AgdaPkt 2020-10-26 Joint SA PFA - Laserfiche WebLink

Browse Search

6.C. - Page 48 of 57 Additional Cost Analysis for the Town of Atherton's Withdrawal I July 22, 2020 1 pg 3 Our analysis does not include such a deduction, and we note that the JPA Agreement does not contemplate what would be, in effect, a retroactive adjustment of rates. Five Scenarios Scenario 1: this analysis simply updates our prior analysis based on changing market conditions and timing and makes the $581,386 adjustment for "overpayment." Based primarily on this adjustment, NHA concludes the amount owed is $1,677,498 rather than $2,103,016as shown in our calculation done for this memo. NHA notes in this scenario that our analysis uses the "simplest and most straight forward approach." Scenario 2: this analysis assumes that in the future Atherton's share of the members' waste stream will decline; if this proved to be true, and the Town remained in the Authority, indeed their share of debt service would decline. We have no insight into that possibility, but we will note that when the original 2009 bonds were issued, the official statement reported that Atherton's share of the waste stream was 2.6%. In 2019, it was 3.2%. In our opinion, the use of speculative future assumptions is an unusual basis for calculating "in full [Atherton's] proportion of any and all existing debts." Scenario 3: in this scenario, NHA proposes the exclusion of defeasance costs related to the 2019B new money bonds, on the basis that the bond proceeds will be used for future improvements that will not benefit Atherton. For informational purposes, we have broken out the cost of defeasing both individual series of bonds, and calculated Atherton's proportionate cost of defeasing only the 2019A bonds, which refunded the Authority's 2009 bond issue. We have used the same timing and interest rate assumptions updated above and 2019 tonnage as the basis for the allocation of Atherton's "proportionate" share. If Atherton were only liable for the cost of liquidating its share of the 2019A refunding bonds, then its share of cost would be $1,443,090.2 Limiting Atherton's liquidation cost to the 2019A bonds would mean that what would have been their portion of debt service on the 2019B bonds would be allocated among the remaining members. We have prepared the following table to put into perspective the relative 2 Note that the amount NHA calculates would be necessary for defeasing Atherton's share of only the 2019A refunding bonds is $1,566,259, while ours is $1,443,090. We assume this reflects different assumptions as to timing and interest rates. 1300 Clay Street, Suite 1000 I Oakland, CA 94612 I Main 510-839-8200 I Fax 510-208-8282 1451 Quail Street, Suite 200 I Newport Beach, CA 92660 I Main 949-346-4900 I Fax 510-208-8282 5757 W. Century Boulevard, Suite 700 I Los Angeles, CA 90045 I Main 310-348-2901 I Fax 510-208-8282 79 All bonds defeasance Atherton Share (3.24%) 2019A (Refunding $44,511,685 $ 1,443,090 2019B(New Mone 20,355,228 659,926 Total $64,866,913 $2,103,016 Limiting Atherton's liquidation cost to the 2019A bonds would mean that what would have been their portion of debt service on the 2019B bonds would be allocated among the remaining members. We have prepared the following table to put into perspective the relative 2 Note that the amount NHA calculates would be necessary for defeasing Atherton's share of only the 2019A refunding bonds is $1,566,259, while ours is $1,443,090. We assume this reflects different assumptions as to timing and interest rates. 1300 Clay Street, Suite 1000 I Oakland, CA 94612 I Main 510-839-8200 I Fax 510-208-8282 1451 Quail Street, Suite 200 I Newport Beach, CA 92660 I Main 949-346-4900 I Fax 510-208-8282 5757 W. Century Boulevard, Suite 700 I Los Angeles, CA 90045 I Main 310-348-2901 I Fax 510-208-8282 79