TITLE
Recommendation to adopt resolution to issue Water Revenue Bonds Series 2010A in an amount not to exceed $26,000,000, acting through its Board of Water Commissioners (the Board), to refund certain Water Revenue Bonds Series 1997A, previously authorized by the City and issued by the Board, fund the Reserve Fund, and pay the cost of issuance for the Series 2010 Bonds. (Citywide)
DISCUSSION
The City of Long Beach Water Department proposes to issue Water Revenue Refunding Bonds Series 2010A (Series 2010A Bonds) in an aggregate principal amount not to exceed $26,000,000, at a coupon rate not to exceed 5 percent, for the purpose of refunding a portion of Water Revenue Refunding Bonds Series 1997A (Series 1997A Bonds). The Series 2010A Bonds will be secured by and payable from the revenues of the Water Enterprise Fund. The objective of this debt restructuring is to reduce debt service costs as a result of lower interest rates.
The Series 1997A Bonds were issued on October 15, 1997, in the amount of $46,945,000, with an average interest rate of 5.195 percent to refund outstanding 1994 Water Revenue Bonds issued to finance the design and construction of the groundwater treatment plant, and to refund the outstanding 1987 Water Revenue Refunding Bonds. The Water Department’s Groundwater Treatment Plant construction was completed and went into operation on May 1, 1997.
Proceeds from the Series 2010A Bonds, together with monies released from the Series 1997A Debt Service Reserve Fund, will be used to refund $24,290,000 aggregate principal of the Series 1997A Bonds, fund a reserve account, and pay the cost of issuing the Series 2010A Bonds. The Series 1997A Bonds include $5,175,000 of non-callable bonds that will remain outstanding through their maturity in 2015. The net present value savings of this refinancing is approximately $1,600,000.
These estimated savings could potentially be used for the development of water conservation and education programs betw...
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