Report to Mayor and City Council
Tuesday, September 04, 2018
Discussion
SUBJECT:
Title
CONSIDER POTENTIAL DEBT FINANCING OPTIONS (CITY COUNCIL AND SUCCESSOR AGENCY)
Body
I. SUMMARY
There are two opportunities for the City to issue debt to finance street projects with no impact to the General Fund. Projects totaling up to $30 million could be financed through a combination of two different bond issues.
In addition there is an opportunity to refund the Successor Agency 2007 Bonds, which may result in approximately $7,600 of additional revenue to the City each year (net present value of roughly $114,000).
Staff requests direction from the City Council and the Successor Agency Board regarding the options to issue debt.
II. RECOMMENDATION
Recommendation
PROVIDE direction to staff for potential debt financing.
Body
III. ALTERNATIVES
TAKE another action deemed appropriate by City Council.
IV. BACKGROUND
Measure R and Measure M Revenue Bonds
The City receives local allocations of transportation sales tax collected by Los Angeles County. Annual allocations include approximately $1.1 million from Measure R and $1.3 million from Measure M. Measure R and Measure M revenue is restricted to transportation improvements and maintenance, such as street repaving and upgrades to traffic signals. Measure R and Measure M revenue comprise 58% of the City's annual restricted funding for street improvements as shown below.
As a reminder, the Road Maintenance and Rehabilitation Account (RMRA) allocation secured by 2017 SB 1 is at risk. On November 6, 2018, California's voters will be asked to consider Proposition 6. If the measure passes, the City will lose its annual $1.6 million RMRA allocation; which is 37% of the City's annual restricted funding for street improvements.
Los Angeles County Metropolitan Authority (METRO) allows cities to issue debt secured by Measure R and Measure M revenue. City staff developed a potential list of projects to finance, and obta...
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