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Summary: Approve Technical Modifications to the 2003 Variable Rate Bonds for Alameda Point.
Adoption of Resolution Approving Amendments to the Reimbursement Agreement, Dated as of December 1, 2003, and Approving a Fee Letter, Relating to the $9,080,000 Alameda Public Financing Authority Variable Rate Demand Revenue Bonds (Alameda Point Improvement Project), 2003 Series A, and the $4,360,000 Alameda Public Financing Authority Taxable Variable Rate Demand Revenue Bonds (Alameda Point Improvement Project), 2003 Series B, and Approving Official Actions. (City Council); and
Adoption of Resolution Electing to Substitute the Remarketing Agent, Approving the Form and Authorizing Execution of a Remarketing Agent Agreement with the Successor Remarketing Agent, Electing to Remove the Confirming Letter of Credit, Approving the Form and Authorizing Execution of Amendments to the Indenture of Trust, Dated as of December 1, 2003, Approving Amendments to the Reimbursement Agreement, Dated as of December 1, 2003, and Approving a Fee Letter, All Relating to the $9,080,000 Alameda Public Financing Authority Variable Rate Demand Revenue Bonds (Alameda Point Improvement Project), 2003 Series A, and the $4,360,000 Alameda Public Financing Authority Taxable Variable Rate Demand Revenue Bonds (Alameda Point Improvement Project), 2003 Series B, and Approving Official Actions. (APFA) (Base Reuse 819099)
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To: Honorable Mayor and Members of the City Council
Honorable Chair and Members of the City of Alameda Financing Authority
From: John A. Russo, City Manager
Re: Adopt A Resolution Approving Amendments To The Reimbursement Agreement, Dated As Of December 1, 2003, And Approving A Fee Letter, Relating To The $9,080,000 Alameda Public Financing Authority Variable Rate Demand Revenue Bonds (Alameda Point Improvement Project), 2003 Series A, And The $4,360,000 Alameda Public Financing Authority Taxable Variable Rate Demand Revenue Bonds (Alameda Point Improvement Project), 2003 Series B, And Approving Official Actions (City Council)
Adopt A Resolution Electing To Substitute The Remarketing Agent, Approving The Form And Authorizing Execution Of A Remarketing Agent Agreement With The Successor Remarketing Agent, Electing To Remove The Confirming Letter Of Credit, Approving The Form And Authorizing Execution Of Amendments To The Indenture Of Trust, Dated As Of December 1, 2003, Approving Amendments To The Reimbursement Agreement, Dated As Of December 1, 2003, And Approving A Fee Letter, All Relating To The $9,080,000 Alameda Public Financing Authority Variable Rate Demand Revenue Bonds (Alameda Point Improvement Project), 2003 Series A, And The $4,360,000 Alameda Public Financing Authority Taxable Variable Rate Demand Revenue Bonds (Alameda Point Improvement Project), 2003 Series B, And Approving Official Actions (APFA)
BACKGROUND
The Alameda Public Financing Authority (the Authority) issued a total of approximately $12.4 million in variable rate bonds related to Alameda Point in 2003. The source of repayment for these bonds is the rental income received from properties managed by the City's Base Reuse department. The Authority has decided to replace its existing remarketing agent for the Bonds and to cancel the confirming letter of credit established for the Bonds issued by the State Teachers Retirement System (STRS).
DISCUSSION
City staff and consultants have been working to prepare the necessary documents to substitute the remarketing agent, to remove a confirming letter of credit and to amend the Reimbursement Agreement. The remarketing agent is being substituted so that the City may continue to receive a letter of credit on these bonds from Union Bank and realize a favorable interest rate on its variable rate bonds. The letter of credit from STRS is being removed because the cost of maintaining such confirming letter of credit exceeds the interest rate benefit of retaining it.
These proposed revisions require amendments to the Indenture and to the reimbursement agreement, dated as of December 1, 2003, by and among the Authority, ARRA and Union Bank, N.A., as letter of credit bank, previously known as Union Bank of California, N.A. (the Bank). The documents include resolutions approving such changes, a new remarketing agreement, a first amendment to the indenture and a first amendment to reimbursement agreement, including a bank fee letter.
FINANCIAL IMPACT
The fee to be charged by the new remarketing agent will increase to 0.100% from 0.075%. The fee to be charged by the Bank will increase to 1.000% from 0.850%. The STRS fee will be eliminated. The net effect of $4,000 of the increased remarketing and letter of credit fees and the elimination of the STRS fee is accounted for in the Base Reuse budget.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
This action is in conformance with the Alameda Municipal Code.
ENVIRONMENTAL REVIEW
This activity is not a project and is exempt from the California Environmental Quality Act (CEQA) pursuant to section 15378 (b)(4) of the CEQA Guidelines, because it involves governmental fiscal activities (issuance of bonds), which does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment.
RECOMMENDATION
Adopt A Resolution Approving Amendments To The Reimbursement Agreement, Dated As Of December 1, 2003, And Approving A Fee Letter, Relating To The $9,080,000 Alameda Public Financing Authority Variable Rate Demand Revenue Bonds (Alameda Point Improvement Project), 2003 Series A, And The $4,360,000 Alameda Public Financing Authority Taxable Variable Rate Demand Revenue Bonds (Alameda Point Improvement Project), 2003 Series B, And Approving Official Actions
Adopt A Resolution Electing To Substitute The Remarketing Agent, Approving The Form And Authorizing Execution Of A Remarketing Agent Agreement With The Successor Remarketing Agent, Electing To Remove The Confirming Letter Of Credit, Approving The Form And Authorizing Execution Of Amendments To The Indenture Of Trust, Dated As Of December 1, 2003, Approving Amendments To The Reimbursement Agreement, Dated As Of December 1, 2003, And Approving A Fee Letter, All Relating To The $9,080,000 Alameda Public Financing Authority Variable Rate Demand Revenue Bonds (Alameda Point Improvement Project), 2003 Series A, And The $4,360,000 Alameda Public Financing Authority Taxable Variable Rate Demand Revenue Bonds (Alameda Point Improvement Project), 2003 Series B, And Approving Official Actions
Respectfully submitted,
Fred Marsh, Finance Director