Report to Successor Agency
Tuesday, November 21, 2017
Discussion
SUBJECT:
Title
CONSIDER POTENTIAL REFUNDING OF SUCCESSOR AGENCY TAX ALLOCATION BONDS 2006 PROJECT AREA NO. 4 (SUCCESSOR AGENCY)
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I. SUMMARY
Outstanding debt of the Successor Agency includes tax allocation bonds issued in 2006 for Project Area Number 4. Current market conditions are favorable; and a bond refunding would likely reduce future debt service, resulting in additional property tax money available to distribute to the taxing entities.
Staff is asking the Successor Agency Board whether to proceed with a refunding proposal. If direction is given to proceed, legal documents will be drafted and the item would come back to the Board in January.
II. RECOMMENDATION
Recommendation
PROVIDE DIRECTION to staff.
1. Should the Successor Agency undertake the bond refunding?
2. Should staff prepare a Request for Proposals from underwriters, or shall the Successor Agency Board select the underwriter(s) from those listed in this report?
3. If the Successor Agency Board does not wish to consider a bond refunding at this time, what dollar threshold of potential savings should staff use to propose a bond refunding in the future?
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III. ALTERNATIVES
TAKE another action deemed appropriate by the Successor Agency Board.
IV. BACKGROUND
In 2006, the former Carson Redevelopment Agency issued $28 million of Tax Allocation Bonds to fund redevelopment activities within Project Area No. 4 (1,034 acres located in 11 separate noncontiguous subareas); including street infrastructure, landscape median improvements, and drainage improvements.
The current outstanding principal balance of the bonds is $22,740,000, with an average coupon rate of 4.38% and total remaining interest payments of $14,423,585.
Based upon a refinancing analysis provided by Piper Jaffray, the Successor Agency's financial advisor C. M. de Crinis & Co. has confirmed that a bond refunding in the current market could save interest...
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