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HomeMy WebLinkAboutBOARD STANDING COMMITTEES - 06012015 - Finance Cte Agenda Pkt       FINANCE COMMITTEE June 1, 2015 10:30 A.M. 651 Pine Street, Room 101, Martinez Supervisor Mary N. Piepho, Chair Supervisor Federal D. Glover, Vice Chair Agenda Items: Items may be taken out of order based on the business of the day and preference of the Committee         1.Introductions   2.Public comment on any item under the jurisdiction of the Committee and not on this agenda (speakers may be limited to three minutes).   3. CONSIDER approving the Record of Action for the March 2, 2015, Finance Committee meeting (Lisa Driscoll, County Finance Director)   4. CONSIDER accepting the April 2015 Projects Report from the Public Works Department. (Brian Balbas, Deputy Public Works Director)   5. CONSIDER approving and authorizing the issuance of 2015 Lease Revenue Bonds, in the approximate amount of $71 million fund new capital projects, including the acquisition and installation of solar panels in certain county facilities and an expansion of the West County Health Clinic, and refunding of existing debt at a savings to the County. (Timothy Ewell, County Administrator's Office)   6.The next meeting is currently scheduled for July 6, 2015 at 10:30 AM.   7.Adjourn   The Finance Committee will provide reasonable accommodations for persons with disabilities planning to attend Finance Committee meetings. Contact the staff person listed below at least 72 hours before the meeting. Any disclosable public records related to an open session item on a regular meeting agenda and distributed by the County to a majority of members of the Finance Committee less than 96 hours prior to that meeting are available for public inspection at 651 Pine Street, 10th floor, during normal business hours. Public comment may be submitted via electronic mail on agenda items at least one full work day prior to the published meeting time. prior to the published meeting time. For Additional Information Contact: Lisa Driscoll, Committee Staff Phone (925) 335-1021, Fax (925) 646-1353 lisa.driscoll@cao.cccounty.us FINANCE COMMITTEE 3. Meeting Date:06/01/2015   Subject:Record of Action for March 2, 2015 Finance Committe Meeting Submitted For: FINANCE COMMITTEE,  Department:County Administrator Referral No.: N/A   Referral Name: Record of Action  Presenter: Lisa Driscoll, County Finance Director Contact: Lisa Driscoll, County Finance Director (925) 335-1023 Referral History: County Ordinance requires that each County body keep a record of its meetings. Though the record need not be verbatim, it must accurately reflect the agenda and the discussions made in the meetings. Referral Update: Attached for the Committee's consideration is the Record of Action for its March 2, 2015 meeting. Recommendation(s)/Next Step(s): Staff recommends approval of the Record of Action for the March 2, 2015 meeting. Fiscal Impact (if any): No fiscal impact. Attachments Draft Record of Action - March 2015 D R A F T FINANCE COMMITTEE   March 2, 2015 10:30 A.M. 651 Pine Street, Room 101, Martinez   Supervisor Mary N. Piepho, Chair Supervisor Federal D. Glover, Vice Chair Agenda Items:Items may be taken out of order based on the business of the day and preference of the Committee   Present: Mary N. Piepho, Chair    Absent: Federal D. Glover, Vice Chair  Staff Present:Lisa Driscoll, Finance Director  Attendees: Ed Diokno             1.Introductions   2.Public comment on any item under the jurisdiction of the Committee and not on this agenda (speakers may be limited to three minutes).    There were no comments from the Public.   3.Staff recommends approval of the Record of Action for the February 2, 2015 meeting.      The Record of Action for February 2, 2015, Finance Committee meeting was approved as recommended.    Chair Mary N. Piepho,     AYE: Chair Mary N. Piepho  Passed  4.Consider updated materials and direct staff to update binder.      Lisa Driscoll presented an update to the Special Revenues Administered by the Board of Supervisors binder for Contra Costa Transfer Station Fees. The binder material summary page will be updated to include a summary of all special revenues administered by the Board of Supervisors.    Chair Mary N. Piepho,     AYE: Chair Mary N. Piepho  Passed  5.Consider updated materials and direct staff to update binder.      Lisa Driscoll presented an update to the Special Revenues Administered by the Board of Supervisors binder for County Regional Enhancement Contributions. The binder material summary page will be updated to include a summary of all special revenues administered by the Board of Supervisors.    Chair Mary N. Piepho,     AYE: Chair Mary N. Piepho  Passed  6.Consider updated materials and direct staff to update binder.      Lisa Driscoll presented an update to the Special Revenues Administered by the Board of Supervisors binder for Crockett Rodeo Return-to-Source. The binder material summary page will be updated to include a summary of all special revenues administered by the Board of Supervisors.    Chair Mary N. Piepho,     AYE: Chair Mary N. Piepho  Passed  7.Begin review of the County's 2006 County Budget Policy to consider future recommendations for changes/updates.       Lisa Driscoll presented materials to begin an update of the County's Budget Policy. The Board-Administered Special Revenue reference binder was discussed in the context of budget policy as well. The Committee requested that staff continue to develop a summary report that describes all of these special revenues and includes a detailed list of how the funds are annually distributed. The details should include how the distribution of monies is annually determined, who gets the revenue, how much they get, what the monies are used for. Ideally the report would list sums received and distributed to date as well as annual figures. This report is partially described in the supplement to the County Budget Policy adopted by the Board of Supervisors on December 3, 2013. Additionally, staff was directed to assign one of the allocation policies described in the supplemental policies to each Board administered special revenue. Staff was also directed to review potential best practices in budget policy for submission to the Committee. The Committee will review staff's recommendations and continue to review the County Budget Policy in its entirety over the next few meetings. In the meantime, staff was directed to begin implementation of the new policies in the FY 2015/16 Recommended Budget and letter.    Chair Mary N. Piepho,     AYE: Chair Mary N. Piepho  Passed  8.The next meeting is currently scheduled for April 6, 2015.   9.Adjourn   The Finance Committee will provide reasonable accommodations for persons with disabilities planning to attend Finance Committee meetings. Contact the staff person listed below at least 72 hours before the meeting. Any disclosable public records related to an open session item on a regular meeting agenda and distributed by the County to a majority of members of the Finance Committee less than 96 hours prior to that meeting are available for public inspection at 651 Pine Street, 10th floor, during normal business hours. Public comment may be submitted via electronic mail on agenda items at least one full work day prior to the published meeting time.  For Additional Information Contact:  Lisa Driscoll, Committee Staff Phone (925) 335-1021, Fax (925) 646-1353 lisa.driscoll@cao.cccounty.us FINANCE COMMITTEE 4. Meeting Date:06/01/2015   Subject:QUARTERLY CAPITAL PROJECTS REPORT Submitted For: Julia R. Bueren, Public Works Director/Chief Engineer  Department:Public Works Referral No.: 1/6/2009 SD.2   Referral Name: Quarterly Capital Projects  Presenter: Brian Balbas, Deputy Public Works Director Contact: Brian Balbas (925) 313-2284 Referral History: On January 6, 2009, the Board of Supervisors approved recommendations for Board Member appointments to local, regional and statewide boards, committees and commissions for the 2009 calendar year. One of the adopted recommendations was to combine the Capital Facilities Committee with the Finance Committee. On February 2, 2009, the Finance Committee met and planned committee meetings and schedules for the coming year. One of the recommendations was for the Finance Committee to receive regular capital facility update reports. The first report was presented to Finance on March 4, 2009 by the Director of General Services, Mike Lango. The Committee reviewed the initial report and requested that additional financing and appropriation information be added to make the report more meaningful. The final report format was accepted at the April 6, 2009 meeting and staff was directed to include on future Finance Committee agendas. Reports were submitted at each Finance Committee meeting through December 2010. Beginning in 2011, the Finance Committee requested that Capital Facility Reports be reviewed quarterly. Quarterly review of Capital Facility Reports is the current practice. Referral Update: Today's report provides a summary of capital projects through April 24, 2015. Recommendation(s)/Next Step(s): ACCEPT the April 2015 Projects Report from the Public Works Department. Fiscal Impact (if any): No fiscal impact. This report is informational only. Attachments Attachments Capital Projects Report - April 2015 FINANCE COMMITTEE 5. Meeting Date:06/01/2015   Subject:Lease Revenue Bonds (Refunding and Capital Projects) Series 2015A and 2015B Submitted For: David Twa, County Administrator  Department:County Administrator Referral No.: N/A   Referral Name: Lease Revenue Bonds (Refunding and Capital Projects) Series 2015A and 2015B  Presenter: Timothy Ewell, 925-335-1036 Contact: Timothy Ewell, 925-335-1036 Referral History: The County Administrator's Office brings debt issuance items to the Finance Committee for review and discussion on an as needed basis. The new capital projects discussed today have been approved previously. Specifically, the solar panel project was approved by the Finance Committee and the West County Clinic Expansion project was approved by the Joint Conference Committee. Today's action is only related to the proposed financing for the projects above and the refunding of existing debt. Referral Update: See attached staff report. Recommendation(s)/Next Step(s): 1. APPROVE and AUTHORIZE the issuance of 2015 Lease Revenue Bonds, in the approximate amount of $71 million fund new capital projects, including the acquisition and installation of solar panels in certain county facilities and an expansion of the West County Health Clinic, and refunding of existing debt at a savings to the County. 2. FORWARD recommendation to the Board of Supervisors. Attachments Staff Report County of Contra Costa OFFICE OF THE COUNTY ADMINISTRATOR MEMORANDUM DATE: JUNE 1, 2015 TO: FINANCE COMMITTEE FROM: TIMOTHY M. EWELL, Senior Deputy County Administrator SUBJECT: PROPOSED 2015 LEASE REVENUE BOND ISSUANCE ______________________________________________________________________________ The purpose of this memorandum is to provide the Contra Costa County Finance Committee (the “Committee”) with information relating to the potential issuance of the Authority Lease Revenue Bonds (Refunding and Capital Projects) Series 2015A and 2015B. Summary: The County has two new projects to finance, approximately $6 million in solar panels and approximately $14 million to expand the Behavioral Health and Medical Clinic at the West County Clinic. In addition, a portion of the Authority’s existing Lease Revenue Bonds can be refunded in the current market for debt service savings. In the current market, the Authority could issue approximately $18,800,000 of fixed rate Series 2015A Bonds (the “2015A Bonds”) to finance the acquisition and installation of solar panels and to fund the construction, acquisition, installation and equipping of the Behavioral Health and Medical Clinic. The Authority could issue approximately $45,135,000 of fixed rate Series 2015B Bonds (the “2015B Bonds”) to refund a portion of the Authority’s outstanding Lease Revenue Bonds issued under the 1999 Trust Agreement for debt service savings.  2015A Bonds: o Solar Panels Project- The Authority would finance approximately $6,000,000 in project funds for the solar panels. The bonds would have level debt service and amortize over 10 years, with principal paid from 2016 through 2025. o Behavioral Health and Medical Clinic Expansion- The Authority would finance approximately $14,000,000 in project funds for the medical clinic expansion. These bonds would have a 20-25 year final maturity with level debt service and principal paid from 2018 through 2035-2040. Bond counsel has advised that no principal should amortize until expected completion of the project. The estimated debt service based on current market rates for the 2015A Bonds is shown on the next page. For illustrative purposes, we have assumed a final maturity date of 2035 on the Clinic Expansion portion of the 2015A Bonds. PROPOSED 2015 LEASE REVENUE BOND ISSUANCE June 1, 2015 Finance Committee Period Ending Principal ($) Interest ($) Debt Service ($) 6/1/2016 390,000                 647,233                     1,037,233              6/1/2017 475,000                 776,725                     1,251,725              6/1/2018 995,000                 762,475                     1,757,475              6/1/2019 1,025,000              732,625                     1,757,625              6/1/2020 1,065,000              691,625                     1,756,625              6/1/2021 1,115,000              649,025                     1,764,025              6/1/2022 1,165,000              593,275                     1,758,275              6/1/2023 1,225,000              535,025                     1,760,025              6/1/2024 1,285,000              473,775                     1,758,775              6/1/2025 1,350,000              409,525                     1,759,525              6/1/2026 720,000                 342,025                     1,062,025              6/1/2027 755,000                 306,025                     1,061,025              6/1/2028 790,000                 268,275                     1,058,275              6/1/2029 830,000                 228,775                     1,058,775              6/1/2030 855,000                 203,875                     1,058,875              6/1/2031 885,000                 173,950                     1,058,950              6/1/2032 920,000                 142,975                     1,062,975              6/1/2033 950,000                 109,625                     1,059,625              6/1/2034 985,000                 75,188                        1,060,188              6/1/2035 1,020,000              38,250                        1,058,250              Total 18,800,000          8,160,271                 26,960,271           2015A Bonds   2015B Bonds: o The 2015B Bonds would be structured with uniform savings by refunded series, and based on current market conditions would include all or a portion of the following outstanding Lease Revenue Bonds: R e funding savings are dependent on market rates and the savings available from a refunding of the 2007A Bonds are particularly rate sensitive, given that the call date is two years in the future. Based on current market rates, only the 2020 through 2026 maturities of the 2007A Bonds would be refunded. Debt service and annual debt service savings for the 2015B Bonds is shown below. Issue Maturities to be Refunded Call Date Refunded Principal (subject to change) Series 1999A 2016-2028 Within 30 days $11,240,000 Series 2002A 2016 Within 30 days $575,000 Series 2002B 2016-2019 Within 30 days $5,350,000 Series 2003A 2016-2017 Within 30 days $1,565,000 Series 2007A 2018-2028 6/1/2017 $41,150,000 PROPOSED 2015 LEASE REVENUE BOND ISSUANCE June 1, 2015 Finance Committee Savings Period Ending Principal ($) Interest ($) Debt Service ($) ($) 6/1/2016 4,155,000                     1,619,063                  5,774,063                    279,604        6/1/2017 2,615,000                     1,879,400                  4,494,400                    321,015        6/1/2018 1,890,000                     1,800,950                  3,690,950                    292,515        6/1/2019 1,985,000                     1,744,250                  3,729,250                    297,853        6/1/2020 5,965,000                     1,664,850                  7,629,850                    361,613        6/1/2021 6,205,000                     1,426,250                  7,631,250                    360,463        6/1/2022 5,665,000                     1,116,000                  6,781,000                    355,463        6/1/2023 5,935,000                     832,750                      6,767,750                    359,963        6/1/2024 2,825,000                     536,000                      3,361,000                    356,375        6/1/2025 2,975,000                     394,750                      3,369,750                    361,625        6/1/2026 3,115,000                     246,000                      3,361,000                    360,900        6/1/2027 880,000                        90,250                        970,250                       121,250        6/1/2028 925,000                        46,250                        971,250                       120,750        Total 45,135,000                  13,396,763               58,531,763                 3,949,387    2015B ‐ Refunding Bonds  A summary of the proposed issuance is provided in the table below. Financing Results ‐ Rates as of 5/27/2015 Series 2015A 2015B Combined Par Amount 18,800,000       45,135,000       63,935,000        Net Proceeds 20,000,000       50,653,103       70,653,103        All‐in TIC 3.40% 2.72% 2.98% Escrow Yield 0.46% NPV Savings ($) 3,322,288          NPV Savings (%) 6.94% Refunded Par 47,870,000        1999 Trust Agreement: All of the potential refunded bonds were issued pursuant to the 1999 Trust Agreement. Under that Trust Agreement, the County is able to purchase out and release specific leased assets by prepaying base rental payments associated with those assets. Any amendment of the lease is subject to consent of the bond insurer, National Public Finance Guarantee (“NPFG”). Based on preliminary conversations with NPFG and the current market rates, we believe that the County we be able to release the assets listed in the table below from the 1999 Trust Agreement. PROPOSED 2015 LEASE REVENUE BOND ISSUANCE June 1, 2015 Finance Committee Assuming the above assets are released, they will then be available to secure the 2015A and 2015B Bonds. The 2015A and 2015B Bonds would be issued under a new 2015 Trust Agreement. As with the Authority’s existing Lease Revenue Bonds, the total value of the leased facilities must equal or exceed the par amount of the bonds and the fair market rental value of the leased facilities must equal or exceed the annual debt service payments on the bonds. The 2015A and 2015B Bonds are not expected to have level overall debt service because the two new money projects have different amortization periods and the refunded bonds do not have level debt service. As such, the intention would be to secure the 2015A and 2015B Bonds with several assets, with various lease maturity dates based on the shape of the 2015A and 2015B debt service. Under current market conditions, it is expected that the Authority could issue the new money and refunding bonds using solely the assets released from the 1999 Trust Agreement. In addition, the Authority may be able to release Summit Centre entirely. The assets that are targeted for inclusion in the 2015 Trust Indenture are indicated in the far right column of the table above. However, given volatile market conditions, the County would need to be prepared to secure additional assets in the case that the size of the refunding decreases and adequate assets are not released. In this case, the proposed assets to add to the financing are listed below. Potential Leased Assets Address Insured  Value  Animal Services Building 4800 Imhoff Place, Martinez $14,715,621 Sheriff's Field Operations Bureau 1980 Muir Road, Martinez $6,078,947 Assets Targeted for Release from  1999 Trust Agreement Address  Final  Lease  Maturity  Insured  Value  Targeted  for 2015  Trust  Agreement  Data Processing Building 30 Douglas Drive, Martinez 2019 $5,991,706 Yes Forensic Science Center 1960 Muir Road, Martinez 2019 6,364,587 Yes Health Services Building 595 Center Street, Martinez 2019 10,071,560 Yes Public Works Department  Administration 255 Glacier Drive, Martinez 2019 14,324,884 Yes  Juvenile Detention Facility 202 Glacier Drive, Martinez 2028 37,654,105 Yes East County Social Services Building  (released in 2008)  4545 Delta Fair Blvd,  Antioch 2008 10,074,972 Yes  Four Buildings at Central Contra  Costa County Public Works Yard 2475, 2479 & 2483  Waterbird Way and 4785  Blum Road, Martinez 2019  4,476,224   No Summit Centre 2530 Arnold Drive, Martinez 2026 26,515,465 No Total $115,473,503  PROPOSED 2015 LEASE REVENUE BOND ISSUANCE June 1, 2015 Finance Committee All of the above results are subject to market conditions at the time of financing. It is also important to note that the results above assume that the 2015A and 2015B Bonds are issued without a reserve fund. Piper Jaffray, the proposed underwriter for the bonds, has recently advised that based on recent market issuances the County may need to issue a reserve for the 2015A and 2015B Bonds. Preliminary analysis indicates that a cash funded reserve would significantly reduce savings on the 2015B Bonds due to the low reinvestment rates available in the current market. Additional options, including the use of a standalone surety policy are currently being explored. It is recommended that the Committee move forward with the proposed financing and that the documentation and potential leased assets preserve the flexibility to respond to the current market’s volatile conditions.