Title
Support the refunding of the County's 2007 Certificates of Participation (COPs) estimated to generate approximately $1.4 million in annual budgetary savings.
Report
RECOMMENDATION:
It is recommended that the Budget Committee support the refunding of the County's 2007 Certificates of Participation (COPs) estimated to generate approximately $1.4 million in annual budgetary savings.
SUMMARY/DISCUSSION:
In 2007, the County issued $152.7 million of Series 2007 (Tax Exempt) Certificates of Participation (COPS). The 2007 Certificates were issued to prepay the principal outstanding on past County COPs and to finance portions of the costs of renovating, constructing, acquiring, and improving certain County infrastructure such as the court facilities and health administration building. The COPs are callable on August 1, 2017 at a redemption price of 100 percent and eligible for a current refunding. All callable maturities will be refunded through 2037. The municipal market continues to perform strong and demand for transactions is favorable.
Based on current market conditions, the refunding is estimated to reduce total debt service payments over the next twenty years by approximately $21.2 million and result in a net present value savings of approximately $18.4 million. The refinancing is expected to create approximately $1.4 million in annual budgetary savings. It is anticipated that refinancing will free previously pledged assets such as the Monterey Courthouse, but this is dependent on real property market conditions. As the County moves forward in the transaction, certain cost of issuance assumptions will be further refined based on actual fees.
OTHER AGENCY INVOLVEMENT:
The Assessor, the Auditor-Controller, Treasurer-Tax Collector, and County Counsel are working with the County Administrative Office on refinancing the 2007 COPs.
FINANCING:
It is estimated that refinancing the 2007 COPs will result in approximately $18.4 million in net present valu...
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