Agenda Cover Memorandum

Transcription

1 Agenda Cover Memorandum Meeting Date: October 3, 216 Meeting Type: COW (Committee of the Whole) City Council Budget Workshop Item Title: Approve the first reading of an Ordinance Authorizing the Issuance of General Obligation Refunding Bonds, Series 216, for the City of Park Ridge, refinancing Series 26A. Action Requested: Approval For Discussion Feedback Requested For Your Information Staff Contact: Joe Gilmore, Acting City Manager Phone Number: (847) Address: Background: The Council has previously been presented with this item and discussed the opportunity to refund the outstanding 26A Bonds for savings. The options presented to Council on 9/12/216 and 9/26/216 included two scenarios ( level payments and optimal savings ) using either a public or private sale. At the 9/26/216 Committee of the Whole meeting after discussion of the item, Council voted unanimously, 7- for the item to be placed on the 1/3/216 Council meeting for a first reading. The level payments scenario creates relatively level total debt payments (approx. $3M annually) for all outstanding debt that is levied for, through levy year 223. This scenario provides for an estimated $1,12,636 in present value savings over the term of the refunded bond. The optimal savings scenario structures the refunding to provide the maximum savings available over the term of the original bond, through levy year 22. This scenario provides for an estimated $1,219,457 in present value savings over the term of the refunded bond. The payment stream fluctuates significantly leading to annual total debt payments for all outstanding debt that is levied for from $1.1M to $4.4M. The public sale option would involve going through the traditional steps of issuing bonds in the public market, including preparing an offering document, obtaining a credit rating, and holding a public sale of the bonds. The private placement targets bank investors and is attractive to them given the size ($1M), the fact they are bank qualified and the short maturity schedule. The private placement has overall lower costs of issuance versus a public sale which will result in higher savings assuming the interest rates are comparable. At the 9/12 meeting, Council consensus favored the level payments scenario using private sale option first. Ultimately, the private sale option will only be pursued if the net savings exceed the public sale option. As was the case with previous refundings, the interest rates and principal amounts will not be known until the time of the bond sale. Action today will authorize placing of a Parameters refunding Ordinance on the 1/3/216 City Council agenda for first reading. A proposed timeline is also attached. Staff has communicated with our bond advisor that the City is interested in accelerating this refunding as quickly as possible, although some of the deliverables are outside of the control of the City (example Ratings Call with Moody s). Recommendation: Approve the first reading of an Ordinance Authorizing the Issuance of General Obligation Refunding Bonds, Series 216, for the City of Park Ridge, refinancing Series 26A. Budget Implications: Does Action Require an Expenditure of Funds: Yes No Attachment(s), if any: Draft Ordinance (redline revised 9/3/216) Timeline Bond Refunding Projection dated 9/8/216 Rev 3/1/213

2 Marked Copy September 3, 216 ORDINANCE NO. ORDINANCE AUTHORIZING THE ISSUANCE OF GENERAL OBLIGATION REFUNDING BONDS, SERIES 216, OF THE CITY OF PARK RIDGE, ILLINOIS BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF PARK RIDGE, ILLINOIS, AS FOLLOWS: Section 1. Authority and Purpose. This ordinance is adopted pursuant to Section 6 of Article VII of the Illinois Constitution of 197 for the purpose of financing the refunding of all or a portion of the outstanding General Obligation Bonds, Series 26A (the Series 26A Bonds ), of the City of Park Ridge, Illinois (the City ) by the issuance of the General Obligation Refunding Bonds, Series 216 (the 216 Bonds ) of the City authorized by this ordinance. Section 2. Refunding Plan. The City may determine to refund all or a portion of the Series 26A Bonds. The particular Series 26A Bonds to be refunded (the Prior Bonds ), the particular Prior Bonds to be redeemed prior to maturity and the date of redemption of any Prior Bonds that are to be redeemed prior to maturity, shall be specified in one or more bond orders (each a Bond Order ) to be executed by the Mayor

3 No. United States of America State of Illinois County of Cook CITY OF PARK RIDGE GENERAL OBLIGATION REFUNDING BOND, SERIES 216 INTEREST RATE MATURITY DATE DATED DATE CUSIP. % December 1, 2, 216 REGISTERED OWNER: Cede & Co. PRINCIPAL AMOUNT: The CITY OF PARK RIDGE, a municipal corporation and a home rule unit of the State of Illinois situate in the County of Cook, acknowledges itself indebted and for value received hereby promises to pay to the registered owner of this bond, or registered assigns, the principal amount specified above on the maturity date specified above, and to pay interest on such principal amount from the date hereof at the interest rate per annum specified above, computed on the basis of a 36 day year consisting of twelve 3 day months and payable in lawful money of the United States of America on June 1, and semiannually thereafter on June 1 and December 1 in each year until the principal amount shall have been paid, to the registered owner of record hereof as of the 15 th day of the calendar month next preceding such interest payment date, by wire transfer pursuant to an agreement by and between the City and the registered owner, or otherwise by check or draft mailed to the registered owner at the address of such owner appearing on the registration books maintained by the City for -1-

4 Section 9. Levy and Extension of Taxes. (A) For the purpose of providing the money required to pay the interest on the 216 Bonds when and as the same falls due and to pay and discharge the principal thereof (including mandatory sinking fund installments) as the same shall mature, there is hereby levied upon all the taxable property in the City, in each year while any of the 216 Bonds shall be outstanding, a direct annual tax sufficient for that purpose in addition to all other taxes, as follows: Tax Levy Year A Tax Sufficient to Produce 216 $2,5, 217 2,5, 218 2,5, 219 2,5, 22 2,5, 221 2,5, 222 2,5, 223 2,5, (B) Interest or principal coming due at any time when there shall be insufficient funds on hand to pay the same shall be paid promptly when due from current funds on hand in advance of the collection of the taxes herein levied; and when said taxes shall have been collected, reimbursement shall be made to the said funds in the amounts thus advanced. (C) As soon asafter the sale of the 216 Bonds and the execution of any Bond Order, an executed copy of the Bond Order and a copy of this ordinance becomes effective, a copy thereof, certified by the City Clerk, which certificate shall recite that this ordinance has been duly adopted, shall be filed with the County Clerk of Cook County, Illinois, who is hereby directed to ascertain the rate per cent required to produce the aggregate tax hereinbefore provided to be levied in the years 216 to 223, inclusive, subject to adjustment as provided in paragraph (D) of this Section, and to extend the -16-

5 same for collection on the tax books in connection with other taxes levied in said years, in and by the City for general corporate purposes of the City, and in said years such annual tax shall be levied and collected in like manner as taxes for general corporate purposes for said years are levied and collected and, when collected, such taxes shall be used for the purpose of paying the principal of and interest on the 216 Bonds as the same become due and payable. (D) In the event that 216 Bonds are to be issued in principal amounts and bearing interest such that for any tax levy year an amount less than that set forth in paragraph (A) of this Section is required to be produced to pay when due the principal of and interest on the 216 Bonds, then the Acting City Manager is authorized and directed to file with the aforesaid County Clerk, a direction for abatement of taxes specifying the exact amount of taxes to be levied to produce the required amounts for each of the various tax levy years. Section 1. Taxes Levied for Prior Bonds. After the issuance of the 216 Bonds, the Acting City Manager shall file with the County Clerk of Cook County, a certificate listing the Prior Bonds and the taxes theretofore levied for the payment of the principal of and interest on the Prior Bonds payable after December 1, 216, and said certificates shall direct the abatement of such taxes. Section 11. Uptown Tax Allocation Fund. The Special Uptown Tax Increment Allocation Fund (the Uptown Tax Allocation Fund ) established pursuant to Ordinance Number adopted by the City Council on August 18, 23 shall be maintained and administered by the City in accordance with the provisions of the Tax Increment -17-

6 Proposed Financing Schedule City of Park Ridge, Illinois General Obligation Refunding Bonds, Series 216 Jul M T W it F S--::- ~ ~ ~ ~hlj. 1f, Au(!'ust M T w I F Is Is ; 6 7 1: 1: ;3~ -t~-j~l ~6 -- ~~ B t Se M T November F s s M T W IT F S IS d 1~ d L}~. {-! ~~t-16' 1:4 ~- ~-zf--24 -z-s-26 :n Monday, Septe mber 12,216 Mo nday, September 19,216 Monday, September 26, 21 6 Tuesday, September 27,216 Monday, October 3, 216 Tuesday, October 4,216 Tuesday, October 4, 216 Friday, October 7,216 Friday. October 14, 216 Mond ay, October 17, 216 Monday, October 17, Monda~ Oc~ber17, Tuesday, October 18, 216 TBD Ongoing Monday, November 7,216 TBD Working Group Regu lar Meeting COW -Review Refunding Options; Approve Consideration of Ordina nce ~- Regula r Meeting -Furthe r Option Review if Nee de d Regular Meeting C!:~..:_Author i~e First Reading of~rdi~-~t Octo ber 3 ~eetl n g Distribute draft of Preliminary Official Statement/Term Sheet Regular Meeting First Read ing of Re funding Ordinance Comments due on draft of Preliminary Official StatmccntfTerm Sheet Bond Rating Rehear sal, if necessary Bond ratings presentation, if necessary Comments due on final draft of Preliminary Official Statement, Term Sheet..... _,. R egular Meeting-Approve Fina l Reading of P a rameter s Re funding Ordina nce Receive bond rating, if necessary Due diligence call Mail Pre liminary Official Statement, Term Sheet to Investors Price Se ries 216 bonds assuming appropriate market conditions Process documentation Regula r Meeting. Closing of the Series 216 Bonds Financiul Advisor, Issuer Financial Advisor/Disclosure Counsel All Parties All Parties ---- All Parties , Disclosure Counsel... Underwriter, UndeiWriter Bond Counsel Issuer All Parties Issuer = The City of Park Ridge, lllinois Financial Advisor= William Blair & Company, LLC Underwriter= TBD Competitive Sale Bond Counsel/ Disclosure Counsel = Katten Mu chin/katten Muchin Rating Agency= Moody's Investor Service Paying Agent= TBD William Blair & Company lljai!llio m!zjiair 15

7 Series 2 16A Refunding Option 1: Level Payments City of Park Ridge, IL Series 216/\ Refunding (Option I) BondYear LevyVear Series Series Ending Ending 26A 2128 Series 215A Series Total 2158 Outstandin g D/ 5 O ption 1: 216A less: Plus: Refunded D/ 5 Series 216A Level Payments Tota l Proposed D/ 5 12/ 1/ ,75 295,598 12/ 1/ ,5 31,278 12/1/ ,5 315,398 12/ 1/ ,472,25 323,348 12/1/ ,467,75 12/ 1/ ,696, 12/1/ / 1/ / 1/ / 1/ / 1/ /1/ /1/ ,25 188,25 453,25 455,3 97,5 1,15, 1,756,15 1,983,15 3,77,748 2,419,2 3,515,228 1,973,95 3,629,98 4,25,898 4,374,8 4,81, 1,756, 15 (66,5) 399,1 (886,5) 368,4 (3,472,25) 2,138,4 (3,467, 75) 2,12,6 (3,696,) 1,814, 1,815,6 1,469,6 1,164,8 3,77,748 3,37,828 3,11,998 2,917,48 2,919,65 2,919,<Xl 2,916,95 2,921,55 2,92,95 Total 12,739,75 1,235,62 7,66,55 6,376,3 27,958,22 (12,129,) 11,182,5 27,11,72 CF Savings PV Savings PV Savings % 946,5 1,12, % William Blair & Company, LLC 9/ 8/ 216 *Based an market conditions os of july 14, 216 *Preliminary, subject to change lljajiliam fl]la ir 7

8 Series 216A Refunding Option 2: Optimal Savings City of Park Ridge, IL Series 216A Refunding (Optio n 2) BondYear Le vyyear Series Ending Ending 26A Series Series A Series Total 2158 Outstanding /5 Option 2: 216A Less: Plus: Refunded / 5 Series 216A Optimal Savings Total Proposed / 5 12/ 1/ ,75 12/ 1/ ,5 12/1/ ,5 12/ 1/ ,472,25 12/1/ ,467, 75 12/ 1/ ,696, 12/ 1/ /1/ / 1/ / 1/ / 1/ /1/ /1/ , ,25 31, ,25 315, ,25 323, ,3 97,5 1,15, 1,756,15 1,983,15 3,77,748 2,419, 2 3,515,228 1,973,95 3,629,98 4,25,898 4,374,8 4,81, 1,756,15 ( 66, 5) 61,683 (886,5) 882,6 (3,472,25) 3,472, (3,467, 75) 3,467, (3,696,) 2,397,2 3,77,748 3,51,411 3,625,198 4,25,648 4,374,5 3,52,2 1,756,15 Total 12,739,75 1,235,62 7,66,55 6,376,3 27,958,22 (12,129,) 1,82,483 26,649,73 CF Savings PV Savings PV Savings% 1,38,517 1,219, % W illiam Blair & Company, LLC 9/8/216 Based on market conditions as of july 14, 216 *Preliminary, subject to change I Q4/filiam /Z)Iair 9