Laserfiche WebLink
REQUEST FOR <br />COUNCIL /SANTA ANA <br />FINANCING AUTHORITY ACTION <br />CITY COUNCIL MEETING DATE: <br />AUGUST 5, 2014 <br />TITLE: <br />UPDATE ON RESULTS OF THE 2004 <br />WATER SYSTEM BONDS ISSUANCE <br />CITY MANAGER <br />RECOMMENDED ACTION <br />Receive and File. <br />DISCUSSION <br />CLERK OF COUNCIL USE ONLY: <br />APPROVED <br />❑ As Recommended <br />❑ As Amended <br />❑ Ordinance on I" Reading <br />❑ Ordinance on 2nd Reading <br />❑ Implementing Resolution <br />❑ Set Public Hearing For <br />CONTINUED TO <br />FILE NUMBER <br />On April 1, 2014, the financing team consisting of City staff, Urban Futures, Inc. (financial advisor), <br />Stifel /De La Rosa & Co. (underwriters) and Best, Best & Krieger LLP (bond counsel), began the <br />process of developing and preparing the documents necessary for the issuance of new Water <br />System Bonds. The bonds to be refinanced were used to finance capital projects relating to the <br />City's water system. More specifically, the funds were used for the Garthe Reservoir Project, the <br />South Reservoir Booster Station, as well as various water main replacement projects throughout <br />the City. The current bonds outstanding are in the amount of $12,785,000 with interest rates <br />ranging from 3.5% to 5.0 %. The final term for the 2004 Bonds was September 1, 2024. <br />On July 15, 2014 the City Council authorized the execution of financing documents related to the <br />refinancing of the 2004 Water Revenue Bonds. On July 9, 2014 a credit presentation was made to <br />Standard and Poor's that highlighted the City's strong financial position and strong water <br />enterprise. On July 15, Standard and Poor's issued a report that confirmed the City's strong AA <br />rating on the bonds. The report highlighted the City's financial operations as strong with a history <br />of strong debt service coverage. In addition, it referenced the water enterprise's stable operations, <br />adequate water supply and capacity to meet demand, and rated overall liquidity and financial <br />operations as strong. <br />Overall the timing for the issuance for the new bonds has improved tremendously over the past <br />year and more so over the past few months. With interest rates on US Treasury Bonds having <br />decreased from 3.0% to 2.5% since the beginning of the year, the municipal bond market has <br />followed suit as shown below. <br />3 -1 <br />