HomeMy WebLinkAboutSR - AGR-6183 - DISTRICT ADMINISTRATION BOND REFINANCING DEL RIOAGENDA ITEM
�o .. January 13, 2015
ReviewedNeri ed By:
City Manager
TO: Honorable Mayor and Finance Direc r
Members of the City Council To Be Presente will Ko►bow
THRU• John W . Sibley X Cons Calendar _ City Mgr Rpts
. City Manager Council Reports _ Legal Affairs
Boards /Cmtes _ Public Hrgs
FROM: William M. Kolbow " Admin Reports Plan/Environ
Finance Director
1. SUBJECT
Approval of the financing team and various Consultant Services Agreements for professional and
technical services in connection with refinancing the bonds that were issued to fund the costs of
public improvements within the City's Community Facilities District No. 06 -1 (Del Rio Public
Improvements).
2. SUMMARY
Due to low interest rates, it is recommended the City refinance bonds that were issued in August,
2010, to fund improvements within the project area, which includes Ambriz Park, streets, roads,
water and sewer improvements, and other necessary public infrastructure within the City's
Community Facilities District No. 06 -1 (Del Rio Public Improvements) (the "CFD "). Although
the outstanding bonds are currently subject to a 3% premium on redemption, the current low
interest rate environment will more than offset this premium and result in lower debt service
payments. The debt service payments are currently funded from special taxes paid annually by
the property owners in the CFD. It is estimated that this refunding will save over $400 per
property per year (597 total residential properties). In order to initiate the refunding process, it is
necessary to contract with a number of consultants (the financing team) having professional and
technical expertise related to the refunding of bonds.
1 3. RECOMMENDED ACTIONS
It is recommended that the City Council approve the Consultant Services Agreement with
Fieldman, Rolapp & Associates; Willdan Financial; Quint & Thimmig LLP; US Bank; Richards,
Watson & Gershon; and Stifel, Nicolaus & Company to provide consultant, legal, and
underwriting services.
ITEM 3.D5 1 1/13/2015
4. FISCAL IMPACT
Payment of fees for all of the consultants, including reimbursable expenses, will be contingent
on, and payable solely from the proceeds of the refunding bonds. The only non - contingent cost
will be for the municipal bond rating from Standard & Poor. There will be no impact to the
City's General Fund.
5. STRATEGIC PLAN GOAL(S)
2. Be a fiscally health community.
a. Expend fiscal resources responsibly.
6. GENERAL PLAN IMPLEMENTATION
Not applicable.
7. DISCUSSION and BACKGROUND
In August 2010, the City issued $24,975,000 Special Tax Bonds for the Del Rio Public
Improvements (CFD 06 -1). These bonds were issued to fund improvements within the project
area, which includes Ambriz Park, streets, roads, water and sewer improvements, and other
necessary public infrastructure. The development is 100% built out. Property owners within this
CFD currently pay an annual average special tax for debt service of approximately $2,600 per
parcel, depending on housing square footage. In addition, property owners currently also pay an
annual special tax of approximately $100 per parcel for maintenance.
The refunding can only occur on stated interest payment dates, which are April and October of
each year. Thus our next opportunity to refund these bonds is April 1, 2015. It is necessary to
begin this process now so that all of the documents can be prepared and insurance quotes
obtained along with a credit rating. It is anticipated that these new bonds will be sold on or about
March 1, 2015. The maturity for the new bonds will remain the same as the existing bonds; i.e.,
all bonds will be paid off in 2040. No additional capital funding will be raised.
In order to initiate the refunding process it is necessary to contract with a number of consultants
with special expertise in bond refundings (the financing team). The recommended consultants
below have extensive experience with bond refundings while most were involved in the original
issuance of these bonds in 2010; thus staff is very confident in their abilities. The estimated fee
for each financing team member is shown below.
Financial Advisors:
Bond Counsel:
Disclosure Counsel:
Underwriter's Discount:
District Administrator:
Trustee:
Fieldman Rolapp & Associates - $38,000
Quint & Thimmig LLP- $75,650
Richards, Watson & Gershon - $32,500
Stifel, Nicolaus & Company - $250,000 (estimated)
Willdan Financial — $6,800
US Bank - $6,750 (at bond closing)
ITEM 2 1/13/2015
Fieldman Rolapp & Associates and the law firm of Quint & Thimmig LLP provided financial
advice and bond counsel services, respectively, to the City when the CFD was formed and bonds
issued in 2010. Proposals for similar services for the refunding of the bonds were not sought-
from other persons or firms offering such services because it will be more cost efficient to retain
these same firms rather than to acquaint new firms with the history of the transactions. In the
case of Quint & Thimmig LLP, the principal attorney has been called upon from time to time
since the issuance of the bonds, and as a part of his ongoing responsibilities under the original
contract, to assist staff with the review of certain requests. The firm of Richards, Watson, &
Gershon was selected based on past work experience with the City on other bond deals, such as
the recent issuance of the 2014 Successor Agency Tax Allocation Refunding Bonds.
Willdan Financial is currently our administrator on the Del Rio CFD. As the administrator
Willdan calculates the annual special taxes and insures that all special taxes are placed on the tax
roll timely and accurately. During the refunding process Willdan will be called upon to provide
additional historical information such as value to lien ratio reports, total assessed valuation
reports, and to aid in calculating the new tax rates.
US Bank is currently the Trustee on the existing Del Rio CFD Bonds. It is recommended that the
City continue to use the services of US Bank for continuity and their rates are very competitive.
The current schedule anticipates that the City Council will consider the financial documents at its
February 10, 2015 council meeting.
8. ATTACHMENTS
Professional Services Agreement with Fieldman Rolapp & Associates;
Attorney Services Agreement with Quint & Thimmig LLP;
Attorney Services Agreement with Richards, Watson & Gershon;
Professional Services Agreement with Willdan Financial;
Underwriter Services with Stifel, Nicolaus & Company; and
Trustee Services Agreement with US Bank.
ITEM 3 1/13/2015