General Obligation Bond Proceeds and Premium Discussion

Transcription

1 STUDY SESSION TO: FROM: DEPARTMENT: Mayor and Council Kathleen Rinkel Finance & Administrative Services DATE: November 6, 2017 General Obligation Bond Proceeds and Premium SUBJECT: Discussion DESCRIPTION: General Obligation Bond Proceeds and Premium Discussion RECOMMENDATION: The City's Financial Advisor, Underwriter and Bond Attorney will provide a presentation on the history, process and transaction of our General Obligation Bond for the Englewood Police Headquarters Building to give context and understanding to the Council on the Bond sales and Premium. PREVIOUS COUNCIL ACTION: SUMMARY: The City appreciates the support of the Community and Council for the safety needs of the City. As a part of the sale of the our General Obligation Bond, the City received additional funds, or premium, due to the market condition at the time of the bond sale. This premium provides the City with a way to complete deferred work or acquire needed capital equipment without requesting an additional increase in taxes. ANALYSIS: The Ballot language approved by Englewood voters allows for the application of premium for addressing other safety services needs. Staff recommends that Council allow for the use of premium funds towards certain safety services projects instead of utilizing General Funds for critical projects. The City has limited capital projects funding available each year and this would help ease the burden on the General Fund for critical projects. FINANCIAL IMPLICATIONS: The Ballot issue passed by the voters on November 8, 2016, provided for use of the funds, including "and to the extent funds are available addressing other safety services needs." The ballot parameters allow use of the proceeds on other safety needs such as (but not limited to) the replacement of the police records system, the replacement of the aging SWAT vehicle, other police equipment, etc. Using proceeds not required in the construction of the building in

2 this manner would positively impact the City's future budget from which these items would need to be funded. ALTERNATIVES: The City could choose to apply the premium towards the outstanding debt at the end of a 10- year call period. However, the rate of return on invested premium funds would be less than the rate of interest on the outstanding debt. The City would net negative in this transaction. CONCLUSION: Staff requests direction from Council on the use of premium received on the sale of the bonds for the Englewood Police Headquarters Building. ATTACHMENTS: Presentation including detailed financials.

3 PFM Financial Advisors LLC pfm.com th Street Suite 2250 Denver, CO California Street Suite 2300 San Francisco, CA

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10 Order Updates Market Info Orders Marketing & Disclosure City of Englewood Stifel Bondholders Pricing Expectations $ for Project Release Bonds Pricing the Bonds Closing the Bonds Prices & Yields Purchase Price City of Englewood Stifel Bondholders Bonds in Electronic Form

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14 Sale Date Issuer Par Amount ($) Premium ($) Project Proceeds ($)* 01/10/17 Montrose Co SD #RE-1J 20,775,000 3,397,906 24,010,804 01/12/17 El Paso Co (Academy) SD #20 160,000,000 24,531, ,671,050 01/18/17 Denver City and Co SD #1 466,675,000 74,047, ,500,000 01/19/17 Morgan Co (Wiggins) SD #RE-50 30,720,000 2,822,420 33,125,000 01/24/17 Summit SD RE-1 68,445,000 9,949,006 77,890,986 01/26/17 Adams Co (Mapleton) PSD #1 111,670,000 14,025, ,000,000 04/11/17 Louisville City-Colorado 23,215,000 1,846,241 28,300,000 05/04/17 Arapahoe Co (Englewood) SD #1 97,500,000 13,239, ,146,085 06/01/17 High Plains Metropolitan Dt 27,415,000 1,138,354 27,073,590 06/07/17 Englewood City-Colorado 27,000,000 5,826,363 32,631,778 08/25/17 Conservatory Metropolitan Dt 20,950, ,978 22,984,870 09/06/17 Adams-Weld (Brighton) SD #27J 88,000,000 17,658, ,086,025

15 Englewood, Colorado Arapahoe County School District Boulder Valley School District Series: 2017 State: CO Series: 2017 State: CO Series: 2017A State: CO Issue Size: $27,000,000 Underlying Ratings: NR/AA+ Issue Size: $97,500,000 Underlying Ratings: Aa2/NR Issue Size: $190,000,000 Underlying Ratings: Aa1/AA+ Maturity: December 1 Insurer: N/A Maturity: December 1 Insurer: N/A Maturity: December 1 Insurer: N/A Underwriter: Stifel, Nicolaus & Co., Inc. Tax Status: Tax-Exempt Underwriter: Rbc Capital Mkts Tax Status: Tax-Exempt Underwriter: Morgan Stanley & Co., Inc. Tax Status: Tax-Exempt Dated Date: Tue 6/20/17 Sale Date: Wed 6/7/17 Dated Date: Thu 6/1/17 Sale Date: Thu 5/4/17 Dated Date: Tue 4/4/17 Sale Date: Thu 3/16/17 Min ROY Spread: -10 bps Max ROY Spread: 24 bps Min ROY Spread: 18 bps Max ROY Spread: 73 bps Min ROY Spread: 16 bps Max ROY Spread: 22 bps W.A.M.: years W.A.Y.: 2.04% W.A.S.: 19 bps W.A.M.: years W.A.Y.: 3.07% W.A.S.: 33 bps W.A.M.: years W.A.Y.: 3.23% W.A.S.: 18 bps Maturity Par Coupon ROY Maturity Par Coupon ROY Maturity Par Coupon ROY ROY Spread* ROY Spread Year (000s) Year (000s) Year (000s) ROY Spread bps bps bps bps bps bps , bps bps , bps bps , bps bps , bps bps , bps bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps * Spreads are to Interpolated MMD

16 Englewood, Colorado Adams County School District Eagle County School District Series: 2017 State: CO Series: 2017 State: CO Series: 2017 State: CO Issue Size: $27,000,000 Underlying Ratings: NR/AA+ Issue Size: $111,670,000 Underlying Ratings: Aa2/NR Issue Size: $131,770,000 Underlying Ratings: Aa2/AA- Maturity: December 1 Insurer: N/A Maturity: December 1 Insurer: N/A Maturity: December 1 Insurer: N/A Underwriter: Stifel, Nicolaus & Co., Inc. Tax Status: Tax-Exempt Underwriter: Rbc Capital Mkts Tax Status: Tax-Exempt Underwriter: George K. Baum & Co. Tax Status: Tax-Exempt Dated Date: Tue 6/20/17 Sale Date: Wed 6/7/17 Dated Date: Thu 2/9/17 Sale Date: Thu 1/26/17 Dated Date: Wed 2/15/17 Sale Date: Wed 1/25/17 Min ROY Spread: -10 bps Max ROY Spread: 24 bps Min ROY Spread: 2 bps Max ROY Spread: 64 bps Min ROY Spread: 26 bps Max ROY Spread: 39 bps W.A.M.: years W.A.Y.: 2.04% W.A.S.: 19 bps W.A.M.: years W.A.Y.: 2.81% W.A.S.: 35 bps W.A.M.: years W.A.Y.: 2.99% W.A.S.: 30 bps Maturity Par Coupon ROY Maturity Par Coupon ROY Maturity Par Coupon ROY ROY Spread* ROY Spread Year (000s) Year (000s) Year (000s) ROY Spread bps , bps bps , bps bps , bps bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps * Spreads are to Interpolated MMD

17 Englewood, Colorado Summit County School District Weld County School District Series: 2017 State: CO Series: 2017 State: CO Series: 2017 State: CO Issue Size: $27,000,000 Underlying Ratings: NR/AA+ Issue Size: $68,445,000 Underlying Ratings: Aa1/NR Issue Size: $53,740,000 Underlying Ratings: Aa2/NR Maturity: December 1 Insurer: N/A Maturity: December 1 Insurer: N/A Maturity: December 1 Insurer: N/A Underwriter: Stifel, Nicolaus & Co., Inc. Tax Status: Tax-Exempt Underwriter: George K. Baum & Co. Tax Status: Tax-Exempt Underwriter: George K. Baum & Co. Tax Status: Tax-Exempt Dated Date: Tue 6/20/17 Sale Date: Wed 6/7/17 Dated Date: Tue 2/7/17 Sale Date: Tue 1/24/17 Dated Date: Wed 1/25/17 Sale Date: Tue 1/10/17 Min ROY Spread: -10 bps Max ROY Spread: 24 bps Min ROY Spread: -3 bps Max ROY Spread: 52 bps Min ROY Spread: 16 bps Max ROY Spread: 74 bps W.A.M.: years W.A.Y.: 2.04% W.A.S.: 19 bps W.A.M.: years W.A.Y.: 2.52% W.A.S.: 25 bps W.A.M.: years W.A.Y.: 2.78% W.A.S.: 44 bps Maturity Par Coupon ROY Maturity Par Coupon ROY Maturity Par Coupon ROY ROY Spread* ROY Spread Year (000s) Year (000s) Year (000s) ROY Spread bps , (3) bps , bps bps , bps bps bps , bps bps bps , bps bps , bps , / bps , / bps , bps , bps , bps , bps , / bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , bps , / /23bps * Spreads are to Interpolated MMD

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