Meeting_Body
FINANCE, BUDGET AND AUDIT COMMITTEE
SEPTEMBER 14, 2022
Subject
SUBJECT: MEASURE R SHORT-TERM BORROWING PROGRAM
Action
ACTION: APPROVE RECOMMENDATIONS
Heading
RECOMMENDATION
Title
ADOPT a resolution that authorizes the Chief Executive Officer and/or other Designated Officers to renew and/or replace the existing direct-pay letter of credit ("LOC") with respect to the Measure R Short-Term Borrowing Program, Attachment A.
(REQUIRES SEPARATE, SIMPLE MAJORITY VOTE OF THE BOARD)
Issue
ISSUE
The Measure R Short-Term Borrowing Program has proven to be a flexible, cost-effective method of short-term financing for Metro's capital program. A letter of credit or similar facility provided by a highly rated financial institution or bank is required for commercial paper ("CP") programs to guarantee repayment of notes at maturity. The Measure R LOCs provided by Bank of America, N.A., and State Street Bank and Trust Company expire in October 2022.
Background
BACKGROUND
The Board established the Measure R Short-Term Borrowing Program in May 2015 to provide interim taxable or tax-exempt financing until grant reimbursement or other funding sources are received. In accordance with the Measure R Ordinance, the Measure R Independent Taxpayers Oversight Committee approved the attached finding of benefit resolution (Attachment B) in favor of the $300 million Measure R short-term borrowing program at the May 2015 committee meeting. Under the program, Metro is authorized to issue and have outstanding at any one time up to $300 million in Measure R Subordinate Obligations. Historically, Measure R Subordinate Obligations have mostly been issued in the form of CP or Revolving Credit Obligations. Currently, Metro does not have any Measure R Subordinate Obligations outstanding. Measure R Subordinate Obligations are backed by a subordinate pledge of 85% of Measure R sales tax revenues.
CP notes are a short-term debt instrument that can be issued with matur...
Click here for full text