Fiscal Year 2023-24 Budget Adjustment Report — September 2023 City Council Meeting of September 25, 2023
Attachment 1
FISCAL YEAR 2023-24
General Fund
A budget adjustment is necessary to amend the Fiscal Year 2023-2024 (FY24) Annual Budget by decreasing the salaries and benefits budget by $53,525 in the General Fund Finance Department and increasing the salaries and benefits budget in the General Fund General Services Department by the same, for the reallocation of the Administrative Assistant position. This position previously had 50% of its budget allocated to the Finance Department, but it will now be used 100% in the General Services Department.
A budget adjustment is necessary to amend the FY24 Annual Budget by increasing the Community Services Special Event expense budget for the Five Winds Country Music Festival by $150,000, bringing the total Five Winds Country Music Festival event expense budget to $625,000. This is necessary due to a $180,000 increase in talent cost, net of event budgetary savings found elsewhere.
A budget adjustment is necessary to amend the FY24 Annual Budget by increasing the Community Services Special Event expense budget by a total of $14,000, for the State of the City special event.
LLMD Zone QQ
A budget adjustment is necessary to amend the FY24 Annual Budget by increasing the expense budget in the LLMD Zone QQ Fund by $200,000 to issue a refund.
Good Faith Estimate
The estimates set forth herein are provided with respect to the proposed City of Yucaipa Community Facilities District No 9801 (Chapman Heights), Special Tax Refunding Bonds, Series 2023A in accordance with California Government Code Section 5852.1. This Good Faith Estimate ("GFE") has been provided to the City by Kosmont Financial Services (Municipal Advisor) in consultation with Oppenheimer & Co., Inc. (Underwriter).
The calculations in this Good Faith Estimate are based on the 7-year level debt service structure.
Principal Amount: Based on the financing plan summarized above and current market conditions, the good faith estimate of the total debt proceeds is $10,500,000, which will be achieved through the issuance of the aggregate principal amount of the Special Tax Refunding Bonds paid by the investors (the "Estimated Principal Amount").
True Interest Cost of the Bonds: Assuming the Bonds are sold, based on the market interest rates prevailing at the time of preparation of this estimate (MMD AA + 35 bps as of September 18, 2023), the estimated True Interest Cost (TIC%), which means the rate necessary to discount the amounts payable on the respective principal and interest payment dates to the purchase price received for the Special Tax Refunding Bonds, is equal to 3.73%.
Finance Charge of the Bonds: Assuming that the Estimated Principal Amount of the Special Tax Refunding Bonds is sold and based on the market interest rates prevailing at the time of preparation of this estimate, the good faith estimate of the finance charge for the Special Tax Refunding Bonds, which means the sum of all fees and charges paid to third parties (or costs associated with the Special Tax Refunding Bonds), including the Underwriter's Discount reflected in the True Interest Cost of the Special Tax Refunding Bonds above and the costs of bond insurance and surety bond, is $400,739
Annual Fees - There will be an annual Trustee fee, Annual Bond Administration Costs, and Annual Continuing Disclosure Fees for as long as the Special Tax Refunding Bonds are outstanding. These fees are paid by the annual special tax imposed on property owners.
Amount of Proceeds to be Received: Assuming that the Estimated Principal Amounts of the Special Tax Refunding Bonds is sold and based on the market interest rates prevailing at the time of preparation of this estimate, the good faith estimate of the amount of proceeds expected to be received for the sale of the Special Tax Refunding Bonds, plus $2,220,755 from the prior Debt Service Reserve Fund and $485,000 of Excess Special Taxes, Tess the finance charge of the Special Tax Refunding Bonds ($398,206), is $10,101,794.
Total Payment Amount: Assuming that the Estimated Principal Amounts of the Special Tax Refunding Bonds is sold and based on the market interest rates prevailing at the time of preparation of this estimate, the good faith estimate of the total payment amount, which means the sum total of all debt service payments (principal & interest) on the Special Tax Refunding Bonds, including the finance charge for the Special Tax Refunding Bonds, as described above, calculated to the final maturity of the Special Tax Refunding Bonds, is $11,775,560.
Kosmont Financial Services
Good Faith Estimate
The foregoing estimates constitute good faith estimates only and are based on the market conditions at the time they were prepared. The actual principal amount of the Special Tax Refunding Bonds issued and sold, the true interest cost thereof, the finance charges thereof, the amount of proceeds received therefrom and total payment amount with respect thereto may differ from such good faith estimates due to:
a) the actual date of the sale of the Special Tax Refunding Bonds being different than the date assumed for purposes of such estimates,
b) the actual principal amount of the Special Tax Refunding Bonds sold being different from the respective Estimated Principal Amounts,
c) the actual amortization of the Special Tax Refunding Bonds being different than the amortization assumed for purposes of such estimates,
d) the actual market interest rates at the time of sale of the Special Tax Refunding Bonds being different than those estimated for purposes of such estimates, e) other market conditions, or
f) alterations in the City's financing plan, or a combination of such factors. The actual date of sale of the Special Tax Refunding Bonds and the actual principal amount of the Special Tax Refunding Bonds sold will be determined by the City based on various factors.
The actual interest rates borne by the Special Tax Refunding Bonds will depend on the market interest rates at the time of sale thereof. The actual amortization of the Special Tax Refunding Bonds will also depend, in part, on the market interest rates at the time of sale thereof. The market interest rates are affected by economic and other factors beyond the control of the City.
Kosmont Financial Services
Good Faith Estimate
CITY OF YUCAIPA
2023 Refunding CFD 98-1
(Chapman Heights)
MMD Insured + 35 bps Sept 18, 2023
SOURCES
Par Value
Prior DSR
Excess Special Taxes
TOTAL
$ 10,500,000
2,220,755
485,000
$ 13,205,755
USES
Escrow
DSR Surety
Cost of Issuance
Bond Insurance
Underwriter's Discount
Rounding
$ 12,805,016
36,750
180,000
89,581
91,875
2,533
TOTAL
$ 13,205,755
Finance Charge
Amount of Proceeds
Total Payment Amount
Cash Flow Savings
NPV Savings
NPV as % Par Refunded
(Par Refunded)
Years to Maturity
# Parcels
Avg. Annual Savings
Savings Per Parcel
Avg. Say. Per Parcel
Arbitrage Yield
TIC%
$ 400,739
$ 10,099,261
$ 11,944,169
$ 3,490,439
3,043,649
24%
$ 12,695,000
7 1,835
$ 498,634
1,902
$ 272
3.4942%
3.7396%
Kosmont Financial Services 1
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