TO:
Honorable Mayor Powell and Members of the City Council
THROUGH:
David N. Carmany, City Manager
FROM:
Bruce Moe, Finance Director
Henry Mitzner, Controller
SUBJECT: Title
Resolution No. 12-6392 Approving the Documents Related to the Replacement of the Existing Marine Avenue Sports Fields Variable Rate Debt Letter of Credit and a Remarketing Agreement with Loop Capital Markets
ADOPT RESOLUTION NO. 12-6392
Body
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RECOMMENDATION: Staff recommends that the City Council adopt Resolution No. 6392 approving the following documents in support of the 2002 Marine Avenue Sports Fields Certificates of Participation (COPs):
a) Replacement Letter of Credit/Reimbursement Agreement with Union Bank;
b) Fee Agreement with Union Bank;
c) Remarketing agreement with Loop Capital Markets; and
d) Remarketing Circular.
FISCAL IMPLICATIONS:
The balance owed on the Marine Avenue Sports Fields is approximately $7.235 million, with a remaining amortization period of twenty years. Annual debt service, which is based on variable interest rates, is budgeted at $600,000. However, due to the low interest rate environment, actual annual debt service has been approximately $340,000. Approval of the replacement letter of credit will not change the amortization schedule. The cost of obtaining the replacement letter of credit is approximately $47,235. This includes Bond/Disclosure Counsel ($15,000), Rating Agency ($5,000), Bank Counsel ($20,000) and the remarketing placement fee ($7,235).
BACKGROUND:
Bank of America currently provides the letter of credit for the City’s 2002 Marine Avenue Sports Fields Certificates of Participation (COPs). Bank of America will not be renewing the letter of credit after it expires on November 1, 2012. As a result, at the August 7, 2012 meeting, the City Council approved the acquisition from Union Bank of a replacement letter of credit for the Marine Avenue Sports Fields Variable Rate ...
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