AHPIA-2017/12/05ANAHEIM HOUSING AND PUBLIC IMPROVEMENTS AUTHORITY
REGULAR MEETING OF DECEMBER 5, 2017
The Anaheim Housing and Public Improvements Authority regular meeting was called to order
at 5:35 P.M. in City Council Chambers located at 200 S. Anaheim Blvd. for a joint public
comment session with the Anaheim City Council and Anaheim Housing Authority. The meeting
notice, agenda, and related materials were duly posted on December 1, 2017.
PRESENT: Chairman Tom Tait and Authority Members: James Vanderbilt, Kris Murray, Denise
Barnes, Jose F. Moreno, Lucille Kring, and Stephen Faessel.
STAFF PRESENT: Interim City Manager Linda Andal, Acting City Attorney Kristin Pelletier and
Acting Secretary Theresa Bass.
ADDITIONS/DELETIONS TO THE AGENDA: None.
PUBLIC COMMENTS:
No public comments offered related to the Housing and Public Improvements Authority agenda
CONSENT CALENDAR: At 8:05 P.M., Authority Member Kring moved to approve the consent
calendar as presented, seconded by Authority Member Barnes. APPROVED VOTE: 7-0.
Motion carried.
HPI 188 3. Approve minutes of Housing and Public Improvements Authority meeting of November
7, 2017.
END OF CONSENT CALENDAR:
B137.1 4. Consider a resolution of the Housing and Public Improvements Authority and a
resolution of the City Council, each separately, authorizing the issuance of Revenue
Refunding Bonds, Series 2017-A (Electric Utility Distribution System Refunding) and
2017-B (Electric Utility Distribution System Refunding), in the aggregate principal
amount not to exceed $275,000,000, with the City Council adopting a Debt Policy
mandated by Senate Bill 1029; and a separate Council resolution authorizing the
approval and delivery of a Remarketing Statement for the Revenue Bonds, Series 2015-
A (City of Anaheim Electric System Distribution Facilities) (Second Lien Qualified
Obligations) of the California Municipal Finance Authority, in the amount of $50,000,000.
Housing and Public Improvements Authority Action:
4-A. RESOLUTION NO. AHPIA 2017-003 A RESOLUTION OF THE BOARD
OF DIRECTORS OF THE ANAHEIM HOUSING AND PUBLIC IMPROVEMENTS
AUTHORITY, (i) authorizing the issuance of not to exceed $275,000,000
aggregate principal amount of Revenue Refunding Bonds, Series 2017-A
Anaheim Housing and Public Improvements Authority Minutes of December S, 2017
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(Electric Utility Distribution System Refunding) and Revenue Refunding Bonds,
Series 2017-B (Electric Utility Distribution System Refunding) of said Authority;
(ii) approving the forms and authorizing the execution of an Indenture of Trust, an
Installment Purchase Agreement, a Purchase Contract and other related
documents; (iii) approving the execution and delivery of an Official Statement;
and (iv) approving certain actions in connection therewith.
City Council Action:
4-B. RESOLUTION NO. 2017-166 A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF ANAHEIM (i) approving the issuance of not to exceed
$275,000,000 aggregate principal amount of Revenue Refunding Bonds, Series
2017-A (Electric Utility Distribution System Refunding) and Revenue Refunding
Bonds, Series 2017-B (Electric Utility Distribution System Refunding) of the
Anaheim Housing and Public Improvements Authority; (ii) approving the forms
and authorizing the execution of an Installment Purchase Agreement, an
Indenture of Trust, Escrow Agreements, a Continuing Disclosure Agreement, a
Purchase Contract and other related documents; (iii) approving the delivery of an
Official Statement; and (iv) approving certain actions in connection therewith,
including the adoption of a Debt Policy.
RESOLUTION NO. 2017-167 A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF ANAHEIM (i) approving the form and authorizing the execution
and delivery of a Remarketing Statement for the Revenue Bonds, Series 2015-A
(City of Anaheim Electric System Distribution Facilities) (Second Lien Qualified
Obligations) of the California Municipal Finance Authority; and (ii) approving
certain actions in connection therewith.
Prior to presenting Item No. 04, Dukku Lee, Public Utilities General Manager, updated Council
regarding an earlier public comment about street lighting on La Palma Avenue between Sunkist
Street and State College Blvd., stating based on the email forwarded by Council Member
Faessel, staff had reviewed the area and would be improving to LED streetlights within the next
two weeks.
Mr. Lee then presented the item as an opportunity to take advantage of very low interest rates
by: 1) refinancing existing electric bonds to provide up to $24 million in interest savings; and 2)
re -marketing $50 million in existing bonds with an adjustable rate component for another three-
year term for very low interest rates, noting there was no new money associated with these
requests. He further explained a new legislative requirement, via Senate Bill 1029, that
mandated all cities and localities that issued debt to have a formal debt policy that discussed the
purposes of the debt issued by the city, the types of debt the city issued, and the relationship of
debt issuances with the city's capital improvement plan, to provide greater transparency by
allowing the state to track bonds issued by public agencies.
Brian Beelner, Finance and Administration Assistant General Manager, explained a variety of
funding mechanisms were used to pay for required investments in capital improvements to
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provide electricity and water to the city's customers, one of which was the issuance of low-
interest, municipal, tax-exempt debt, which allowed for generational equity of customers paying
their proportional share for use of the infrastructure over time. He continued that staff requested
approval of two items: 1) to issue fixed-rate electric bonds, in an amount not -to -exceed $275
million, to refinance existing more -expensive debt, with a shortening of the bonds' term by
approximately four years and a reduced interest rate from approximately 4.72% to 3.2%,
resulting in up to $24 million in savings; and 2) to re-market/re-issue a $50 million floating-rate
note, previously approved by City Council in March 2015. Mr. Beelner further explained this
note was a variable-rate instrument with rates that increased or decreased weekly with the
market and would become due on 4/1/2018, but staff recommended re -marketing the note for
another three-year term due to interest rates of approximately 1.5%, which was about two- to
three -times lower than fixed rate bonds. By issuing floating rate notes, he stated, the city could
take advantage of these incredibly low interest rates and use the savings to pay off more -
expensive debt faster, thereby continuing to strengthen the balance sheet, as done in 2015. He
cited approximately $4.4 million in interest savings over the past 2 Y2 years by using the variable
rate note instead of issuing fixed rate bonds. He further explained the $50 million note was less
than 10% of the Public Utilities Department's current portfolio, more conservative than other
utilities with variable-rate notes up to 75% of their portfolios. In summary, Mr. Beelner reiterated
the requested actions were to refinance older, more -expensive fixed-rate bonds, projected to
save up to $24 million over their remaining life, and re -market the Utilities' only variable-rate
debt, with anticipated additional savings beyond the $4.4 million already earned, in order to take
advantage of the current market and save money on current debt for the benefit of the city's
customers.
DISCUSSION: Mayor Pro Tem Vanderbilt questioned if more money was being borrowed or
extended, to which Mr. Lee responded that no additional money was being borrowed but
existing debt would be reissued at lower interest rates (3.2% vs. 4.7%) to save approximately
$24 million over the life of bonds. Mr. Beelner added the term of the bonds would also be
shortened from 2041 to 2036 or 2037.
In response to Mayor Tait, Mr. Beelner confirmed there were no changes from a fixed-rate to a
variable-rate, but two separate actions with the fixed-rate bonds receiving a lower, fixed interest
rate and the variable-rate bond being rolled over for another three-year term to take advantage
of the low rate. Mr. Lee stated staff would closely monitor the variable-rate note, and if interest
rates rose significantly, staff would return to Council to recommend changing to fixed-rate. Mr.
Beelner explained the risk to the portfolio remained the same, but cash reserves would generate
increased interest income if interest rates rose to offset associated costs on the $50 million
floating-rate note, with a return to Council to fix rates and eliminate interest rate risk if needed.
Housing and Public Improvements Authority Action:
MOTION: Authority Member Murray moved to approve RESOLUTION NO. AHPIA 2017-
003 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ANAHEIM HOUSING
AND PUBLIC IMPROVEMENTS AUTHORITY, (i) authorizing the issuance of not to exceed
$275,000,000 aggregate principal amount of Revenue Refunding Bonds, Series 2017-A
(Electric Utility Distribution System Refunding) and Revenue Refunding Bonds, Series 2017-B
(Electric Utility Distribution System Refunding) of said Authority; (ii) approving the forms and
authorizing the execution of an Indenture of Trust, an Installment Purchase Agreement, a
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Purchase Contract and other related documents; (iii) approving the execution and delivery of an
Official Statement; and (iv) approving certain actions in connection therewith, seconded by
Authority Member Moreno. APPROVED VOTE: 7-0. Motion carried.
City Council Action:
MOTION: Council Member Murray moved to approve RESOLUTION NO. 2017-166 A
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM (i) approving the issuance
of not to exceed $275,000,000 aggregate principal amount of Revenue Refunding Bonds,
Series 2017-A (Electric Utility Distribution System Refunding) and Revenue Refunding Bonds,
Series 2017-B (Electric Utility Distribution System Refunding) of the Anaheim Housing and
Public Improvements Authority; (ii) approving the forms and authorizing the execution of an
Installment Purchase Agreement, an Indenture of Trust, Escrow Agreements, a Continuing
Disclosure Agreement, a Purchase Contract and other related documents; (iii) approving the
delivery of an Official Statement; and (iv) approving certain actions in connection therewith,
including the adoption of a Debt Policy; and RESOLUTION NO. 2017-167 A
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM (i) approving the form and
authorizing the execution and delivery of a Remarketing Statement for the Revenue Bonds,
Series 2015-A (City of Anaheim Electric System Distribution Facilities) (Second Lien Qualified
Obligations) of the California Municipal Finance Authority; and (ii) approving certain actions in
connection therewith, seconded by Council Member Moreno. APPROVED VOTE: 7-0. Motion
carried.
ADJOURNMENT:
There being no further business, without objection, Chairman Tait adjourned the meeting of the
Anaheim Housing and Public Improvements Authority at 8:17 P.M.
Respectfully submitted,
Theresa Bass, CMC
Acting Secretary, Anaheim Housing and Public Improvements Authority