PROPOSAL:
Adopt Resolution Approving Third Supplemental Trust Agreement, Escrow
Agreement, and Preliminary Official Statement for SCAQMD Building
Corporation Bonds Relating to Diamond Bar Headquarters Facilities
SYNOPSIS:
This item, in conjunction with the agenda item regarding the adoption
of an Ordinance and approval of an Addendum to our Installment Purchase
Agreement with the SCAQMD Building Corporation, is required to complete
the refunding of the Building Corporation’s Installment Sale Revenue
Refunding Bonds, Series 1992. Current bond market interest rates make a
refinancing of the callable 1992 Series Bonds attractive at this time with
an estimated annual savings of $70,000. This action is to adopt a
Resolution approving the documents required to complete the refinancing.
COMMITTEE:
Finance, April 19, 2002, Recommended for Approval
RECOMMENDED ACTION:
Adopt the attached Resolution approving the Third Supplemental Trust
Agreement, the Escrow Agreement, and the Preliminary Official Statement.
Barry R. Wallerstein, D.Env.
Executive Officer
Background
As noted in the staff recommendation regarding the Ordinance approving an
addendum to the Installment Purchase Agreement which appears elsewhere on
the agenda, the current bond market interest rates make a refinancing of the
callable Series 1992 Refunding Bonds attractive at this time. Staff has also
proposed that the debt be restructured as part of this refinancing to spread
out the 2008 and 2009 budget savings (the result of the 1998 early
redemption of the 2009 Term Bond from the proceeds from the sale of the El
Monte property) over the remaining bond period.
Proposal
The documents recommended for approval in this Resolution are required to
complete the refinancing. These documents establish the financial
relationships necessary to administer the bond payments over the remaining
12 years of the bond term.
The Third Supplemental Trust Agreement is between U.S. Bank, N.A., the
SCAQMD Building Corporation, and the SCAQMD. Under the Agreement, U.S. Bank
is authorized to administer the Building Corporation’s bond payments to
ensure proper disbursement to bond holders. The Escrow Agreement establishes
the funding and maintenance of the refunding escrow fund as provided for in
the Trust Agreement. The Preliminary Official Statement (attached and to be
replaced eventually by a final official statement) will be used to market
the refinancing bond issue. Official Statements are used to provide detailed
financial information about an organization to prospective bond purchasers.
Resource Impacts
The recommended action along with the related recommendation appearing
elsewhere on this agenda will result in estimated annual budget savings from
the refinancing of $70,000. Additional estimated annual budget savings of
$400,000 could be realized from restructuring the financing to spread out
the savings from the 2009 Term Bond redemption.
Attachment
- Resolution
- Third Supplemental Trust Agreement
- Escrow Agreement
- Preliminary Official Statement
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