HomeMy WebLinkAbout8.1 PlnReduceFinCstsCivicCtr
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CITY OF WBLIN
CITY COUNCIL MEETING DATE: March 22, 1993
AGENDA STATEMENT
SUBJECT: Consideration of Plan to Reduce Total Financing
Costs For Dublin civic Center
~(prepared by: Paul S. Rankin, Assistant City Mgr)
EXHIBITS ATTACHED: 1. / Memorandum from the Ci ty Manager Providing
Background Information on Lease F1nancing
2. / Recommended Goals of Restructuring The ci vic
Center Financing
3. I Assump!-ions Used In The Analysis Of Financing
Scenar10S
4. / Summary Cash Flow Analysis Of Al ternati ves
Including Detailed Scenar10S
5. / Comparison of Current ci vic Center Lease
PaYment Schedule to A New 1993 Financing
6. /Resolution Authorizing Staff To Secure the
Services of A Financial Underwriter and Bond
Counsel
RECOMMENDATION:
f;/1
FINANCIAL STATEMENT:
1.
Receive Staff Report and Presentation from
Financing. Consultant.
2.
Discuss Options Presented and Goals to be
Accomplished By Undertaking A Revised Financing
Plan.
3.
Staff would recommend pursuit of Scenario III
which requires the services of Bond Counsel and
an Underwriting Firm. In order to proceed in a
timely manner the city Council should adopt the
resolution appointing these representatives,
and authorize staff to negotiate final
agreements. (The majority of any cost of these
services would only occur if a new financing of
Certificates is completed. The cost of these
services would be paid from the issue.)
There is an opportunity for the City to reduce
the amount of annual lease payments by more
than $130,000 per year between 1994-1999.
Staff has also proposed a plan to allow for
total defeasance in 1999. See report for
detailed description.
DESCRIPTION: city staff have been discussing with Financial
Consultants opportunities to restructure the current lease payment
schedule on the Dublin Civic Center Project. Periodically since early
in the fiscal year staff has monitored the market and obtained
independent reviews of potential savings. staff informed the City
council last fall that the market was beginning to change and a
presentation would be made in the future.
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8.1
COPIES TO:Ms. Virginia Horler,Underwriter
Rauscher pierce and Refsnes, Inc
CITY CLERK
FILE ~
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During the city council deliberations regarding the need to reduce
expenditures, Councilmember Houston proposed that the city evaluate the
opportunity to utilize city General Fund Reserves to eliminate the lease
payments. The specific aspects of this proposal as well as an analysis
of the impacts are discussed as Scenario II within this report.
BACKGROUND
Prior to evaluating different financing scenarios it is important to
have a basic understanding of the process used in a certificate of
Participation (COP) Lease Financing. Exhibit 1, provides this type of
overview along with historical information related to the Dublin civic
Center Financing. The final section discussed in Exhibit 1 focuses on
issues encountered when a certificate Issue is paid off prior to the
formal maturity. dates.
In addition to the information provided in the City Manager's memorandum
(Exhibit 1), Ms. Virginia Horler of Rauscher Pierce and Refsnes, Inc.,
will be in attendance to answer specific questions. Ms. Horler was the
underwriter on the 1988 Civic Center coP issue as well as the recent
Dublin Boulevard Extension Assessment District. In addition to
extensive experience in the field, Ms. Horler has authored a practical
guide which explains Public Debt Issuance.
GOALS TO CONSIDER IN STRUCTURING A REVISED FINANCING PAYMENT PLAN
staff has analyzed the various goals and opportunities presented by a
restructured lease payment schedule. Exhibi t 2 contains a detailed
listing and discussion.
It is important to have a common understanding, as to what the City
council believes the City should accomplish from its assets. In this
case the "assets" would include the city's buildings and property, as
well as the General Fund investment portfolio.
The purpose of presenting these goals is to provide the city Council
with an understanding of factors considered when reviewing the scenarios
developed by the financing Consultant. The city Council may have
addi tional goals which would be appropriate to add. Also, in the
sections which follow the priority or weight given to any of the goals
referenced above may impact the final selection.
OPTIONS ANALYZED
staff has worked closely with the Financial firm of Rauscher Pierce and
Refsnes, Inc., to evaluate numerous options which could be considered.
Based on numerous scenarios Staff then compared the options to the
recommended goals, to determine which would best meet the financial and
pOlicy needs of the City. For presentation purposes Staff and the
Consultants have refined two of the Scenarios, which are compared to the
current base case.
ASSUMPTIONS USED IN THE SCENARIOS PRESENTED
In completing the analysis several assumptions had to be made. Exhibit
3 provides a detailed explanation of key assumptions. The Consultant
has used conservative estimates typically based on current conditions.
Most economic indicators and analysts believe that the current low
interest rates will not hold over a long period of time. This is
especially the case if you look at historical trends and the length of
the financing (i. e. 17 years). Even with the promising outlook for
interest earnings on reserves over the long term, the comparisons are
based on current rates.
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ANALYSIS OF SCENARIOS
Exhibi t 4 displays a cash flow summary of the analysis.
scenarios described are as follows:
The three
I. Current Situation with the city making payments in accordance
with the 1988 COP payment schedule.
II. Defeasance of the 1988 COP issue with a deposit on 5/1/93 from
the General Fund Reserve. This requires the city to deposit
into an escrow account approximately $ 9.1 million on May 1,
1993. The city would continue to make the scheduled lease
payments between 1994 and 1999. The Escrow account would pay
off all certificates maturing after 1999.
III. Refinancing of the 1988 COP's structured to provide a
significant annual lease payment savings between 1994 and
1999, with the city making a deposit from the General Fund
Reserves, on February 1, 1999, to defease all outstanding
certificates.
The summary attempts to display key indicators in order to identify both
economic as well as policy implications. Following the Summary are
detailed sheets which display the calculations of each scenario.
Scenario III was found to produce the greatest economic advantage to the
ci ty. As shown in the second column on Exhibit 4, the Present value
(PV) savings is calculated at $9,496,341.
The term "present value" means that the Consultants have
comparison purposes to show the figures in today's dollars.
in scenario III (Refinancing / with Defeasance In 1999)
($2,872,120) greater than Scenario II (No Refinancing /
General Fund Reserves On May 1, 1993).
In looking at the policy implications of the Scenarios Staff has also
found that Scenario III, most closely meets the goals discussed earlier
in this report. This Scenario maintains the General Fund Reserve at a
level, which will provide flexibility in the event that a future city
Council determines a special need. It is also available to take
advantage of increases in interest rates. The average General Fund
Reserve Balance, available over the 17 years analyzed, would not be
expected to drop below $ 10.3 million. In scenario II the average
balance in the near term is less than $ 5.2 million.
adjusted for
The savings
is over 43%
Defease From
Exhibi t 5 displays the difference between the current Lease Payment
schedule with a Refinanced 1993 issue. The proposed financing has been
structured to preserve the city's abilitr to call all outstanding COP's
in 1999, without any premium. In add1tion, significant savings are
obtained in the city's annual payment prior to 1999.
ESTABLISHMENT OF CIVIC CENTER PROJECT RESERVE
The recommendation by Staff to pursue Scenario III will also include a
recommendation that the City council establish a CIVIC CENTER PROJECT
RESERVE of $ 14,060,000. These funds would reduce the General Fund
Reserve. -The formal action would be done by the City Council through
the adoption of a Resolution, which would recognize that these funds
were set aside for the purpose of defeasing the COP's outstanding in
1999. These funds would not generally be available for other needs,
however, any interest earnings could be used as a General Fund Revenue.
The maintenance of reserve funds by public agencies is a common practice
and should be regarded as prudent management. The funds would not be
subjected to an escrow account. Therefore, unforeseen future needs
could be addressed if the City Council at the time made a determination
that this was in the public interest and changed the policy.
Staff has looked at the types of reserves maintained by some of the
neighboring agencies. As previously mentioned, maintaining reserves for
specific projects or liabilities is appropriate for a public agency.
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Both the city of Livermore as well as the city of Pleasanton have
investment portfolios including reserve funds, which total in excess of
$ 43,000,000 for each agency. In both cases these funds represent over
90 % of their current operating budget.
The resolution to implement this Reserve Fund will be presented to the
ci ty Council with other financing documents, provided that staff is
directed to proceed.
SELECTION OF UNDERWRITER AND BOND COUNSEL
In order to proceed with the recommended scenario it will be necessary
to engage the services of Financial Consultant and Bond Counsel. It is
typical for these services to be provided on a contingent basis. If the
city were unable to complete the financing there would be no charge for
the professional services rendered to date. There may be a small
expense for any incidentals or direct expenses.
Rauscher pierce Refsnes, (RPR) Inc., has com~leted three financings for
the City of Dublin. Staff believes that thelr past performance as well
as their knowledge of the COP's to be refinanced is a great benefit to
the city of Dublin. Ms. Virginia Horler would serve as the principal
assigned to this project.
In reviewing the financing schedules presented to Staff, the firm has
also, presented a competitive discount rate. This is the charge for
developing and marketing the financing. The fee is 1.4% of the amount
issued. In 1988, the city received formal proposals which contained
discount rates of 1.40 % - 2.25%. The RPR proposal is at the bottom of
this range. The fee is included in the amount financed and has been
taken into consideration in calculating the savings.
staff has also discussed with three law firms the cost of providing Bond
Counsel services. Due to the low "interest rates many firms are finding
their workloads to be very heavy. Therefore, staff recognizes that
there is value in seeking legal counsel which is familiar with the 1988
COP financing.
The firm of Brown & Wood served as the Underwriter's Counsel for the
1988 COP issue. When contacted by Staff they presented a very
competitive fee. Mr. David Casnocha, will be the principal in charge of
this project. A description of the firm has been provided separately to
each member of the City council. In addition to their work on the
earlier issue the firm is currently working with the DUblin Unified
School District on a possible General Obligation Bond issuance. The
total fee quoted was $35,000 inclusive of printing and delivery
expenses. This represents a significant discount from the fee paid in
1988 to a different firm.
staff would recommend that the city Council adopt the resolution, which
will allow staff to proceed with the refinancing under the terms
discussed above. As noted, Ms. Horler will be making a presentation and
will be available to answer questions.
. CITY OF DUBLIN .
MEMORANDUM
TO: Mayor and city councilmembers
FROM:~1tr-Richard C. Ambrose, city Manager
RE: Background Information On Lease Financing and
History of Dublin Civic Center Financings
DATE:
March 18, 1993
The purpose of this memorandum is to provide background information on
how a Certificate of Participation (COP) Lease financing is arranged.
The mechanics of the past financings of the Dublin civic Center project
are used as examples. An explanation is also provided regarding the
subject of defeasance, or paying off an issue prior to its stated
maturity date.
DESCRIPTION OF THE CERTIFICATE OF PARTICIPATION PROCESS
The certificate of Participation (COP) process is a lease financing
method widely used by government agencies. The process allows the city
to finance a long term capital improvement over several years. In this
case, the city of DUblin has financed the civic center / Police
Facility.
In the private sector financing a, project of this magnitude would be
considered typical, since most businesses do not pay cash for this type
of investment. The servicing of the debt can be viewed as part of the
cost of operation for an entity. Of course, there is also a value in
the asset owned once all of the payments are completed.
The description of the lease financing process which follows will use
the Dublin civic center financing as an example.
1. Dublin Information Inc. (DII) is a non-profit organization,
holds title to the Civic Center project. This entity was formed by the
City to undertake projects of benefit to the Dublin community. The
Board of Directors consists of the Mayor and City councilmembers, the
City Manager, and the Assistant city Manager.
2. The City of Dublin leases the civic Center from DII. The
lease payment schedule is equivalent to the payment schedule to retire
the COP's. Once all of the lease payments have been made the ownership
of the project transfers to the city.
3. DII has issued Certificates of participation (COP's) to fund
the project. These are tax exempt instruments which are purchased by
individuals and institutions. The certificate provides the investor
with an interest in the stream of lease payments, which will be made
over the life of the financing. The individual certificates have
varying maturities and interest rates. It is common to look at the
average interest rate paid over the life of the issue.
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4. Payment of principal and interest is handled by an independent
third party Trustee (First Trust of California). The Trustee has an
obligation to oversee the repayment process on behalf of the COP
holders.
5. The Trustee also maintains a reserve fund which is intended as
partial insurance in the event a payment is not made by the City. First
Trust currently retains a reserve fund of $ 1,723,000 for the 1988
COP's. This amount is equivalent to approximately one year's lease
payment. Interest earnings on the reserve fund are applied to reduce
annual amount paid to the Trustee by the City. At the conclusion of the
payment cycle the reserve fund is applied to the final lease payment.
The description above is only intended to provide a brief summary. The
tax exempt status of COP's reduces the amount of interest paid. Given
the complex structure, it is important to utilize competent Legal and
Financial consultants, which specialize in municipal financing.
HISTORY OF CITY OF DUBLIN COP FINANCINGS
In December of 1985, the city reached agreement with the owner of the
Civic center parcel. In order to finance the land purchase as well as
obtain funds for design and construction, the city council authorized
the issuance of COP's. The total size of the issue was $11,968,000,
which included the cost of issuance.
In December of 1987, the City completed the design of the Civic Center
project, including the acceptance of a bid for the construction. Based
on the project scope the City Council proceeded with a revised financing
plan. This included the following elements:
a. Defease the 1985 outstanding Certificates to take
advantage of lower interest rates. (The true interest
rate on the 1985 issue was approximately 9.17%.)
b. Generate an additional $ 3.8 million in construction
funds from a new issue, which is combined with the
refunding of the outstanding 1985 COP's.
c. contribute an additional $ 1 million from the General
Fund reserves towards the project.
In March of 1988, the City completed this plan through the issuance of
$17,230,000 in COP's. The total included the costs of issuance, the
additional ~ 3.8 million for construction costs, as well as the
defeasance of the outstanding 1985 COP's. The average interest rate on
this issue was 7.50%. This provided the City with the ability to pay
for this infrastructure improvement and community asset over a period of
time through annual lease payments. The financial community and the
Rating agencies (Standard & Poors / Moody'S) look favorably at COP
issues for essential facilities. The provision of a modern police
Building and Civic center were considered by the Rating agencies as
essential facilities.
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DEFEASANCE OF PREVIOUSLY ISSUED COP'S
With COP's it is customary to have a provision in the financing
documents which protects the investor from having their Certificates
redeemed in a short term. This is typically provided by requiring the
agency which issues the COP's to pay the investor a premium, if the
certificate is paid off early. The issuing agency receives a more
competitive interest rate by using this provision.
For example, the 1985 COP's could be called without a premium after
February 1, 1996. The 1988 COP's provide the investor with a premium if
they are called for redemption prior to February 1, 1999. When interest
rates are favorable a defeasance can be structured, which takes
advantage of current market rates and avoids the payment of additional
premiums. This structure was employed with the refunding and defeasance
of the outstanding 1985 COP's.
Included in the amount of the 1988 financing were funds, which were
placed in an Escrow Account under the control of the Trustee. The
documents provided that these funds were to be invested to insure the
ability to payoff all of the 1985 obligation. The investment of these
funds was structured to assure the Trustee that sufficient monies were
available in 1996, when the majority of the issue could be prepaid .
without a penalty.
The Federal Tax Code has eliminated the opportunity to generate more in
interest earnings from this escrow than is required to retire the
outstanding certificates. This is referred to as arbitrage and the
Federal government requires the entity to refund the excess to the
Federal Treasury. To avoid an arbitrage rebate the Escrow funds are
invested in instruments which are tied closely to the amount of funds
required.
In addition, specialized accountants as well as legal counsel reviews
the calculations to determine whether arbitrage has occurred. These
instruments are medium term investments designed for this purpose, which
have a maturity coinciding with the payment date. Therefore, there is
no risk that any additional money will be required to fully retire the
old issue.
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~commended
'(joa{s of
~structuring the
Civic Center ~inancing
EXHIBIT ;l
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RECOMMENDED GOALS
TO BE ACCOMPLISHED BY RESTRUCTURING
THE CIVIC CENTER LEASE FINANCING
The following are some of the key elements from a management point of
view that Staff would recommend that the city Council incorporate into
goals for any revised financing plan to be undertaken.
MAINTAIN FLEXIBILITY TO RESPOND TO CHANGING CONDITIONS
The structure of any financing plan must maximize the
options available both now and in the future. Economic
conditions can impact earnings on reserves. In addition
the stability of government funding at all levels may
impact the need to consider the use of reserves to
provide an appropriate level of services as determined by
city council policy. The ability to exactly predict when
or how conditions will change is impossible.
IDENTIFY POTENTIAL EVENTS WHICH COULD BENEFIT FROM THE
FLEXIBILITY CREATED BY HAVING AVAILABLE GENERAL FUND RESERVES
As noted above it is impossible to fully anticipate all
impacts. This is especially valid in the case of long
term projections. The following are potential events
which could initiate consideration of reducing reserves:
Catastrophic Loss: For example, a major earthquake
which destroys or damages a public facility.
Reduced Traditional Local Revenues: For example, if
the State once again took part or all of a
significant local revenue source.
stimulate Local Economic Activity: The City may
identify a long term project which through a public
investment would increase jobs and provide a return
on the investment.
Opportunity To Purchase A Major Asset without
Additional Financing: A historical example would be
the opportunity Alameda county had to purchase the
Santa Rita site from the Federal Government. 'The
county is now embarking on projects where the asset
will provide a long term revenue stream.
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PRESERVATION OF INTEREST EARNINGS AS REVENUE
The city has benefitted from the development of a
portfolio over several years. Interest earnings on this
portfolio have been used to support General Fund
operational expenses. The level of earnings has
fluctuated with economic conditions. Although the
current rate of interest earnings is at a . record low
level, there are opportunities to earn more as interest
rates rise. This is also a revenue source which the
State Government cannot take from a local agency.
MINIMIZE ANNUAL LEASE PAYMENTS
Refinance the outstanding issue at a lower interest rate
when conditions permit. The savings should result in a
significant net impact to reduce the city's annual
operating.c?st. This requires that the cost of issuance
and serv1c1ng of the financing be taken into the
calculation of determining the savings.
IF A NEW FINANCING IS STRUCTURED RETAIN THE SAME CALL PERIOD
(i.e. FEBRUARY 1999) IN THE NEW ISSUE
staff believes that the structure of a new issue should
allow the city the opportunity to payoff all outstanding
certificates without a premium at the same date as the
1988 issue. This preserves the opportunity for the city
to entirely eliminate its lease payments if funds are
available and the city Council in 1999, determines that
it would be an appropriate policy.
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!Jlssumptions
ilsed in .9Lna{yzing
~inancing Scenarios
EXHIBIT 3
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ASSUMPTIONS USED TO ANALYZE DUBLIN CIVIC CENTER CERTIFICATE OF
PARTICIPATION LEASE FINANCING ALTERNATIVES
(MARCH 1993)
Interest Earninas on General Fund Reserves: 4.86% is used
based on the city's current portfolio. If the City'S
current portfolio were maintained until the final payment
is made, $ 751,011 in interest earnings are available
each year.
coP Reserve Fund Interest Earnings:
The 1988 COP Reserve is currently yielding over 8%.
$485,000 matures 1/15/94
$1,723,000 matures l/15/95
The analysis assumes earnings on this fund at maturity at
the current market rates, which are significantly lower.
The impact is that the net COP payment by the City
increases after these funds mature. This is due to the
fact that less interest income is available to offset the
payment due.
Reserve Fund earnings on a refinanced COP issue are
based on current market rates at 5.332%.
Averaae Interest Rate Of A Refinanced Issue:
The average was based on current market conditions
at approximately 5.11%.
Defeasance of 1988 Con's on 5/1/93:
In order to legally defease the 1988 COP'S at this
time an escrow account would need to be established. The
Consultants have advised that the funds would need to be
invested in Federal securities. Based on current rates
securities could be purchased for $9,087,219 on May 1,
1993, which would generate the $12.345 million required
to defease the outstanding 1988 issue in 1999.
Accumulation of Additional FundS After Defeasance:
The two scenarios assume that once the final lease
payment is made, the avoided cost of not making a lease
payment would be appropriated on an annual basis to the
General Fund Reserve. The purpose of this adjustment is
to demonstrate the impact of what would be required to
restore the General Fund Reserve, if this policy' is
followed until the end of the COP issue in 2010. (Note:
This assumption relies on a future city council to
appropriate these funds to the reserve instead of
appropriating them for annual operations or a specific
project. )
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CITY OF DUBLIN
Defeas8nctl Refinancing of 1988 COPs Analysis
SUMMARy OF RESULTS
Scenario
L · No ReOnanclng
· No Defeasance
(Existing Situation - Base Case)
11 · No Refinancing, Defeasance of 1988 COPs
. >>efeasance of 1988 COPs witb General Fund
Reserves on 511/93
ill · Refinancing of 1988 COPs witb 1993 COPs
(6 Year Call, Accelerated Savings)
. Defeasance of 1993 COP. wItb General Fund
Reserves on 2/1199
Reserve EamlnRs @ 4.86%
Increase (Decrease)
in General Food
Reserve Balance
5838,829
13,733.972
16.966.546
PV of Increase
(Decrease) in General
Fund Reserve Balance
A vg. General Fund
Reserve Balance
1994.1999
S334,585
$15,452,898
6.624.221
9.496,341
Page 1
Prep3l'cd by RaUSl.1her Pierce Refsnes, Inc.
S5,187.377
15.864,768
A vg. General Fund
Reserve Balance
2000 - 2010
515,452,898
$11,630,120
10,306,325
EXHIBIT Lf
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CITY OF DUBLIN
DefeulU1~ef Rel1nam:bljl of 1988 COPs Analysb. No Rel'lnandnl. No Defeaslllai
(EsUtIn& Situation)
Existing General Fund Reserve: 515,452,898
Present Value
Increase of Increase
W fD from (Decrease) in (Oea-ca.se )
Qenera.1 Fund 1988 COP Net General Fund in orn Balance
to Pay DS (1) Debt Service Resern B.lance 5.500%
5/1193 15.452,898 15,452.898
1994 15,452,898 751,011 0 "1,011 15,452,898 828.048 1,579.059 0 0
1995 15,452,898 751,011 0 751,011 15.452,898 834,750 1,585,761 0 0
1996 1',452.898 751.011 0 751,011 15,452,898 877,555 1,628,566 0 0
1997 15,452.898 751,011 0 751,011 15,452,898 878,005 1,629,016 0 0
1998 15,452,898 751,011 0 751,011 15,452,898 879,445 1,630,456 0 0
1999 15,452,898 751,011 0 751,011 15,452,898 881,345 1,632.356 0 0
2000 1 :l,452,898 751,011 0 751,011 15,452,898 878,845 1,629,856 0 0
2001 15,452,898 751,011 0 751,011 lS,452,898 876,845 1,627.856 0 0
2002 15,452.898 751.011 0 751,011 15,452,898 879,860 1,630,871 0 0
2003 15,452,898 751.011 0 751,011 15,452,898 877,435 1,628,446 0 0
2004 15,4.52,898 751,011 0 751,011 15,452,898 878,804 1,629,815 0 0
2005 15,452,898 751,011 0 751,OH 15,452.898 879,266 1,630,277 0 0
2006 15,452,898 751,011 0 751,011 15,452,898 878,429 1,629,440 0 0
2007 15,452,898 751,011 0 751,011 15,452,898 880,898 1,631,909 0 0
2008 15,452,898 751,011 0 751,011 15,452,898 880,885 1,631,896 0 0
2009 15,452,898 751,011 0 751,011 15,452,898 877,998 1,629,009 0 0
2010 15,452,898 751,011 87,818 0 16,291,727 0 (87,81ll) 83,8,829 334,585
TOT A1.S 12,767,184 87,818 12,016,173 13,968,414 25,896,770 838.829 334,585
(1) Represents supp~ental amount appropriated from General fund necessary to pay Net Debt Service.
Sct~p.~~o I
Page 2 Prepared by Rauscher Pierce Refsne5, Inc.
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CITY OF DUBLIN
>>ere_eel ReOnllnelnC of 1988 COP, Analy.b - No Rettn.nclnl, Defeasance rrom ee.....nd Fund Raenel
. Defeasance Fands Deposited on 5/1/93 (Mr, Houston's Proposal)
Existing General Fund RescfVC; $IS,4S2,898
Presmt Valuc
Increase of Increase
WfD from 1988 COP Net (Decrease) in (D<<Teil$e )
General Fund Debt service General Fund in OFR Balance
to Pay DS (1) to Defeasance R~c Balance S.SOO%
S/I/93 15,452,898 9,087,219 6,365,679
1994 6,36S,679 309,372 0 7S1,Oll 5,924,OMl 828,048 1,319,OS9 (441,639) (414,896)
1995 5,924,040 287,908 0 751,OB 5,460,938 834,7S0 I,S85,761 (463,102) (412,379)
1996 S,460,938 26S,402 0 751,011 4,97.5,328 877,5S.5 1,628,566 (48.5,609) (409,878)
1997 4,975,328 241,801 0 751,011 4,466,119 878,00.5 1,629,016 (.509,210) (407,391)
1998 4,466,1l9 217,053 0 751,011 3,932,161 879,44.5 1,630,4.56 (.533,9.57) (404,920)
1999 3,932,161 191,103 969,6S9 0 .5,092,923 881,34.5 (88,314) 1,160,762 834,359
2000 S,092,923 247,.516 878,84S 0 6,219,284 878,84S 1,126,361 767,423
2001 6,219,284 302,2.57 876,84S 0 7,398,387 876,84.5 1,179,102 761,476
2002 7,398,387 359,.562 879,860 0 8,637,809 879,860 1,239,422 138,703
2003 8,637,809 419,797 877,43.5 0 9,93.5,041 877,435 1,297,233 7.52,693
2004 9,93S,041 482,843 878,804 0 11,296,688 878,804 1,361,647 748,880
2005 11,296,688 S49,Ol9 879,266 0 12,724,974 879,266 1,428,285 744,'78
2006 12,724,974 618,434 878,429 0 14,221,836 878,429 1,496,863 739,647
2007 14,221,836 691,181 880,898 0 1.5,793,91S 880,898 1,572,079 736,316
2008 15,793,91.5 767,584 880,88.5 0 17,442,385 880,88.5 1,648,469 731,844
2009 17,442,38.5 847,700 877,998 0 19,168,082 877,998 1,725,698 726,189
2010 19,168,082 931,569 0 0 20,099,651 0 931,569 371,576
7,730,102 9,158,924 9,087,219 3,75.5,054 13,968,414 7,964,S44 13,733,972 6,624,2l1
(1) Reprll$Cllls the. Additional Oeneral Fund Contribution" from the 'Existing Situation" scenario. lfneeded, this amount helps pay net debt servil;e. Otherwise,
it floWl into the General Fund Reserve and is CQnsidefed savings.
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CITY OF DUBLIN
Dereasance! Rellnandnc or 1988 COPs An.a.I"b - Reftnanclnl, Defeasance 0(1993 COP.
.1993 COP, (wIG Year Call, Accelerated Savin2s) Replace 1988 COPs, Defeasance Funds Depolllted on 2/1/99
Existing General Fund Reserve: $1.5,4's2,898
Present Value
Increase of Increase
WID from 1993 COP Net (Decreue) in (Decrease)
Ocnenll Fund Debt Semcc General Fund in OFR BahUlce
10 Pay OS (1) to Defeasance Reserve Balance ,s..500%
.5/1193 1's,4.52,898 1.5,4's2,898
1994 1.5,4.52,898 751,011 0 620,962 15,582,946 828,048 1,449,011 130,048 122,174
1995 1's,'s82,9% 7's7,331 0 608,888 1's,73 1,390 834, no 1,443.638 148,443 132,184
1996 1.5,731,390 764,'s46 0 564,304 1's,931,631 877,'s.5.5 1,441,8.59 200,241 169,013
1997 1.5,931,631 774,277 0 ,S68,8,S2 16,137,0.57 878,005 1,446,8.57 20's,426 164,3's0
1998 16,137,0.57 784,261 0 's68,633 16,352,68's 879,44.5 1,448,078 21.5,628 163,'s19
1999 16,3'2,685 794,740 972,992 14,060,000 0 4,060,418 881,34.5 (91,647) 1,767,733 1,270,651
2000 4,060,418 197,336 878,845 0 5,136,599 878,845 1,076,181 733,234
2001 5,136,599 249,639 876,84,5 0 6,263,083 876,84,5 1,126,484 727,49.5
2002 6,263,083 304,386 879,860 0 7,447,329 879,860 1,184,246 724,927
2003 7,447,329 361,940 877,43's 0 8,686,704 877,435 1,239,375 719,122
2004 8,686,704 422,174 878,804 0 9,987,682 878,804 1,300,978 715,.513
200.5 9,987,682 48.5,401 879,266 0 11,352,350 879,266 1,364,668 711,413
2006 11,3.52,350 SSI.724 878,429 0 12,782,503 878,429 1,430,153 706,684
2007 12,782,.503 621,230 880,898 0 14,284.630 880,898 1,.502,127 703,SS3
2008 14,284,630 694,233 880,885 0 15,859.748 880,885 1.57.5,118 699,280
2009 15,859,748 770,784 877,998 0 17,.508,530 877,998 1,648,781 693,822
2010 17,508.530 8S0.91S 0 0 18,3'9,444 0 8'0,91.5 339,405
10.135.928 9,762,257 14,060,000 2,931,639 13,968,414 7,137,796 16,966,546 9,496,341
(1) Representll the "Additiolllll General Fund Contribulion" from the "Existing Situation" scenario. If needed, this amounl helpll pay net debt service. Otherwise,
it flows into the Oetwral Fund Reserve and is considered savings.
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Page 4 Prepared by Rauscher Pierce Ref$nes, Inc.
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OLD NEW
1988 Net 1993 Net Debt Service
Debt Services Certificates Savings
Year Payment Payment
1994 1,579,059 1,449,011 130,048
1995 1,585,761 1,443,638 142,123
1996 1,628,566 1,441,859 186,707
1997 1,629,016 1,446,857 182,159
1998 1,630,456 1,448,078 182,378
1999 1,632,356 1,627,160 5,196
2000 1,629,856 1,625,618 4,238
2001 1,627,856 1,620,594 7,262
2002 1,630,871 1,626,432 4,439
2003 1,628,446 1,624,384 4,062
2004 1,629,815 1,622,954 6,861
2005 1,630,277 1,622,906 7,371
2006 1,629,440 1,623,273 6,167
2007 1,631,909 1,623,973 7,936
2008 1,631,896 1,623,913 7,983
2009 1,629,009 1,623,803 5,206
2010 -87,818 -90,621 2,803
TOTAL 25,896,771 25,003,832 892,939
Comparison of Current Lease Payment
Schedule to a New 1993 Issue
EXHIBIT ~
, .
$
.
RESOLUTION NO.
- 93
.
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF DUBLIN
****************
AUTHORIZING STAFF TO ENGAGE SPECIAL LEGAL COUNSEL AND UNDERWRITER
IN CONNECTION WITH REFUNDING CERTIFICATE OF PARTICIPATION PROCEEDINGS
WHEREAS, the city has heretofore issued its certificates of
Participation as of March 1, 1988, in the aggregate principal amount
of $17,230,000 (the "1988 Certificates") to finance the Civic Center
pUblic improvements for the city; and
WHEREAS, the city wishes to institute proceedings at this time
for the refunding of the 1988 certificates through the issuance of
Refunding certificates of Participation (the "Refunding certificates")
and in connection with such refinancing proceedings, the city requires
the advice and assistance of special legal counsel and an investment
banking firm.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the city of
Dublin as follows:
1. That Staff is authorized to negotiate an agreement by and
between the city and Brown & Wood, a Professional Law corporation, for
special legal counsel services in connection with the issuance of the
Refunding Certificates. The appropriate officers of the city are
hereby authorized and directed in the name and on behalf of the city
to execute said agreement.
2. That Staff is authorized to negotiate an agreement by and
between the City and Rauscher Pierce Refsnes, Inc., for investment
banking services in connection with the issuance of the Refunding
certificates. The appropriate officers of the city are hereby
authorized and directed in the name and on behalf of the City to
execute said agreement.
3. The basic principles to be in the agreements shall be as
described in the Staff Report presented at the City Council meeting on
March 22, 1993.
4. This Resolution shall take effect immediately upon its
adoption.
PASSED, APPROVED AND ADOPTED this 22nd day of March, 1993.
AYES:
NOES:
ABSENT:
ABSTAIN:
Mayor
ATTEST:
City Clerk
Exhibit 6