[00:00:05]
GOOD AFTERNOON, AND THE BOARD FINANCE COMMITTEE OF THE EAST BAY REGIONAL PARK DISTRICT FOR TUESDAY, JULY 9TH, BEGINNING AT EXACTLY 3:00, IS NOW OPEN.
WILL THE RECORDING CLERK PLEASE TAKE THE ROLL CALL?
[Roll Call]
DIRECTOR ROSARIO.HERE. DEBORAH SPAULDING, ASSISTANT GENERAL MANAGER.
HERE. LYNNE BOURGAULT GENERAL COUNSEL.
HERE. TODAY'S MEETING IS BEING HELD PURSUANT TO THE BROWN ACT.
STAFF IS PROVIDING LIVE AUDIO AND VIDEO STREAMING.
MEMBERS OF THE PUBLIC WISHING TO MAKE A PUBLIC COMMENT MAY DO SO BY SUBMITTING AN EMAIL.
IF THERE ARE NO QUESTIONS ABOUT THE MEETING PROCEDURES, WE WILL BEGIN.
THE NEXT ITEM IS APPROVAL OF THE MINUTES.
[Approval of Minutes]
OF THIS FINANCE COMMITTEE FOR MAY 22ND.DO I HAVE A MOTION TO APPROVE THE MINUTES? I'LL MAKE THE MOTION. SECOND AND A SECOND.
DO WE HAVE ANY PUBLIC COMMENTS FOR ITEMS NOT ON THE AGENDA? NO PUBLIC COMMENTS.
OKAY. THANK YOU VERY MUCH, AND NOW WE'RE ON TO OUR ACTION ITEMS.
[Action Items]
ACTION ITEM.WHICH IS THE TITLE IS RECOMMENDATION TO AUTHORIZE THE ISSUANCE OF PROMISSORY NOTES IN THE PRINCIPAL AMOUNT OF UP TO $47,500,000 FOR CONSTRUCTION OF PERALTA OAKS NORTH BUILDING, AND WE HAVE A PRESENTATION FOR THAT COMING UP HERE.
I'M DEBORAH SPAULDING, ASSISTANT GENERAL MANAGER OF FINANCE AND MANAGEMENT SERVICES, AND I'M GOING TO WALK YOU THROUGH AN OVERVIEW OF THE VERY LARGE PACKET THAT WE SENT OUT TO YOU GUYS AND THEN WE ALSO HAVE SOME EXPERTS HERE.
WE HAVE OUR LEGAL ADVISOR KATIE DOBSON FROM JONES HALL AND OUR FINANCIAL ADVISOR ANNA SARABIAN FROM FIELDMAN ROLAPP. SO IF YOU HAVE PARTICULARLY TECHNICAL QUESTIONS, WE CAN ASK FOR THEM TO JUMP IN.
ALL RIGHT. SO I'M GOING TO START OUT BY GIVING YOU SOME BACKGROUND ON THE PROJECT ITSELF.
SO IT WAS INITIALLY CONSTRUCTED IN 1983 BY THE STATE COMPENSATION INSURANCE FUND.
IT WAS PURCHASED BY THE PARK DISTRICT IN 2019 FOR $14.4 MILLION USING OUR 2012 PROMISSORY NOTE FUNDS. SO THAT WAS THE FIRST TIME THAT WE HAD ISSUED PROMISSORY NOTES WAS BACK IN 2012.
THE FACILITY IS INTENDED TO BE USED, SO WE PURCHASED IT, INTENDING FOR IT TO BECOME OUR NEW PUBLIC SAFETY HEADQUARTERS, AND THEN IN ADDITION, IT'S GOING TO HAVE A BOARD OF DIRECTORS MEETING ROOM.
SO SOME SPACE, BECAUSE WE DO NEED TO EXPAND HERE.
WHEN THE BUILDING WAS ORIGINALLY PURCHASED, THE CONSTRUCTION COST ESTIMATE WAS $30 MILLION.
HOWEVER, AS TIME HAS PASSED AND AS WE HAVE REFINED THE PARTICULAR NEEDS FOR THE BUILDING THE COST THAT 30 MILLION COST ESTIMATE TURNED OUT TO BE SIGNIFICANTLY LOWER THAN OUR ULTIMATE COST TURNED OUT TO BE.
WE DO NEED TO ADD ON TO THAT, HOWEVER SOFT COSTS.
SO CONSTRUCTION MANAGEMENT, ARCHITECTURAL COSTS, ENGINEERING COSTS AND STAFF TIME, THAT ADDS ON APPROXIMATELY 10 MILLION, AND THEN WE STAFF HAS ASKED US TO HAVE A 20% CONTINGENCY BUDGET.
SO THAT'S AN ADDITIONAL APPROXIMATELY 12 MILLION.
SO OUR TOTAL COST FOR THE CONSTRUCTION WILL BE WELL FOR EVERYTHING.
SO NOW TALKING ABOUT WELL WHERE IS THAT MONEY GOING TO COME FROM? SO WE HAVE A LITTLE BIT OF MONEY STILL REMAINING IN THE PROJECT THAT WE'VE BEEN USING TO DATE TO DO THE WORK THAT'S BEEN DONE SO FAR.
[00:05:03]
SO 341,000 AVAILABLE IN THAT PROJECT.SO 881,000, AND THEN WE HAVE THIS FUTURE OFFICE NEEDS PROJECT, AND THE BOARD FINANCE COMMITTEE RECALLS THAT WE EARLIER THIS YEAR TOOK 21.6 MILLION FROM OUR COMMITTED FUND BALANCE, AND WE MOVED IT INTO THAT PROJECT.
SO ADDING THAT ONTO THE BALANCE THAT WAS ALREADY IN THERE.
WE HAVE 33.4 MILLION IN THAT PROJECT.
SO THAT BRINGS US TO A TOTAL OF 34.6, ROUGHLY AVAILABLE WITH A GAP OF ABOUT 47 MILLION AND SO QUESTIONS COME UP WHENEVER WE TALK ABOUT PROMISSORY NOTES.
WELL, WHAT ARE PROMISSORY NOTES AND WHY PROMISSORY NOTES? WHY NOT SOME OTHER FORM OF FUNDING? SO THE EAST BAY REGIONAL PARK DISTRICT HAS THIS PARTICULAR SET ASIDE, I GUESS WE'LL CALL IT IN THE CALIFORNIA PUBLIC RESOURCES CODE THAT GIVES US AUTHORITY TO ISSUE PROMISSORY NOTES.
SO IT IS KIND OF UNUSUAL, BUT IT'S A PARTICULAR TYPE OF DEBT ISSUANCE THAT WE ARE ALLOWED TO DO.
WE ARE REQUIRED, PER THE CALIFORNIA PUBLIC RESOURCES CODE, TO REPAY THE PRINCIPAL AND INTEREST OVER 20 YEARS, AND WE CAN ONLY USE OUR GENERAL FUND REVENUES, SO THERE'S NO OTHER REVENUE SOURCE THAT WE CAN USE.
I MENTIONED EARLIER, WE DID A PROMISSORY NOTE ISSUANCE IN 2012 FOR 25 MILLION, AND THOSE FUNDS WERE USED PREDOMINANTLY FOR THE ACQUISITION OF PERALTA OAKS NORTH, AND SO THAT ISSUANCE IS STILL BEING PAID OFF THROUGH 2037 WITH AN ANNUAL PAYMENT OF ABOUT 1.42 MILLION, AND SO THIS IS SPELLED OUT IN A LITTLE BIT MORE DETAIL IN YOUR PACKET, BUT TRYING TO PUT THEM ALL THREE SIDE BY SIDE HERE.
SO THE PRIMARY RECOMMENDATION IS TO USE THE FUNDS REMAINING IN THAT PROJECT.
1593. WE HAVE THAT SAME RECOMMENDATION ACROSS ALL THREE ALTERNATIVES, AS WELL AS USING THE INTEREST ON THE 2012 PROMISSORY NOTES THAT HASN'T YET BEEN APPROPRIATED.
SO THAT'S THE SAME ACROSS ALL THREE, AND THEN USING THE FULL 33.4 MILLION IN THE FUTURE OFFICE NEEDS PROJECT, WE ARE ALSO PROPOSING TO USE 4 MILLION IN FUND BALANCE, AND THIS WOULD BE FROM THE CLOSE OF THE 2023 FISCAL YEAR.
SO REVENUES THAT EXCEEDED EXPENDITURES FROM 2023.
WE'RE PROPOSING USING 4 MILLION FROM THAT, AND THEN IN ADDITION, 43 MILLION IN PROMISSORY NOTES, AND WE'LL TALK A LITTLE BIT MORE ABOUT THE BREAKDOWN OF THAT.
HOW MUCH IS PRINCIPAL VERSUS HOW MUCH IS PREMIUM, AND SO IN TOTAL THAT COMES OUT TO 81.6 MILLION, AND THAT WOULD HAVE AN ANNUAL DEBT SERVICE, AND THIS IS PRELIMINARY BASED ON WHAT WE THINK THE MARKET WILL GIVE US WHEN WE ACTUALLY GO TO THE MARKET.
SO DEBT SERVICE WOULD BE APPROXIMATELY 3.16 MILLION, AND NOW MOVING TO ALTERNATIVE A.
SO IN THIS SCENARIO WE DON'T USE ANY OF THE ADDITIONAL FUND BALANCE.
THE AMOUNT THAT I HAD DISCUSSED, THE 4 MILLION THAT I DISCUSSED BEING REVENUE ABOVE EXPENDITURES FROM 2023 AND INSTEAD ISSUE SOME ADDITIONAL PROMISSORY NOTES.
SO IN THAT SCENARIO WE WOULD BORROW WE WOULD HAVE 47 MILLION IN PROMISSORY NOTES, BUT BECAUSE WE'RE BORROWING MORE, WE'D HAVE A LITTLE BIT HIGHER DEBT SERVICE OF AGAIN, THIS IS BASED ON CURRENT MARKET VALUES, APPROXIMATELY 3.5 MILLION, AND THEN A THIRD SCENARIO IS TO USE ONLY 23.4 MILLION OF THE FUTURE OFFICE NEEDS PROJECT, AND THEN FROM ADDITIONAL FUND BALANCE, AND THIS WOULD REQUIRE GOING BEYOND JUST WHAT'S GOING TO BE AVAILABLE FROM THE 2023 CLOSE, BUT ALSO DIPPING INTO THE FUND BALANCE.
SO USING SOME OF OUR UNASSIGNED FUND BALANCE AND DIPPING INTO THAT 32% PER POLICY THAT WE SET ASIDE FOR, YOU KNOW, UNEXPECTED CIRCUMSTANCES, WE COULD USE SOME OF THOSE FUNDS, AND WE COULD ALSO YOU'LL SEE THE TOTAL AMOUNT AT THE BOTTOM.
SO THEN WE WOULD BORROW A LITTLE BIT LESS FOR THE PROMISSORY NOTES.
SO ONLY 35 MILLION, AND THAT BRINGS US TO 79 MILLION.
SO THAT WOULD ALSO REQUIRE US TO HAVE A LITTLE SMALLER CONTINGENCY BUDGET.
[00:10:04]
MILLION. SO THOSE OBVIOUSLY THERE'S LIKE A, YOU KNOW, A WIDE RANGE OF SCENARIOS IN BETWEEN THOSE, BUT THOSE ARE JUST SOME ALTERNATES SO THAT YOU COULD GET A SENSE OF WHAT ELSE IS POSSIBLE, BUT AGAIN, OUR PRIMARY RECOMMENDATION IS IN THAT FIRST COLUMN, AND THE FISCAL IMPACT OF THAT IS, IS DESCRIBED IN A LITTLE BIT MORE DETAIL ON THIS SLIDE.SO BASED ON CURRENT MARKET CONDITIONS WE BELIEVE THAT WE WOULD RECEIVE 39.
WE WOULD ISSUE 39 MILLION IN PROMISSORY NOTES AND THAT WOULD GENERATE 4 MILLION IN PREMIUM, AND THAT'S JUST BASED ON HOW THE MARKET IS IS OPERATING RIGHT NOW, AND I COULD ASK ANNA TO TALK ABOUT THAT MORE IF YOU'D LIKE.
IN ADDITION, WE HAVE COST OF ISSUANCE WHEN WE DO THIS PROMISSORY NOTE PROCESS.
SO WE'VE ALREADY MET WITH THE RATING AGENCIES THIS MORNING AND PRESENTED TO THEM, AND WE BELIEVE THAT WE'LL BE RECEIVING POSITIVE NEWS NEXT WEEK. I DON'T WANT TO GET AHEAD OF THINGS, BUT SO THE RATING AGENCY COSTS, FINANCIAL ADVISOR COSTS, BOND COUNSEL COSTS AND AN UNDERWRITERS FEE THAT ALL NEED TO BE PAID AND THAT WILL COME FROM THE BOND PROCEEDS, AND AGAIN, THAT WOULD BRING US TO 3.16 MILLION IN ANNUAL DEBT SERVICE COSTS.
SO THAT CONCLUDES THE PRESENTATION, AND SO WE'RE LOOKING FOR A RECOMMENDATION TO THE TO THE BOARD, AND I'LL STOP HERE, AND I'M GUESSING PEOPLE HAVE QUESTIONS.
ALL RIGHT. ANY QUESTIONS FROM THE COMMITTEE? OH, AND SORRY, THERE'S ONE. ONE MORE.
SO THIS IS ON PAGE 48 OF THE PACKET.
I DON'T KNOW IF YOU WANT TO FLIP TO IT, BUT IT'S TALKING ABOUT THE OAKLAND HILLS FIRE, AND IT MISTAKENLY SAYS OCTOBER OF 2001, AND IT SHOULD SAY OCTOBER OF 1991 FOR WHEN THAT OAKLAND HILLS FIRE HAPPENED.
SO ARE THERE ANY QUESTIONS OR COMMENTS? YEAH. GO AHEAD. GO AHEAD.
SO THE DEBT SERVICE IS GOING TO COME OUT OF THE GENERAL FUND, CORRECT? SO AND FOR 13 YEARS, IT'S GOING TO THERE'S GOING TO OVERLAP BETWEEN 2012 AND THIS 2024 IF IT GETS APPROVED. SO THAT'S 4.6.
SO I JUST WANT TO KNOW WHAT PERCENTAGE OF THAT IS WHAT THE PERCENTAGE OF THAT IS THAT OF THE GENERAL FUND? OH, GREAT QUESTION, AND WE DID TALK ABOUT THIS.
SO OUR GENERAL FUND IS ABOUT 212 MILLION.
SO IT'S I THINK IT'S LIKE 2.5% OF OUR GENERAL FUND REVENUE.
ANNA DO YOU HAVE THAT? THAT'S RIGHT. YES.
SO IT'S SOMETHING WE CAN ABSORB.
HOW ARE WE GOING TO FIT THIS INTO THE BUDGET? OKAY, GREAT, AND THEN YOU PRETTY MUCH ANSWERED A LOT OF MY QUESTIONS THAT I PRESENTED.
I'M JUST TRYING TO THINK IF THERE'S ANYTHING THAT SHOULD BE DISCUSSED IN PUBLIC, BUT, YEAH, I THINK I'M GOOD FOR RIGHT NOW.
WE'LL SEE IF SOMETHING ELSE HAPPENS.
SO TO PREPARE FOR TODAY, YOU KNOW, I THINK THAT I JUST WANT TO MAKE THE COMMENT.
I KNOW THAT WE SCHEDULED THIS AS A SPECIAL MEETING TODAY AS WELL, THAT I LIKE TO ALSO YOU KNOW, BOOKMARK THAT ASPECT OF THINGS, JUST KNOWING, YOU KNOW, THE IMPORTANCE OF TIMELINE TO PREPARE FOR TODAY.
I DID KIND OF GO BACK AND REVIEW SOME OF OUR TIMELINE EARLIER IN THE YEAR AROUND SPRINGTIME.
I KNOW AT THE MARCH FINANCE COMMITTEE MEETING WAS WHEN WE WERE LOOKING AT THE AT THE ASSIGNMENT TO THE FUTURE OFFICE NEEDS FUND, AND THEN THAT CAME BEFORE THE FULL BOARD OF DIRECTORS IN THE MIDDLE OF APRIL, AND IN BETWEEN THAT, THERE WAS AN EXECUTIVE COMMITTEE MEETING WHERE THERE
[00:15:03]
WAS AN INFORMATIONAL UPDATE ABOUT THE IMPROVED PERALTA OAKS NORTH PROJECT, WHERE I DID REVIEW THAT EXECUTIVE COMMITTEE MEETING WHERE THEY GOT TO SEE THE RENDERINGS AND ASK QUESTIONS AND GET A SENSE OF THE PROJECT THAT ASPECT OF THE PROJECT NEVER CAME TO THE FULL BOARD, HOWEVER.SO I KNOW FOR ME, IN MY YEAR AND A HALF HERE ON THE BOARD OF DIRECTORS, I HAVEN'T HAD A CHANCE REALLY TO RECEIVE A PRESENTATION ABOUT THE PROJECT AND BE ABLE TO ASK QUESTIONS, AND I DO HAVE UNANSWERED QUESTIONS FOR THIS PROJECT, AND SO IN PREPARING FOR TODAY, I'VE BEEN THINKING ABOUT THAT, AND, YOU KNOW, I'M WILLING TO SUPPORT THIS RECOMMENDATION TO THE FULL BOARD WITH THE CAVEAT.
SO I WOULD ACTUALLY AMEND THIS RECOMMENDATION.
SO WHETHER OR NOT MY COLLEAGUES ALSO AGREE WITH ME WITH THE CAVEAT THAT WHEN THIS IS BROUGHT FORWARD TO THE FULL BOARD, THAT WE DO REVIEW THE PROJECT AS A FULL BOARD, AND THE FULL BOARD DOES HAVE AN OPPORTUNITY TO ASK QUESTIONS BOTH ABOUT THE BUILDING ITSELF AS WELL AS THE OVERALL STRATEGY IN REGARDS TO HAVING OUR PUBLIC SAFETY IN THIS BUILDING.
I KNOW AT FIRST I TOOK A ROUNDABOUT WAY TO GET TO THIS CONCLUSION FOR MYSELF WHERE I, YOU KNOW, I'M FAMILIAR WITH YOU KNOW, WHAT'S HAPPENING ACROSS ALAMEDA COUNTY, LESS FAMILIAR WITH CONTRA COSTA COUNTY IN TERMS OF DISPATCH.
BOTH, YOU KNOW, WITHIN THE PUBLIC SAFETY STRUCTURE AND BOTH ON THE POLICE SIDE AND THE FIRE SIDE, AND DID SOME OF MY OWN RESEARCH ON DISPATCH THAT I WOULD LOVE TO BE ABLE TO ASK QUESTIONS ABOUT. TODAY'S NOT THE APPROPRIATE DAY TO ASK THOSE QUESTIONS, AND I WOULD REALLY APPRECIATE ACTUALLY, BEFORE YOU KNOW, WHEN THIS COMES BEFORE THE FULL BOARD, WHICH I'M ANTICIPATING WILL PROBABLY IN A FEW WEEKS AT THE BOARD MEETING, THAT THERE IS AN OPPORTUNITY TO BE ABLE TO ASK THOSE QUESTIONS AS A MEMBER OF THE BOARD.
SO I'M WILLING TO SUPPORT THIS TODAY, BECAUSE I KNOW OF ALL THE WORK THAT'S GONE INTO THIS, AND I WANT TO SUPPORT THAT WORK, BUT, YOU KNOW, BEFORE THIS COMES TO THE FULL BOARD, I WOULD LIKE TO HAVE THE OPPORTUNITY TO REVIEW THE PROJECT AND TO BE ABLE TO ASK SOME QUESTIONS.
SO THAT'S MY CAVEAT TO MY ABILITY TO SUPPORT THIS TODAY.
ALL RIGHT. ANY OTHER ANY OTHER QUESTIONS THOUGH ABOUT THE STAFF REPORT OR I GUESS MY ONLY QUESTION.
SO I, YOU KNOW, WITH THIS NOTE IT, WHEN I READ IT, IT'S MORE OR LESS A LOAN OR SIMILAR TO A LOAN. THE INTEREST RATE ACTUALLY LOOKS SOMEWHAT FAVORABLE GIVEN OUR CURRENT INTEREST RATE CONDITIONS.
SO I THINK THAT'S A TESTAMENT TO THE HARD WORK THAT'S BEEN DONE HERE TODAY.
I GUESS MY ONLY QUESTION IS, WHAT'S WHY WOULDN'T WE BE ABLE TO HAVE A BOND FOR THIS PROJECT? RIGHT. SO YEAH, AGAIN, LIKE THIS PROMISSORY NOTE IS LIKE KIND OF UNUSUAL AND I DON'T KNOW IF YOU WANT TO OR KATY IF YOU WANT TO, LIKE, SAY ANYTHING MORE ABOUT THIS, BUT IT IS UNUSUAL THAT WE HAVE THIS PARTICULAR SET ASIDE.
SO IN THE CALIFORNIA PUBLIC RESOURCES CODE SAYING THAT WE CAN BORROW IN THIS WAY.
SO WE CAN'T SO THE LIKE A GENERAL OBLIGATION BOND THAT WE'VE DONE FOR MEASURE WW.
THAT'S WHEN YOU LIKE GO TO THE VOTERS AND ASK FOR THEM TO PAY ADDITIONAL TAX INCREMENT.
WE WOULDN'T DO THAT FOR THIS PROJECT JUST BECAUSE IT DOESN'T BENEFIT THE PUBLIC, AND THEN LIKE A REVENUE BOND IS ALSO SOMETHING YOU COULD DO, BUT BECAUSE WE HAVE THIS PARTICULAR PROMISSORY NOTE AUTHORITY SET ASIDE IN THE PUBLIC RESOURCES CODE LIKE THAT'S SET UP FOR US ESPECIALLY.
SO I KNOW THE PREVIOUS AGENCY I WAS ON THE BOARD OF DIRECTORS FOR AT ZONE SEVEN WATER AGENCY.
WE ACTUALLY HAD A DUAL ROLE WHEN WE WERE ON THE BOARD OF DIRECTORS FOR ZONE SEVEN.
WE WERE ALSO ON THE BOARD OF DIRECTORS FOR AN ORGANIZATION CALLED THE LIVERMORE VALLEY WATER FINANCING AUTHORITY, AND THAT'S WHERE WE HAD WHAT I BELIEVE WAS A BOND WHERE WE HAD GONE TO NEW YORK CITY, ACTUALLY, TO GET THE FINANCING FOR THIS.
I GUESS THIS VEHICLE--WE'LL SAY THIS FINANCIAL VEHICLE OR THIS BOND, WHICH IS WHAT I BELIEVE IT WAS--AND THEN THROUGH THAT, WE WERE ABLE TO THEN USE THAT THOSE FUNDS TO PAY FOR TWO VERY LARGE CONSTRUCTION PROJECTS.
RIGHT, YEAH, SO I KNOW WATER DISTRICTS BECAUSE THEY ARE ABLE TO SET AND AGAIN, ANNA OR KATY, IF YOU GUYS WANT, YOU DEAL WITH THIS STUFF DAY IN DAY OUT, BUT BECAUSE THEY'RE ABLE TO SET RATES, THEY HAVE LIKE VERY GOOD CONTROL OVER LIKE ALL RIGHT.
WE'RE GOING TO SET THIS RATE, AND BECAUSE WE'VE ISSUED THIS DEBT WE'RE GOING TO SET OUR RATE AT THIS, AND SO BECAUSE THEY HAVE THAT CONTROL THEY DO THEIR BONDING IN A DIFFERENT WAY THAN THIS PROMISSORY NOTE VEHICLE.
SO DO YOU WANT TO ADD ANYTHING TO THAT? THAT'S A VERY HELPFUL ANSWER.
[00:20:01]
I THINK YOU ANSWERED IT, BUT I'D LOVE TO HEAR WHAT YOU HAVE TO SAY, TOO.YES. GOOD AFTERNOON, ANNA SARABIAN WITH FIELDMAN.
I THINK THAT PROVIDED ALL THE BACKGROUND, THE UNIQUE POSITION OF THE DISTRICT IS THAT DUE TO THIS PUBLIC RESOURCES CODE SECTION, YOU ARE ABLE TO ISSUE IT'S JUST A TERMINOLOGY BOND NOTE IN YOUR CASE, A PROMISSORY NOTE, BUT THE UNIQUE FEATURE OF THIS PROMISSORY NOTE IS THAT IT'S SECURED BY ALL THE PROPERTY TAX AND ALL THE GENERAL FUND LEGALLY AVAILABLE FUNDS, ESSENTIALLY MAKING IT A ALMOST THE SAME CREDIT AS A GENERAL OBLIGATION BOND WITHOUT YOU HAVING TO LEVY AN ADDITIONAL TAX, AND BECAUSE OF THAT, THAT'S THE LOWEST COST OF BORROWING MECHANISM THAT THE DISTRICT HAS BESIDES GENERAL OBLIGATION BOND, AND THIS MORNING.
SABRINA LANDRETH AND DEB SPAULDING PRESENTED TO THE TWO RATING AGENCIES THIS FINANCING AND BOTH INDICATIONS WERE THAT SIMILAR TO THE OUTSTANDING 2012 PROMISSORY NOTES, WHICH ARE RATED ON PAR WITH YOUR GENERAL OBLIGATION BONDS, THE EXPECTATION IS THESE NEW NOTES WILL SECURE THE SAME HIGHEST RATING, AND YOU COULD ISSUE A LEASE REVENUE BOND WHICH OTHER LIKE A CITY WOULD DO FOR A PROJECT OF THIS NATURE, BUT THAT CREDIT CHARACTERISTIC IS NOT AS STRONG AS THE ONE YOU'RE AFFORDED BY ISSUING PROMISSORY NOTES HERE.
SO THIS IS THE BEST MECHANISM FOR THE DISTRICT.
I HOPE THAT ANSWERED THE QUESTION.
OKAY. DID YOU THINK OF ANYTHING ELSE? NO. OKAY, I THINK I EXHAUSTED MYSELF.
YOU DID QUITE A RESEARCH PROJECT THERE.
SO, YOU KNOW, JUST SOME GENERAL COMMENTS.
YOU KNOW, WHY DO WE NEED TO GO ACROSS THE STREET AND ADD A BUNCH OF SPACE? WELL, BECAUSE THE DISTRICT IS GROWING, AND THAT'S THE IDEA IS TO GROW AND PRESERVE MORE LAND PROVIDE MORE OPPORTUNITIES FOR OUR THE RESIDENTS.
SO IN ORDER TO DO THAT IN A RESPONSIBLE WAY, WE NEED TO ADD STAFF, AND THERE THEY ARE, PLUS THE LOCATION AND THE BUILDINGS OF THE CURRENT PUBLIC SAFETY.
I THINK THE TERM IS HAVE OUTLIVED THEIR USEFULNESS OR, YOU KNOW, THEY'VE GONE BEYOND THEIR DESIGN LIFE AND THEY WOULD COST TOO MUCH TO FIX THEM, AND ALSO, THEY'RE NOT IN A VERY ACCESSIBLE LOCATION FOR THE PUBLIC.
SO THAT'S WHY WE'RE GOING ACROSS THE STREET AND WHICH IS VERY CONVENIENT FOR US TO DO.
I WANT TO MAKE A REFERENCE TO THE 20% CONTINGENCY.
THAT WAS ONE OF THE, ONE OF THE OPTIONS WAS TO REDUCE THAT DOWN, AND WE'VE HAD I THINK 20% IS A VERY PRUDENT LEVEL OF CONTINGENCY IN THE CONSTRUCTION WORLD, WHICH IS WHAT THAT IS, AND, YOU KNOW, WE'VE HAD SOME EXPERIENCE IN THE PAST WITH A FEW, YOU KNOW, KIND OF MEDIUM TO LARGE, LARGE PROJECTS WHERE WE EXCEEDED, WE BLEW WE BASICALLY BLEW THROUGH THE CONTINGENCY.
WE REALLY DON'T WANT TO DO THAT AGAIN.
I DON'T WANT TO DO THAT AGAIN.
SO THE 20% CONTINGENCY, I SUPPORT THAT WHOLEHEARTEDLY.
I ALSO WANTED TO ADDRESS SOMETHING THAT I ASKED ABOUT, AND I JUST WANT TO REPEAT IT IS IN THESE TYPES OF INSTRUMENTS, THERE'S AN OPTION FOR JUST LIKE WHEN, YOU KNOW, WITH YOUR HOME MORTGAGE, WHEN YOU IF YOU GET YOUR HOME MORTGAGE IN AT 7% AND THEN MORTGAGE RATES DROP DOWN TO 5%, YOU CAN REFINANCE.
AND PEOPLE DO THAT ALL THE TIME.
I'VE DONE IT MANY TIMES AT HOME.
WE HAVE A SIMILAR MECHANISM, CORRECT, THAT WE CAN USE CALLED REFUNDING.
THAT ENABLES US TO LOWER THE INTEREST RATE ON THIS.
CAN YOU TELL US A LITTLE BIT ABOUT HOW THAT MIGHT WORK? SURE. YEAH.
SO, YOU KNOW, THE INTEREST RATE ISN'T THE GREATEST WE'VE EVER SEEN, YOU KNOW, RIGHT NOW, BUT ALL IS NOT LOST BECAUSE THIS THIS TECHNIQUE I THINK IS, IS SOMETHING THAT WE COULD LOOK AT, RIGHT? YEAH. THAT'S ABSOLUTELY RIGHT.
SO I'LL HAVE ANNA COME UP AND BECAUSE SHE IS THE EXPERT ON THIS BUT YEAH.
SO, AND I WANTED YOU TO ADD SOME.
[00:25:01]
YEAH. THANK YOU, DEB.SORRY. YES, WE ARE STRUCTURING THE NOTES WITH AN OPTIONAL REDEMPTION FEATURE, WHICH ALLOWS THE DISTRICT TO CALL THE BOND THE NOTES AT PAR.
WHEN THAT PAR CALL DATE APPROACHES.
RIGHT NOW, THE STANDARD IS TEN YEARS.
SO IN TEN YEARS, YOU COULD REFINANCE.
OR IF YOU HAD EXTRA CASH LYING AROUND, YOU COULD ALSO PAY IT OFF PARTIALLY OR FULLY.
OKAY, WE ALL CAN UNDERSTAND THAT, I THINK.
EXCELLENT. THANK YOU, THANK YOU.
I DON'T HAVE ANY FURTHER QUESTIONS AT THIS POINT.
ARE THERE ANY ANYBODY WISHING TO MAKE PUBLIC COMMENTS ON THIS? NO PUBLIC COMMENTS.
SO THEN I GUESS IT'S TIME FOR OUR CALL FOR A MOTION HERE.
I GUESS I HAVE A QUESTION ABOUT THE MOTION, SO I KNOW THAT THERE WAS A SLIDE, AND MAYBE IT MIGHT BE HELPFUL TO HAVE THAT SLIDE UP FOR REFERENCE, WHERE WE HAVE THE PRIMARY OPTION AND THE TWO ALTERNATIVES, A AND B, BECAUSE I BELIEVE IN THIS MOTION.
WOULD WE RECOMMEND ONE OF THESE OPTIONS.
IS THAT WHAT WE'RE LOOKING FOR OR.
WHY CAN I NOT GO BACKWARDS HERE? THERE WE GO. THERE.
THAT'S THE SLIDE YOU WANTED TO SEE.
I MEAN, SO I'M GOING TO GO AHEAD AND TRY MY MOTION AND WE'LL SEE IF IT GOES.
YOU KNOW, MY MOTION WOULD BE TO MOVE RECOMMENDATION FOR THE PRIMARY TO THE FULL BOARD WITH THE CAVEAT THAT BEFORE THE BOARD REVIEWS THIS RECOMMENDATION, WE DO GET A SIMILAR PRESENTATION TO THE APRIL 3RD EXECUTIVE COMMITTEE ON THE PROJECT WHERE THE PROJECT WAS REVIEWED AND THERE'S AN OPPORTUNITY TO ASK QUESTIONS.
DO I HAVE A SECOND? I'LL SECOND THAT. OKAY, GREAT.
ALL RIGHT. ALL IN FAVOR? I OPPOSED CARRIES UNANIMOUSLY, AND I THINK THAT'S A GOOD.
I THINK THAT'S A GOOD IDEA, OLIVIA.
THANK YOU VERY MUCH TO ALL OF YOU.
I MEAN, THIS WHOLE PROCESS, IT'S A BIG DEAL FOR US.
SO YEAH, I APPRECIATE ALL THE WORK THAT WENT INTO THIS.
YOU DID. SO, BUT THANK YOU VERY MUCH.
IT WAS A TREMENDOUS AMOUNT OF WORK, AND I APPRECIATE THE EXPERTISE AND CARE THAT WAS GIVEN TO THIS.
SO MOVING ON ARE THERE ANY OTHER INFORMATIONAL ITEMS? I DON'T THINK THERE ARE NONE, AND ANYBODY CARE TO MAKE AN ANNOUNCEMENT OF ANY TYPE? NO. OKAY.
IT'S OKAY. ALL RIGHT, THEN, WE'LL BE IN ADJOURNMENT AT 3:29.
* This transcript was compiled from uncorrected Closed Captioning.