FULL AGENDA PACKET_2021-05-18 - Laserfiche WebLink

Home Browse Search

RFP No. 21-025 EXHIBIT B �G42 Ml loll POP' 1IIIIIIIIIIIIIIIIIIIi��_ The chart below is a summary comparison of the two options. Because the average life of the UAL payments for the 50% POB option is 24 years and the 90% option has an average life of 18.5 years the True Interest Cost (TIC) is higher for the smaller PCB issuance. However, the 50% option offers a greaLer percenLage of savings. It is important to delineate the difference between true budgetary savings and deferred UAL savings. POBs refinancing the City'sfuture UAL payments at a lower interest rate. The difference between the scheduled UAL payments and the payments on the POBs represent deferred UAL payments, which total $184 million or $253 million in deferred UAL payments / $145 million and $217 million Net Present Value (NPV) for the 50% and 90% POB, respectively. In other words, this amount represents the savings from what the City would be required to pay in the future. Since these savings are predicated on future rising payments, this amount cannot be construed as actual budgetary cash flows savings. We measure budgetary cash flow savings by comparing the POB debt service versus the FY 21- 22 UAL payment amount of $S6.2 million. As noted in the table below, the annual debt services on POBs are equal to $51.6 million and $46.2 million for the 50% and 90% POB respectively. The green shaded area in the chart above, illustrates true cash flow or budgetary savings realized from a POB issue, which totals $37 million or $161 million for 50% and 90% POBs. In either case, the savings from a POB is substantial. Par Value Total Debt Service Avg. Annual Payment Budgetary Savings Deferred UAL Savings NPV Savings Savings 9 fr'*C 357,800,000 5 641,865,000 528,044,092 884.946.714 (0,4 'kW l (W 1 182,699,037 253,872,795 1l1 /1,_/_5.9,62/1 21/,109,100 41% 34% P, .1 FigG 3. 0151i: City Council 23 — 53 5/18/2021