HomeMy WebLinkAbout19-CON~1Agenda Item # 19
ACTION
To:
Board of Directors
From:
Robert Mescher
Date:
June 05, 2013
Subject: Consideration of Documents Associated with the Refinancing of the
Special Tax Bonds for Community Facilities District No. 03-1 (Old
Greenwood CFD)
1. WHY THIS MATTER IS BEFORE THE BOARD
This item involves discussion of a proposed refinancing of the Special Tax Bonds
("2003 Bonds") for the Community Facilities District No. 03-1 (Old Greenwood)
("CFD").
2. HISTORY
In 2003, the District issued $12,445,000 of Special Tax Bonds, the proceeds of which
were used to construct and acquire various public improvements related to the
proposed development within the CFD. The 2003 Bonds are paid by property owners
in the CFD via a special tax levied on the property tax roll.
The 2003 Bonds have interest rates that range from 4.80% in 2013 to 6.10% in their
final maturity of 2033. The 2003 Bonds are callable on September 1, 2013 at par (no
premium). There is approximately $11,765,000 outstanding on the issue.
At the April 3, 2013 Board Meeting, the District staff proposed refinancing the bonds to
reduce the overall assessments in Old Greenwood at no cost to the Truckee Donner
PUD. The Board directed staff to pursue the refinancing and present documents to the
Board for consideration at the June 5, 2013 meeting.
3. NEW INFORMATION
The financing team has drafted the resolution (Attachment 1), the trust indenture
(Attachment 2), the bond purchase agreement (Attachment 3) and the preliminary
official statement (Attachment 4). The resolution authorizes the sale and issuance of
the 2013 Special Tax Refunding Bonds in the par amount of not to exceed
$12,000,000 on or about June 26th. It provides for an authorized officer of the District
to provide for all services necessary to effect the issuance of the 2013 Bonds.
If the resolution is approved, the financing team will work to complete and publish the
official statement and sell the 2013 Bonds in late June, market conditions permitting. If
the transaction closes in early July, as anticipated, Old Greenwood property will realize
the benefit beginning with the December 2013 tax bill.
4. FISCAL IMPACT
Current market interest rates are estimated to range from 1.60% in 2013 to 4.75% in
the final maturity of 2033, with the average interest rate being about 4.33%. This is
over 100 basis points of savings in interest rate when compared to the 2003 Bonds.
The summary of the refunding (Attachment 5) illustrates that property owners in the
CFD will save over $200,000 per year for the first three years, and about $100,000 per
year thereafter. Total savings will be approximately $2.2 million over the life of the
issue, and net present value savings are estimated to be $1.6 million or 14%.
These savings of the Old Greenwood CFD will be at no cost to the Truckee Donner
PUD.
5. RECOMMENDATION
Adopt the resolution authorizing the sale and issuance of its 2013 Special Tax
Refunding Bonds, approving documents relating thereto, and authorizing and directing
certain related actions.
Robert Mescher
Administrative Services Manager
Michael D. Holley
General Manager