RDA Min 1997-01-06 - Laserfiche WebLink

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3. GENERAL A. Public Financing Authority 1991 Local Agency Revenue Bonds, Series B. Approval of Resolutions will authorize the Redevelopment Agency Treasurer/City Director of Finance to execute agreements refinancing the subject bonds to realize savings of approximately $50,000 on the armual cost to service the debt, without extending the final maturity date. (404) REPORT: Director of Finance and Financial Plarming Ponty and Redevelopment Agency Executive Director Church, January 6,1997. Director Ponty presented the staff report recommending Council approval of Series B Revenue Bonds refinancing if certain conditions are met. Director Ponty said the subject bonds were issued to fund various projects of the Redevelopment Agency and consolidate previous debt incurred by the Agency. He said the underlying financial principles of the proposed transaction are similar to those when refinancing a private residence; essentially, to take advantage of current, lower interest rates. Director Ponty said when the bonds were issued the average rate was 7.17%. "If we proceed with this financing now, the average interest rate would be about 5.1 %. This proposal does not increase the Redevelopment Agency's debt, nor does it extend the term of the bonds. We are not borrowing money for additional projects. This is strictly a refinancing to save money. If favorable market conditions are achieved, this proposal will save the Agency around $50,000 a year in armual debt service expenditures." Director Ponty said "We are recommending that the Executive Director of the Agency be authorized to execute the necessary agreements only if financial market conditions improve that will enable the Agency to reach the target level of savings. Although another bond issue is not plarmed at this time, this refunding does set forth some guidelines for future bond issues. Specifically, it sets forth the requirement that for every dollar of debt that the Agency would incur of armual debt service, that there be a dollar and a quarter of tax increment revenue to support that." Director Ponty reviewed the documents included in the proposal and the Council packet: I) an Escrow Agreement, 2) an Indenture of Trust and Official Statement, 3) a Continuing Disclosure Certificate, and 4) a Purchase Contract. Director Ponty described the changes to the Official Statement which is a "profile of the Agency and a description of the proposed bond issue. This will be relied upon by the investment community in determining whether or not to purchase these bonds..... The Agency Attorney has identified several changes to be made to this document prior to being released to the investment community. The underwriter has assured us that these changes will be made." SPECIAL REDEVELOPMENT AGENCY MEETING MINUTE BOOK NO.1 JANUARY6,1997 MINUTES PAGE 2 Page No. 382