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Home My WebLink About6/20/2001 - STAFF REPORTS (2) DATE: June 20, 2001 TO: Financing Authority/Redevelopment Agency/City Council FROM: Director of Finance & Treasurer RE: Refinancing of 1991 Housing Tax Allocation Bonds RECOMMENDATION: It is recommended that the Palm Springs Financing Authority approve the refinancing of the 1991 Housing Tax Allocation Bonds. SUMMARY: This action would call the existing bonds at their first optional call date of August 1, 2001, using the proceeds from the refinancing. The average interest rate would decline from 6.86% to 5.35%, for an annual average savings of about $40,000. The original term, August 1, 2021, remains the same. BACKGROUND: The Housing Fund bonds were part of the $14,030,000 1991 Tax Allocation bond issue. The Redevelopment loans were refinanced in 1994, leaving the Housing loan outstanding. Most of the proceeds of the original issue were used for land acquisition. Because of favorable interest rates, it is possible to refinance the existing $5,655,000 balance and save approximately$795,000 over the remaining term of the issue. The present value of the savings is about $432,000. The attached resolution and the companion resolutions for the Community Redevelopment Agency and City Council would authorize an issuance not to exceed $6,000.000. The Financial Advisor's estimate of the necessary size of the issue is $5,810,000. Excerpts from the Financial Advisors May 23`d Study Session presentation are attached. The complete set of bond documents prepared by the City Attorney is on file with the City Clerk. Submitted by: Approved: 25�'"`�� Thomas M. Kanarr David H. Ready / Director of Finance& Treasurer City Manager/Exeaf3tfve Director ATTACHMENTS: May 23, 2001 Study Session report excerpts Resolutions MAY.22.2001 3:14PM HARRELL & CO. NO.502 P.5i15 CITX OIL PALM SPRINGS HOUSING TAX ALLOCATION BONDS REFINANCING D $14,030,000 Bonds Issued in 1991 to make 5 Redevelopment Loans and 1 Housing Loan. D Redevelopment Loans were refinanced in 1994,leaving the Housing Loan Outstanding, ➢ Housing Loan is secured by the 201/6 set-aside from the Redevelopment Projects. Outstanding Housing Loan balance$5,655,000,Average Interest Rate 6,869/6 D Pas Amount of Refunding Bonds$5,810,000,Average Interest Rate 5.35% Annual Cashflow Savings of$30,000-35,000 annually. A Cashflow Savings of$795,000;PV Savings of$432,000 or.7.61/o. D City Charges an Administration Fee of$15,000, The Bonds mature in 2021,no extension of the existing term of the 1991 Housing Loan. ➢ Next Optional Call Date occurs on August 1,2001, Trustee must receive notice by July 1, 2001 if bonds are to be called on August 1,2001. Next call date is February 1,2002. Bond Year 1991 Loan Refunding Cashflow Ending, Debt Service Debt Service Savings 8/1/2002 $ 507,961 $ 479,369 $ 28,592 8/1/2003 514,381 477,850 36,531 8/1/2004 509,s11 479,895 29,916 8/1/2005 509,911 476,510 33,401 8/1/2006 514,031 477,710 36,321 8/1/2007 512,131 479,260 53,871 8/1/2008 514,561 478,140 36,411 8/1/2009 515,931 477,530 38,621 8/1/2010 516,331 479,370 36,961 8/1/2011 515,691 480,600 35,091 8/1/2012 514,031 476,020 38,011 8/1/2013 516,156 480,900 35,256 8/1/2014 521,906 479,700 42,206 8/1/2015 520,938 477,690 43,248 8/1/2016 518,594 479,870 38,724 8/1/2017 524,875 480,970 45,905 9/1/2018 629,094 4S0,990 48,104 8/1/2019 531,250 479,930 51,320 8/1/20R0 531,344 477,790 53,554 8/1/2021 53075 479,570 54,805 $ 10,373,318 $ 9,578,464 $ 794,851 Page 3 FA a,��. MAY.22.2001 3:14PN HARRELL & CO. NO.502 P.6i15 SOURCES AND USES OF FUNDS Redevelopment Agency of the City of Palm Springs 2001 Housing Tax Allocation Bonds Dated Date 07/26/2001 Delivery Date 07/26/2001 Sources; Bond Proceeds: Par Amount 5,810,000.00 Other Sources of Funds: August I Loan Payment 318,000.00 1991 Housing Resere 534,375.00 852,375.00 6,662,373.00 Uses; Refunding Escrow Deposits: Cash Deposit 5,958,643.13 Other Fund Deposits: Reserve Fund 480,990.00 Delivery Date Expenses; Cost of Issuance 116,200.00 Underwriter's Discount 87,150.00 203,350.00 Other Uses of Funds; City Admin Charge 15,000.00 Additional Proceeds 4,391,97 19,391.87 6,662,375.00 May 22,2001 1;06 pm Prepared by Harrell&Company Advisors,LLC FA Ah 3 MAY.22.2001 3:15PM HARRELL & CO. NO.502 P.7i15 BOND DEBT SERVICE Redevelopment Agency of the City of Palm Springs 2001 Housing Tax Allocation Bonds Dated pate 07/26/2001 Delivery Date 07/26/2001 Period Ending Principal Coupon Interest Debt Service 08/01/2001 00//2002 175,000 4.200% 304,369.44 479,369.44 09/01/2003 1851000 4.300% 292,850.00 477,850.00 08/01/2004 195,000 4.300% 284,895.00 479,895.00 08/01/2005 200,000 4.400% 276,510.00 476,510.00 08/01/2006 210,000 4.500% 267,710.00 477,710.00 09/01/2007 22000 4,600% 258,260.00 478,260.00 08/01/2008 230,000 4,700% 248,140.00 478,140,00 08/01/2009 240,000 5.400% 237,330.00 477,330.00 08/01/2010 255,000 5,400% 224,370.00 479,370.00 08/01/201I 270,000 5.400% 210,600.00 480,600,00 06(01/2012 280,000 5.400% 196,020,00 476,020.00 08/01/2013 300,000 5.400% 180,900,00 480,900,00 08/01/2014 315,000 5,400% 164,700,00 479,700.00 08/01/2015 330,000 5.400% 147,690,00 477,690,00 03/0112016 350,000 5.400% 129,870,00 479,970,00 09/0112017 370,000 5,400% 110,970.00 480,970.00 08/01/2018 390,000 5.400% 90,990.00 480,990.00 08/01/2019 410,000 5.40001a 69,930,00 479,930.00 08/01/2020 430,000 5.400% 47,790.00 477,790.00 08/01/2021 455,000 5,400% 24,570,00 479,570,00 51810,000 3,768,464.44 9,578,464.44 May 22,2001 1:06 pm Prepared by Harrell&Company Advisors,LLC RESOLUTION NO. 23 RESOLUTION OF THE CITY OF PALM SPRINGS FINANCING AUTHORITY AUTHORIZING THE REFINANCING OF CERTAIN OBLIGATIONS OF THE AUTHORITY, AND TAKING CERTAIN OTHER ACTIONS IN CONNECTION WITH THE ISSUANCE OF THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS 2001 HOUSING TAX ALLOCATION BONDS WHEREAS, the Community Redevelopment Agency of the City of Palm Springs (the "Agency") is a redevelopment agency, a public body, corporate and politic duly created, established and authorized to transact business and exercise its powers, all under and pursuant to the Community Redevelopment Law, being Part 1 of Division 24 (commencing with Section 33000) of the Health and Safety Code of the State of California (the "Law") and the powers of such agency include the power to incur indebtedness for the purpose of financing and refinancing redevelopment activities within and of benefit to its redevelopment project areas and to issue bonds for any of its corporate powers; and WHEREAS, the City of Palm Springs Financing Authority (the "Authority") is a Joint Powers Authority (a public body, corporate and politic) duly created, established and authorized to transact business and exercise its powers, all under and pursuant to the Joint Powers Law (Articles 1 through 4 of Chapter 5, Division 7, Title 1 of the California Government Code); and WHEREAS, $14,030,000 aggregate principal amount of the Authority's Revenue (Tax Allocation) Bonds, 1991 Series B (Agency Loans) (the "1991 Bonds") were sold and delivered on September 5, 1991; and WHEREAS, the Authority loaned the proceeds of the 1991 Bonds to the Agency for deposit in the Low and Moderate Income Housing Fund (the "Housing Loan") and for deposit in the Redevelopment Fund (the "Project Loans" and together with the Housing Loan, collectively, the "1991 Loan") under and pursuant to a loan agreement, dated as of September 1, 1991 (the 1991 Loan Agreement"); and WHEREAS, a portion of the 1991 Bonds relating to the Project Loans were previously refunded and the Agency now finds it desirable to issue its 2001 Housing Tax Allocation Bonds (the "2001 Bonds") for the purpose, among others, of prepaying the Housing Loan under the 1991 Loan Agreement; and WHEREAS, the prepayment under the 1991 Loan Agreement will result in the refunding of the outstanding 1991 Bonds; and WHEREAS, the Authority finds and determines that it is within the authority of the Agency and is a public purpose that the Agency approve the delivery and sale of the 2001 Bonds #CA h A Resolution No. _ Page 2 for said purposes and that there are significant public benefits arising from the taking of such action; and WHEREAS, in connection with the marketing of the 2001 Bonds, it is now necessary and desirable to approve the form of the Escrow Deposit Agreement, and take certain other action with regard to the marketing of the 2001 Bonds. NOW, THEREFORE, BE IT RESOLVED, by the City of Palm Springs Financing Authority, as follows: SECTION 1. The above recitals are true and correct. SECTION 2. Pursuant to the Act, the Authority hereby approves the issuance by the Agency of the 2001 Bonds for the purpose of prepaying the remaining 1991 Loan which will result in the refunding of the outstanding 1991 Bonds. SECTION 3. That the form of Escrow Deposit and Trust Agreement, dated as of July 1, 2001, by and between BNY Western Trust Company, as Escrow Bank, the Agency and the Authority, a copy of which is on file with the Secretary of the Agency, be and is hereby approved in substantially the form thereof, or with such changes as may be approved by the Chairperson or Vice Chairperson or Executive Director or Treasurer of the Authority, said Chairperson's or Vice Chairperson's or Executive Director's or Treasurer's execution thereof to constitute conclusive evidence of said officer's approval of all such changes, and the Chairperson or Vice Chairperson or Executive Director or Treasurer of the Authority be and is hereby authorized, together or alone, to execute and deliver said Agreement. SECTION 4. That the Chairperson, Vice Chairperson, Secretary, Treasurer and Executive Director and other authorized officers of the Authority be and are hereby each authorized to execute and deliver such certificates, requests, statements, agreements and other documents and to take such other action as may be necessary to consummate the transactions contemplated by the aforesaid Agreement. SECTION 5. This resolution shall take effect and be enforceable immediately upon its adoption. IRV#12259 vI _2_ rh :2 X 2 Resolution No. _ Page 3 ADOPTED THIS _day of June 2001. AYES: Members NOES: Members ABSENT: Members ATTEST: CITY OF PALM SPRINGS FINANCING AUTHORITY By: Secretary Chairperson REVIEWED & APPROVED IRV 412259 vI FAQ � /33