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6.3.C. - Page 1 <br /> RE PO RT <br /> To the Public Financing Authority Board <br /> From the Cit Mana er <br /> March 25, 2013 <br /> SUBJECT <br /> Selection of financing team by the Public Financing Authority to refund the outstanding <br /> City of Redwood City Public Financing Authority Water Revenue Bonds, Series 2005A <br /> (2005 Bonds) and Series 2006A (2006 Bonds, collectively the Water Revenue Bonds), <br /> and to refund the City of Redwood City Public Financing Authority Lease Revenue <br /> Bonds, Series 2003 (2003 Bonds) <br /> RECOMMENDATION <br /> Approve, by resolution, appointment of the consultants in connection with the refunding <br /> of the Public Financing Authority Water Revenue Bonds, Series 2005A and Series <br /> 2006A, and Public Financing Authority Lease Revenue Bonds, Series 2003. <br /> BACKGROUND <br /> In 2005 the City and Public Financing Authority sold the first of three Water Revenue <br /> bond issues to fund the construction of a recycled water project that provides tertiary <br /> treated non-potable, recycled waste water to customers of the City's water enterprise for <br /> landscape irrigation and industrial uses. Three series of bonds were sold to coincide <br /> with construction needs and the water enterprise's ability to service increasing amounts <br /> of debt. <br /> The 2003 Bonds were sold in the amount of $11,475,000; of which $5,130,000 remain <br /> outstanding. These were issued to refund the outstanding 1998 Lease Refunding <br /> bonds that were initially issued to finance the acquisition and construction of certain <br /> general city infrastructure improvements. <br /> ANALYSIS <br /> The Water Revenue Bonds — The 2005 Bonds, sold in the amount of $35,790,000, are <br /> currently outstanding in the amount of $29,305,000. The City's financial advisor, William <br /> Euphrat Municipal Finance, Inc., estimates that at current market rates, these bonds <br /> could be refunded to produce net present value (NPV) savings of approximately <br /> $2,771,000, or approximately 9% of the amount of refunding bonds to be sold. This <br /> exceeds the Government Finance Officers Association "Best Practices" recommended <br /> minimum NPV savings of 3%. Average annual debt service savings, in future dollars, <br /> would be approximately $165,000. <br /> The 2006 Bonds were sold in the amount of $26,000,000 and are currently outstanding <br /> in the amount of $22,005,000. The City's financial advisor estimates that these bonds <br /> could be refunded to produce NPV savings of approximately $1,024,000, or <br />