TITLE
Recommendation to adopt resolution approving the decision of the City of Long Beach, as the Successor Agency to the Redevelopment Agency of the City of Long Beach, to participate in the County of Los Angeles Redevelopment Bond Refunding Program, and direct the commencement of a refunding of certain bonds and indebtedness.
DISCUSSION
Effective February 1, 2012, pursuant to Assembly Bill 1x 26 (AB1x 26), redevelopment agencies throughout the State were abolished and prohibited from engaging in future redevelopment activities. AB1x 26 provided for the formation of Successor Agencies (SAs), which have the responsibility of winding down outstanding obligations of the former redevelopment agencies.
On June 27, 2012, the State passed Assembly Bill 1484 (AB 1484), which included provisions permitting SAs to refund outstanding bonds or other obligations of a former redevelopment agency to achieve savings. A number of SAs have since refunded their existing redevelopment bonds to provide savings to taxing entities, while others are in the process of doing so.
Long Beach Successor Agency Tax Allocation Bonds
The City of Long Beach as Successor Agency (Long Beach SA) to the Redevelopment Agency of the City of Long Beach (Former RDA) could issue approximately $130 million of bonds to refund several tax allocation bonds issued by the Former RDA. The issues being considered for refunding are the 2002 Series A, the 2002 Series B, the 2005 Series A-1, and the 2005 Series B. Based on current interest rates, a refunding would reduce existing debt payments by an average of $640,000 each year for a total savings of approximately $12.6 million over the life of the bonds, or roughly $8.8 million in today's dollars (net present value basis). If the market improves or additional efficiencies become available, the Long Beach SA could issue approximately $170 million of refunding bonds, which could generate as much as $25 million of gross savings, or $17 million of savings in ...
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