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File #: 2017-0840   
Type: Resolution Status: Agenda Ready
File created: 12/14/2017 In control: Finance, Budget and Audit Committee
On agenda: 2/14/2018 Final action:
Title: ADOPT a resolution, Attachment A, that: A. AUTHORIZES the issuance of bonds by competitive sale to refund the Proposition C Series 2008-A Bonds, 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 on file with the Board Secretary as set forth in the resolution all as 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 refunding bonds. (REQUIRES SEPARATE, SIMPLE MAJORITY BOARD VOTE)
Sponsors: Finance, Budget and Audit Committee
Indexes: Bids, Debt, Policy, Proposition A, Proposition C, Resolution
Attachments: 1. Attachment A - Authorizing Resolution, 2. Notice of Intention to Sell Bonds - LACMTA 2018 Proposition C, 3. Notice Inviting Bids (2018-A) - LACMTA 2018 Proposition C, 4. Twenty-Eighth Supplemental Trust Agreement - LACMTA 2018 Proposition C, 5. Continuing Disclosure Certificate - LACMTA 2018 Proposition C, 6. Escrow Agreement - LACMTA 2018 Proposition C, 7. POS - LACMTA 2018 Proposition C
Related files: 2018-0091
Date Action ByActionResultAction DetailsMeeting DetailsAudio
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Meeting_Body
FINANCE, BUDGET AND AUDIT COMMITTEE
FEBRUARY 14, 2018

Subject
SUBJECT: PROPOSITION C BONDS

Action
ACTION: AUTHORIZE COMPETITIVE SALE OF 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 2008-A Bonds, 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 on file with the Board Secretary as set forth in the resolution all as 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 refunding 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 Second Senior Bonds, Series 2008-A (the "2008-A Bonds"). Approximately $69 million of the outstanding 2008-A Bonds can be refunded. Under current market conditions, the issuance of the Proposition C Sales Tax Revenue Refunding Bonds (the "Refunding Bonds") would achieve approximately $7.0 million in net present value savings over the four year life of the bonds.

Discussion
DISCUSSION

IRS tax code regulates tax-exempt debt issuance. Tax-reform legislation enacted by Congress repeals tax-exempt advance refunding bonds effective January 1, 2018. An advance refunding is a refunding that closes more than 90 days prior to the date when the outstanding bonds are called for redemption.

The 2008-A Bonds may be refunded on a current refunding basis in early April, 2018 as their call date is July 1, 2018. The Debt Policy establ...

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