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AGENDA REPORT Reviewed:
City Manager
MEETING DATE: NOVEMBER 19, 2019
TO: MATTHEW S. WEST, CITY MANAGER
FROM: JOHN A. BUCHANAN, FINANCE DIRECTOR
SUBJECT: RESOLUTION AUTHORIZING THE COMMENCEMENT OF
PROCEEDINGS IN CONNECTION WITH THE PROPOSED ISSUANCE
OF BONDS TO REFUND THE OUTSTANDING TUSTIN PUBLIC
FINANCING AUTHORITY (ORANGE COUNTY, CALIFORNIA) 2013
WATER REVENUE BONDS, CONFIRMING THE APPOINTMENT OF
PROFESSIONAL SERVICES AND AUTHORIZING CERTAIN OTHER
ACTIONS IN CONNECTION THEREWITH
SUMMARY:
Approval by the City of Tustin ("City") is requested to authorize the initiation of
proceedings to refinance the 2013 Water Revenue Bonds (the "2013 Bonds") to take
advantage of lower interest rates to reduce the annual debt service payments.
RECOMMENDATION:
It is recommended that:
• THE CITY COUNCIL ADOPT CITY COUNCIL RESOLUTION 19-55 ENTITLED:
RESOLUTION AUTHORIZING THE COMMENCEMENT OF PROCEEDINGS IN
CONNECTION WITH THE PROPOSED ISSUANCE OF BONDS TO REFUND
THE OUTSTANDING TUSTIN PUBLIC FINANCING AUTHORITY (ORANGE
COUNTY, CALIFORNIA) 2013 WATER REVENUE BONDS, CONFIRMING THE
APPOINTMENT OF PROFESSIONAL SERVICES AND AUTHORIZING
CERTAIN OTHER ACTIONS IN CONNECTION THEREWITH
FISCAL IMPACT:
The Bonds will have no financial impact on the City's General Fund, as all payments of
principal and interest on the Bonds will be paid solely from the net revenues of the
Water Enterprise Fund. It is estimated that the refunding of the 2013 Bonds on a
taxable basis will reduce annual debt service payments by $91,000 per year, totaling
over $1.43 million in net present value savings over the remaining term of the Bonds.
BACKGROUND:
The City, working with its Municipal Advisor, Fieldman, Rolapp & Associates, has
determined that, due to prevailing financial market conditions, it is in the best interests
INITIATION OF PROCEEDINGS TO REFUND THE 2013 WATER REVENUE BONDS
NOVEMBER 19, 2019
PAGE 2
of the City at this time to refund the 2013 Bonds. The $14.05 million 2013 Bonds were
issued to fund the Water System Improvements Projects. The 2013 Bonds mature in
2043.
Refunding Process and Next Steps:
It is anticipated that the refunding will take approximately three months to complete. The
key milestones to complete the refunding are identified below:
• City Council approve initiation of proceedings to refund outstanding 2013 Bonds
and approve the engagement of professionals (Tonight's Action)
• Secure underlying credit rating from Standard & Poor's (January 2020)
• City Council Approval of the Preliminary Official Statement and remaining
financing documents and legal documents (January 2020)
• Negotiated sale of Refunding Bonds (February 2020)
• Bond Closing (March 2020)
• Prior Bonds Called (April 2022)
The City Council resolution being presented for approval authorizes the initiation of
proceedings to refund the outstanding 2013 Bonds and approves the engagement of
professionals to assist the City to refund the 2013 Bonds.
Jo)h�
A. Buchanan
Fince Director
Attachment: Resolution No. 19-55
RESOLUTION NO. 19-55
RESOLUTION AUTHORIZING THE COMMENCEMENT OF PROCEEDINGS IN CONNECTION
WITH THE PROPOSED ISSUANCE OF BONDS TO REFUND THE OUTSTANDING TUSTIN
PUBLIC FINANCING AUTHORITY (ORANGE COUNTY, CALIFORNIA) 2013 WATER
REVENUE BONDS, CONFIRMING THE APPOINTMENT OF PROFESSIONAL SERVICES
AND AUTHORIZING CERTAIN OTHER ACTIONS IN CONNECTION THEREWITH
WHEREAS, the City proposes to issue its water refunding revenue bonds (the "Bonds") to
refund the outstanding Tustin Public Financing Authority (Orange County, California) 2013 Water
Revenue Bonds; and
WHEREAS, it is appropriate that the Council formally authorize commencement of
proceedings, to appoint a municipal advisor, a bond counsel, a disclosure counsel, and an
underwriter, and to approve certain preliminary actions in connection with the authorization,
issuance, and sale of the Bonds;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUSTIN DOES RESOLVE,
DECLARE, DETERMINE, AND ORDER AS FOLLOWS:
SECTION 1. The Council authorizes appropriate officers and officials of the City to proceed with
the preparation of the necessary documents in connection with the issuance and sale of the
Bonds, subject to the final approval thereof by the Council at a subsequent meeting.
SECTION 2. The Council hereby confirms the appointment of Fieldman, Rolapp & Associates,
Inc. as municipal advisor to the City in connection with the authorization, issuance, and sale of
the Bonds.
SECTION 3. The Council hereby confirms the appointment of Quint & Thimmig LLP as bond
counsel and disclosure counsel in connection with the authorization, issuance, and sale of the
Bonds.
SECTION 4. The Council hereby confirms the appointment of Stifel, Nicolaus & Company,
Incorporated as underwriter in connection with the authorization, issuance, and sale of the Bonds.
SECTION 5. All actions of the officers, agents, and employees of the City that are in conformity
with the purposes and intent of this resolution, whether taken before or after the adoption hereof,
are hereby ratified, confirmed, and adopted.
SECTION 6. The Mayor, the City Manager, the Finance Director, and other appropriate officers
and officials of the City are hereby authorized and directed to take such action and to execute
such documents as may be necessary or desirable to effectuate the intent of this resolution.
SECTION 7. This resolution shall be in full force and effect immediately upon its adoption.
Resolution No. 19-55
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Tustin that the
RESOLUTION AUTHORIZING THE COMMENCEMENT OF PROCEEDINGS IN CONNECTION
WITH THE PROPOSED ISSUANCE OF BONDS TO REFUND THE OUTSTANDING TUSTIN
PUBLIC FINANCING AUTHORITY (ORANGE COUNTY, CALIFORNIA) 2013 WATER
REVENUE BONDS, CONFIRMING THE APPOINTMENT OF PROFESSIONAL SERVICES AND
AUTHORIZING CERTAIN OTHER ACTIONS IN CONNECTION THEREWITH is hereto approved
and adopted.
PASSED, APPROVED, AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF
TUSTIN THIS 19th DAY OF NOVEMBER, 2019.
CHARLES E. PUCKETT
Mayor
ATTEST:
ERICA N. YASUDA
City Clerk
APPROVED AS TO FORM:
DAVID E. KENDIG
City Attorney
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) SS
CITY OF TUSTIN )
I, Erica N. Yasuda, City Clerk and ex -officio Clerk of the City Council of the City of Tustin, California,
do hereby certify that the whole number of the members of the City Council of the City of Tustin is
five; that the above and foregoing Resolution No. 19-55 was duly passed and adopted at a regular
meeting of the Tustin City Council, held on the 19th day of November, 2019 by the following vote:
COUNCILMEMBER AYES:
COUNCILMEMBER NOES:
COUNCILMEMBER ABSTAINED:
COUNCILMEMBER ABSENT:
ERICA N. YASUDA
City Clerk
Resolution No. 19-55