TO: Mayor Bien-Willner and Town Council Members
FROM: Jill Keimach, Town Manager
Douglas Allen, CPA
DATE: March 12, 2020
DEPARTMENT: Finance
Staff Contact Douglas Allen, CFO, 480-348-3696
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AGENDA TITLE:
Title
Update and Discussion of Financing the Capital Improvement Program and Financial Plan
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SUMMARY STATEMENT:
PV Town Council has demonstrated that adaptability and flexibility are key attributes to mitigating risk and fiscal resiliency.
Over the past few months, Council has diligently and thoroughly examined the prospects with various options for issuing debt obligations, even though the Town is experiencing good economic times.
This patience and dedication to finding the best solutions has resulted in finding very
low costs of capital borrowing while providing flexibility for future Councils.
This presents a clear path for the Town's financial plan to ensure the Town:
* Remains compliant with the Annual Expenditure Limitation,
* Meets the Council's goal of paying down the PSPRS unfunded liability,
* Continue the CIP and status quo Town operations;
* Maintain sufficient reserves to protect the town from external stresses;
* Honor development agreement obligations to front cash for the Five Star perimeter road project and invoice for reimbursement,
* Hedges the actual timing of reimbursements for the next two years.
Due to current market conditions and negotiations, costs of an Excise Tax Revenue Obligation Private Placement is proving to be significantly less than a Public Sale.
A $8,145,000 Private Placement with up to a 7-year maturity, 4-year call has been negotiated to 1.59% "all in costs". Staff locked into this unprecedented rate (1.09% plus costs of issuance) for Council's consideration. Locking the rate does not obligate the Town; Council action is required.
Pursuant to Council directives, staff has obtained current numbers for an excise tax revenue obligation in the $8mm range; for both a Private Placement (sing...
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