OB - Item 3C - Rosemead Tax Increment 2006A, 2006B, and 2010A BondsROSEMEAD SUCCESSOR
AGENCY STAFF REPORT
TO: THE HONORABLE CHAIR AND BOARD MEMBERS
FROM: MATTHEW HAWKESWORTH, ASSISTANT CITY MANAGER
DATE: APRIL 25, 2012
SUBJECT: ROSEMEAD TAX INCREMENT 2006A, 2006B AND 2010A BONDS
SUMMARY
The Rosemead Redevelopment Commission issued Tax Increment Bonds in both 2006
and 2010 under previous redevelopment law. The outstanding obligation on these
bonds is approximately $67.5 million with payments due through 2033. Authorization
from the Oversight Board is being requested to continue making the debt service
payments as required by the bond covenants.
Staff Recommendation:
That the Oversight Board approve the required debt service payments for the 2006A,
2006B and 2010A Bonds as required by the bond covenants.
BACKGROUND
The 2006A and 2006B series bonds require debt service payments in April and October
of each year. The April payments are for interest only and the October payments are
for principal and interest. Therefore, the October payments will be substantially larger
than the April payments. As such, the previous redevelopment agency would typically
set aside funds throughout the year to ensure that the agency would have sufficient
fund balance in October to make the necessary payments. Under the new distribution
system of property taxes to the Successor Agency to meet obligations, it's still unclear
how the pre- funding will take place. For the purposes of this Oversight Board meeting,
the Board is requested to authorize the April and October 2011 payments required for
these bonds. A debt payment schedule (Attachment A) has been included for
reference. As the Board may note, the 2006A series bonds will be paid off in 2022
while the 2006B series bonds will be paid off in 2033.
The 2010A series bonds require debt service payments in June and December of each
year. The June payments are for interest only and the December payments are for
principal and interest. Therefore, the December payments will be substantially larger
than the June payments. Similarly to the 2006 series bonds, previous tax increment
funds were set aside throughout the year to ensure sufficient funds were on hand to
make the required debt service payments. The Board is requested to authorize the
June and December 2011 payments required for these bonds. A debt payment
schedule (Attachment B) has been included for reference. The 2010A series bonds will
be paid off in 2023.
ITEM NO
Rosemead Successor Agency Oversight Board
April 25, 2012
Page 2 of 2
It's also important to note that the 2006 series bonds received a rating of BBB+ and the
2010 series bonds were upgraded to A, The City as the Successor Agency is very
proud of this upgrade as Standard and Poor's recognized the fact that the previous
Rosemead Redevelopment Commission had been fiscally solvent, responsible with
their budgeting and expenditure practices and had solid programs and policies in place
to ensure ongoing stability. It's important the bond holders or investors of these bonds
that the Successor Agency remain solvent and stable to ensure timely payments and
reporting as required by the bond covenants and law.
PUBLIC NOTICE PROCESS
This item has been noticed through the regular agenda notification process in
accordance with the Brown Act.
Prepared by:
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Matthew E. Hawkesworth
Assistant City Manager