02-04-1997 - Possible Refinancing of 1987 Certificates of ParticipationCity of West Covina
Memorandum
TO: City Council AGENDA
ITEM NO. J-1
FROM: Finance Department DATE February 4, 1997
® PRINTED ON RECYCLED PAPER
SUBJECT: POSSIBLE REFINANCING OF 1987
CERTIFICATES OF PARTICIPATION
SUMMARY: The Council will consider forming a financing team to pursue the possible
refinancing of the 1987 refunding Certificates of Participation (Civic Center
Complex).
BACKGROUND:
In 1987, the City issued 1$26,875,000 in Certificates of Participation to refund $20,430,000 in
Certificates issued in 1984. The 1984 Certificates refunded two prior issues of the Civic Center
Authority used to:
1. Refinance the Civic C
parking facilities; and
2. Construct the
These facilities are leased
General Fund.
ANALYSIS:
A preliminary analysis ha
be achieved. This comp,
save the City approximate
saved annually through. 20
Complex consisting of City and police administration buildings and
facility.
to the City by the Authority. The lease payments are budgeted in the
shown that in today's environment a true interest cost of 5.49 % could
-es favorably with the existing true interest cost of 6.75 % and would
$1.9 million in present value terms. This equates to about $166,000
Staff contacted the following consultants to form a financing team:
BOND COUNSEL
Rutan & Tucker: 0.1 % of the amount of the bond issue -plus
expenses not to exceed $2,500. $25,000 on an
assumed bond issue size of $25 million.
Straddling, Yocca, Carlson & Rauth: $40,000 flat fee. .
Jones Hall Hill & White: 1 % of the first $1 million of principal
'/a % of next $2 million of principal
'/ % of next $5 million of principal
1/8% of next $10 million of principal
1 / 16 % of next remaining principal
i.e. $49,375 on an assumed bond issue size of $25
million.
Memo to City Council - Age*
Page 2
9
FINANCIAL ADVISOR
Kitahata & Company:
Rod Gunn Associates, Inc.:
Project Finance Associates:
$17,500 plus expenses not to exceed $1,000
$29,000 plus expenses
$35,000
Due to legal restriction, the. earliest that this refinancing could close would be early June. Staff
recommends that the financing team be hired now to be ready to enter the market as soon as
legally possible to take advantage of current low interest rates.
RECONEUENDATION:
Staff recommends that the Council authorize staff to assemble a financing team (as shown below)
to pursue a possible refinancing of the 1987 Certificates of Participation (Civic Center Complex):
Bond Counsel: Rutan & Tucker at 0.1 % of the amount of the bond issue plus expenses not to
exceed $2,500.
Financial Advisor: Kitahata & Company $17,500 plus expenses not to exceed $1,000.
Both fees are contingent on the successful completion of the refunding.
Basil Panas
City Controller
e
REVIEWED AND APPROVED:
Abraham tirector
Koniarsky
Finance
Possible Refinancing of 1987 Certificates of Participation. Agenda