SA-3 - RESO - REFUNDING BONDS - Laserfiche WebLink

Home Browse Search

Resolution Approving the Preliminary Official Statement Tax Allocation Refunding Bonds, Series 2018A and 2018B October 2, 2018 Page 3 bond issue (the "2018 Bonds"), with a 2018A series issued as tax exempt bonds and a 2018B series issued as federally taxable bonds, is expected to generate a total debt service Savings (Savings) of approximately $17.3 million (subject to change per market conditions and selection of savings option), without extending the current final maturity dates of the bonds. In order to maximize the savings amount, the Successor Agency will contribute the existing cash funded reserve account (approximately $6.7 million) and unspent proceeds (approximately $5.8 million) from the 2011A Bonds, to the refunding escrow for the 2018 Bonds. The final Savings amount will depend on the market interest rates in effect at the time the 2018 Bonds are priced, which is anticipated to be during the third week of October 2018. Based on the current redevelopment dissolution laws, the estimated savings amount (approx. $17.3 million for the remaining life of the bond) would be allocated towards enforceable obligations, or shared among taxing entities (including: the City of Santa Ana , the Santa Ana Unified School District, the County of Orange, Rancho Santiago Community College District and other countywide Special Districts) as residual revenues. The City of Santa Ana's share of the Savings is anticipated to be approximately $3.5 million. The Savings to be receipted via increase Residual Revenues is based on the selection of the upfront option which allocates the majority of the Savings towards the City within the first three to four fiscal years (FY 2018-19 through FY 2021- 22). The upfront option was selected largely as a result of receiving the funds to address deferred capital maintenance along with other operational needs. FUTURE ACTIONS Based on the timing of the DOF review period, it is anticipated that the Successor Agency will be pricing the 2018 Bonds on October 17, 2018, with bond closing scheduled for October 31, 2018. Upon closing of the bonds, the 2003A & B bonds will be redeemed. The net bond proceeds necessary to redeem the outstanding 2011A Bonds will be placed into an escrow account with the Escrow Agent, to be used to pay remaining principal and interest payments on the 2011A Bonds through the first call date of March 1, 2021, at which time the remaining escrow balance will be used to redeem all outstanding 2011A Bonds. Upon bond closing, the 2011A Bonds will be defeased and no longer an obligation of the Successor Agency payable from tax revenues. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's effort to meet Goal #4 - City Financial Stability, Objective #2 - (Provide a reliable five-year financial forecast that ensures financial stability in accordance with the strategic plan), Strategy D (Conduct an assessment of the City's debt and refinancing options to achieve savings). FISCAL IMPACT All costs associated with this transaction will be paid at closing with proceeds from the refunding 2018 Bonds. The proposed 2018 Bonds will generate an estimated total debt service savings of $17.3 million (over the term of the Bonds) net of all costs related to the issuance of the debt for all SA -3-3