HomeMy WebLinkAboutMINUTES - 10282008 - C.9 TO: BOARD OF SUPERVISORS ?''s L"'° Contra
FROM: JULIE BUEREN, PUBLIC WORKS DIRECTOR - eWisran. Costa
DATE: October 28, 2008 °�sra rev County
SUBJECT: Contra Costa County Airports Financing—First Amendment to Lease/Lease-Back Agreement
SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION
L RECOMMENDED ACTION: 0
APPROVE and AUTHORIZE the Public Works Director, or designee, to execute a First Amendment to
Lease/Lease-Back Agreement with Transocean Funding,Inc.,and all related documents necessary to complete the
transaction,to increase the principal borrowing amount by$10,000 to a new amount of$693,777 and extend the
term by three years to a new maturity date of November 1, 2013 for improvements to the Buchanan Field and
Byron Airports. (Airport Enterprise Fund).
II. FISCAL IMPACT:
The County's entry into the new Lease/Lease-Back Agreement will lower annual debt service payments to provide
the Airport Enterprise Fund with additional operating funds. This new agreement includes about$10,000 for the
cost of funding services,with the remaining$683,777 balance (principal plus interest over five year term)of the
existing Transocean Lease/Lease-Back Agreement. There is no impact to the County's General Fund.
Continued on Attachment: e SIGNATURE: C-,,Lj- -�Ij
OF COUNTY ADMINISTRATOR E] RECOMMENDATION OF BOARD COMMITTEE
JZRECOMMENDATION
APPROVE ❑ OTHER
SIGNATURE(S): �) q' ,
ACTION OF BOARD ON CJ`r4A&,m/
APPROVED AS RECOMMENDED OTHtR ❑
VOT OF SUPERVISORS f�
UNANIMOUS(ABSENT 1 hereby certify that this is a true and correct copy of an action taken
AYES: NOES: and entered on the minutes of the Board of Supervisors on the date
ABSENT: ABSTAIN: shown.
ATTESTED: 047ea&y !4� G j
DAVID TWA, Clerk of the Board of Supervisors and County
ContDiv:County Airports
Contact: Beth Lee(925)646-5722 Administrator
cc: County Administrator
Public Works Director
Aviation Advisory Committee By , Deputy
Clerk of the Board(Maddy Book)
SUBJECT: Contra Costa County Airports Financing—First Amendment to Lease/Lease-Back Agreement
DATE: October 28, 2008
PAGE: 2 of 2
III. BACKGROUND:
Over the years the County's Airports has received millions of dollars in grants from the Federal Aviation
Administration(FAA)to construct the Byron Airport and to complete various other Airport Improvements at
the Buchanan Field Airport. The FAA grants provided about 90% of the total cost of the improvements,
Caltrans typically would fund 4.5%, and the County Airports were required to fund the remaining 5.5%.
In 1994, the County, again on behalf of the Airports, entered into two financial agreements to; 1) raise
additional funds necessary for the completion of improvements to the Byron Airport that were not otherwise
eligible for FAA or Caltrans funding, and 2) pay off the outstanding Caltrans agreements that were at
relatively high interest rates. These agreements were in the form of a Lease/Lease-Back Agreement and a
License and Lease-Purchase Agreement. The agreements provided for semi-annual interest-only payments
up to May 1, 1999, and semi-annual principal and interest payments through May 1,2002. The principle of
the two agreements totaled $3.495 million.
In 2005, the Board authorized the County, on behalf of the Airports, to enter into a new Lease/Lease-Back
Agreement in the amount of$1,300,377.10 to take advantage of lower interest rates at the time and to spread
the payments over a longer period of time to more accurately match revenues with debt payments.The lower
annual debt payment provided the Airport with additional revenue for capital improvement projects and to
fund its portion of staff retirement buy-backs.
Staff recommends approval of the new agreement for the following reasons:
1. This new agreement will defer the May 1, 2009, November 1, 2009, and May 2010 principal
payments, which would total approximately $482,500 under the existing agreement. The new
agreement will also extend the term by three years.
2. Spreading the payments over a longer period of time will allow staff to better manage the budget and
cash flow of the Airport Enterprise Fund by more accurately matching anticipated revenue with debt
service payments.
IV. CONSEQUENCES OF NEGATIVE ACTION:
The Lease/Lease-Back Agreement will not be amended and anticipated reductions in annual interest and
principal payments will not be realized.
First Amendment to Lease and Lease-Back Agreement
This first amendment to Lease and Lease-Back Agreement is made October
2008, and is between Capital One Public Funding, LLC (formerly known as All Points
Public Funding, LLC, as assignee of Transocean Funding, Inc.) ("Lessor") and Contra
Costa County ("Lessee").
Recitals
A. Lessor and Lessee are parties to that certain Lease and Lease-Back
Agreement dated as of September 1, 2005 (the "Lease").
B. The Lease originally named Transocean Funding, Inc. ("Transocean") as
Lessor. On September 1, 2005, Transocean sold, transferred and assigned all of its right,
title and interest in the Lease to the Lessor.
C. The parties desire to amend the Lease by (i) extending the term to
November 1, 2013, (ii) increasing the principal balance by $10,000, (iii) revising the
payment schedule, and (iv) increasing the interest rate to 5.39% beginning November 1,
2008.
The parties therefore agree as follows:
Agreement
1. Defined Terms. Defined terms used but not defined in this amendment
have the meanings ascribed to them in the Lease.
2. Amendment to Section 4.1. Section 4.1 of the Lease is deleted in its
entirety and replaced with the following:
Section 4.1 Lease Term. The term of this Lease begins September
1, 2005, and ends November 1, 2013, unless earlier terminated in
accordance with Article XI of the Lease.
3. Amendment to Section 4.2 (a). Section 4.2 (a) of the Lease is deleted in
its entirety and replaced with the following:
(a) Lessee shall pay Lessor (i) the Payment Amounts set forth in
Exhibit C on the Due Dates specified in Exhibit C through
November 1, 2008, and (ii) the Payment Amounts set forth in
Exhibit C-1 on the Due Dates specified in Exhibit C-1,
(together, "Lease Pats"). Lessee shall pay the Lease
Payments without notice or demand at the office of the Lessor
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(or such other place as Lessor may from time to time designate
in writing) on the 15th day of the month preceding the Due
Dates set forth in Exhibit C and Exhibit C-1. Any notice,
invoicing, purchase orders, quotation or other forms or
procedures required by Lessee as a condition precedent to
payment shall be fully explained and provided to Lessor or its
assignee sufficiently in advance of the payment due date for
the completion thereof by Lessor or its assignee prior to such
payment date. Lease Payments shall be paid absolutely and
unconditionally in all events and without assertion of any right
to any set-off, defense or counterclaim, except as expressly
authorized elsewhere in this Lease.
4. Amendment to Article XI. Article XI of the Lease—Option to Prepay— is
deleted in it entirety and replaced with the following:
On the Due Date for any Lease Payment, Lessee has the option to
prepay the Lease (a "Prepayment Option") by paying the Prepayment
Amount set forth on Exhibit C-1 for that Due Date.
The Prepayment Option is exercisable by Lessee by giving written
notice delivered to the corporate offices of Lessor thirty (30) days prior to
the Due Date on which Lessee intends to exercise its Prepayment Option,
but failure to provide such notice shall not prohibit Lessee from exercising
the option. Upon payment of the Prepayment Amount and any Lease
Payments due on that Due Date, and upon satisfaction of Lessor that
Lessee is not on such date in default pursuant to any term of this Lease,
Lessor shall deliver to Lessee a full release of Lessor's right, title or
interest in and to the Property, in such form as reasonably specified by
Lessee.
5. Amendment to Section 16.1. Section 16.1 of the Lease is deleted in its
entirety and replaced with the following:
Section 16.1. Notices. Except where another form of notice is
specifically authorized in a section of this Lease, all notices to be given
under this Lease shall be made in writing and mailed by certified mail,
return receipt requested. Notices to Lessee shall be addressed to: Director
of Airports, County of Contra Costa, 550 Sally Ride Drive, Concord,
California 94520-5550; (925) 646-5722, fax: 646-5731, or at such address
as the County or the Director of Airports may provide in writing from time
to time. Notices to Lessor shall be addressed to: Capital One Public
Funding, LLC, 265 Broadhollow Road, Melville, NY 11747, or at such
address as Lessor may provide in writing from time to time.
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6. Addition of Exhibit C-1. Exhibit C-1, attached hereto, is hereby
incorporated into the Lease.
7. Conditions to Effectiveness. The effectiveness of this amendment is
conditioned upon the occurrence of the following events:
a. Lessor's receipt of a copy of an executed Board Order indicating
that this amendment has been duly authorized and approved by the Board of Supervisors
of Contra Costa County.
b. Lessor's receipt of an Opinion of Counsel from the County
Counsel's Office of Contra Costa County that pertains to this amendment and is in
substantial conformity with Exhibit E to the Lease.
C. Lessee's receipt of evidence satisfactory to it that this amendment
has been authorized and approved by Lessor and that the party executing this amendment
on behalf of Lessor is duly authorized to do so.
8. Miscellaneous.
a. Except as amended by this amendment, the terms and provisions of
the Lease remain in full force and effect. In the event of any conflict between this
amendment and the Lease, this amendment governs.
b. The Lease and this amendment constitute the entire agreement
between the parties with respect to their subject matter. There is no understanding or
agreement, oral or written, between the parties that is not set forth herein. The waiver by
Lessor of any breach by Lessee of any term, covenant or condition hereof shall not
operate as a waiver of any subsequent breach thereof.
[Remainder of this Page Intentionally Left Blank]
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C. The laws of the state of California govern all matters arising out of
this amendment.
The parties are signing this amendment on the date stated in the introductory
clause.
Contra Costa County, on behalf of Capital One Public Funding,LLC
Buchanan Field Airport and Byron Airport, (formerly known as All Points Public
Instrumentalities of Contra Costa County Funding, LLC)
By: By:
Julie Bueren Jonathan A. Lewis
Director of Public Works Senior Vice President
RECOMMENDED FOR SIGNATURE:
Contra Costa County
By:
Karen Laws
Principal Real Property Agent
By:
Keith R. Freitas
Director of Airports
APPROVED AS TO FORM:
County Counsel, Silvano B. Marchesi
By:
Kathleen M. Andrus
Deputy County Counsel
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