PISMO BEACH CITY COUNCIL and
PUBLIC FINANCING AUTHORITY STAFF REPORT
Agenda Item #12.A
SUBJECT/TITLE:
AUTHORIZING AND DIRECTING THE REDEMPTION OF ALL OUTSTANDING 2012
WASTEWATER REFUNDING REVENUE BONDS, AND AUTHORIZING CERTAIN
ACTIONS IN CONNECTION THEREWITH
AND
APPROVING THE REDEMPTION OF 2012 WASTEWATER REFUNDING REVENUE
BONDS AND AUTHORIZING CERTAIN ACTIONS RELATED THERETO
RECOMMENDATION:
1. Adopt a Resolution of the City Council of the City of Pismo Beach authorizing and directing the redemption of all outstanding 2012 Wastewater Refunding Revenue bonds, and authorizing certain actions in connection therewith; and
2. Adopt a Resolution of the Board of Directors of the Pismo Beach Public Financing Authority approving the redemption of 2012 Wastewater Refunding Revenue bonds and authorizing certain actions related thereto.
EXECUTIVE SUMMARY:
The Pismo Beach Public Financing Authority (Authority) has issued its Series 2012 Wastewater Refunding Revenue bonds (2012 Bonds) and the City and Authority now desire to redeem all outstanding 2012 Bonds. The benefit of redeeming these bonds is to provide interest cost savings and meet anticipated debt service coverage requirements for the upcoming proposed Central Coast Blue Water Infrastructure Finance and Innovation Act (WIFIA) loan in the Wastewater Enterprise Fund. This action is included in the Council-approved Water and Wastewater Rate study. In order to do this, (i) the City Council must adopt a Resolution authorizing and directing the redemption of all outstanding 2012 Bonds, and authorizing certain actions in connection therewith; and (ii) the Board of Directors of the Authority must approve the subject resolution authorizing the redemption of all outstanding 2012 Bonds, and authorizing certain actions related thereto.
This meeting has been convened as a joint meeting of the City Council and the Authority's Board of Directors in order to allow the City Council, and the Council Members acting in their capacity as the Authority's Board, to take the above actions.
Deposit of Funds to Redeem the 2012 Bonds with the Trustee for the 2012 Bonds There is approximately $3,320,000 of principal remaining outstanding on the 2012 Bonds.
By adopting the attached resolution, the City Council will be authorizing and directing the redemption of the entire remaining outstanding balance of 2012 Bonds and the payment of interest thereon to the optional call date of November 1, 2023 (the Redemption Date), as authorized under the applicable prepayment provisions of the 2012 Bond documents.
Council Agenda 10-17-2023 12.A-1
The total amount of the outstanding balance plus interest is approximately $3,338,547.88.
The monies needed to redeem the 2012 Bonds will be deposited by the City with U.S.
Bank National Association, acting as Trustee for the 2012 Bonds in the amount necessary to redeem the 2012 Bonds in advance of their scheduled maturities on the Redemption Date.
Conclusion and Recommendation
Staff recommends that the City Council adopt a Resolution (Attachment 1) to authorize and direct the redemption of all outstanding 2012 Wastewater Refunding Revenue bonds, and authorize certain actions in connection therewith; and In addition, staff recommends that the Board of Directors of the Pismo Beach Public Financing Authority adopt a Resolution (Attachment 2) to approve the redemption of 2012 Wastewater Refunding Revenue bonds, and authorize certain actions related thereto.
FISCAL IMPACT:
The fiscal impact of adopting the attached resolutions is the removal of the 2012 Bonds from the City’s finances. The payment of approximately $3,338,547.88 comes from the Wastewater Enterprise Fund’s net position (available fund balance).
The approximate $3,338,547.88 will be deposited in the City’s Trustee Bank account to pay off all principal and interest due on the 2012 Bonds by November 1, 2023. This would free up approximately $390,000 per year in Wastewater Enterprise Fund debt service payments through Fiscal Year 2033, saving approximately a net present value of $561,598.37 for the remainder of the term. This would also allow for better debt service coverage to support the proposed Central Coast Blue WIFIA loan debt service payments.
ALTERNATIVES:
1. Decline to adopt one or both Resolutions; provide alternate direction to staff.
ATTACHMENTS:
1. City (Council) Resolution
2. Authority (Board) Resolution
Submitted by: Meeting Date: October 17, 2023
Nadia Feeser, Administrative Services Director, Public Financing Authority Treasurer City Manager / Public Financing Authority Executive Director Approval:
Council Agenda 10-17-2023 12.A-2
RESOLUTION NO. R-2023-XXX
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PISMO BEACH,
CALIFORNIA AUTHORIZING AND DIRECTING THE REDEMPTION OF ALL OUTSTANDING 2012 WASTEWATER REFUNDING REVENUE BONDS, AND
AUTHORIZING CERTAIN ACTIONS IN CONNECTION THEREWITH
WHEREAS, the City Council of the City of Pismo Beach (the City), has heretofore caused the Pismo Beach Public Financing Authority (the Authority) to issue its Pismo Beach Public Financing Authority, Series 2012 Wastewater Refunding Revenue Bonds (Wastewater Project of 2004) in the original aggregate principal amount of $5,710,000 (the 2012 Bonds), pursuant to (i) an Installment Sale Agreement, dated as of May 1, 2012, by and between the Authority and the City (the 2012 Installment Sale Agreement), and (ii) an Indenture, dated as of May 1, 2012, by and between U.S. Bank Trust Company, National Association, as successor trustee thereunder, and the Authority (the 2012 Indenture, and together with the 2012 Installment Sale Agreement, the 2012 Bond Documents); and
WHEREAS, there is approximately $3,320,000 of principal remaining outstanding on the 2012 Bonds; and
WHEREAS, the City wishes at this time to redeem the entire remaining outstanding balance of 2012 Bonds and pay interest thereon to the redemption date of November 1, 2023 (the Redemption Date), as authorized under the applicable prepayment provisions of the 2012 Bond Documents; and
WHEREAS, the monies needed to prepay the 2012 Bonds will be deposited with Trustee and will be applied by the Trustee on the Redemption Date to redeem all of the outstanding 2012 Bonds; and
WHEREAS, this action does not constitute a “Project” under California Environmental Quality Act (CEQA) Guidelines Section 15378.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Pismo Beach as follows:
Section 1. The foregoing recitals are adopted as findings of the City Council as though set forth fully herein.
Section 2. The City Council hereby authorizes and directs the redemption of all outstanding 2012 Bonds in accordance with this Resolution and the 2012 Bond Documents.
Section 3. All actions heretofore taken by the officers and agents of the City with respect to the redemption of the 2012 Bonds are hereby ratified, confirmed and approved. The Council Agenda 10-17-2023 12.A-3
Attachment 1
City Manager, the Administrative Services Director, the City Clerk and any and all other officers of the City are hereby authorized and directed, for and in the name and on behalf of the City, to do any and all things and take any and all actions, including execution and delivery of any and all assignments, certificates, requisitions, agreements, notices, consents, instruments of conveyance, warrants and other documents, which they, or any of them, may deem necessary or advisable in order to cause the redeem all of outstanding 2012 Bonds.
Section 4. This Resolution shall take effect from and after the date of its passage and adoption.
UPON MOTION OF Council Member , seconded by Council Member , the foregoing resolution was adopted by the City Council of the City of Pismo Beach this 17th day of October 2023, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
RECUSED:
Approved: Attest:
________________________ ________________________
Ed Waage, Mayor Erica Inderlied, City Clerk
Council Agenda 10-17-2023 12.A-4
Attachment 1
RESOLUTION NO. PFA R-2023-XXX
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE PISMO BEACH PUBLIC FINANCING AUTHORITY APPROVING THE REDEMPTION OF 2012 WASTEWATER
REFUNDING REVENUE BONDS AND AUTHORIZING CERTAIN ACTIONS
RELATED THERETO
WHEREAS, the Pismo Beach Public Financing Authority (the Authority) has heretofore assisted the City of Pismo Beach (the City), by issuing its Pismo Beach Public Financing Authority, Series 2012 Wastewater Refunding Revenue Bonds (Wastewater Project of 2004) in the original aggregate principal amount of $5,710,000 (the 2012 Bonds), pursuant to (i) an Installment Sale Agreement, dated as of May 1, 2012, by and between the Authority and the City (the 2012 Installment Sale Agreement), and (ii) an Indenture, dated as of May 1, 2012, by and between the U.S. Bank Trust Company, National Association, as trustee thereunder, and the Authority (the 2012 Indenture, and together with the 2012 Installment Sale Agreement, the 2012 Bond Documents); and WHEREAS, there is approximately $3,320,000 of principal remaining outstanding on the 2012 Bonds; and
WHEREAS, the City has approved a resolution authorizing and directing the redemption of the entire remaining outstanding balance of 2012 Bonds and the payment of interest to the redemption date of November 1, 2023 (the Redemption Date), as authorized under the applicable redemption provisions of the 2012 Bond Documents; and WHEREAS, the Board of Directors of the Authority (the Board) wishes at this time to approve redemption of the entire remaining outstanding balance of 2012 Bonds, plus and pay interest thereon to the redemption date of November 1, 2023 in the public interests of the Authority; and
WHEREAS, this action does not constitute a “Project” under California Environmental Quality Act (CEQA) Guidelines Section 15378.
NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Pismo Beach Public Financing Authority, as follows:
Section 1. The foregoing recitals are adopted as findings of the Board as though set forth fully herein.
Section 2. The Board hereby authorizes and directs the redemption of all outstanding 2012 Bonds in accordance with this Resolution and the 2012 Bond Documents.
Section 3. All actions heretofore taken by the officers and agents of the Authority with respect to the redemption of the 2012 Bonds are hereby ratified, confirmed and approved.
The Executive Director, Treasurer, Secretary and any and all other officers of the Council Agenda 10-17-2023 12.A-5
Attachment 2
Authority are hereby authorized and directed, for and in the name and on behalf of the Authority, to do any and all things and take any and all actions, including execution and delivery of any and all assignments, certificates, requisitions, agreements, notices, consents, instruments of conveyance, warrants and other documents, which they, or any of them, may deem necessary or advisable in order to cause the redemption of all outstanding 2012 Bonds.
Section 4. This Resolution shall take effect from and after the date of its passage and adoption.
UPON MOTION OF Board Member , seconded by Board Member , the foregoing resolution was adopted by the Board of Directors of the Pismo Beach Public Financing Authority this 17th day of October 2023, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
RECUSED:
Approved:
________________________
Ed Waage, Chairperson
Attest:
________________________
Erica Inderlied, Secretary
Council Agenda 10-17-2023 12.A-6
Attachment 2