HomeMy WebLinkAbout1998-09-14 City Council (10)City of Palo Alto
City Manager’s Report
TO:HONORABLE CITY COUNCIL
FROM:CITY MANAGER DEPARTMENT: ADMINISTRATIVE
SERVICES
DATE:SEPTEMBER 14, 1998 CMR:357:98
SUBJECT:RESULTS OF GOLF COURSE CERTIFICATES OF PARTICIPATION
SALE
This is an information report and no Council action is required.
BACKGROUND
On August 6; the City received competitive bids from four underwriters to purchase the
City’s Golf Course Certificates of Participation. BancAmerica-Robertson Stephens was the
winning bidder, i.e., the underwriter which offered the lowest total cost of interest to the City
for the Certificates. The bids were:
BancAmerica
Piper Jaffrey
Paine Webber
Salomon Smith Barney
4.794%
4.838%
4.817%
4.818%
As a result of the favorable interest rates received, the City will realize annual savings in debt
service payments over the life of the certificates. In addition, when staff forecasted the golf
course revenue stream that could support annual debt service and other golf course operating
costs, it did so conservatively. The forecast staff used assumed that the golf course would
have to pay for about $675,000 in annual debt service payments. The actual debt service
payments over the life of the certificates will average about $542,000. (Actual debt service
will be higher in the earlier years before much principal is paid off, and will decline over
time). Therefore, the golf course should be better positioned to generate the necessary
additional revenues over time to pay for some of the deferred improvements cited in the golf
course master plan that were scaled back for this bond sizing. A debt service schedule is
attached.
The final bond sale numbers were as follows:
CMR:357:98 Page 1 of 3
Sources of Funds
Certificates sold
Plus remaining dollars available
in refunded 1978
Golf Course Bond Reserve
Less underwriter’s compensation
Total Sources of Funds
Uses of Funds
Refunding 1978 bonds
Reserve Fund
Costs of issuance (estimated)*
Available for construction & design
costs, including interim improvements
already incurred
Total Uses of Funds
$7,735,000
174,000
(54,000)
$7,855,000
$647,000
711,000
123,000
6.374.000
$7,855,00
There will possibly be some residual funds saved after all invoices are paid for the cost
of issuing the certificates. Any residual funds will be available for construction work.
As
$716,000 in costs paid by the General Fund over the last two fiscal years, including design,
interim improvements, and construction costs through May 31, 1998.
of September 1, the City has already been reimbursed by the financial trustee for
ATTACHMENT
Attachment: Debt Service Schedule
CMR:357:98 Page 2 of 3
PREPARED BY:Jim Steele, Manager, Investments and Debt
APPROVED BY:
CARL YEAT
Services
CITY MANAGER APPROVAL:
CC: n/a
HARRISON
Assistant City Manager
CMR:357:98 Page 3 of 3
Period
Ending
12/30/1998
06/30/1999
12/30/1999
06/30/2000
12/30/2000
06/30/2001
12/30/2001
06/30/2002
12/30/2002
06/30/2003
12/30/2003
06/30/2004
12/30/2004
06/30/2005
12/30/2005
06/30/2006
12/30/2006
06/3012007
12/30/2007
06/30/2008
12/30/2008
06/30/2009
12/30/2009
06/30/2010
12/30/2010
06/30/2011
12/30/2011
06/30/2012
12/30/2012
06/30/2013
12/30/2013
06/30/2014
12/30/2014
06/30/2015
12/30/2015
06/30/2016
12/30/2016
06/30/2017
12/30/2017
06/30/2018
12/30/2018
06/30/2019
NET DEBT SERVICE
City of Palo Alto
Certificates of Participation, 1998 (Golf Course)
Principal Interest
Total Debt Service
Debt Service General Fund Reserve Fund
Net
Debt Service
345,000
375,000
39O,000
405,000
270,000
285,000
295,000
31~000
325,000
335,000
355,000
370,000
385,000
405,000
425,000
445,000
470,000
495,000
520,000
545,000
203,942.82
174,808.13
167,908.13
167,908.13
160,408.13
160,408.13
152,608.13.
152.608.13
144508.13
144 508.13
139 108.13
139 108.13
133 408.13
133 408.13
127 360.63
127 360.63
120 850.63
120 850.63
113 944.38
113 944.38
106 741.88
106 741.88
98,931.88
98,931.88
90,606.88
90,606.88
81,751.88
81,751.88
72,234.38
72,234.38
61,875.00
61,875.00
50,750.00
50,750.00
39,000.00
39,000.00
26,625.00
26,625.00
13,625.00
13,625.00
203 942.82
519 808.13
167 908.13
542 908.13
160 408.13
550 408.13
152 608.13
557 608.13
144 508.13
414,508A3
139,108.13
424,108.13
133,408.13
428,408.13
127,360.63
437,360.63
120,850.63
445,850.63
113,944.38
448,944.38
106,741..88
461,741.88
98,931.88
468,931.88
90,606.88
475,606.88
81,751.88
486,751.88
72,234.38
497,234.38
61,875.00
506,875.00
50,750.00
520,750.00
39,000.00
534,000.00
26,625.00
546,625.00
,13,625.00
558,625.00
(1,209.16) 1,209.16
17,718.81 16,742.17
.16,742.17
16,742.17
16,742.17
16,742.17
16,742.17
16,742.17
66,728.60
15,564.82
15,564.82
15,564.82
15,564.82
15,564.82
15,564.82
15,564.82
15,564.82
15,564.82
15,564.82
15,564.82
15,564.82
15,564.82
15,564.82
15,564.82
15,564.82
15,564.82
15,564.82
15,564.82
15,564.82
15,564.82
15,564.82
15,564.82
15,564.82
15,564.82
15,564.82
15,564.82
!5,564.82
15,564.82
15,564.82
(1,939.82)15,564.82
1,939.82 676,394.65
169 481.84
503 065.96
151165.96
526165.96
143 665.96
533 665.96
135 865.96
490 879.53
128 943.31
398 943.31
i23 543.31
408 543.31
117 843.31
412 ]43.31
111,795.81
421,795.81
105,285.81
430,285.81
98,379.56
433,379.56
91,177.06
446,177.06
83,367.06
453,367.06
75,042.06
460,042.06
66,187.06
471,187.06
56,669.56
481,669.56
46,310.18
491,310.18
35,185.18
505,185.18
23,435.18
518,435.18
11,060.18
531,060.18
(119,709.47)
7,750,000 4,183,243.59 11,933,243.59 16,509.65 1,344,037.02 10,572,696.92
Annual
Net D/S
169,481.84
654,231.92
669,831.92
669,531.92
619,822.84
522,486.62
526,386.62
524,639.12
527,081.62
528,665.37
524,556.62
529,544~12
528,409.12
526,229.12
527,856.62
527,979.74
526,495.36
528,620.36
529,495.36.
531,060.18
(119,709.47)
10,572,696.92
Prepared by Public Financial Management, Inc.Page l