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Beaumont council directs staff to use 3% NPV or $200 floor when evaluating CFD refundings, with limits on escalators
Summary
Council members asked staff to return with specific packages of community facilities districts (CFDs) to consider for refunding under a policy that uses either a 3% net-present-value savings threshold or a $200 annual savings floor; the council also set conditions for removing built-in tax escalators.
Beaumont City Council members on the dais directed city staff to use a clear threshold — either a 3% net present value (NPV) savings or a $200-per-year savings floor — when deciding which community facilities district (CFD) refunding opportunities to bring back for formal approval.
Council members and the city’s financing team discussed a long slate of potential CFD refundings and the tradeoffs of refinancing now versus waiting for bonds to become callable at par. The council’s guidance calls for approving refunding packages when the greater of a 3% NPV savings or $200 in annual savings can be achieved. For CFDs that include a built-in tax “escalator” (a scheduled property tax step-up), the council said staff should only remove an escalator if doing so would result in near-zero net dis-savings in the first year and no net…
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