The URL can be used to link to this page

Home My WebLink AboutAgenda Bill 05/07/2001 (18) RAY 072001 6 CITYOFJPETALUMA, CALIFORNIA. AGENDA, BILL �genda Title RESOLUTION"OF'THE CITY COUNCIL OF THE Meeting Date: CITY OF PETALUMAAPPROVING THE ISSUANCE,'OF TAX May 7, 2001 ALLOCATION REFUNDING BONDS RELATING TO REFUNDING OF BONDS ISSUED FOR THE PETALUMA COMMUNITY-DEVELOPMENT PROJECT Department: Director Contact.Person• , Phone.Number City'Manager's Office Fred Stouder William J.Thou 778;4323 Cost of Proposal: None to City of Petaluma Amount Budgeted: NA ($115,000 to PCDC) Account Number: NA Attachments to AgendaJPackettItem: Resolution Approving the .Issuance by the Petaluma Community Development Commission of 2001A Tax Allocation Refunding Bonds: Summary Statement: As a result of the recent decline in interest rates, the firm,of Kelling, Northcross & Nobriga, is recommending that the 1992A Tax Allocation Bonds be refinanced at an approximate interest rate of 4.93% (All In True Interest Cost`). The,estimated net savings is.$297,000. The Petaluma Community Development Commission (PCDC) intends to refinance the 1992A • Tax Allocation Bonds in an amount not to exceed $5.0 million. California Health and Safety Code, Section 33640 provides the authorization for such financing. Under the code, the City Council is required to authorize;the issuance of bondslby the PCDC. • Therefore, the purpose of this item is for the City .Council to adopt the attached resolution, approving the issuance of the-Series 2001A Tax Allocation Bonds by the PCDC. Council Priority: THIS AGENDA ITEM IS CONSIDERED To BEPART OF, OR NECESSARY To, ONE OR MORE OF THE 2000-2001 PRIORITIES'ESTABLISHED BY THE";CITY COUNCIL ON MARCH 18, 2000. Priority(s): Complete Redevelopment Agency Review: Issue Bond'Activity.& Maximize Income Recommended City Council Action/Suggested Motion: It is recommended that the City,Council adopt.the attached resolution,approving the issuance of Series 2001A Tax Allocation Bonds by the Petaluma , 'uunity.Develo.ment Commission: Reviewed by Finance Director Revie ed' 'v .rnev Approved by City Manager: I/0a jet,ate ®►y ate Date:rot Today's Date: Revision # and DateRevised , ile ode: CITY OF'PETALUMA, CALIFORNIA • MAY 7,-2001 AGENDA REPORT FOR RESOLUTION OF THE CITY.COUNCIL OF THE CITY OF PETALUMA APPROVING THE ISSUANCEWOF'TAX ALLOCATION REFUNDING BONDS RELATING TO REFUNDING OF ISSUED FOR THE PETALUMA COMMUNITY DEVELOPMENT'PROJECT 1. EXECUTIVE SUMMARY: In 1992, the Petaluma Community Development Commission (PCDC) issued$5,000,000 in Tax Allocation Bonds (TABs) to finance certain improvement within.the Petaluma Community Development Project.Area and to refinance the Commission's 1988 Notes. The coupon interest rates on the 1992A TABs range from 5.9% to 6.5% with a final maturity on May 1, 2014. As a result of the recent decline in interest Tates, the firm of Kelling, Northcross & Nobriga, is recommending that the 1992A TABs be refinanced at an approximate interest • rate of 4.93% (All In True Interest Cost). The estimated net present value savings is $297,000 after takinginto consideration all.costsof issuance. The PCDC intends to refinance the 1992A Tax Allocation Bonds in an amount not to exceed $5.0 million. California Health and Safety Code, Section 33640 provides the authorization for such financing: The City Council is required to authorize the issuance of bonds by the PCDC. Therefore, the purpose of this item is tO request that the City Council adopt the attached resolution, approving the issuance of the Series 2001A Tax Allocation Refunding Bonds by the PCDC. 2. BACKGROUND: The PCDC's financial advisor, the firm of Kelling, Northcross & Nobriga, has examined the feasibility of refinancing the 1992A TABs. Anianalysis revealed that refinancing the 1992A TABs;would result in a net savings in the amount of$297,000. The interest rate would drop from 5.9%-6:5% to 4.93%: Cash;flow savings to the PCDC would be in excess of$25,000 per year. 3. ALTERNATIVES: No Refinancing: Under this alternative, the PCDC would retain the 1992A TABs at a high interest rate of 5:9%0-6.5%0, foregoing a net present value savings of approximately $297,000 over the life of the TABs and annual debt service would be an estimated $25,000 higher per year than if the bonds are refunded. This alternative does not maximize the PCDC's resources and would be inconsistent with previous Commission direction. 4. FINANCIAL IMPACTS: The proposed refinancing,of the 1992A TABs would result-in a:net present value savings of approximately$297,000. This is afterd$115,000 in expenses associated with the cost of issuance has beewpaid. These expenses willbepaid from the proceeds a bonds. According to the agency's Bond Counsel, the issuance of$5.0 million in Series 2001A Tax Allocation Bonds by the PCDChas no financial or legal impact on the City of Petaluma, CA, whiefi is;a Separate and distinct legal entity. 5. CONCLUSION: The PCDC's financial advisors have concluded that it is cost-effective to refinance the 1992A TABs, estimating that a net present value savings of$297,000 will occur from the proposed action. The proposed action is consistent with the City Council's March 18th. 21000 sedonctprioritY: Complete Redevelopment Agency Review: r.Issud BOnd Activity -- Maximize Income -- Expenditure Priority 6. REccimmENUATION: It is recommended that the City Council adopt the attached reSolutiowapproVinglhe issuance of"2001A Tax Allocation Bonds by the Petaluma Community Development Commission. 1111 • Resolution No. 2001-091 N.CS. of the City of_,Petaluma, California. • APPROVING°THE.'ISSUANCE}BY THE PETALUMA COMMUNITY DEVELOPMENT COMMISSION OF NOT TO EXCEED$5,000,000'IN REFUNDING TAX ALLOCATION BONDS FOR THE PUREOSE,OF FINANCING AND REFINANCING OF CERTAIN PUBLIC:IMPROVEMENTS' WHEREAS, the Petaluma'Community Development Commission'(the Commission) is authorized pursuant to Part 1 of Division 24 (commencing withSection 33000) of the California Health and Safety Code (the Act) to issue bonds forany of its corporate purposes: and WHEREAS, in_order!to refinance the Commission's;Petaluma{Community Development Project Tax Allocation Bonds, Series'1992A (the Prior Bonds);°the Commission has indicated its intention to issue not to exceed $5,000,000'aggregate principal amount;of Petaluma Community Development Project Refunding Tax Allocation Bonds, Series 2001A(the'Bonds); and WHEREAS, pursuant to the Act, the City Council also must authorize the issuance of the • Bonds by the Commission: NOW, THEREFORE BE IT RESOLVED,DETERMINED AND ORDERED BY THE CITY COUNCIL OF THE CITY OF PETALUMA AS FOLLOWS: SECTION 1. Approval of Financing. This City Council hereby approves the refinancing of the Prior Bonds and other purposes related thereto,by means of the issuance of not to exceed $5,000,000 aggregate principal amount of the Bonds, pursuant to the provisions and subject to the requirements of the Act. This approval is'intended to satisfy/the requirements of Health and Safety Code Section 33640. SECTION 2. Effective Date. This Resolution shall'take;effect immediately upon adoption. Under the power and-authority conferred,upon this Council by the Charter of said City: REFERENCE: I hereby certify the foregoing Resolution was introduced and adopted by the Council of the City of Petaluma at a Regular meeting on, May 7,2001, Approved as to by the following vote: form: City Attorney AYES: O' Br-ien, Healy , Torl`iat.t , Maguire . .Moy:nhan, Vice Mayor Cader-Thompson Mayor- Thompson NOES: None • ABSENT: None 'ATTEST: City Clerk Mayor Resolution No. .2001-09ds'