TO: Mayor Bien-Willner and Town Council Members
FROM: Jill Keimach, Town Manager
Douglas Allen, CPA
DATE: February 27, 2020
DEPARTMENT: Finance
Staff Contact Douglas Allen, CFO, 480-348-3696
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AGENDA TITLE:
Title
Update and Discussion of the Capital Improvement Program and Financial Plan
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SUMMARY STATEMENT:
Staff will have a brief presentation followed by Council discussion regarding the current status on the Town's capital improvement and development agreement financing plans for the fiscal years 2019/20 and 2020/21 including Council's requests and directives.
On February 13th, Town Council gave direction to continue with the Town's financial plan that ensures the Town remains compliant with the Expenditure Limitation, meets the Council's goal of paying down the PSPRS unfunded liability, honors development agreement obligations to front cash for the Five Star project and invoice for reimbursement, hedges the actual timing of reimbursements and directed staff to:
> Prepare to proceed with a public "bond" offering secured by excise tax revenues;
> Return to Council with more refined cost with options for callable and non-callable bonds in 2-3 years; and
> Attempt to negotiate a private placement option by locking in a rate for 45 days.
In response to the Council questions, Stifel provided the attached chart in the PowerPoint that shows both non-callable and a 4 year par call debt service for both a public and private sale. Stifel assumed using the bond proceeds over two years during the construction and financial close out of the perimeter road project and that if the Council had excess cash and desired to pay off bond debt, it would first choose to pay off the 2016 bonds. If the Council choose to have a 3 year callable bond, the additional cost to the Town would approximate 10-15 basis points higher for the three year call.
As for locking the rate for the private placement, Banker #1 could do that once the full structure and Tow...
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