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Home My WebLink About10 2006 Revenue COPs Remaining Balance RefundingPage 1 of 2AgendaItem#10TRUCKEEDONNERPublicUtilityDistrict~- --------------~------WORKSHOPTo:From:Date:Subject:BoardofDirectorsJeremyPopovMarch02,20162006RevenueCOPsRemainingBalanceRefunding1.WHYTHISMATTERISBEFORETHEBOARDThisworkshopistoreviewtheremainingoutstandingbalanceofthe2006RevenueCertificatesofParticipation(COPs)thatwasineligibleforrefundingduringthe2015COPsrefundingcompletedinAugustof2015perResolution2015-14.ThisworkshopisintendedtoinformtheBoardofopportunitiesforrefundingtosecureimprovedinterestratesandreduceDistrictdebtservice.2.HISTORYIn2006TruckeeDonnerPublicUtilityDistrictFinancingCorporationissued$26,570,000ofWaterUtilityRevenueCertificatesofParticipation(WaterSystemImprovementProjects).In2015theBoardapprovedResolution2015-14,authorizingtherefundingofthe2006RevenueCOPs.The2015refundingpartiallyrefundedthe2006COPs,howeverrefundingdidnotrefundabalanceof$4,315,000(asofAugust2015),thatbalancebeingtheportionof1996COPsalreadyrefundedin2006.The1996portionwasnotrefundedasonlyoneadvancerefundingisallowedpertaxlaw.Theunrefundedamountcarriesaninterestratebetween4%and5%.Thesebondsarecallableon11/15/2016.Theoutstandingbalanceatcalldatewillbe$3,848,600,whichincludesaprincipalandinterestpaymentdueatcalldateof$653,600.FinalmaturityisinNovemberof2021.3.NEWINFORMATIONInterestrateshaveimprovedascomparedtotherateof4%-5%ontheremainingunrefunded2006COPsbalance.TheDistrictisreviewingallopportunitiestoreduceratepayerinterestexpenseandtherebyreducetotaldebtservice.Anadvancerefundingoccursiftherefundingclosesmorethan90daysfromthecalldate.BrandisTallman,theDistrict'sfullserviceinvestmentbankingfirmandbroker/dealer,hasbeenworkingtoprovidetheDistrictanalternativetolockinatcurrentlowratessinceitisnotpossibletoadvancerefund.Consideringthisinabilitytorefundinadvanceofthecalldate,theDistricthasbeenprovidedanalternativesolution.TheDistricthastheoptiontolockintoalowratenowthroughaprivateplacementwhichwouldprovidetheDistrictalongclosingprocess.Thiswouldallowforfullcompliancewiththeadvance Page 2 of 2refundingrestrictionsasclosingwouldbewithin30daysofthecalldate.Privateplacementisgenerallymorestreamlinedthanpublicoffering,howeverapublicofferingmayprovideslightlyincreasedsavings.TheDistrictcansaveapproximately$30,900peryear,or$185,500intotal,ifaprivateplacementratelockwithalongclosingisimplemented.TheprivateplacementAll-InTICwouldbe2.92%.Thisequatestoanetpresentvaluesavingsof4.25%or$160,000.Alternatively,theDistrictcanwaitandconsiderrefundinginthefallof2016.Ifthemarketremainsstabletopresent,thesavingswouldbeanadditional$3,800peryear,or$23,000moreintotal.However,iftheDistrictdecidestowaitforthecalldate,theDistrictwouldbeexposedtomarketinterestrateriskbetweennowandOctoberof2016.StaffisinclinedtoaddresstheBoardwithconservativeopportunitiestolockintoimprovedratesandsavingsatpresent.4.FISCALIMPACTTheDistrictcansaveapproximately$30,900peryearor$185,500intotalbyconsideringaratelockprivateplacementrefundingwithalongclosingperiod.Thetotalbondparamountisexpectedtobe$3,909,000,whichincludesthetotalescrowrequirementof$3,848,600plus$60,500costofissuance.TheAll-InTICwouldbe2.92%,a4.25%percentagesavingsofrefundedbonds.5.RECOMMENDATIONReviewthisworkshopitemandprovidefeedback.~JeremyPopovAdministrativeServicesManagerMichaelD.HolleyGeneralManager