TITLE
Recommendation to adopt resolution approving the incurrence and issuance by the Board of Harbor Commissioners, on behalf of the City of Long Beach, of a loan to be provided by the United States Department of Transportation and a related subordinate Harbor Revenue Note, in an aggregate principal amount not to exceed $325,000,000, both secured by subordinate Harbor Department revenues. (District 2)
DISCUSSION
The Board of Harbor Commissioners (Board), acting on behalf of the City of Long Beach (City), will propose on May 12, 2014, to (a) incur a loan under the Transportation Infrastructure Finance and Innovation Act of 1998 (TIFIA Loan), whose principal amount is not to exceed $325,000,000, provided by the United States Department of Transportation, acting through the Federal Highway Administrator, and (b) issue a Harbor Revenue Note evidencing the TIFIA Loan payment obligations of the Board, acting on behalf of the City, for the purposes of financing and refinancing the construction, improvement and acquisition of a new bridge replacing the existing Gerald Desmond Bridge at the Port of Long Beach.
The TIFIA program provides Federal loans for transportation projects of national significance. To qualify, a project must be eligible for existing Federal ground transportation programs, be in excess of $50 million and must be supported from dedicated user charges. The TIFIA Loan proceeds may be drawn only after substantial completion of the project. After substantial completion of the project, the Harbor Department intends to draw on the TIFIA Loan and repay the Series 2014 Short-Term Notes and credit lines, which were authorized by the City Council on April 1, 2014. This structure lowers the overall cost of borrowing for the project. The amount of the cost reduction is difficult to predict at this time, as it will depend on the difference between the U.S. Treasury rate at the close of the TIFIA Loan and the rate at which the Series 2014 Short-Term Note...
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