TITLE
Recommendation to adopt resolution approving an amendment to the Indenture of Trust for the 2010 Taxable Revenue Bonds (Carnival Cruise Terminal Financing) to allow for improvements to terminal facilities being constructed by Carnival Corporation. (District 2)
DISCUSSION
On November 2, 2010, the City of Long Beach (City) issued $30 million of Taxable Revenue Bonds (2010 Bonds) to refund the outstanding 2002 Taxable Revenue Bonds, and finance capital improvements to property leased by Carnival Corporation (Carnival). The 2010 Bonds are a limited obligation of the City, payable solely from tariff revenues levied by the Harbor Department and collected by Carnival. A tariff of $6.33 is assessed on cruise passengers embarking and debarking from Carnival's cruise ship terminal, and is used to pay debt service on the 2010 Bonds and to create a capital reserve for future Carnival improvements.
Carnival has requested that the City amend the Indenture of Trust in connection to the 2010 Bonds. The amendment would allow Carnival to use tariff revenues from the capital reserve for costs of additional terminal improvements currently being undertaken by Carnival to allow for larger cruise ships to access the terminal facilities.
Carnival has unconditionally guaranteed the debt service payments on the 2010 Bonds. If tariff revenues are insufficient to pay debt service on the 2010 Bonds, Carnival will be required to make up any shortfalls. Neither the full faith, credit, nor any taxing power of the City is pledged to the repayment of the 2010 Bonds. The City does not have a claim to the 2010 Bond proceeds or the tariff revenues.
This matter was reviewed by Deputy City Attorney Monica J. Kilaita on December 2, 2019 and by Budget Management Officer Rhutu Amin Gharib on November 25, 2019.
TIMING CONSIDERATIONS
City Council action is requested on December 17, 2019, to ensure timely completion of the terminal facility improvements.
FISCAL IMPACT
There is no fiscal ...
Click here for full text