2020-08-19 City Council Item No. 12.1 Total Road Improvement Program Debt Refinancing Presentation Regular MEETING - Additional Meeting Materials12.1 REFINANCING OF THE CALIFORNIA COMMUNITIES
TRANSPORTATION REVENUE (INSTALLMENT SALE)
CERTIFICATES OF PARTICIPATION, SERIES 2012A (T.R.I.P. –
TOTAL ROAD IMPROVEMENT PROGRAM)
WENDY PREECE
DEPUTY FINANCE DIRECTOR
AUGUST 19, 2020
Discussion
•In May of 2012 the City of Menifee participated in the Total Road Improvement
Program (T.R.I.P.)established by the California Statewide CommunitiesDevelopmentAuthority(CSCDA)to finance street and roadway improvements
•2012A Certificates were executed and delivered in the amount of $20 million on
behalf of the City of Menifee
•The proceeds were used to fund the Newport Road Interchange Widening which
was completed in FY 16/17 and the Scott Road Interchange Widening which willbecompletedinthiscurrentfiscalyear
•The original financing is at 5.25%and the payments were due from December2012throughJune2042withinstallmentsalespaymentsforprincipaland
interest totaling $39,103,261 over the life of the agreement
•The current outstanding principal balance is $17,025,000 with remaining
payments of $28,677,725,including interest,through June 2042
Discussion (cont.)
•With this refinancing, the interest rate will be lowered, taking advantage
of record low rates, giving the City an estimated annual savings of about $199,866 and total savings of $4,322,277 over the debt service term
•The following is a summary of the refinancing analysis:
2012 Bonds Summary
Par Amount $ 17,025,000
Avg. Coupon 5.1%
Call Date 6/1/2022
2020 Refunding Analysis Summary
Par Amount $ 17,920,000
Avg. Borrowing Yield 3.14%
Escrow Yield 0.11%
NPV Savings ($)11.02%
NPV Savings (%)$ 1,876,021
Avg. Annual Savings $ 199,866
Total Savings $ 4,332,277
Discussion (cont.)
•This item was reviewed and supported by the Finance Committee at its
meeting held on July 23, 2020
•The 2020 Refunding Certificate installment payments are secured by and
will be paid from Measure A and Gas Tax revenues, as were the original 2012A payments. Currently the City is using only Measure A Revenues and
plans to continue that through 2039. The Measure A .5% on sales tax
revenue is currently only approved by voters through 2039. From 2040
through 2042 the City plans on using Gas Tax Revenues to satisfy the debt
payments.
•The General Fund will not be responsible for making payments on the
2020 Refunding Certificates
Recommended Action
•Fiscal Impact
•If,and when the 2020 Refunding Certificates price and if City Councilapprovestheresolutiontoproceed,the City is estimated to save roughly
$199,000 of the aforementioned pledged revenues (Measure A and Gas TaxRevenues)annually through 2042,based on current market conditions.
•Recommended Action
•Approve a Resolution approving the execution and delivery of CaliforniaStatewideCommunitiesDevelopmentAuthorityTransportationRevenue
(Installment Sale)Certificates of Participation,Series 2020 (T.R.I.P.–TotalRoadImprovementProgram)pursuant to a First Supplemental to Trust
Agreement to prepay and refund the City’s 2012 Installment Sale Agreement
and related Certificates of Participation,authorizing the execution and
delivery of a First Supplemental to 2012 Installment Sale Agreement,A First
Supplemental to Trust Agreement,A Program Trust Agreement,CertificatePurchaseAgreementandanEscrowAgreement,authorizing the distribution of
an official statement in connection with the offering and sale of suchcertificatesandauthorizingothermattersrelatingthereto.
Questions?Thank You.