Title
Recommendation to Accept Report on Sale of Successor Agency to the Community Improvement Commission of the City of Alameda 2014 Bonds. (Finance 2410)
Body
ody
To: Honorable Mayor and Members of the City Council
From: John A. Russo, City Manager
Re: Accept Report on Sale of Successor Agency to the Community Improvement Commission of the City of Alameda 2014 Bonds
BACKGROUND
The State suspended all new redevelopment activity except for limited specified activities as of June 27, 2012. The City elected to become the Successor Agency and on February 1, 2012 the Community Improvement Commission's assets were distributed to and liabilities were assumed by the Successor Agency. All actions of the Successor Agency are subject to review of the Oversight Board whose members are appointed by the various taxing entities (i.e. AC Transit, Alameda Unified School District, and Peralta Community College District) which are impacted by tax increment financing.
The Successor Agency is obligated to receive property tax revenues and pay debt service on existing debt issues. One of the limited specified activities which is permitted is refinancing existing debt if there are debt service savings within the same or shorter maturity date. The Successor Agency continues to explore these criteria for each of the outstanding debt issues. In August 2014, a proposal to refund existing 2003 Taxable and Tax-Exempt Tax Allocation Bonds was approved by the Successor Agency.
DISCUSSION
The goal of the refunding was to reduce the True Interest Cost (TIC) by approximately 1.50%. The par amount of the proposed refunding was not to exceed $33 million in tax-exempt bonds and $32 million in taxable bonds. The net present value savings was estimated at $6 million. The annual savings was estimated to be $475,000 through 2033 of which $118,750 would accrue to the City's General Fund.
The City's Financial Advisor, Pacific Financial Management, Inc. (PFM) ser...
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