HomeMy WebLinkAboutF-9 Staff Report - Council_Mt Cove CFD 2002-1CONSENT ITEM
F-9
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
VIA: SERGIO GONZALEZ, CITY MANAGER
FROM: TALIKA M. JOHNSON, DIRECTOR OF ADMINISTRATIVE SERVICES
DATE: JUNE 21, 2021
SUBJECT: COMMUNITY FACILITIES DISTRICT NO. 2002-1 (MOUNTAIN COVE)
REFUNDING BOND RESULTS
BACKGROUND:
Mountain Cove Community Facilities District was formed in 2002 and consists of 327 single-family
homes, on approximately 136 gross acres in the City of Azusa, located at the northern boundary at the
terminus of San Gabriel Canyon Road in the foothills of the San Gabriel Mountains.
On May 17, 2021 the City adopted Resolution No. 2021-C23 approving the issuance of the City of
Azusa Community Facilities District No. 2002-1 (Mountain Cove) Special Tax Refunding Bond, Series
2021 (2021 Bond) to refund the City’s outstanding 2011 Bonds. The Resolution authorized the City to
issue the 2021 Bond at a not-to-exceed true interest cost of 2.50% and a par amount of $6,000,000.
The financing team on the 2021 Bond consisted of Urban Futures, Inc. as Municipal Advisor; Best, Best
& Krieger LLP as Bond Counsel; Special District Financing & Administration as Special Tax
Consultant; and Wilmington Trust, National Association as Fiscal Agent.
RECOMMENDATION:
Staff recommends the City Council take the following action:
1)Receive, review, and file this report of results of Community Facilities District No. 2002-1
(Mountain Cove) Refunding Bond.
The 2021 Bond was closed on June 8, 2021 at a time of historically low interest rates. Working with the
City’s Municipal Advisor (Urban Futures, Inc.), the City conducted a rigorous solicitation process with
private placement banks that resulted in a final interest rate of 2.16% from First Foundation Bank, the
purchaser of the 2021 Bond.
The 2021 Bond was structured with level debt service, which is expected to level off special tax rates for
District residents. As shown in the below summary, the 2021 Bond will generate $1.5 million in cash
flow savings over the next 11 years, averaging approximately $139,000 annually. The net present value
APPROVED
CITY COUNCIL
6/21/2021
Refinancing of CFD 2002-1 Special Tax Bonds (Mountain Cove) – Final Results
June 21, 2021
Page 2
savings on the transaction was $1.1 million, or 19.8% of refunded par amount. Savings are net of costs
of issuance of $87,500.
Savings for 2021 Refunding Bond
Prior 2011 Bonds
Par Amount Outstanding1 $5,945,000
Prior Interest Rates 4.70% - 5.875%
2021 Refunding Bond
Bond Amount $5,468,563.71
True Interest Cost 2.16%
Net Present Value Savings ($) $1,116,898
Net Present Value Savings 19.8%
Avg. Annual Savings Through 2032 $139,000
Avg. Savings Per Parcel Through 20322 $427
2021 Refunding Bond – Cash Flow Savings
Bond Year Annual Savings Per Parcel2
2022 $104,435 $319
2023 112,129 343
2024 117,654 360
2025 126,391 387
2026 132,901 406
2027 137,326 420
2028 148,245 453
2029 151,814 464
2030 163,326 499
2031 167,195 511
2032 173,714 531
Total $1,535,131 $4,695
1. As of 6/8/2021; Proceeds of the 2021 Bond are being used to refund callable 2011 Bonds maturing in 2022 through 2032 on 9/1/2021.
2. Based on 327 taxable parcels.
FISCAL IMPACT:
Overall, the refinancing will lower the annual special taxes for District residents by approximately $319
to $531 in each year. The savings will be in effect when property owners in the District receive tax bills
for fiscal year 2021-22.
Prepared by: Reviewed and Approved:
Talika M. Johnson Sergio Gonzalez
Director of Administrative Services City Manager