

AYES: Gerhardstein, Stevenson, Reese, Stewart, Ware, Whistler

NAYS: None

XIII. EXECUTIVE DIRECTOR’S REMARKS

Director Grossman said serving at OWDA has been a joy and that he has loved coming to work every day. All OWDA Boards have been supportive and all decisions have been nonpartisan, concern for the communities has always come first. It has been another great year for the Authority, the staff has been great, we have continued to grow and develop. Director Grossman announced that Mr. Scott Campbell has been appointed as the Executive Director and will assume the position of OWDA Executive Director on January 2, 2018. Director Grossman reminisced during the beginning of OWDA; there were 100 million dollars of loans the first year with one program and eight staff members. This year OWDA has accomplished 1.1 billion dollars of loans with 16 staff members. He shared that Ohio EPA offers great support with the SRF loans. Additional support is provided by the Bond Counsel, General Counsel, financial advisors, and from the banks that support our funds. Serving as Director of OWDA has been highlight of his career and he thanked the Board members and the staff.

XIV. CHAIRMAN’S REMARKS

Chairman Stewart turned the remarks over to Mr. Campbell who presented Mr. Grossman with a plaque naming the executive boardroom the “Steven J. Grossman Boardroom”

***MOTION***

Motion to name the room the “Steven J. Grossman Boardroom”

Moved by Mr. Gerhardstein

Seconded by Mr. Whistler

AYES: Gerhardstein, Stevenson, Reese, Stewart, Ware, Whistler

NAYS: None

XV. EXECUTIVE SESSION TO DISCUSS PERSONNEL ISSUES

Chairman Stewart called for a motion to go into an Executive Session to discuss employment matters.

Moved by Mr. Gerhardstein

Seconded by Mr. Reese

Chairman Stewart asked for a role call from Secretary-Treasurer Campbell for the Executive Session.

Mr. Stewart: Yes

Mr. Gerhardstein: Yes

Mr. Whistler: Yes

Mr. Reese: Yes

Ms. Stevenson: Yes

Mr. Ware: Yes

Chairman Stewart called for a motion to adjourn the Executive Session.

Moved by Mr. Reese

Seconded by Mr. Gerhardstein

XVI. APPROVAL OF OPERATING BUDGET/STRATEGIC INITIATIVES

Mr. Campbell presented the Operating Budget. Mr. Grossman discussed the significance of regionalization stating the City of Athens and the City of Nelsonville are working together with the shared use of the Nelsonville treatment plant.

****MOTION****

Chairman Joyce called for a motion to approve the 2018 Operating Budget and Strategic Initiatives.

Moved by Mr. Gerhardstein

Seconded by Ms. Stevenson

AYES: Gerhardstein, Stevenson, Reese, Stewart, Ware, Whistler

NAYS: None

Chairman Stewart called for a motion to adjourn the meeting.

Moved by Mr. Whistler.

Seconded by Ms. Stevenson

AYES: Gerhardstein, Stevenson, Reese, Stewart, Ware, Whistler

NAYS: None

The meeting adjourned at 12:09 p.m.

________________________________ _____________________________

CHAIRMAN SECRETARY-TREASURER

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