Loading...
HomeMy WebLinkAbout16 Refunding of the Special Tax Bonds for Community Facilites District No. 03-1 A ends Item # 16 TRUCKEE DONNER > u I d"t 'str*ct bl'c Uti ny Di i ................................... ................. ............. WORK HOP To: Board of Directors From: Robert Mescher Date: October 03, 2012 Subject: Discussion of a Proposed Refunding 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 refunding 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 March 1, 2013 at a 1% premium. There is approximately $11,765,000 outstanding on the issue. 3. NEW INFORMATION Brandis Tallman LLC, a full service investment banking firm and broker/dealer in San Francisco, and the firm that assisted the District with its Side Fund refinancing in 2011, contacted the District to propose the refunding of the 2003 Bonds. The decrease in municipal bond interest rates, coupled with the build-out of the CFD, makes the refunding economically feasible at this time. The District has discussed the timeline and financing plan with the underwriter, Brandis Tallman. The method of sale would be a public offering, the same as the sale of the 2003 Bonds. Current market interest rates are estimated to range from 1.60% in 2013 to 5.00% in the final maturity of 2033, with the average interest rate being about 4.72%. This is over 100 basis points of savings in interest rate when compared to the 2003 Bonds. The summary of the refunding (Attachment 1) illustrates that the propertyowners in the CFD will save approximately $75,000 per year. If directed to proceed with the refunding, the next steps are: 11/07/2012 - Present the Financing documents to the Board for approval 11/26/2012 - Publish the Public Offering Statement 12/05/2012 - Sell the 2012 Bonds 12/18/2012 - Close the transaction and deposit funds with the Trustee 01/29/2013 - Send the call notices for the 2003 Bonds 03/01/2013 - Call the 2003 Bonds 4. FISCAL IMPACT The summary of the refunding (Attachment 1) illustrates that the property owners in the CFD will save approximately $75,000 per year. With about 180 parcels in the CFD, that is an annual savings of $416 per parcel. Total savings are approximately $1.5 million over the life of the issue, and net present value savings are estimated at $9865000. 5. RECOMMENDATION Direct staff to pursue the proposed refunding of the 2003 Bonds and to present financing documents to the Board for their review and approval at a future Board Meeting. Robert Mescher Michael D. Holley Administrative Services Manager General Manager Attachment 1 TRUCKEE DONNER PUBLIC UTILITY DISTRICT Refunding of CFD 03-1 Special Tax Bonds, Old Greenwood Summary of Refunding 10/3/2012 Refunding Results 0��B Cost of Defeasance @ 3/1/13 for Bonds 12,231,140 (Gross Funded Escrow) Cost of Issuance & Underwriter's Discount t'� 272,992 New Reserve Fund 111869500 Existing Reserve Fund 19265,632 Par Amount of 2012 Bonds 129425,000 Arbitrage Yield 4.72% All-In True Interest Cost 4.96% Final Maturity (September 1st) 2033 AV ....... NIUL � `0 ............. RIB Existing 11019,405 Refunding (2012 Issue) 944,124 Savings 75,281 OT:A L NET n� ��' �129 Existing 20,372,399 Refunding (2012 Issue) 189870,606 Savings 11501,793 Net Present Value Savings 9869759 Net Present Value Savings % 8.39% (1)Includes bond counsel, disclosure cousel, District admin.,printing,trustee, underwriter's discount, appraisal,special tax consultant,verification report,and rounding/miscellaneous,as necessary. (2)Includes the reserve funds,and interest earnings thereon,for both the existing and the 2012 Bonds.