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August 14, 2000
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STAFF REPORT r
TO: Mayor Campbell and Members of the Cit y Council
THRU: Dan Dorsey, Acting City Manager
FROM: Pamela Arends-King, Director of Administrative Services/Treasurer
SUBJECT: REFINANCING THE ASSESSMENT DISTRICT
NO. 94-1 (SURFSIDE COLONY) BONDS.
SUMMARY OF REQUEST:
City Council approve the refinancing of the Assessment District No. 94-1 (Surfside
Colony) Taxable Limited Obligation Improvement Bonds.
BACKGROUND:
During the past several weeks Sutro & Co. Incorporated has studied the feasibility of
refunding the outstanding bonds for Assessment District No. 94-1 (Surfside Colony). It
was determined by taking advantage of the current interest rate environment and issuing
tax exempt bonds the annual debt service savings would be approximately $20,000,
resulting in a reduction of assessments to each property owner of $108 annually. In
aggregate,the property owners would achieve debt service savings in excess of$300,000
during the life of the outstanding bond issue. The total aggregate principal amount of
bonds to be reissued is $1,570,000. This amount includes $1,370,000 principal amount
of bonds outstanding, interest and closing costs. The life of the newly issued bonds
cannot exceed the life of the existing bonds and the debt service payments for the newly
issued bonds cannot exceed the current principal and interest payments on the existing
bonds. The outstanding bonds can only be redeemed on interest payment dates, which
are September 2 and March 2. Therefore, to eliminate an additional interest expense of
$28,000 it is in the best interest of the property owners if the approval of the refinancing
of the bonds occurs prior to September 2, 2000.
To initiate the refinancing of the bonds five resolutions need to be approved by the City
Council.
The first resolution declares the intention of the City Council to undertake reassessment
proceedings and to issue limited obligation refunding bonds by summary proceedings
without notice and hearing.
Agenda Item
A
August 14, 2000
Staff Report
Refinancing the Assessment District No. 94-1 (Surfside Colony)Bonds
Page 2
The second resolution approves and confirms the report on the levy of reassessments and
the refunding of its 1915 act improvement bonds.
The third resolution requests the City Council to approve the issuance and sale of
authority 2000 refunding revenue bonds, approve form and substance of indenture of
trust, authorize modifications thereof and execution and delivery as modified, approve a
preliminary official statement, authorize changes thereto and execution and delivery
thereof and of an official statement to be derived therefrom, approve a local obligation
purchase contract, approve a bond purchase contract and a continuing disclosure
certificate, authorize modifications thereof and execution and delivery of each; and
authorize related actions necessary to implement the proposed refunding program. Please
note the actual amount of principal to be issued will be $1,370,000.
The fourth resolution requests the Seal Beach Public Financing Authority to authorize the
issuance, sale and delivery of not to exceed $2,500,000 aggregate principal amount of
2000 Authority Refunding Revenue Bonds. It also requests the approval and
authorization of the execution and delivery of indenture of trust, approval of a
preliminary official statement and an official statement to be derived therefrom, a local
obligation purchase contract, and approval of professional services agreements with
bond counsel and disclosure counsel, and authorization of related actions in connection
with the issuance, sale and delivery of the 2000 Authority Refunding Revenue Bonds.
Please note the actual aggregate principal amount of the 2000 Authority Refunding
Revenue Bonds will be approximately $1.570,000.
The fifth resolution provides for the issuance of City of Seal Beach Limited Obligation
refunding bonds of the Surfside Colony Reassessment District No. 2000-1 and prescribes
the form of said bonds and certain terms and provisions therefrom: authorizes the
execution of said bonds, approves the sale of said bonds to the Seal Beach Public
Financing Authority, and approves form and substance of preliminary official statement
and execution of final official statement to be derived therefrom.
FISCAL IMPACT:
The refinancing of the Assessment District No. 94-1(Surfside Colony)bonds will have no
fiscal impact on the City's General Fund because the City is not liable for the debt service
on the bonds.
August 14, 2000
Staff Report
Refinancing the Assessment District No. 94-1 (Surfside Colony)Bonds
Page 3
RECOMMENDATION:
Staff recommends City Council approve the refinancing of the Assessment District No.
94-1 (Surfside Colony)bonds to provide significant tax savings for property owners.
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Pamela Arends-King
Director of Administrative Services/Treasurer
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Dan D iI rse
Acting City Manager