Agenda Item #21
Refunding of the District's 2007B and 2007C Certificates of Participation (COP)
District staff, along with the District's Financial Advisor, RBC Capital Markets and others on the District's financing team have been closely monitoring interest rates and market conditions since our most recent 2014 refunding issue, dated September 18, 2014. Since that time, we have continued to encounter a very low interest rate environment and we are currently experiencing interest rates that continue to work in our favor to realize additional savings by refunding the outstanding 2007B and 2007C certificates. As you will recall, with the 2014 refunding issue, we achieved a net present value (NPV) savings of 7.4%. The savings equated to a reduction of overall debt payments by $5 million to be realized over the next 3 budget years, beginning in fiscal year 2015-16.
Currently, our analysis shows that the District can achieve approximately 6% in aggregate NPV savings for the 2007B and 2007C refundings, which provides a savings through the reduction of overall debt service payments of approximately $10 million. Based on guidance provided by the Government Finance Officers Association (GFOA), a 3-5% NPV savings threshold is considered a best practice.
District staff is requesting the Board to adopt the attached authorizing resolution which delegates to the Associate Superintendent, Financial Services, the authority to move forward with the refunding at such time the market conditions are in place to allow the District to achieve at least a 3% NPV savings.
While we cannot predict whether the current market trends will remain at these levels, we are continuing to monitor market conditions and will keep you apprised. An update on the NPV savings and the final results will also be provided to you when the refunding is completed.
After careful consideration and discussions with the District's Financial Advisor and the Finance Team, staff is recommending the following Underwriting Team: CitiGroup Global Markets Inc.; Wells Fargo Securities; Raymond James & Associates, Inc.; and Stifel, Nicolaus and Company, Incorporated. This recommendation is being made due to their continued relationships and the ongoing services they have provided to the District since the 2007 COP issues. We are also recommending the continued services of Bryant Miller Olive as the Bond and Disclosure Counsel, along with RBC Capital Markets as the District's Financial Advisor.
Approve the delegation of the Associate Superintendent, Financial Services, to move forward with the financing plan at the optimum time that allows the District to achieve at least a 3% net present value savings, all as set forth in the attached resolution; and approve members of the Financing Team, to include the Financial Advisor, Bond and Disclosure Counsel, and the Underwriting Team as delineated above.
Consent w/o Information - 1/20/2015
Authority for Action
F.S. Chapter 1001, 1003, 1013
Involves Expenditure of Funds Directly in the Classroom
Source of Funding
Agenda Item will not Require the Expenditure of Funds
Jo Ann Clark, Director of Accounting Services, ext. 660
Judy Preston Associate Superintendent of Financial Services, ext. 600
Attachment: School Board Resolution - Agenda 1-20-15 Mtg (00969393).pdf
Attachment: School Board Preliminary Official Statement - 2015B-C (00969054-3).pdf
Attachment: School Board Certificate Purchase Contract 184279122_v 1_2015BC 1-13-15.pdf