DEBT SERVICE REQUIREMENTS
1 DEBT SERVICE REQUIREMENTS
The Debt Service section summarizes the debt service requirements of the City as of July 1, 2021. These obligations represent the annual payment schedule for principal and interest for Capital Improvement Plan projects funded through debt financing. This section also summarizes the City Council authorized loans extended to other funds from the General Fund for capital improvements and equipment purchases.
DEBT SERVICE REQUIREMENTS
2 GENERAL FUND DEBT
DESCRIPTION
The debt service schedule provides for the payment of principal and interest obligations and associated administrative costs incurred with the issuance of debt instruments for the City. The budget includes funding for the following General Fund debt service requirements for 2021-22 and 2022-23:
General Fund Debt
1. In 2012, the City issued $18,305,000 principal amount of Pension Obligation Bonds refinancing the outstanding Public Safety side fund obligations to take advantage of low bond interest rates ranging from 1.140% to 5.540%. The bond transaction refunded the existing CalPERS side fund obligation having rate of 7.75% over the same term, in the same total amount, and expiring in 2023-24. The debt service payments for 2021-22 and 2022-23 totals $2,350,516 and $2,432,716.
2. In a related refinancing, City’s General fund borrowed $6,000,000 from the Water Pollution Control Fund reserves for the initial pay-down of the side fund obligation of $24,305,000. The loan was made at an interest rate of 3% per annum compared to the bond interest rate and higher than the rate reflected by the City’s investment portfolio return. Wastewater rate payers also benefit from this approach. The loan will be over the same term which will expire in 2023-24. The annual debt service payment for 2021- 22 and 2022-23 is $602,773.
3. In 2013, the City issued $8,883,000 principal amount of Refunding Lease Revenue Bonds providing funds to refund the City’s 2001 and 2003 Certificates of Participation. Interest rates range from 2.00% to 5.00%. The interest rate is 2% payable over two years. The debt service payments for 2021-22 and 2022-23 total $872,816 and $873,996.
4. In July 2016, the City entered into an equipment lease/purchase agreement with Bank of America to finance energy and water conservation equipment to be to be located at City facilities. Cost of the equipment is up to an amount of $5,500,000 with a 16-year term at
2.1% interest rate. The annual debt service requirement for 2021-22 and 2022-23 is $422,249.
5. In November 2017, the City entered in to the 2016 Refunding Lease Revenue Bonds through the San Leandro Public Financing Authority for $14,125,000 to refund outstanding debt on 2007 Certificates of Participation of $15,825,000. The term is 12 years at a rate of 2.46% and matures in 2029. The debt service requirement for 2021-22 and 2022-23 is $1,429,600 and $1,424,975.
6. In December 2018, the City entered into the 2018 Lease Revenue Bond (LRB) through the San Leandro Public Financing Authority for $22,000,000 for the purpose of financing several capital improvement projects consisting of improvements to the Police and South Office buildings, the Mulford-Marina branch library, Manor Park competition pool, Farrelly
DEBT SERVICE REQUIREMENTS
3 pool, and the Casa Peralta. The term of the LRB is 30 years at a rate ranging from 3.5% to 5.0% and matures in November 2048. The annual debt service requirement for 2021- 22 and 2022-23 is $871,575.
DEBT SERVICE REQUIREMENTS
4 San Leandro Financing Authority
The San Leandro Public Financing Authority was established through a joint power’s agreement with the City. The Authority was formed with purpose of assisting the City finance, acquire, and construct public improvements benefiting city residents. The Mayor and City Council serve as the Board of Directors of the Authority and the City Manager serves as the Executive Director.
Improvements undertaken by the Authority have included seismic retrofitting of some essential facilities owned by the City, such as City Hall, three fire stations and the Police building. The Authority has also financed the seismic retrofit/ renovation/ expansion of the Main Library and the acquisition of two replacement fire stations in lieu of seismic retrofit of these facilities.
The Public Financing Authority's receives an annual payment of principal and interest from the General Fund to pay the debt service requirements for the 2013 Lease Revenue Bonds (refunded the 2003 Certificates of Participation), and the 2016 Lease Revenue Bonds (refunded the 2007 Library and Fire Stations Certificates of Participation). For 2021-22 and 2022-23, the General Fund facility lease payments, including principal and interest total $4,536,438 and $4,819,034.
GENERAL FUND DEBT SERVICE OBLIGATIONS
The following is a summary of the fiscal year 2021-22 and 2022-23 principal payments, the projected year-end balance and the loan maturity dates for the long-term obligations.
Annual Principal Requirements
Balance
06/30/2021
Debt
Service
2021-22
Debt
Service
2022-23
Balance
06/30/2023
Maturity
Date
General Long-Term Debt:
2018 Lease Revenue Bond 18,905,000 $ - $ - $ 18,905,000 $ 11/01/2048 2016 Lease Revenue Bond (2007 COP) 10,520,000 (970,000) (1,015,000) 8,535,000 11/01/2029 2016 Equipment Lease/Purchase-Climatec 4,294,106 (333,816) (340,863) 3,619,426 07/21/2032 2012 Pension Obligation Bonds 6,570,000 (2,000,000) (2,185,000) 2,385,000 06/01/2024 2012 Water Pollution Control Plant 1,705,009 (551,622) (568,171) 585,216 06/30/2024 2013 Lease Revenue Bond(2003 COP) 5,352,000 (681,000) (710,000) 3,961,000 06/01/2028
DEBT SERVICE REQUIREMENTS
5 2013 Lease Revenue Bonds
In April 2013, the City issued $8,883,000 principal amount of 2013 Refunding Lease Revenue Bonds (2013 RLRB). The purpose of the 2013 RLRBs was refunding and retiring the 2003 COPs and 2001 COPs. The 2013 RLRBs bear interest rates ranging from 2.0% to 5.0% and are payable semiannually on each June 1 and December 1. Principal payments are payable annually on December 1.
The refunding of the 2003 COPs resulted in a present value of savings of $928,703 of the refunded bonds. At June 30, 2021, debt service requirements for the City’s portion of the 2013 RLRB are as follows.
For the Year Ending June 30, Principal Interest Total
2022 681,000 $ 191,816 $ 872,816 $
2023 710,000 163,996 873,996
2024 736,000 137,836 873,836
2025 762,000 113,018 875,018
2026-2028 2,463,000 161,936 2,624,936
Total Debt Service 5,352,000 $ 768,602 $ 6,120,602 $
DEBT SERVICE REQUIREMENTS
6 2016 Refunding Lease Revenue Bonds
In October 2016, City and the San Leandro Public Financing Authority approved resolutions and documents required for issuing the 2016 Refunding Lease Revenue Bonds (RLRB) with the issue amount of $14,125,000 that will mature in 2029 at a true interest rate of 2.46%. The 2016 RLRB was issued to refund the 2007 Certificates of Participation (COP) of $23,435,000 principal amount in 2007. The purpose of the 2007 COP was to provide funds to refund the outstanding 1999 Certificates of Participation (Library and Fire stations projects).
At June 30, 2021, debt service requirements for the 2016 RLRB are as follows.
For the Year Ending June 30, Principal Interest Total
2022 970,000 $ 459,600 $ 1,429,600 $
2023 1,015,000 409,975 1,424,975
2024 1,070,000 357,850 1,427,850
2025 1,120,000 303,100 1,423,100
2026-2030 6,345,000 772,250 7,117,250
Total Debt Service 10,520,000 $ 2,302,775 $ 12,822,775 $
DEBT SERVICE REQUIREMENTS
7 2012 Pension Obligation Bonds
In 2012, the City issued $18,305,000 principal amount of 2012 Taxable Pension Obligation Bonds (2012 POB). The purpose of the 2012 POB is to save the City money, the interest rate, including the cost of issuance, must be significantly less than the interest rate the CalPERS charges to amortize the public safety side fund which is distinct from the City’s other CalPERS plans. Side funds are retired over a fixed term with a fixed amortization schedule based on CalPERS actuarial earnings assumption rate (7.75%). Principal is due annually on December 1 and the interest is due semi-annually on June 1 and December 1 through June 2024. Debt service is payable from available City resources.
At June 30, 2021, debt service requirements for the City’s portion of the 2012 Taxable Pension Obligations Bonds are as follows.
For the Year Ending June 30, Principal Interest Total
2022 2,000,000 $ 350,516 $ 2,350,516 $
2023 2,185,000 247,716 2,432,716
2024 2,385,000 132,129 2,517,129
Total Debt Service 6,570,000 $ 730,360 $ 7,300,360 $
DEBT SERVICE REQUIREMENTS
8 2012 Water Pollution Control Plant Loan
In addition to issuance of the Pension Obligation Bonds, City’s General fund borrowed $6,000,000 from the Water Pollution Plant Fund reserves for the initial pay-down of the side fund obligation totaling $24,305,000. The loan was made at a lower interest rate of 3% per annum compared to the bond interest rate and higher than the rate reflected by the City’s current investment portfolio return. Ultimately, the Wastewater rate payers also benefits from this approach. The loan will be over the same term which will expire in 2023-24.
At June 30, 2021, debt service payments for the 2012 Water Pollution Control Plant Loan are as follows.
For the Year Ending June 30, Principal Interest Total
2022 551,622 $ 51,150 $ 602,773 $
2023 568,171 34,602 602,773
2024 585,216 17,556 602,773
Total Debt Service 1,705,009 $ 103,308 $ 1,808,318 $
DEBT SERVICE REQUIREMENTS
9 2016 Equipment Lease/Purchase Agreement
In July 2016, City Council approved an equipment lease/purchase agreement with Bank of America to finance energy and water conservation equipment to be installed at City facilities pursuant to the Energy Services Agreement with Climatec for a cost of $5,500,000. The agreement has a 16-year term at a 2.19% interest rate. The equipment includes high efficiency HVAC at City Hall, Main Library, and the Marina Community Center, building automation system upgrades, and citywide streetlight conversion to LED.
At June 30, 2021, debt service requirements for the 2016 equipment lease/purchase are as follows.
For the Year Ending June 30, Principal Interest Total
2022 333,816 $ 88,433 $ 422,249 $
2023 340,863 81,386 422,249
2024 348,059 74,190 422,249
2025-2029 1,853,661 257,585 2,111,246
2030-2033 1,417,707 60,166 1,477,872
Total Debt Service 4,294,106 $ 561,760 $ 4,855,866 $
DEBT SERVICE REQUIREMENTS
10 2018 Lease Revenue Bond
In December 2018, the City entered into the 2018 Lease Revenue Bond (LRB) through the San Leandro Public Financing Authority for $22,000,000 for the purposes of financing capital improvement projects, anticipated to consist of improvements to the Police and South Office buildings, the Mulford-Marina branch library, Manor Park competition pool, Farrelly pool, and the Casa Peralta. The term of the LRB is 30 years to mature on November 1, 2048 at a rate ranging from 3.5% to 5.0%. The debt service requirement for 2021-22 and 2022-23 is $871,575.
At June 30, 2021, debt service requirements for the 2018 Lease Revenue Bond are as follows.
For the Year Ending June 30, Principal Interest Total
2022 - $ 871,575 $ 871,575 $
2023 - 871,575 871,575
2024 - 871,575 871,575
2025-2029 - 4,357,875 4,357,875
2030-2049 18,905,000 10,019,763 28,924,763
Total Debt Service 18,905,000 $ 16,992,363 $ 35,897,363 $
DEBT SERVICE REQUIREMENTS
11 WATER POLLUTION CONTROL ENTERPRISE FUND DEBT SERVICE OBLIGATIONS State Water Resources Control Board
In August 2011, the City entered into a finance agreement with the State Water Resources Control Board in the total principal amount of $43,000,000, for the purpose of financing the Water Pollution Control system expansion and improvement. The loan bears an interest rate of 2.6%. Principal and interest payments are payable annually on July 1. The debt is secured by the WPCP Enterprise Fund operating revenues. Expansion and improvement work were completed in 2016-17.
In accordance with the agreement, the City is required to collect net revenues equal to at least 1.20 times the total annual debt service in such fiscal year. In 2019-20, net revenues amounted to $4,221,700 which represented coverage of 153% under the $2,765,864 in debt service. Future debt service is expected to average $3 million per year through fiscal year 2035-36 for a total $41,487,966.
At June 30, 2021, debt service requirements for the State Water Resources Control Board loan are as follows.
For the Year Ending June 30, Principal Interest Total
2022 1,882,004 $ 883,861 $ 2,765,864 $
2023 1,930,936 834,929 2,765,864
2024 1,981,140 784,724 2,765,864
2025-2029 10,705,658 3,123,664 13,829,322
2030-2036 17,494,905 1,866,146 19,361,051
Total Debt Service 33,994,642 $ 7,493,324 $ 41,487,966 $
DEBT SERVICE REQUIREMENTS
12 2021 Equipment Lease/Purchase Agreement
In January 2021, the City Council approved an equipment lease/purchase agreement with Banc of America Public capital Corp. to finance energy conservation and resiliency equipment to be installed at The Water Pollution Control Plant. The equipment will be installed under an installation agreement with Climatec. The principal amount to be financed under the agreement is $7,624,900. Annual lease payments on the 15-year agreement are $592,925, with the total principal and interest amounting to $8,893,900. The interest rate is set at 1.989%.
For the Year Ending June 30, Principal Interest Total
2022 441,265 $ 151,660 $ 592,925 $
2023 450,042 142,883 592,925
2024 458,993 133,932 592,925
2025-2029 2,435,594 529,031 2,964,625
2030-2036 3,839,029 311,447 4,150,476
Total Debt Service 7,624,924 $ 1,268,952 $ 8,893,876 $
DEBT SERVICE REQUIREMENTS
13 SHORELINE ENTERPRISE FUND DEBT SERVICE OBLIGATIONS
Marina Cal Boating Notes Payable
The City entered into various construction loan agreements with the California Department of Boating and Waterways with the total principal amount of $5,331,032. The loans bear an average interest rate of 4.50%. Principal and interest payments are due annually on each August 1. The debt is secured by Shoreline Enterprise Fund operating revenues.
At June 30, 2021, debt service requirements for the Marina Cal Boating Notes Payable are as follows.
Golf Course and Marina Dredging General Fund Loans
The City Council authorized loans to the Shoreline Enterprise Fund for capital improvements at the Marina and the Monarch Bay golf course. The loans are to be paid over 30 years with an annual interest accrual rate of 5%. Principal payments are made annually provided the fund has sufficient resources.
At June 30, 2021, debt service requirements are as follows.
For the Year Ending June 30, Principal Interest Total
2022 93,273 $ 10,236 $ 103,509 $
2023 45,334 6,039 51,373
2024 20,770 3,999 24,769
2025 21,705 3,064 24,769
2026-2027 46,385 3,154 49,539
Total Debt Service 227,467 $ 26,491 $ 253,959 $
For the Year Ending June 30, Principal Interest Total
2022 234,941 $ 324,052 $ 558,993 $
2023 247,112 311,881 558,993
2024 259,916 299,077 558,993
2025-2029 1,516,221 1,278,745 2,794,965
2030-2034 1,952,556 842,409 2,794,965
2035-2040 2,045,392 294,623 2,340,016
Total Debt Service 6,256,138 $ 3,350,787 $ 9,606,926 $
DEBT SERVICE REQUIREMENTS
14 SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY
OF THE CITY OF SAN LEANDRO FUND
DEBT SERVICE OBLIGATIONS
2013 Lease Revenue Bonds
In 2013, the City issued $11,995,000 principal amount of 2013 Refunding Lease Revenue Bonds (2013 RLRB) was issued. The purpose of the 2013 RLRBs was to refund the 2003 COPs and 2001 COPs. The 2013 RLRBs bear interest rates ranging from 2.0% to 5.0% and are payable semiannually on each June 1 and December 1. Principal payments are payable annually on December 1.
The refunding resulted in a present value of savings of $1,348,397 or 11% of the refunded bonds.
With the five-year extension of debt service, $2,750,000 of additional capital improvement funds became available, with a reduction in the annual debt service.
At June 30, 2021, debt service requirements for the Successor Agency’s portion of the 2013 Refunding Lease Revenue Bond are as follows.
For the Year Ending June 30, Principal Interest Total
2022 234,000 $ 54,190 $ 288,190 $
2023 240,000 44,710 284,710
2024 249,000 35,864 284,864
2025 258,000 27,464 285,464
2026-2027 542,000 25,355 567,355
Total Debt Service 1,523,000 $ 187,583 $ 1,710,583 $
DEBT SERVICE REQUIREMENTS
15 2014 Tax Allocation Refunding Bonds
In September 2014, the Successor Agency issued $11,235,000 of Tax Allocation Bonds (2014 TABs) to prepay the 2002 and 2004 Tax Allocation Bonds and to cover issuance costs. The 2014 TABs are payable and secured by a pledge of tax revenues from tax increment generated in the Plaza Project Area and the West San Leandro/MacArthur Boulevard Project Area. The 2014 TABS bear interest rates ranging from 3.5% to 5.0% and are payable semiannually on each March 1 and September 1. Principal payments are payable on September 1.
Proceeds were deposited in an irrevocable trust with an escrow agent to provide funds to fully redeem, on October 30, 2014, the principal and accrued interest of the 2002 and 2004 Tax Allocation Bonds. As a result, the 2002 and 2004 Tax Allocation Bonds are considered redeemed (current refunding) and the liability for those bonds has been removed from the statement of net position.
On the date of issuance of the 2014 Bonds, the Successor Agency deposited into the reserve account for the 2014 Bonds a municipal bond debt service insurance policy in the amount of $1,121,078, equal to the Reserve Requirement for the 2014 Bonds. Neither the balance in the reserve account nor the Reserve Requirement for the 2014 Bonds has changed.
At June 30, 2021, future debt service requirements for the 2014 Tax Allocation Refunding Bonds are as follows.
For the Year Ending June 30, Principal Interest Total
2022 675,000 $ 476,450 $ 1,151,450 $
2023 720,000 441,575 1,161,575
2024 740,000 405,075 1,145,075
2025-2029 4,025,000 1,439,750 5,464,750
2030-2035 4,185,000 427,188 4,612,188
Total Debt Service 10,345,000 $ 3,190,038 $ 13,535,038 $
DEBT SERVICE REQUIREMENTS
16 2018 Tax Allocation Refunding Bonds Series A
In May 2018, the Successor Agency issued Tax Allocation Refunding Bonds (2018A TABs) in the amount of $16,845,000. The proceeds of the bonds will be used to refund the 2008 Tax Allocation Bonds, Series 2008. Principal payments of the 2018A TABs are due annually on September 1 from 2023 to 2039 and bear interest rates ranging from 3.375% to 5.000%. Interest is payable semiannually March 1 and September 1.
Annual debt service payments range between $718,888 and $1,398,676. The bonds are payable solely from tax increment revenue generated in the Alameda County - City of San Leandro Redevelopment Project Area. Total principal and interest remaining to be paid on the bonds was $24,201,194 as of June 30, 2021.
Proceeds from the 2018A TABs were deposited in an irrevocable trust with an escrow agent to provide funds to fully redeem, on June 5, 2018, the outstanding principal and accrued interest of the 2008 Tax Allocation Bonds. The bonds were issued at a premium of $1,809,519 that amortized over the 21-year life of the bonds resulting in an annual amortization of $86,168. On the date of issuance, the Successor Agency deposited into the reserve account for the 2018A TABs a municipal bond debt service insurance policy in the amount of $1,431,438, equal to the Reserve Requirement for the 2018A TABs.
At June 30, 2021, debt service requirements for the 2018 Tax Allocation Refunding Bonds Series A are as follows.
For the Year Ending June 30, Principal Interest Total
2022 - $ 718,888 $ 718,888 $
2023 430,000 710,288 1,140,288
2024 710,000 687,488 1,397,488
2025-2029 4,085,000 2,875,813 6,960,813
2030-2034 5,225,000 1,765,338 6,990,338
2035-2039 6,395,000 598,381 6,993,381
Total Debt Service 16,845,000 $ 7,356,194 $ 24,201,194 $
DEBT SERVICE REQUIREMENTS
17 2018 Tax Allocation Refunding Bonds Series B
In May 2018, the Successor Agency issued Tax Allocation Refunding Bonds (2018B TABs) in the amount of $2,215,000. The proceeds of the bonds will be used to refund the 2008 Tax Allocation Bonds, Series 2008. Principal payments of the 2018B TABs mature annually each September and bear interest at rates ranging from 2.700% to 3.210%. Interest is payable semiannually March 1 and September 1. The bonds are payable solely from tax increment revenue generated in the Alameda County - City of San Leandro Redevelopment Project Area. Total principal and interest remaining to be paid on the bonds was $952,904 as of June 30, 2021.
Proceeds from the 2018B TABs were deposited in an irrevocable trust with an escrow agent to provide funds to fully redeem, on June 5, 2018, the principal and accrued interest of the 2008 Tax Allocation Bonds.
At June 30, 2021, debt service requirements for the 2018 Tax Allocation Refunding Bonds Series B are as follows.
For the Year Ending June 30, Principal Interest Total
2022 670,000 $ 18,731 $ 688,731 $
2023 260,000 4,173 264,173
Total Debt Service 930,000 $ 22,904 $ 952,904 $
DEBT SERVICE REQUIREMENTS
18 COMMUNITY DEVELOPMENT BLOCK GRANT FUND
DEBT SERVICE OBLIGATIONS
HUD 108 Guarantee Loan
In 2011, the City received a $2,500,000 20-year federal loan from Housing and Urban Development (HUD), at an interest rate of 3% to finance the acquisition and construction of Sam Leandro Senior Center. The loan is secured and payable from the Community Development Block Grant Fund.
At June 30, 2021, debt service requirements for the HUD 108 Guarantee loan are as follows.
For the Year Ending June 30, Principal Interest Total
2022 132,000 $ 46,246 $ 178,246 $
2023 132,000 41,257 173,257
2024 132,000 36,135 168,135
2025 132,000 30,881 162,881
2026-2030 660,000 71,478 731,478
Total Debt Service 1,188,000 $ 225,997 $ 1,413,997 $
DEBT SERVICE REQUIREMENTS
19 SPECIAL ASSESSMENT FUND DEBT SERVICE OBLIGATIONS
Special Assessment Debt Without City Commitment
Special assessment districts are established in various parts of the City to provide improvements to properties located in those districts. Properties are assessed for the cost of improvements and assessments are payable over the term of the debt issued to finance the improvements.
The total amount of the assessment is recorded as receivable and deferred revenue at the time the related debt is issued and reduced as assessments are collected. The City is obligated to be the purchaser of last resort or to advance available City funds to repay this debt in the event of default by any of these districts. These funds are paid from special assessment revenues levied on the property owners in each assessment district. On June 30, 2020, all these districts were in compliance with the repayment and other requirements of their respective debt issues.
Special assessment debt with City commitment as of June 30, 2021 is as follows.
For the Year Ending June 30, Principal Interest Total
2022 325,000 $ 110,017 $ 435,017 $
2023 345,000 88,242 433,242
2024 370,000 65,000 435,000
2025 395,000 40,138 435,138
2026 420,000 13,650 433,650
Total Debt Service 1,855,000 $ 317,046 $ 2,172,046 $