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OCII approves refinancing authorization for 2017 refunding bonds; commissioner recuses
Summary
The Commission on Community Investment and Infrastructure approved a resolution authorizing up to $158 million (taxable) and $27 million (tax-exempt) in refunding tax allocation bonds intended to refinance outstanding obligations and realize estimated savings of about $2.6 million; one commissioner recused from the vote.
The Commission on Community Investment and Infrastructure on Tuesday voted to authorize issuance of two refunding bond series under Resolution 24 2017 to refinance outstanding redevelopment project obligations.
Staff said the authorization covers a taxable Series D issuance not to exceed $158,000,000 and a tax-exempt Series E issuance not to exceed $27,000,000. Senior Financial Analyst John Daigle told commissioners the actual deal is expected to be substantially smaller than those "not to exceed" caps — roughly $123 million in par amount if markets permit — and identified five refunding candidates in the agency—ook.
"The savings are estimated at $2,600,000.0 or 11.6% of the refunded principal," Daigle said, describing estimated net present-value savings that the agency expects the refunding to generate.
Daigle and staff explained that those savings remain in the Redevelopment Property Tax Trust Fund (RPTTF) for distribution to taxing entities and would not flow into OCII operating revenue. "It does not become available to us," Daigle said, noting the savings could be available to fund future housing bonds or otherwise go to other taxing entities.
Commissioner Singh announced a conflict and recused himself from the item. The motion to approve — moved by Commissioner Rosales and seconded by Vice Chair Bustos — passed on a 4-0 vote with one recusal.
The resolution also authorizes execution of the supplemental indenture of trust, bond purchase agreement and redemption agreements and affirms the selection of underwriters and financing team, including CSG Advisors as municipal advisor, Jones Hall as bond counsel, and Piper Jaffray and Stifel as underwriters.
Next steps outlined by staff include consideration by the Oversight Board, submission of the savings analysis to the Department of Finance (beginning a roughly 60-day review clock), preparation of a preliminary official statement and pricing the bonds (staff indicated pricing could happen in October with issuance in early November, subject to market conditions).
The commission pproved the resolution and instructed staff to proceed with the financing steps required to finalize the refunding transaction.
Votes at a glance: Resolution 24 2017 (refunding bonds) pproved; vote 4 ayes, 0 no, 1 recusal.
