1998AGN JUN 02 I08 - Laserfiche WebLink

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City of Colton AGENDA REPORT FOR COUNCIL MEETING OF JUNE 2 1998 TO: HONORABLE MAYOR AND CITY COUNCIL G i 1 APPROVAL: HENRY T. GARCIA, CITY MANAGE, FROM: ANNA A. VEGA, FINANCE DIRECTOR C� SUBJECT: APPROVAL OF COMMUNITY FACILITIES DISTRICT NO. 89-2 REFINANCING TEAM DATE: MAY 27,1998 BACKGROUND The Community Facilities District 89-2 (CFD) was formed by the City of Colton, at which time bonds were sold to finance public facilities that benefit the property within the boundaries of the CFD. The property owners are responsible for paying an annual special tax in order to repay the debt. The total amount of the bonds authorized was $9,000,000 however, there were only $3,395,000 bonds issued. Currently, there is $3,290,000 in principal amount of outstanding bonds. The outstanding bonds were issued in 1989. Interest rates on, the bonds range between 7.05% and 7.75% with the final maturity, on September 1, 2019. The bonds are callable on September 1, 1999 at a premium of 2%. DISCUSSION/ANALYSIS We have determined that there is a possibility of refunding the City of Colton Community Facilities District No. 89-2 Special Tax Bonds, Series A. The City would issue a new set of bonds in an amount sufficient to refund all the outstanding bonds, including payment of the 2% redemption premium, costs of issuance on the new bonds, and the funding of a reserve fund for the new bonds. The new debt service would be structured to provide approximately equal annual savings throughout the life of the issue. There would be no extension of maturities. An escrow account will be funded to redeem the Outstanding Bonds, which will be fully retired upon the call date of September 1, 1999. There is one significant timing consideration with regards to the refunding schedule. The transaction must be completed by the beginning of August so that the new debtservice schedule and accompanying new special tax rates can be posted on the County roil for fiscal year 1998-99: This would allow property owners the realized savings on their special taxes in December of 1998 and April of 1999. If the City initiated proceedings in June, this deadline could be met. Currently, there are 188 single-family units in the CFD and 141 entitled lots. Together, those properties generate maximum special taxes of $340,000, which is more than adequate to cover debt service. Additionally, there are 19 acres of undeveloped property that can generate another $60,000 of annual special tax revenue. Overall, the credit quality of this CFD would be considered very good. Item # 8