TITLE
Recommendation to adopt resolution approving and authorizing the execution of various documents required to commence the refunding of various tax allocation bonds for debt service savings; and authorizing appropriate staff to take actions necessary to complete the refunding, subject to Oversight Board approval. (Citywide)
DISCUSSION
The Oversight Board elected on September 22, 2014 to participate in the County of Los Angeles Redevelopment Bond Refunding Program (County Program) and directed the Long Beach Successor Agency to commence efforts to refund certain tax allocation bonds. (Exhibit A - Staff Report)
Long Beach Successor Agency Tax Allocation Bonds
The Successor Agency (Long Beach SA) to the Redevelopment Agency of the City of Long Beach (Former RDA), has the opportunity to issue bonds to refund approximately $184 million in tax allocation bonds issued by the Former RDA to reduce the cost of debt service payments. The bond issues proposed to be refunded were marketed through several series of revenue bonds issued by the Long Beach Bond Finance Authority: the 2002 Series A, the 2002 Series B, the 2005 Series A-1, the 2005 Series A-2, and the 2005 Series B. The bonds involve different project areas that have varying payment requirements and savings levels. Proceeds of the bonds were used by the Former RDA to construct public improvements throughout various project areas. By refunding several bonds at once, the Long Beach SA will eliminate the need for overcollateralization and will reduce additional administrative costs.
Based on current interest rates, the refunding would lower the Long Beach SA’s existing debt payments by approximately $1.69 million each year over 26 years, or $24.3 million in today’s dollars (net present value savings), which will be divided among various taxing agencies and the City. The City’s General Fund would receive approximately $360,000 of additional property tax each year. These estimates may change based on market c...
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