FINANCING PLANS FOR 2025 CERTIFICATES OF PARTICIPATION (COPS) SERIES 2025 A (400 MBB)SERIES 2025 B (PUBLIC SAFETY RADIOS)JULY 28, 2025 2CITY OFMANHATTAN BEACH
DEBT FINANCING PLAN FOR 400 MBB/RADIOS AUGUST 5, 2025CITY COUNCIL MEETING AGENDA1. Background2. 400 Manhattan Beach Boulevard (MBB) Project Timeline and Overview3. Public Safety Radio Equipment Purchase Overview4. Proposed Financing Plans Presented by KNN Public Finance5. Next Steps and Recommendation to Issue 2025 COPs 3CITY OFMANHATTAN BEACH
DEBT FINANCING PLAN FOR 400 MBB/RADIOS AUGUST 5, 2025
BACKGROUND•Purchase of 400 MBB for $13.0 Million approved by City Council on April 1, 2025•Resolution No. 25-0036 stated intention to issue tax-exempt debt and reimburse General Fund•Purchase of Public Safety Radio Communications Equipment for $3.6 million approved by City Council on June 17, 2025•Resolution No. 25-0081 stated intention to issue tax-exempt debt and reimburse General FundCITY COUNCIL MEETING 4CITY OFMANHATTAN BEACH
DEBT FINANCING PLAN FOR 400 MBB/RADIOS AUGUST 5, 2025
AAA CREDIT RATING AFFIRMED BY S&P•The City’s Issuer credit rating “AAA” was affirmed by S&P•The 2025A and 2025B COPs will carry a “AA+” rating, which is the highest credit rating possible for COPs•S&P also reaffirmed the City’s “AAA” rating on the Pension Obligation Bonds and “AA+” on all existing COPs
CITY COUNCIL MEETING
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DEBT FINANCING PLAN FOR 400 MBB/RADIOS AUGUST 5, 2025CITY COUNCIL MEETING 400 MBB PROJECT TIMELINE
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400 MBB FINANCING OVERVIEW
DEBT FINANCING PLAN FOR 400 MBB/RADIOS AUGUST 5, 2025
*Goal is to refinance 2025A Series in advance of July 1, 2028* •Bond proceeds will reimburse General Fund for $13.0 million land acquisition and costs of issuance•$2.0 million estimated for initial entitlement and conceptual design phases based on projections from Engineering•$1.0 million available in FY 2025-2026 CIP budget•Additional appropriation and possible drawdown from CIP Fund reserve will be factored into FY 2026-2027 CIP budgetCITY COUNCIL MEETING 7CITY OFMANHATTAN BEACH
PUBLIC SAFETY RADIO EQUIPMENT
DEBT FINANCING PLAN FOR 400 MBB/RADIOS AUGUST 5, 2025CITY COUNCIL MEETING •Critical radio communications equipment last purchased in 2018•Average useful life of roughly 7 years•307 radios will be replaced (251 for Police and 56 for Fire) in 2025•Bond Proceeds will reimburse General Fund for $3.6 million equipment purchase and costs of issuance•First debt service payment will be budgeted in FY 2026-2027 General Fund Budget
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1. Certificates of Participation, Series 2025A •400 MBB•Term Rate Mode2. Certificates of Participation, Series 2025B •Public Safety Radios•Fixed Rate DEBT FINANCING PLAN FOR 400 MBB/RADIOS AUGUST 5, 2025
DEBT FINANCING PLANS
Presented by KNN Public Finance CITY COUNCIL MEETING
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•Fixed Rate Soft Put Bonds best achieve the City’s financing goals:•Reimburse the General Fund within the 18-month timeframe of the Reimbursement Resolution•Provide maximum flexibility for the ultimate use and tax status of the acquired property•Alternative financing structures do not provide use or tax status flexibility and/or are costlier•Put bonds provide a short-term financing (3 years) with a long-term nominal final maturity (30 years)•The City agrees to put (i.e., purchase) the bonds in three years (7/1/2028 Soft Put Date)•No event of default if the COPs remain beyond the Soft Put Date DEBT FINANCING PLAN FOR 400 MBB/RADIOS AUGUST 5, 2025CITY COUNCIL MEETING PLAN OF FINANCE – 2025 A COPS
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•Fixed Rate, Tax-Exempt•January-1 and July-1 semi-annual interest, beginning January 1, 2026•January 1, 2028 Optional Par Call Date•July 1, 2028 Soft Put Date•Interest only during the three-year put period; principal amortization begins July 1, 2028 DEBT FINANCING PLAN FOR 400 MBB/RADIOS AUGUST 5, 2025
PLAN OF FINANCE – 2025 A COPS
Preliminary; subject to change
Sources and UsesPar Amount $12,710,000Premium 553,139TOTAL SOURCES $13,263,139Project $13,004,145Cost of Issuance 195,444Underwriter's Discount 63,550TOTAL USES $13,263,139
CITY COUNCIL MEETING
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Payment DatePrincipal Coupon InterestAnnual Debt Service2025A COPBalance7/1/2026 $0 $536,644 $536,644 $12,710,0007/1/2027 0 635,500 635,500 12,710,0007/1/2028 220,000 5.00% 635,500 855,500 12,490,0007/1/2029 230,000 6% / 8% 938,832 1,168,832 12,260,0007/1/2030 240,000 8.00% 980,800 1,220,800 12,020,0007/1/2031 250,000 8.00% 961,600 1,211,600 11,770,0007/1/2032 265,000 8.00% 941,600 1,206,600 11,505,0007/1/2033 280,000 8.00% 920,400 1,200,400 11,225,0007/1/2034 290,000 8.00% 898,000 1,188,000 10,935,0007/1/2035 305,000 8.00% 874,800 1,179,800 10,630,0007/1/2036 320,000 8.00% 850,400 1,170,400 10,310,0007/1/2037 340,000 8.00% 824,800 1,164,800 9,970,0007/1/2038 355,000 8.00% 797,600 1,152,600 9,615,0007/1/2039 370,000 8.00% 769,200 1,139,200 9,245,0007/1/2040 390,000 8.00% 739,600 1,129,600 8,855,0007/1/2041 410,000 8.00% 708,400 1,118,400 8,445,0007/1/2042 430,000 8.00% 675,600 1,105,600 8,015,0007/1/2043 455,000 8.00% 641,200 1,096,200 7,560,0007/1/2044 475,000 8.00% 604,800 1,079,800 7,085,0007/1/2045 500,000 8.00% 566,800 1,066,800 6,585,0007/1/2046 525,000 8.00% 526,800 1,051,800 6,060,0007/1/2047 550,000 8.00% 484,800 1,034,800 5,510,0007/1/2048 580,000 8.00% 440,800 1,020,800 4,930,0007/1/2049 605,000 8.00% 394,400 999,400 4,325,0007/1/2050 635,000 8.00% 346,000 981,000 3,690,0007/1/2051 670,000 8.00% 295,200 965,200 3,020,0007/1/2052 700,000 8.00% 241,600 941,600 2,320,0007/1/2053 735,000 8.00% 185,600 920,600 1,585,0007/1/2054 775,000 8.00% 126,800 901,800 810,0007/1/2055 810,000 8.00% 64,800 874,800 0TOTAL$12,710,000 $18,608,876 $31,318,876DEBT FINANCING PLAN FOR 400 MBB/RADIOS AUGUST 5, 2025 2025 A PRELIMINARY DEBT SERVICE
0200,000400,000600,000800,0001,000,0001,200,0001,400,000202620282030203220342036203820402042204420462048205020522054 Debt Service ($)Fiscal Year Ending 6/302025A COPs2028 Financing Preliminary; subject to change
Soft Put Date
*2028 Financing debt service schedule is illustrative. In addition to refinancing the 2025A COPs, the 2028 Financing will likely include project improvements for 400 MMB and Lot 3 to the extent such projects need financing.
Step-up coupon penaltyIf the City does not refinance the 2025A into long term fixed rate bonds or remarket a new soft put term *
CITY COUNCIL MEETING
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•The 2025B COPs will reimburse the cost for police and fire radio communication equipment and pay costs of issuance•Fixed Rate, Tax-Exempt•January-1 and July-1 semi-annual interest, beginning January 1, 2027•July-1 annual principal repayment, 2027 through 2032 •7-year term (4.6-year average life)•Level annual debt serviceDEBT FINANCING PLAN FOR 400 MBB/RADIOS AUGUST 5, 2025 PLAN OF FINANCE – 2025 B COPS
Preliminary; subject to change
Sources and UsesPar Amount $3,350,000Premium 294,848TOTAL SOURCES $3,644,848Project $3,584,057Cost of Issuance 44,041Underwriter's Discount 16,750TOTAL USES $3,644,848
CITY COUNCIL MEETING
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DEBT FINANCING PLAN FOR 400 MBB/RADIOS AUGUST 5, 2025
2025 B PRELIMINARY DEBT SERVICE
Preliminary; subject to change
Payment DatePrincipalCouponInterest Debt ServiceAnnual Debt Service1/1/2026 $0 $07/1/2026 $0 0 0 $01/1/2027 0 225,194 225,1947/1/2027 380,000 5.00% 83,750 463,750 $688,9441/1/2028 0 74,250 74,2507/1/2028 540,000 5.00% 74,250 614,250 688,5001/1/2029 0 60,750 60,7507/1/2029 565,000 5.00% 60,750 625,750 686,5001/1/2030 0 46,625 46,6257/1/2030 590,000 5.00% 46,625 636,625 683,2501/1/2031 0 31,875 31,8757/1/2031 620,000 5.00% 31,875 651,875 683,7501/1/2032 0 16,375 16,3757/1/2032 655,000 5.00% 16,375 671,375 687,750TOTAL$3,350,000 $768,694 $4,118,694 $4,118,6940100,000200,000300,000400,000500,000600,000700,000800,000900,0001,000,000Debt Service ($)Fiscal Year Ending 6/30
CITY COUNCIL MEETING
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0123456789Debt Service ($)Millions2013 COPs2016 COPs2021 COPs (Ref)2021 COPs (Fire)2021 POBs2025A COPs2025B COPsDEBT FINANCING PLAN FOR 400 MBB/RADIOS AUGUST 5, 2025
PROJECTED TOTAL DEBT SERVICE
Preliminary; subject to change
Assumes Long-Term Fixed Rate Refinance of 2025A COPs in 2028 Original Par AmountCurrently OutstandingPar Call Final Maturity Ratings2/12/2013 2013 COPs (Police and Fire Facility Refunding) $10,510,000 $4,355,000 1/1/2023 1/1/2032 AA+12/1/2016 2016 COPs (Marine Field Refunding) 5,905,000 3,370,000 1/1/2026 1/1/2033 AA+5/12/2021 2021 Taxable POBs 91,275,000 77,700,000 1/1/2031 1/1/2043 AAA8/17/2021 2021 COPs (Fire Station No. 2) 7,440,000 6,935,000 1/1/2031 1/1/2051 AA+12/15/2021 2021 COPs Refunding 5,925,000 4,025,000 noncall 1/1/2032 AA+$121,055,000 $96,385,000Preliminary 2025 FinancingPar Amount*Par CallPut DateMaturity8/26/2025 2025A COPs 12,710,000 1/1/2028 7/1/2028 7/1/20558/26/2025 2025B COPs 3,350,000 TBD 7/1/2032$112,445,000General Fund Secured Long-Term Debt ObligationsBond Series
CITY COUNCIL MEETING
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DEBT FINANCING PLAN FOR 400 MBB/RADIOS AUGUST 5, 2025
2025 A AND 2025 B FINANCING SCHEDULEAugust 2025SFTWTMS 219876543 16151413121110 23222120191817 3029282726252431Date ItemTuesday, August 5, 2025 City Council Meeting for Financing ApprovalWednesday, August 6, 2025 Post POSWednesday, August 13, 2025 Pricing of COPsWednesday, August 27, 2025 Closing DateCITY COUNCIL MEETING 16CITY OFMANHATTAN BEACH
DEBT FINANCING PLAN FOR 400 MBB/RADIOS AUGUST 5, 2025
RECOMMENDATION•Staff recommends the City Council adopts Resolution No. 25-0103authorizing the issuance of the 2025A and 2025B COPs and approving related documents:•Trust Agreements•Site and Facilities Lease•Lease Agreement•Contract of Purchase•Preliminary Official Statement (POS) •Continuing Disclosure Certificate•Staff recommends the CIC Board of Directors adopts CIC Resolution No. CIC-14 authorizing the issuance of the 2025A and 2025B COPs and approving related documents, including the Assignment AgreementCITY COUNCIL MEETING
QUESTIONS
•May 13, 2025