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HomeMy WebLinkAbout4 COPs Refinancing Agenda Item # 4 rTRUCKEE DONNER l..L.� Public Utility District FINANCE BUSINESS ITEM To: Board of Directors From: Jeremy Popov Date: May 04, 2016 Subject: Consideration of the 2006 COP Financing Approval Documentation 1. WHY THIS MATTER IS BEFORE THE BOARD This item involves the consideration of adopting a resolution to authorize the finalization and execution of documents related to the refunding of the remaining balance of 2006 Certificates of Participation (COPs). 2. HISTORY As background, in 2006 Truckee Donner Public Utility District Financing Corporation issued $26,570,000 of COPs to finance various water system improvements. In 2015 the COPs were partially refunded to achieve an improved interest rate and reduce debt service. At the time of the August 2015 refunding, a remaining balance of $4,315,000 was not eligible for refunding. With support from Brandis Tallman, a full service investment banking firm and broker/ dealer, the District issued an RFP to several lenders for the 2006 COPs remaining balance refunding. On March 02, 2016 a Board workshop item presented informed the Board of an opportunity to refund the remaining balance of the 2006 COPs. On April 06, 2016 the Board authorized the General Manager to accept a lenders commitment letter for the 2006 COPs refunding. 3. NEW INFORMATION Three proposals were received in response to the RFP. Proposals were evaluated considering interest rate, rate lock terms, compliance to closing schedule, and overall total savings to the District. On April 07, 2016 the General Manager accepted the most favorable lender's proposal. JPMorgan Chase (Chase) was selected as the most favorable lender, providing the most favorable interest rate at 1.54% for a bank qualified issue. Chase's rate lock closing terms are in compliance with the District's RFP and provide for a rate lock through October 7, 2016. Closing is scheduled for October 4, 2016. 4. FISCAL IMPACT The District is estimated to save $243,860 ($48,772 annually), which equates to a NPV savings of over 5.8%. Cost of issuance is included in the financing and results in an all-in total interest cost of 2.32%. The refunding is a direct savings to District ratepayers. Savings are not yet included in the Financial Master Plan. 5. RECOMMENDATION Adopt Resolution 2016-01 to authorize the finalization and execution of certain financing documents for the refunding of the remaining balance of 2006 Certificates of Participation (COPs). Jeremy Popov Michael D. Holley Administrative Services Manager General Manager TRUCKEE DONNER Public Utility District Resolution No. 2016 - 01 RESOLUTION OF THE BOARD OF DIRECTORS OF THE TRUCKEE DONNER PUBLIC UTILITY DISTRICT FINANCING CORPORATION AUTHORIZING THE EXECUTION AND DELIVERY OF AN INSTALLMENT SALE AGREEMENT WITH TRUCKEE DONNER PUBLIC UTILITY DISTRICT, AND AUTHORIZING AND DIRECTING CERTAIN ACTIONS IN CONNECTION THEREWITH WHEREAS, the Truckee Donner Public Utility District Financing Corporation (the "Corporation") is a nonprofit public benefit corporation organized and existing under the laws of the State of California with the authority to provide financial assistance to the Truckee Donner Public Utility District (the "District") by acquiring, constructing and financing various public facilities, land and equipment, and leasing facilities, land and equipment for the use, benefit and enjoyment of the public; and WHEREAS, the District and the Corporation have previously entered into that certain Installment Purchase Agreement, dated as of September 1, 2006, as supplemented by that certain First Supplemental Installment Purchase Agreement, dated as of August 1, 2015, by and between the District and the Corporation (so supplemented, the "2006 Installment Purchase Agreement"), for the purpose of financing and refinancing certain equipment and facilities within the District through the execution and delivery of the Refunding Revenue Certificates of Participation (Water System Improvement Projects) Series 2006 (the "2006 Certificates"); and WHEREAS, in August 2015, the District issued its Water System Refunding Revenue Bonds, Series 2015 to provide funds to prepay a portion of the then-outstanding installment payments due under the 2006 Installment Purchase Agreement and, in turn, a portion of the then-outstanding 2006 Certificates; and WHEREAS, the District and the Corporation now desire to enter into an Installment Sale Agreement (the "Installment Sale Agreement") for the purpose of providing funds to prepay the remaining outstanding installment payments due under the 2006 Installment Purchase Agreement and, in turn, the remaining outstanding 2006 Certificates; and WHEREAS, to obtain funds to effectuate such refinancing, the Corporation will assign certain of its rights under the Installment Sale Agreement to JPMorgan Chase Bank, N.A. (the "Purchaser") in accordance with the terms of that certain Assignment Agreement (the "Assignment Agreement"), dated as of October 1, 2016, by and between the Corporation and the Purchaser; and WHEREAS, for this financing there has been presented to the Corporation the forms of the Installment Sale Agreement and Assignment Agreement for approval; and NOW, THEREFORE, the Board of Directors of Truckee Donner Public Utility District Financing Corporation DOES HEREBY RESOLVE, DETERMINE AND ORDER as follows: SECTION 1. Recitals. The foregoing recitals are true, correct and a substantive part of this Resolution. SECTION 2. Approval of Documents. The Installment Sale Agreement, in a principal amount not to exceed $3,266,000, and the Assignment Agreement, each in substantially the form on file with the Secretary, are hereby approved. The President or Vice-President of the Corporation or their written designees (the "Authorized Officers"), acting alone, is hereby authorized and directed to execute and deliver the Installment Sale Agreement and the Assignment Agreement. Such agreements shall be executed in substantially the forms hereby approved, with such additions thereto and changes therein as may be recommended by General Counsel or Special Counsel to the District and as approved by the officers executing such agreements, such approval to be conclusively evidenced by the execution and delivery thereof. SECTION 3. Professional Services. The Board of Directors hereby appoints Porter Simon, Professional Corporation as Corporation Counsel in connection with the execution and delivery of the Installment Sale Agreement. SECTION 4. Other Actions. The Authorized Officers are hereby authorized and directed, acting singly, to do any and all things and to execute and deliver any and all documents which such officers may deem necessary or advisable in order to consummate the execution and delivery of the Installment Sale Agreement and Assignment Agreement and otherwise effectuate the purposes of this Resolution, and such actions previously taken by such officers are hereby ratified and confirmed. SECTION 5. Effective Date. This Resolution shall take effect immediately. PASSED AND ADOPTED by the Board of Directors of the Truckee Donner Public Utility District Financing Corporation in a meeting duly called and held within said District on May 4, 2016 by the following roll call vote: AYES: Directors: NOES: None. ABSENT: None. TRUCKEE DONNER PUBLIC UTILITY DISTRICT By: Joseph Aguera, President of the Board ATTEST: Michael D. Holley, Clerk of the Board