Title
Highlights of the Finance Committee Meeting of September 7, 2016
Body
CITY OF SAN LEANDRO
FINANCE COMMITTEE
September 7, 2016
5:00 - 6:30p.m.
San Leandro City Hall
835 East 14th Street
San Leandro, California
(Sister Cities Gallery)
HIGHLIGHTS
1. CALL TO ORDER
Mayor Cutter called the meeting to order at 5:00 p.m.
1.A. Attendance
Committee members present: Mayor Cutter, Councilmember Lee, Councilmember Prola
City staff present: City Manager Zapata, Acting Assistant City Manager Kay, Community Development Director Battenberg, Assistant Finance Director Fuentes, Budget/Compliance Manager Perini
Public present: Holly Vocal, Corina Lopez
1.B. Announcements
None.
2. DISCUSSION ITEMS
2.A. 2016 Refunding lease Revenue Bonds
The City of San Leandro issued Certificates of Participation (COPs) in 2007 to refund prior debt, the 1999 COPs. Currently there is $16.7 million outstanding on that issuance with interest rates ranging from 4% 2016 to 4.375% in 2029. The proposed refinancing is expected to bring the average interest rate down to approximately 2%, based on current market conditions.
Holly Vocal of Stifel, Bond Underwriter, stated that the following financing strategy is now contemplated:
* The 2007 COPs will be refunded as Lease Revenue Bonds. Lease Revenue Bonds in the municipal market are perceived as a better credit than COPs.
* No Debt Service Reserve fund is necessary and that will increase cash flow savings for the City.
* Standard and Poor's will be the only rating the City will pursue and this will provide a cost savings of $25,000 and there is no impact when bringing the bonds to market.
* Allowing for issuance of additional debt. In 2007 the Library had an asset value of $22 million. Now the refinancing par value is $14 million and therefore there is at least $7 million of value in the Library value that will provide the City with more flexibility for future new money financing, which could be secured by the Li...
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