AgdaPkt 2015-04-13 Closed and Joint SA and PFA REVISED 04_10_2015

Browse Search

8.B. - Page 1 REPORT To the Honorable Mayor and City Council From the City Manager April 13, 2015 SUBJECT Sale of refunding bonds by the Port of the City of Redwood City RECOMMENDATION Approve, by resolution, the issuance of Port of Redwood City Revenue Bonds in an amount not to exceed $8.1 million to refinance the Port of Redwood City's 1999 Bonds pursuant to the City Charter. BACKGROUND In 1999, the Port issued Bonds to remediate hazardous waste left in chemical storage tanks on Port property by a prior tenant. These bonds are now subject to optional redemption on any date and are currently outstanding in the amount of $7,755,000. The Port also has a 20-year loan with GE Capital issued in June 2012 in the original principal amount of $10,000,000, of which $9,068,739 remains outstanding. This loan is not yet subject to optional redemption. Additionally, the Port had a loan outstanding with the California Department of Boating and Waterways (DBW) that bore interest at 4.5% in the amount of $389,944. The loan was fully amortizable and had a final maturity date of August 1 , 2023. While the GE loan cannot be effectively refunded at this time, the Port Board of Commissioners approved by resolution on March 25, 2015 to pay off the DBW loan to realize savings in interest expenses and more importantly, to facilitate the refunding of 1999 Bonds. The Port has retained the same team of professionals to implement its refunding that the City has retained to implement the refunding of its 2006 Water Revenue Bonds. William Euphrat Municipal Finance, Inc. serves as the Port's Municipal Advisor, Jones Hall serves as bond counsel, and Quint & Thimmig serves as Disclosure Counsel. In addition, the Port has retained the securities firm Raymond James to underwrite its bonds. The Port Board of Commissioners approved the sale of refunding bonds, along with all related bond documents, on April 8, 2015. The Port of Redwood City is a department of the City but operates as an enterprise in which the cost of operating the Port on a continuing basis is financed solely from the fees, charges, rents, tariffs and other revenues generated from the operation of the Port. The Port has pledged its net revenues (gross revenues of the Port less maintenance and operating expenses) to repay its bonds. While the Port may issue bonds, pursuant to the City's charter, the City Council must first approve any such issuance of bonds by majority vote of the City Council members.