REPORT TO COUNCIL
SUBJECT
Title
Adopt a Resolution Approving the Refinancing of the 2003 and 2007 Solid Waste Revenue Bonds
Report
BACKGROUND
In February 2003, the City of Sunnyvale (City), in partnership with the cities of Mountain View and Palo Alto, issued $20,575,000 of Solid Waste Revenue Refunding Bonds, Series 2003 (2003 Bonds). The 2003 Bonds refinanced the Sunnyvale Finance Authority's Utilities Revenue Bonds, 1992 Series B (Solid Waste Materials Recovery and Transfer Station), which had been issued to finance the original construction of the Sunnyvale Materials Recovery and Transfer Station (SMaRT Station). In November 2007, again in partnership with Mountain View and Palo Alto, the City issued its $8,130,000 Solid Waste Revenue Bonds, Series 2007 (the 2007 Bonds with the 2003 Bonds are the "Prior Bonds") to finance the cost of replacing processing system equipment at the SMaRT Station. The 2007 Bonds were issued on parity with the 2003 Bonds. The 2007 Bonds differed in that Mountain View elected to pay its share of the cost in cash as opposed to financing the expense and therefore is not party to the 2007 Bonds.
At the time of this City Council meeting, $5,375,000 of 2003 Bonds and $4,635,000 of 2007 Bonds will be outstanding. The 2003 Bonds carry an interest rate of 5.50 percent through 2017 (final maturity); the 2007 Bonds carry an interest rate of 4.0197 percent through 2021 (final maturity). At the present time, bond interest rates are significantly lower than when the 2003 Bonds and 2007 Bonds were issued. The lower interest rates present the opportunity for the City to substantially reduce annual debt service on the Prior Bonds and to shorten the final maturity on the 2007 Bonds.
EXISTING POLICY
Council Fiscal Policy F.2.5 Revenue Bonds - All City utility-related improvements shall be funded only from revenues of the respective utilities.
Council Fiscal Policy 7I1.1b.1 Capital improvements associated with the existing infra...
Click here for full text