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9 - 1 3� <br />refunding of the 1991 bonds will generate approximately $455,000 of net present value <br />savings, or nearly seven percent of the refunding bonds sold, to the general fund. <br />A schedule comparing the existing debt service payments for the proposed bond issue <br />can be found in Attachment Ill. <br />Bond Documents <br />A description of the bond documents can be found in Attachment IV. The indenture t)f <br />trust, the subordinate site lease, the subordinate lease agreement, the continuing <br />disclosure certificate, and the bond purchase contract are available in the City Clerk's <br />Department for your review. The preliminary official statement is included in this <br />package for your review (Attachment V). <br />Next Steps <br />Staff expects to sell bonds in November. Depending on revised lease payment debt <br />service, a lease payment budget amendment for FY 2003/04 may be necessary. This <br />will be presented to the Council later in the year with other budget adjustments. <br />Fiscal Impact <br />Negligible lease payment debt service reductions payable from utility users' tax <br />revenues are anticipated through FY 2011/12. Lower debt service payments with <br />respect to the 1991 refunded bonds will be programmed from FY 2003/04 through FY <br />2011/12 and new debt service payments with respect to the refunded 1991 bonds will <br />be programmed from FY 2012/13 through FY 2018/19, where none are presently <br />programmed. The revised debt service structure is expected to generate approximately <br />$455,000 of net present value savings. <br />The new money portion of the 2003 bonds attributable to the Agency loan will be paid <br />from utility users' tax revenues, and reimbursed by the Agency with tax increment. If <br />reimbursed on a current basis from tax increment, then the loan will be revenue - neutral <br />to the general fund. At two percent assessed valuation growth, staff expects that a <br />portion of the loan will have to be deferred. However, once redevelopment activities <br />cease in FY 2027/28 and all tax increment is devoted to debt service, the loan should <br />be fully repaid, with interest on deferred amounts, by FY 2028/29. Even with this <br />deferral, the loan will be revenue - neutral on a net present value basis because the <br />Agency will pay interest on amounts deferred. If all of the debt service on the loan is <br />deferred (at the City Council's election) until FY 2027/28, the Agency is expected to be <br />able to fully reimburse the City, with interest on deferred amounts, by FY 2031/32. <br />Debt service on the 2003 bonds not reimbursed on a current basis by the Agency with <br />tax increment will be paid by utility users' tax revenue. If the agency is unable to <br />reimburse the general fund debt service, then this would reduce the CIP pay -as- you -go <br />budget by up to approximately $150,000 annually through FY 2011/12 and $500,000 <br />annually through FY 2018/19. These amounts would be reimbursed, with interest, <br />starting in FY 2028/29. <br />The net interest cost on the funds to support the PAL loan guarantee portion of the 2003 <br />bonds will be approximately $50,000 for the first year. If no proceeds are advanced to <br />the PAL, bonds may be called and the debt service obligation eliminated. <br />n <br />