TITLE
Recommendation to adopt resolution authorizing the issuance of Marina Revenue Bonds, Series 2015, in an aggregate amount not to exceed $125,000,000, and the execution of various related documents. (District 3)
DISCUSSION
The City proposes to issue Marina Revenue Bonds, Series 2015 (Series 2015 Bonds), in an aggregate amount not to exceed $125,000,000, to finance the completion of the waterside improvements to the Alamitos Bay Marina (ABM Rebuild). This proposed bond issuance includes $49.2 million for the waterside improvements, prepayment of certain existing State loans, funding of capitalized interest on the Series 2015 Bonds during the construction period, funding a debt service reserve for the Series 2015 Bonds, and payment of bond issuance costs.
On April 15, 2014, staff reported to the City Council that the cost to complete the ABM Rebuild was $60.1 million. Staff also reported that a bond issuance of $34 to $40 million for the waterside improvements could be feasible, assuming ongoing 2 percent annual slip rent increases. To complete the ABM Rebuild, an additional $20 to $26 million would need to be identified, with the most likely source being the Tidelands Fund.
On August 19, 2014, the City Council authorized $10.9 million from the Tidelands Operating Fund (TF 401) for the ABM Rebuild with the understanding that additional funding, likely from Tidelands, of up to $15 million might still be needed (for a total of $26 million). Due to the sharp decline in the price of oil and the lack of funding for new Tidelands capital projects in the foreseeable future, staff began exploring the feasibility of funding the remaining cost of the ABM Rebuild with a bond issuance supported exclusively by Marina Fund revenues.
Much investigation was done to ensure that the completion of the ABM Rebuild was affordable. The City engaged a team of financial and market experts to determine the feasibility of such a bond issuance. The team projected that annual slip...
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