CDC - Item 2 - Refinancing Of Certain Debt-Redevelopment Project• •
TO:
FROM:
DATE:
SUBJECT:
HONORABLE CHAIRMAN AND MEMBERS ROSEMEAD
COMMUNITY DEVELOPMENT COMMISSION
BILL CR'OWE, EXECUTIVE DIRECTOR
OCTOBER 18, 2005
RESOLUTION NO. 2005-18: A RESOLUTION OF THE
ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION
APPROVING THE REFINANCING OF CERTAIN
OUTSTANDING DEBT ISSUED IN CONNECTION WITH
Staff is recommending the refunding of a portion of the Community Development Commission's
(formerly the Rosemead Redevelopment Agency) Tax Allocation Bonds, Series 1993A. Long-term
interest rates have declined since the issuance of the 1993 Bonds. Staff has discussed the feasibility of
refunding the outstanding bonds with a variety of potential underwriters and with Commission bond
counsel Orrick, Herrington & Sutcliffe LLP. After consultation with our bond counsel and Public
Financial Management, Inc., an independent financial advisor, staff believes that we can take
advantage of the decline in rates to refund a portion of the 1993 Bonds and obtain savings which
~qual or exceed the industry-standard 3% net present value savings threshold.
Staff is recommending Public Financial Management, Inc. (PFM) to serve as financial advisor. PFM
is one of the nation's leading providers of independent financial and investment advisory services.
Public Financial Management has a solid reputation in the municipal bond marketplace, assisting in
financing programs totaling in excess of $290 billion. Last year, PFM advised on 793 bond
transactions with a total volume of over $33 billion. Compensation, in an amount not-to-exceed
$47,500 is contingent upon the bond sale. Orrick, Herrington & Sutcliffe LLP, represented by
William Bothwell, will serve as Bond and Disclosure Counsel. Mr. Bothwell was Bond Counsel on
the 1993 Bonds.
To round out the investment team, staff proposes that an RFP for investment banking services be
issued to bond underwriting firms. Both the Bond Counsel and financial advisor believe a negotiated
sale is the most efficient means for going to market. We have already received interest from five
underwriting firms. With the assistance of our financial advisor and bond counsel, staff will interview
underwriters making proposals and make a selection based on the best overall proposal taking into
COMMISSION AGENDA
OCT 25
2n05
ITEM No. a
REDEVELOPMENT PROJECT AREA NO. 1
•
P j
account financing concepts, price, experience with redevelopment agency financings and marketing
capabilities.
fie 2005 Bond proceeds will be used to fund a refunding escrow and to pay transaction costs. We
will also be exploring with the underwriters the opportunity to generate additional proceeds through
the issuance of new debt. Staff believes the proposed refinancing is a prudent strategy to generate
savings to the Commission by refunding higher interest cost debt. All issuance costs will be paid from
bond proceeds.
RECOMMENDATION:
Adopt Resolution No. 2005-18.
• •
RESOLUTION NO. 2005-18
A RESOLUTION OF THE ROSEMEAD COMMUNITY
DEVELOPMENT COMMISSION APPROVING THE
REFINANCING OF CERTAIN OUTSTANDING DEBT
ISSUED IN CONNECTION WITH REDEVELOPMENT
PROJECT AREA NO. I
WHEREAS, the Community Development Commission (the "Agency") is a
redevelopment agency, duly created, established and authorized to transact business and
exercise its powers, all under and pursuant to the Community Redevelopment Law (Part 1
of Division 24 of the Health and Safety Code of the State of California and referred to
herein as the "Law") and the powers of such Agency include the power to issue bonds for
any of its corporate purposes; and
WHEREAS, a redevelopment plan, known as the Redevelopment Plan for
the Redevelopment Project Area No. 1 (the "Plan") has been adopted and approved in
accordance with the Law; and
WHEREAS, the Plan contemplates that the Agency will issue its bonds to
finance and refinance a portion of the cost of such redevelopment; and -
WHEREAS, the Agency has heretofore issued its Tax Allocation Bonds,
Series 1993A (the "Series 1993 Bonds"), the proceeds of which were used by the Agency to
finance or refinance redevelopment activity in Redevelopment Project Area No. 1; and
WHEREAS, the Agency in now considering the issuance of Redevelopment
Project Tax No. I Tax Allocation Refunding Bonds, Series 2005A (the "Series 2005
Refunding Bonds") for the purpose of refinancing portions of the redevelopment project
through the prepayment of a portion of the Series 1993 Bonds; and
NOW, THEREFORE, BE IT RESOLVED, DETERMINED AND
ORDERED BY THE ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION AS
FOLLOWS:
SECTION 1. Approval of Financing. The Agency hereby approves the
refinancing of a portion of the Series 1993 Bonds through the issuance of Series 2005
Refunding Bonds; provided that the savings which occur as a result of such refunding are
at least equal to 3%, on a net present value basis, of the Series 1993 Bonds being
refunded. The City Manager, the Assistant City Manager and the City Attorney, on
behalf of the Agency, and Orrick, Herrington & Sutcliffe LLP, as the Agency's Bond
Counsel and Public Financial Management, Inc., as the Agency's Financial Advisor, are
authorized to take such steps as may be necessary to accomplish such refinancing on such
terms, including the drafting of documents. The City Manager is authorized to engage a
fiscal consultant to prepare a report on the tax increment revenues generated in
Redevelopment Project Area No. 1.
DOCSLA1504719.1
1415040 WWB
• •
SECTION 2. Effective Date. This Resolution
immediately upon adoption.
APPROVED and ADOPTED this October 2005.
shall take effect
CHAIRPERSON
ATTEST:
SECRETARY
DOCSLA1:504719.1
1-415040 WWB
0
PI
The PFM Group
Public Financial Manaaament, Inc
PFM Assaf Management LLC
PRA Advisors
Memorandum
To: Rosemead Redevelopment Working Group
From: Keith D. Curry
Re:-. Schedule
0Suile 750 949721-9422
660 Newport Center Drive 949 721-9437 fax
Newport Beach, CA www.pfm.com
92660-6408
October 19, 2005
October 25
City Council authorizes transaction
October 26
Release RFP for Investment Bankers
November 4
Investment banking proposals due
November 4
First draft of legal documents/POS
November 7
Select bankers
November 8
City Council approves bankers (if necessary)
November 11
Second draft of documents/POS
November 15
Docket council transmit documents to S & P and insurers
November 22
City council adopts bond documents
November 28
Receive S & P rating
November 29
Receive insurance commitments
November 30
Print and mail Official Statement
7 Pre-price bonds
8 Price bonds
16 Pre-close
ovember 17 Close transaction