Real Meetings, Real Impact

The Bond at Risk

$147.97M Senior Living Revenue Bonds, Series 2016 (City of Apple Valley, MN), backed by eight senior living communities including The Timbers. With repayment solely from operating revenues and no city backing, this issue was vulnerable to market dynamics.

By Q2 2025, the warning signs were clear: Net deficit of $2.15M, DSCR of 0.81x (below 1.05 covenant), with high leverage and market competition pressuring cash flows.

What Council Meetings Revealed

While traditional credit analysis focused on historical financials, &Evergreen was tracking something more telling: Apple Valley's city council meetings throughout Q2 2025 revealed a pattern of approvals that would devastate The Timbers' competitive position.

The Intelligence Edge

Traditional bond analysis would have missed this story until occupancy reports showed the damage. &Evergreen identified the competitive threat and policy risk months before they impacted financials.

The result: Investment teams using &Evergreen adjusted positions before the market recognized the elevated refinancing risk and occupancy pressures facing The Timbers.

Bond Overview

GLWA's Series 2025 bonds are payable solely from Net Revenues of the Sewer System—revenues remaining after Operation and Maintenance Expenses. Any factor affecting GLWA's ability to generate sufficient revenues or manage operational costs directly influences bond performance and security.

Strong underlying metrics: FY2024 debt service coverage ratios were 2.06x for Senior lien bonds, 1.54x for combined Senior and Second lien, and 1.24x across all bonds—exceeding required thresholds.

Revenue Generation and Customer Affordability

Operational Efficiency Analysis

Municipal meeting intelligence reveals both efficiency gains and concerning operational issues. DWSD's drone-based inspection initiative saved $4 million within months, reducing data analysis time from nine months to 48 hours.

However, operational concerns persist: Only three of 15 JEDER trucks are active while external contractors may be filling the gap—raising questions about efficiency and elevated O&M expenses. DWSD was responsible for 5 of 29 gas line strikes, with 151 unresolved claims from a Southwest Detroit rupture.

Infrastructure Investment Strategy

GLWA is strategically reducing dependency on bonds by prioritizing cash and low-interest SRF loans. DWSD is pursuing a $20 million SRF loan for sewer rehab in North Corktown and Hubbard Farm, with potential for principal forgiveness due to Detroit's overburdened status.

Risk Assessment Conclusion

GLWA's Series 2025 Bonds benefit from solid underlying financials, disciplined capital strategy, and favorable external funding pursuits. The authority maintains strong debt service coverage and substantial cash reserves.

Key monitoring areas: Customer arrears, aging infrastructure in Corktown, operational incidents, and regulatory compliance costs represent material risks to Net Revenues—the sole repayment source.

The Bond Behind the Rating

UTOPIA's $205.3M Series 2022 Bonds carry an S&P “AA-” rating with Stable Outlook, but public board meetings reveal a more complex story. These special limited obligations are paid exclusively from pledged sales tax and net revenues—with no general obligation backing or physical asset security.

The surface metrics look stable, but beneath lies fiscal strain, underwater cash flows, and growing competitive pressure that don't appear in standard disclosures.

What Board Meetings Revealed

While traditional credit analysis focused on the AA- rating and revenue growth, &Evergreen was tracking warning signals emerging in UTOPIA board meetings throughout 2025—patterns that revealed underlying financial stress.

Operational Strengths vs. Financial Strain

Despite financial pressures, UTOPIA shows operational success. New door-to-door sales programs deliver “phenomenal return on investment,” and strategic partnerships like Bountiful Fiber generate revenue without additional debt. UIA recently hit over $4M in monthly recurring revenue.

However, cash flow timing remains problematic: Construction projects like Bountiful temporarily create “underwater” cash flow situations due to billing schedules, even as overall revenue trends positive.

The Intelligence Advantage

Standard bond analysis would miss the disconnect between strong operational metrics and mounting financial pressure. &Evergreen identified the timing mismatch between debt service escalation and revenue growth acceleration months before it would impact formal disclosures.

The insight: While UTOPIA's long-term fundamentals remain sound, the 2024-2026 period represents peak financial stress—critical intelligence for bondholders evaluating near-term refinancing scenarios.