Meeting_Body
FINANCE, BUDGET AND AUDIT COMMITTEE
APRIL 13, 2016
EXECUTIVE MANAGEMENT COMMITTEE
APRIL 14, 2016
Subject/Action
SUBJECT: PROPOSITION C BONDS
ACTION: AUTHORIZE COMPETITIVE SALE OF REFUNDING BONDS
Heading
RECOMMENDATION
Title
ADOPT a resolution, Attachment A, that:
A. AUTHORIZES the issuance of bonds by competitive sale to refund the Proposition C Series 2006-A Bonds (the "2006-A Bonds") in one or more transactions, consistent with the Debt Policy;
B. APPROVES the forms of Notice of Intention to Sell Bonds, Notice Inviting Bids, Supplemental Trust Agreement, Continuing Disclosure Agreement, Escrow Agreement, and Preliminary Official Statement, all subject to modification as set forth in the resolution; and
C. AUTHORIZES taking all action necessary to achieve the foregoing, including, without limitation, the further development and execution of bond documentation associated with the issuance of the Bonds.
(REQUIRES SEPARATE, SIMPLE MAJORITY BOARD VOTE)
Issue
ISSUE
Low interest rates offer an opportunity for Metro to lower its debt service costs by refunding on a current basis the outstanding Proposition C Sales Tax Revenue Refunding Bonds Series 2006-A. Approximately $112.7 million of the outstanding 2006-A Bonds can be refunded on July 1, 2016. It is our expectation that the 2006-A Bonds will be refunded through one competitive sale, depending on market conditions. Under current market conditions, the refunding would achieve nearly $11 million in present value savings over the life of the bonds, or almost $1 million in savings on an annual basis over the next 14 years. We are requesting the authority to sell Proposition C Sales Tax Revenue Refunding Bonds Senior Bonds, Series 2016 (the "Refunding Bonds") in one or more transactions through December 31, 2016, to allow flexibility should significant market volatility occur.
Discussion
DISCUSSION
The Debt Policy establishes criteria to evaluate refunding opportunities. The refu...
Click here for full text