2024 A Lease Revenue Bond
Issuance for the Financing of the
Public Safety Facility Project
Agenda Item 11.A
By Nadia Feeser, Administrative Services Director
Meeting Date: May 7, 2024
Financing Team
•Municipal Advisor: Urban Futures, Inc.
•Bond and Disclosure Counsel: Stradling Yocca Carlson & Rauth LLP •Underwriter: BofA Securities, Inc.
•Underwriter’s Counsel: Hawkins Delafield & Wood LLP
•Trustee/Filing Agent: Wilmington Trust, N.A.
Timeline
City Council adopted
Resolution R-2024-018
setting forth Council’s
intention to proceed with
bond issuance for the
design and construction of
the PSF.
19 Mar. 2024
City Manager,
Administrative Services
Director, Municipal Advisor,
Underwriter met with
Standard & Poor’s to obtain
rating for 2024A Lease
Revenue Bonds
29 Apr. 2024
City received rating of AA+
by Standard & Poor's, the
highest rating for Lease
Revenue Bonds
6 May 2024
Public Hearing City Council
and Pismo Beach Public
Financing Agency (PFA2)
authorize and approve the
bond issuance of not to
exceed $48.5 million for the
PSF project 2024A Lease
Revenue Bonds.
May 7, 2024
Public Safety Facility
construction begins
June 10, 2024 (Estimate)
Bonds sold on a negotiated
basis with BoA Securities,
Inc. serving as underwriter.
Pricing and Issuance. Timing
dependent on market
conditions.
May - July 2024
Public Safety Facility
project construction
complete
March 31, 2026 (Estimate)
Bond Structure
•Not to Exceed $48,500,000 principal/borrowing amount (represents upper limit)
•Current estimated borrowing amount is $38,530,000
•Project proceeds of $41,106,732 (net of finance charges) Description Good Faith Estimates (preliminary, subject to change) Term 30 years
True Interest Rate 4.40%
Principal Amount $38,530,000 + Premium $2,928,034
Matures December 1, 2054
Finance Charge $351,302
Proceeds Amount (for Facility
Project)$41,106,732
Total Base Rental Payment $76,130,243
Annual Base Rental Payment General Fund $2.5 million/year Call Provisions 10-year call with no prepayment penalty of outstanding par amount
Leased Property
•City Hall
•2024 Project Site/Public
Safety Facility Land
Release Assets
•Veterans Hall – Bello
Street
•Fire Station 63
•Chumash Park
Fiscal Impact
Pay -As-You -Go Cash
$10,685,000
General Fund TOT 1% Set-Aside $4,435,000
General Fund Reserve $2,000,000
Parking Enterprise Fund $4,000,000
Development Impact Fees $250,000
$2,500,000 average annual debt service over 30 years
Debt Service Payment
Sources (first 10 years):
General Fund Transient Occupancy Tax
revenues 1% = $1,500,000
General Fund $400,000
Parking Enterprise Fund $600,000
Leased Property and Bond Documents
Bond Documents (Second Supplement to 2017 Pier Bonds Legal Documents)
Site and Facility Lease Agreement: City leases Leased Property to Agency Lease Agreement: Agency leases the Leased Property back to City for semi-annual rental payments (base rental payments) pledged to repayment of Bonds. City annually budgets for and appropriates the Base Rental Payments for occupancy and use of Leased Property Indenture: Between Agency and Trustee – sets forth the terms of the Bonds and provides certain covenants of the Agency
Assignment Agreement: Agency assigns its rights under the Lease Agreement, including the right to receive the Base Rental Payments, to the Trustee
Bond Documents
Preliminary Official Statement: Source of information for potential bond buyers: Public marketing and selling of Bonds – describes City, financing, project, leased property, bonds, documents, and risk factors Bond Purchase Agreement: Among City, Agency, and Underwriter – terms and conditions for sale of Bonds to Underwriter – locks in final terms and interest rates of Bonds
Continuing Disclosure Certificate: Obligates the City to continue providing certain information regarding City and Bonds for outstanding bonds
Public Hearing and Action Items
California Government Code Section 6586 (a), (c), and (d) require a public hearing to consider public testimony concerning the possible issuance of Bonds by the Agency City Resolution: Adopt a Resolution of the City Council of the City of Pismo Beach making required findings, authorizing the execution and delivery of documents relating to the sale and issuance of not to exceed $48,500,000 Pismo Beach Public Financing Agency Series 2024A Lease Revenue Bonds (Public Safety Facility Project) to finance construction of a Public Safety Facility Project and authorizing and directing certain actions in connection therewith.
Agency Resolution: Adopt a Resolution of the Pismo Beach Public Financing Agency approving the execution and delivery of documents in connection with the sale and issuance of the Pismo Beach Public Financing Agency Series 2024A Lease Revenue Bonds (Public Safety Facility Project) in a principal amount not to exceed $48,500,000 and authorizing and directing certain actions in connection therewith.