Patterson Public Finance Authority
Special Tax Revenue Refunding Bonds, Series 2023
(Community Facilities District No. 2001-1)
(the “2023 Bonds”)
Plan of Finance and Savings Analysis
July 18, 2023
The “2013 Bonds”
Call Date /
Premium
Final
Maturity
Interest
Rate(s)
Remaining
Principal
Original
Principal
2013 Bonds
Series 2013A $67,190,000 $53,265,000 5.25-5.75% 2039 9/1/23 @ 100% Series 2013B $6,465,000 $5,235,000 5.875% 2039 9/1/23 @ 100% Totals $73,655,000 $58,500,000
Note: The Revenue Bonds, Senior Series 2013A and Subordinate Series 2013B were sold to purchase three (3) local obligations (the “Local Obligations”) listed below. The Local Obligations refunded all the prior notes and bonds issued for CFD No. 2001-1:
• Series 2013-A-1
• Series 2013-A-2
• Series 2013-B
The existing Local Obligations listed above will be purchased by the 2023 Bonds to provide cash flow to the 2023 Bonds
2 Refunding Plan (the “2023 Bonds”)
3 Purpose of the 2023 Bonds:
§ Refund two outstanding series of revenue bonds, Senior Series 2013A and Subordinate Series 2013B for economic savings (collectively the “2013 Bonds”)
§ Add $5 million of new money to be used for the Emergency Operations Center project
Refunding Structure:
§ The Authority issues the 2023 Bonds to payoff the prior 2013 Bonds
§ The 2023 Bonds purchase the existing Local Obligations as the underlying payment stream for the 2023 Bonds
§ The Local Obligations provide cash flow in excess of the debt service on the 2023 Bonds, even including the debt service on the additional new money and provides 1.07x debt service coverage to the 2023 Bonds
§ The cash flow can provide a credit on property owner tax bills in subsequent years
Credit Factors
4 CFD 2001-1
§ CFD 2001-1 includes 2,339 parcels of which 2,296 are singlefamily residential properties, 42 are senior housing properties and 1 single-family residential parcel remains undeveloped.
This is a 100% developed project, save for the 1 single-family residential parcel.
§ The $806,292,194 assessed value of the properties is 11.4 times greater than the Local Obligations outstanding
2023 Bonds
§ The Local Obligations provide annual debt service coverage of
1.07x debt service on the 2023 Bonds
§ The 2023 Bonds received an “A” rating with a Stable Outlook from Standard & Poor’s Global Ratings
§ The Financing Team has applied for bond insurance and surety quotes from the two bond insurers potentially bringing the credit to an insured rating of “AA”
Property Owner
Tax Bills
Local
Obligations
(CFD Bonds)
2023 Bonds
Proposed Financing Flow of Funds
5 Note: The refunding provides $364,341 of average annual cash flow which provides
1.07x debt service coverage to the 2023 Bonds or $156 per parcel per year.. The annual savings can be credited to the property owners on their tax bills in subsequent years
Provides 1.07x Debt Service
Coverage to the 2023 Bonds. (See
Note Below)
Cash Flow and Debt Service Coverage
6 Refunding Results
7 NPV Savings
Percentage
(Refunded)
Net Present
Value Savings
Average
Annual
Savings (*)
Total
Taxpayer
Savings
2023 Bonds $5,837,452 $364,341 $3,709,336 6.30%
Generally net present value savings in excess of 3.00% are considered significant. The Government Finance Officers Association, in their best practices white paper titled “Analyzing and Issuing Refunding Bonds” from February 2011, reports that “one test often used by issuers to assess the appropriateness of a refunding is the requirement specifying the achievement of a minimum net present value (NPV) savings. A common threshold is that the savings (net of all issuance costs and any cash contribution to the refunding), as a percentage of the refunded bonds exceeds 3-5%.” The City’s Debt Policy uses 3% NPV savings as a guideline.
Note (*): Excludes First Year Cash Flow Savings Already on the Tax Roll and includes the debt service on the new money portion of the 2023 Bonds
Below is a table of the refunding results based on market conditions as of June 27, 2023:
Sources and Uses of Funds
8 Estimated Costs of Issuance
9 Role Company Total
Bond Counsel Jones Hall $146,975.00
Disclosure Counsel Jones Hall $45,000.00
City Administration Fee City of Patterson $15,000.00
Municipal Advisor Del Rio Advisors, LLC $72,500.00
Municipal Advisor Expenses (NTE) Del Rio Advisors, LLC $750.00 Special Tax Consultant Goodwin Consulting Group $60,000.00 Overlapping Debt Statement Goodwin Consulting Group $650.00 Rating Fee S&P Global Ratings $42,000.00
Trustee Fee (Acceptance) U.S. Bank National Association $2,000.00 Trustee Fee (Annual Fee) U.S. Bank National Association $2,500.00 Trustee Legal Counsel Dorsey & Whitney $3,000.00
Fiscal Agent Fee U.S. Bank National Association $1,000.00 Escrow Agent U.S. Bank National Association $1,000.00
Escrow Verification Agent Robert Thomas CPA $1,750.00
Printing of Official Statement TBD $5,000.00
Contingency / Miscellaneous Misc. $875.00
Total Estimated Costs $400,000.00
Financing Team
10 Administration: City Staff
Bond and Disclosure Counsel: Jones Hall
Municipal Advisor: Del Rio Advisors, LLC
Underwriter: Hilltop Securities, Inc.
Trustee / Fiscal Agent / Escrow: U.S. Bank Trust Company Special Tax Consultant: Goodwin Consulting Group
Financing Schedule
11 Date Action
July 18 Board Approval of Financing and Related Documents th Due Diligence Call
Preliminary Official Statement Printed and Posted
Week of July 24th
Monday July 31 Pre-Pricing st
Tuesday August 1 Pricing st
Print and Post Final Official Statement
Final Documents Executed
Week of August 7th
Wednesday August 16 Closing and Transfer of Funds th
Documents for Review
12 (1) Resolution
(2) Trust Indenture
(3) Amendment to Fiscal Agent Agreement
(4) Escrow Agreement
(5) Preliminary Official Statement (Includes
Continuing Disclosure Agreement)
(6) Bond Purchase Agreement
13 Questions and Discussion