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Home My WebLink About2016-01-21 - Board of Directors Meeting Agenda Packet Yorba Linda Hater District AGENDA YORBA LINDA WATER DISTRICT BOARD OF DIRECTORS SPECIAL MEETING Thursday, January 21, 2016, 3:00 PM 1717 E Miraloma Ave, Placentia CA 92870 1. CALL TO ORDER 2. PLEDGE OF ALLEGIANCE 3. ROLL CALL Ric Collett, President Michael J. Beverage, Vice President Phil Hawkins Robert R. Kiley Gary T. Melton 4. PUBLIC COMMENTS Any individual wishing to address the Board is requested to identify themselves and state the matter on which they wish to comment. If the matter is on the agenda, the Board will recognize the individual for their comment when the item is considered. No action will be taken on matters not listed on the agenda. Comments are limited to matters of public interest and matters within the jurisdiction of the Water District. Comments are limited to three minutes. 5. ACTION CALENDAR This portion of the agenda is for items where staff presentations and Board discussions are needed prior to formal Board action. 5.1. Refunding Option for 2008 Certificates of Participation Recommendation. That the Board of Directors approve going forward with the Refunding Option for the 2008 Certificates of Participation. 6. DISCUSSION ITEMS This portion of the agenda is for matters that cannot reasonably be expected to be concluded by action of the Board of Directors at the meeting, such as technical presentations, drafts of proposed policies, or similar items for which staff is seeking the advice and counsel of the Board of Directors. Time permitting, it is generally in the District's interest to discuss these more complex matters at one meeting and consider formal action at another meeting. This portion of the agenda may also include items for information only. 6.1. District Fiduciary Responsibilities 7. ADJOURNMENT 7.1. The next Regular Board of Directors Meeting will be held Thursday, January 28, 2016 at 8:30 a.m. Items Distributed to the Board Less Than 72 Hours Prior to the Meeting Pursuant to Government Code section 54957.5, non-exempt public records that relate to open session agenda items and are distributed to a majority of the Board less than seventy-two (72) hours prior to the meeting will be available for public inspection in the lobby of the District's business office located at 1717 E. Miraloma Avenue, Placentia, CA 92870, during regular business hours. When practical, these public records will also be made available on the District's internet website accessible at http://www.ylwd.com/. Accommodations for the Disabled Any person may make a request for a disability-related modification or accommodation needed for that person to be able to participate in the public meeting by telephoning the Executive Secretary at 714-701-3020, or writing to Yorba Linda Water District, P.O. Box 309, Yorba Linda, CA 92885-0309. Requests must specify the nature of the disability and the type of accommodation requested. A telephone number or other contact information should be included so the District staff may discuss appropriate arrangements. Persons requesting a disability-related accommodation should make the request with adequate time before the meeting for the District to provide the requested accommodation. ITEM NO. 5.1 AGENDA REPORT Meeting Date: January 21, 2016 To: Board of Directors From: Marc Marcantonio, General Manager Presented By: Delia Lugo, Finance Manager Dept: Finance Prepared By: Delia Lugo, Finance Manager Subject: Refunding Option for 2008 Certificates of Participation STAFF RECOMMENDATION: That the Board of Directors approve going forward with the Refunding Option for the 2008 Certificates of Participation. DISCUSSION: Joshua Lentz and Tom DeMars of Fieldman Rolapp & Associates will present the Board with a presentation regarding a refunding opportunity. Due to current municipal bond market conditions, there is an opportunity for the District to refund the 2008 Certificates of Participation (COP's). The amount of savings is dependent on the interest rates in effect at the time of refunding. After consideration and approval to pursue the refunding option, the next step would be to engage bond counsel and assemble the financing team. The entire process of this refunding opportunity could be completed by Spring 2016. ATTACHMENTS: Description: Type: Backup Material Distributed Less Than 24 Hours Prior to Presentation.pdf Backup Material the Meeting W Yorba Linda Water Disirict Backup Material Distributed Less Than 24 Hours Prior to the Meeting Refunding Options for 2008 Certificates of Participation Thursday, January 21, 2016 FIELDMAN I ROLAPP & ASSOCIATES Backup Material Distributed Less Than 24 Hours Prior to the Meeting Yorba Linda Water District 1. General Market Conditions 2. Current Savings Estimates & Options Introductions FIELDMAN I ROLAPP & ASSOCIATES Backup Material Distributed Less Than 24 Hours Prior to the Meeting Yorba Linda Municipal Market Update — Market Movements Water District Change in MMD & UST (Last Week) Change in MMD & UST (20 15 Year-to-Date) (basis points) (basis points) 10 , 30 5 0 N (10) 5.00% 4.00% 3.00% 2.00% 1.00% 0.00% 3yr 5yr 7yr 10yr 30yr AAA MMDYield Curve 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 Source: Thomson Financial and U.S. Treasury. 2 20 18 17 15 14 10 10 .. 32 0 - (1 0) (6) (6) 5.00% 4.00% 3.00% 2.00% 1.00% 0.00% (18) - ......- -- f 3yr 5yr 7yr 10yr 30yr USTYield Curve 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 FIELDMAN I ROLAPP & ASSOCIATES Yorba Linda Water District Backup Material Distributed Less Than 24 Hours Prior to the Meeting Municipal Market Update — Interest Rate Overview MMDYield Curve (Last Five Years) 6.00% 5.00% 4.00% SEEMS 3.00% 2.00% - 1.00% 0.00% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 5.10% 4.10% 3.10% 2.10% 1.10% Jan -11 Source: Thomson Financial. 10 -Year and 30 -Year MMD Rates (Last Five Years) Jan -12 Jan -13 Jan -14 Jan -15 I � � I 3.00% I 2.50% I I � A 1 2.00% J� I y 1.50% Jan -16 I Jan -15 Apr -15 Jul -15 Oct -15 Jan -16 FIELDMAN I ROLAPP & ASSOCIATES Backup Material Distributed Less Than 24 Hours Prior to the Meeting Yorba Linda Current Savings Estimate Water District The refunding opportunity continues to produce favorable results Refunding Results* Refunded Maturities Refunded Par Total Cashflow Savings Average Annual Cashflow Savings ......................... ............................... Total Net PV Savings ................................ ............................... NPV Savings as % of Refunded Par ................................ ............................... Cost of Refunding Escrow Period (April 2016 — October 2017) ................................ ............................... Refunding Efficiency True Interest Cost ................... ............................... Estimated Cost of Issuance and Underwriter's Discount 2016-2038 $26,910,000 ...................... $7,410,705 ...................... $322,205 ...................... $3,549,883 11.89% .................. $692,776 .................. 83.67% .................. 3.09% .................. $300,000 Pro Forma Cashflow Savings* Fiscal Year Prior Debt New Refunding Estimated June 30) Service Debt Service C- --ings 2017 $2,128,396 $1,807,169 $321,228 2018 2,125,996 1,803,300 322,696 2019 2,127,296 1,805,400 321,896 2020 2,127,196 1,803,300 323,896 2021 2,125,696 1,801,500 324,196 2022 2,127,696 1,804,500 323,196 2023 2,123,196 1,800,625 322,571 2024 2,122,196 1,799,875 322,321 2025 2,123,815 1,802,000 321,815 2026 2,122,215 1,801,875 320,340 2027 2,117,726 1,794,625 323,101 2028 2,115,450 1,795,125 320,325 2029 2,115,434 1,793,125 322,309 2030 2,112,175 1,788,625 323,550 2031 2,110,525 1,786,500 324,025 2032 2,111,063 1,791,375 319,688 2033 2,108,675 1,788,125 320,550 2034 2,104,250 1,781,875 322,375 2035 2,102,250 1,782,375 319,875 2036 2,101,125 1,779,375 321,750 2037 2,100,625 1,777,750 322,875 2038 2,095,625 1,772,375 323,250 2039 2,091,000 1,768,125 322,875 Total $48,639,623 $41,228,919 $7,410,705 = Fi1LUMAIV I ROLAPP & ASSOCIATES * PRELIMINARY, SUBJECT TO CHANGE. BASED ON MARKET CONDITIONS AS OF JANUARY H, 2016 Backup Material Distributed Less Than 24 Hours Prior to the Meeting Yorba Linda Water District 2008 Certificates Refunding Sensitivity Analysis* ater 1. Refunding Bond Rate is based on arbitrage yield. Coupons and yields are based on current market conditions as of January 8, 2016. 2. Average annual savings on fiscal year basis (excludes first year). 3. Net Present Value Savings are discounted to the Closing Date. 4. NPV Savings as a percentage of 2008 Certificates refunded. 5. Amount rates can increase for a scenario and breakeven from Scenario 1. 6. Escrow efficiency measures impact of escrow cost. Shows NPV savings as percentage total possible NPV savings without escrow cost. FIELDMAN I ROLAPP & ASSOCIATES * PRELIMINARY, SUBJECT TO CHANGE. BASED ON MARKET CONDITIONS AS OF JANUARY H, 2016 Backup Material Distributed Less Than 24 Hours Prior to the Meeting Yorba Linda Water District ■ Proceed with assembling the financing team ■ Prepare refunding to be ready for sale in Spring 2016 Next Steps ■ Explore taking out the Wells Fargo Line of Credit and including it the refunding ■ Continue to monitor refunding opportunity FIELDMAN I ROLAPP & ASSOCIATES Yorba Linda Water District FIELDNIAN ROLAPP Backup Material Distributed Less Than 24 Hours Prior to the Meeting Yorba Linda Water District Refunding Revenue Bonds, Series 201bA SCHEDULE Revised on: Fndac, January QS, 201b BC = 8om Coatsl - S.3&.g ]-arm Cson ad & Ranm en GC = G A Camca - hldman Lam LIP FA = Fm--W Ad— - P etdm Fo1gT & Assadaas I = Lauer - Y. ba Lands Water M,= T = That" - CS- Back lsadoail Assorlama U = Cndn - To Be Detetmmed UC = Undeawticer Councel - To Be Demmmued CA = Fenficanon Apem - To Be Deomlaed t e- F-M. 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POS AR . -z and Rating Presenanon Toesdai,Apti1113016 Post and d=bm Official Sntemem 2d daft of =n Pee`° " °'""" —Imd PA 'reek of - `.fosYla {', Pe1xuL{'9,2Oi6 Rsnsed dmfn of legal daatmems Uneaessa , and POS B[ + _ - .U� n.-d —g All nd daft of P—hu. Canhzct arcuated Six (30-g Pmal draft of Ratng Preseoafon circulated PA Pddar, U—h Oi, 7D16 Fm=g Agency Pad r d.smbtmd to S&P PA Reek of 3totda{•, klu� 0', 3016 Rating Ag— Pie<,ennooa Confetenre Cat] a & S&P L FAI U T 'agenda Deadline far uueh Ifith Baadd of Dueemrs Meetwg A8 U'eek of U—dw. kdnffi 14_ _ ^016 Firings R—and Lem 5&P L Pi U Baud of Daecmn ]Seetag 4 8:30 Ali Tlmndac U—h 3i. S76 Adopt Remmton appracmg dsstnnce of cquuding bonds and L BC. FA- U farms of the kf$ doc®ems, POS- and Psrhue Comoct Illustrative Schedule FIBLDMAN ROLAPP Yorba Linda Water District Refunding Revenue Bonds, Series 201bA SCHEDIILE a FIELDMAN I ROLAPP & ASSOCIATES F-M. ' + - tuai POS atcolaEed forfimf tom: xa- 'w --v 3C Pant. post and &'mhd POS BC +: - Ttae =day, Apn] OS -3016 Pa -PdanB aonfeteoce call L PA, U P¢Poasg ®mbers redfed br Ved &.don Agent CA Pnagg eoafennrt eat and amud silo 1, PA, U Pndag m—ben ceneud bf Venfi d kg= VA P.chase C—M— finalized and eatotsfed L fl, UC Pddar, Apd108, 2026 Offl.W Statement cmnfated for foal rerrecr BC 1-mA daft of vcd =oa Report -,.Li d . -z + Toesdai,Apti1113016 Post and d=bm Official Sntemem �C Final teadan of vet &=- Repo¢ —hod + _ Tnesdac Apd1 19, 3D16 n.-d —g All +;- W.W dn, Apu11.q 3016 (30-g At De[easmce of tbe:.008 Cem&ates of Patticit.— Stmdar. Ocsabc 01, 301' nepatment of the 300S Ce,ta-.e.. of PamcaQatmn T FIELDMAN I ROLAPP & ASSOCIATES Yorba Linda Water District I Backup Material Distributed Less Than 24 Hours Prior to the Meeting Disclaimer The scenarios are being provided for informational purposes only, and do not reflect any specific recommendation regarding a financial transaction. These materials include an assessment of current market conditions, and include Fieldman, Rolapp & Associates, Inc. assumptions about interest rates, execution costs, and other matters related to municipal securities issuance or municipal financial products. These assumptions may change at any time subsequent to the date these materials were provided. The refinancing and refunding scenarios presented herein are not intended to be inclusive of every feasible or suitable refinancing alternative. Fieldman, Rolapp & Associates, Inc. is an SEC - registered Municipal Advisor, undertaking a fiduciary duty in providing financial advice to public agencies. Compensation contingent on the completion of a financing or project is customary for municipal financial advisors. To the extent that our compensation for a transaction is contingent on successful completion of the transaction, a potential conflict of interest exists as we would have a potential incentive to recommend the completion of a transaction that might not be optimal for the public agency. However, Fieldman, Rolapp & Associates, Inc. undertakes a fiduciary duty in advising public agencies regardless of compensation structure. FIELDMAN I ROLAPP & ASSOCIATES