AHPIA-2020/01/14 ANAHEIM HOUSING AND PUBLIC IMPROVEMENTS AUTHORITY
REGULAR MEETING OF JANUARY 14, 2020
The Anaheim Housing and Public Improvements Authority regular meeting was called to order
at 5:10 P.M. in the City Council Chamber located at 200 S. Anaheim Blvd. in joint session with
the Anaheim City Council and the Successor Agency to the Anaheim Redevelopment Agency.
The meeting notice, agenda, and related materials were duly posted on January 9, 2020.
PRESENT: Chairman Harry Sidhu and Authority Members Stephen Faessel, Denise
Barnes, Jordan Brandman, Jose F. Moreno, Lucille Kring, and Trevor
O'Neil.
STAFF PRESENT: City Manager Chris Zapata, City Attorney Robert Fabela, and Secretary
Theresa Bass
ADDITIONS/DELETIONS TO THE AGENDA: None
PUBLIC COMMENTS: Prior to receipt of public comments, an outline of rules for public
comments and a brief decorum statement was provided by Secretary Theresa Bass.
William Fitzgerald, Home Owners Maintaining Our Environment, expressed concern regarding
Item No. 04 and believed the City Council was looking out for its own self-interests.
John Seymour expressed his support for Item No. 04, reiterated its benefit to Anaheim
residents, and encouraged City Council to pass the item so Anaheim remained affordable
compared to other cities.
At 7:54 P.M., Chairman Sidhu recessed the Housing and Public Improvements Authority,
reconvening at 7:59 P.M.
CONSENT CALENDAR: At 7:59 P.M., Authority Member Faessel moved to approve the
consent calendar as presented, in accordance with reports, certifications, and recommendations
furnished each Housing and Public Improvements Authority member and as listed on the
consent calendar, seconded by Authority Member O'Neil. ROLL CALL VOTE: AYES — 7
(Chairman Sidhu and Authority Members Faessel, Barnes, Brandman, Moreno, Kring, and
O'Neil). NOES — 0. Motion carried.
HPI188 3. Approve minutes of Housing and Public Improvements Authority meeting of November
19, 2019.
Anaheim Housing and Public Improvements Authority Minutes of January 14, 2020
Page 2 of 6
END OF CONSENT CALENDAR:
B137.1 4. Consider two resolutions of the Housing and Public Improvements Authority (AHPIA)
and two resolutions of the City Council, separately, authorizing the issuance (AHPIA)
and approving the issuance (City Council) of Revenue Bonds, Series 2020-A (Water
System Project) and Revenue Bonds, Series 2020-B (Water System Refunding)
(Taxable) in the aggregate principal amount not to exceed $85,000,000, and Revenue
Bonds, Series 2020-A (Electric Utility Distribution System Improvements), Revenue
Refunding Bonds, Series 2020-B (Electric Utility Distribution System Refunding)
(Taxable) and Revenue Refunding Bonds, Series 2020-C (Electric Utility Distribution
System Refunding), and related items, in the aggregate principal amount not to exceed
$250,000,000.
Housing and Public Improvements Authority Action:
4-A. 1) RESOLUTION NO. AHPIA-2020-001 A RESOLUTION OF THE
BOARD OF DIRECTORS OF THE ANAHEIM HOUSING AND PUBLIC
IMPROVEMENTS AUTHORITY(I) authorizing the issuance of not to exceed
$85,000,000 aggregate principal amount of Revenue Bonds, Series 2020-A
(Water System Project) and Revenue Bonds, Series 2020-B (Water System
Refunding) (Taxable) 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.
2) RESOLUTION NO. AHPIA-2020-002 A RESOLUTION OF THE
BOARD OF DIRECTORS OF THE ANAHEIM HOUSING AND PUBLIC
IMPROVEMENTS AUTHORITY (I) authorizing the issuance of not to exceed
$250,000,000 aggregate principal amount of Revenue Bonds, Series 2020-A
(Electric Utility Distribution System Improvements), Revenue Refunding Bonds,
Series 2020-B (Electric Utility Distribution System Refunding) (Taxable) and
Revenue Refunding Bonds, Series 2020-C (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,
Purchase Contracts and other related documents; (Ill) approving the execution
and delivery of an Official Statement; and (IV) approving certain actions in
connection therewith.
City Council Action:
4-B. 1) RESOLUTION NO. 2020-001 A RESOLUTION OF THE CITY
COUNCIL OF THE CITY OF ANAHEIM (I) approving the issuance of not to
exceed $85,000,000 aggregate principal amount of Revenue Bonds, Series
2020-A (Water System Project) and Revenue Bonds, Series 2020-B (Water
System Refunding) (Taxable) of the Anaheim Housing and Public Improvements
Authority; (II) approving the forms and authorizing the execution of an Installment
Anaheim Housing and Public Improvements Authority Minutes of January 14, 2020
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Purchase Agreement, an Indenture of Trust, an Escrow Agreement, a Continuing
Disclosure Agreement, a Purchase Contract and other related documents; (Ill)
approving the delivery of an Official Statement; and (IV) approving certain actions
in connection therewith.
2) RESOLUTION NO. 2020-002 A RESOLUTION OF THE CITY
COUNCIL OF THE CITY OF ANAHEIM (I) approving the issuance of not to
exceed $250,000,000 aggregate principal amount of Revenue Bonds, Series
2020-A (Electric Utility Distribution System Improvements), Revenue Refunding
Bonds, Series 2020-B (Electric Utility Distribution System Refunding) (Taxable)
and Revenue Refunding Bonds, Series 2020-C (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, Purchase Contracts and other related documents; (Ill) approving the
delivery of an Official Statement; and (IV) approving certain actions in connection
therewith.
Public Utilities General Manager Dukku Lee presented the item and reported Anaheim Public
Utilities (APU) has an opportunity to take advantage of low-interest rates while continuing to
invest in the City's water and electric infrastructure.
Assistant General Manager, Finance and Administration, Brian Beelner reported there is
currently approximately $1.4 billion invested in water and electric infrastructure in Anaheim of
which 60% has been funded through tax-exempt municipal bonds. He reported bonds issued
by APU do not impact the General Fund and all debt issued by APU is secured by its revenue.
He explained bonds are used to fund such capital projects because the large-scale
infrastructure tends to last at least 30 years. He further explained to collect the full cost of the
asset from its customers would mean today's customers would bear the full financial burden of
the asset to the benefit of future customers.
Mr. Beelner reported credit rating agencies have affirmed Anaheim's credit rating based on the
City's use and access to bonds. He advised these very high, investment-grade ratings ensure
that APU may issue debt for water and electric infrastructure needs at the lowest interest rates
available. He advised the proposal is to continue to take advantage of the ultra-low interest
rates. He reported the drop in interest rates will result in a $550,000 per year savings to the
City.
Mr. Beelner reported the historically low-interest rates will allow APU to follow through with its
ongoing bond strategy to refinance its older and more expensive debt, to reduce future interest
payments by shortening the term of the existing debt by 5-7 years, to invest in new
infrastructure, and to improve reliability.
Mr. Beelner reported APU will achieve this goal by refinancing one electric debt bond and one
existing water debt bond, both issued in 2016, with the current aggregate outstanding balance
of those bonds being $158,000,000. He noted refinancing those bonds will result in saving
$67,000,000 in future interest payments. He clarified a key item to the refinancing proposal is to
shorten the term of the electric bond by approximately seven years and the water bond by five
years, which will take advantage of the yield curve. He advised APU proposes to refinance a
$50,000,000 variable rate bond, issued in 2015, into a fixed rate bond to eliminate any interest
rate risk. Lastly, he reported APU is proposing the issuance of$115,000,000 in new electric
Anaheim Housing and Public Improvements Authority Minutes of January 14,2020
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and water bonds to replace aging infrastructure such as water mains, wells, substations, system
upgrades to maintain reliability, and further updates to the grid.
Mr. Beelner explained by taking advantage of the current market environment, APU can
refinance its existing debt, save its customers $67,000,000, and allow APU to responsibly
borrow for its current needs. Lastly, he noted running a public water and electric utility which is
focused on the needs of the community takes continued investment and reinvestment using all
tools at its disposal, such as securing low-interest municipal tax-exempt debt to keep customer
rates affordable while also maintaining some of the highest levels of reliability in the region.
MOTION: Authority Member Brandman moved to approve Item No. 04-A-1, seconded by
Authority Member Faessel.
DISCUSSION: In response to Authority Member Moreno's inquiry, Mr. Lee explained by saving
$67,000,000 in future interest payments, it helps to offset any type of rate impacts. He did note
there will always be a nominal rate increase over time due to costs of construction and materials
year over year. Mr. Beelner clarified he does not foresee an increase in electrical rates but
water rates may increase by $1 per month, on the high end, due to the bond issuance. Mr. Lee
clarified there are approximately 750 miles of water pipeline in Anaheim with three miles being
replaced per year. Mr. Lee would like to see the replacement reach seven and a half miles per
year with this proposal.
In response to City Manager Chris Zapata's request, Mr. Lee clarified cost increases can rise
due to the heavy regulation of the utilities and increases to the customer are used to cover the
cost of compliance and mitigation efforts. He also noted the City will need to invest in a water
treatment facility in the future. Authority Member Moreno recommended providing residents a
comparison tool that allows them to see how APU rates against its competitors. Mr. Lee
reported rate calculators were available online and staff was available to assist individual
customers with questions as well.
Authority Member Faessel thanked the team for their diligence on this proposal and expressed
his support for the item.
Housing and Public Improvements Authority Action:
MOTION: Authority Member Brandman moved to approve RESOLUTION NO. AHPIA-2020-001
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ANAHEIM HOUSING AND
PUBLIC IMPROVEMENTS AUTHORITY(I) authorizing the issuance of not to exceed
$85,000,000 aggregate principal amount of Revenue Bonds, Series 2020-A (Water System
Project) and Revenue Bonds, Series 2020-B (Water System Refunding) (Taxable) 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; (Ill)
approving the execution and delivery of an Official Statement; and (IV) approving certain actions
in connection therewith, seconded by Authority Member Faessel. ROLL CALL VOTE: AYES — 7
(Chairman Sidhu and Authority Members Faessel, Barnes, Brandman, Moreno, Kring, and
O'Neil). Motion carried.
Anaheim Housing and Public Improvements Authority Minutes of January 14,2020
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MOTION: Authority Member Faessel moved to approve RESOLUTION NO. AHPIA-2020-002 A
RESOLUTION OF THE BOARD OF DIRECTORS OF THE ANAHEIM HOUSING AND PUBLIC
IMPROVEMENTS AUTHORITY (I) authorizing the issuance of not to exceed $250,000,000
aggregate principal amount of Revenue Bonds, Series 2020-A (Electric Utility Distribution
System Improvements), Revenue Refunding Bonds, Series 2020-B (Electric Utility Distribution
System Refunding) (Taxable) and Revenue Refunding Bonds, Series 2020-C (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, Purchase Contracts
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
Kring. ROLL CALL VOTE: AYES — 7 (Chairman Sidhu and Authority Members Faessel,
Barnes, Brandman, Moreno, Kring, and O'Neil). Motion carried.
City Council Action:
MOTION: Council Member Kring moved to approve RESOLUTION NO. 2020-001 A
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM (I) approving the
issuance of not to exceed $85,000,000 aggregate principal amount of Revenue Bonds, Series
2020-A (Water System Project) and Revenue Bonds, Series 2020-B (Water System Refunding)
(Taxable) 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, an
Escrow Agreement, 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, seconded by Mayor Pro Tern Faessel. ROLL CALL VOTE:
AYES — 7 (Chairman Sidhu and Authority Members Faessel, Barnes, Brandman, Moreno, Kring,
and O'Neil). Motion carried.
MOTION: Council Member O'Neil moved to approve RESOLUTION NO. 2020-002 A
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM (I) approving the
issuance of not to exceed $250,000,000 aggregate principal amount of Revenue Bonds, Series
2020-A (Electric Utility Distribution System Improvements), Revenue Refunding Bonds, Series
2020-B (Electric Utility Distribution System Refunding) (Taxable) and Revenue Refunding
Bonds, Series 2020-C (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, Purchase Contracts and other related documents; (III) approving the
delivery of an Official Statement; and (IV) approving certain actions in connection therewith,
seconded by Mayor Pro Tern Faessel. ROLL CALL VOTE: AYES — 7 (Chairman Sidhu and
Authority Members Faessel, Barnes, Brandman, Moreno, Kring, and O'Neil). Motion carried.
Anaheim Housing and Public Improvements Authority Minutes of January 14,2020
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ADJOURNMENT:
With no further business to conduct, Chairman Sidhu adjourned the meeting of the Anaheim
Housing and Public Improvements Authority at 8:18 P.M.
Res.ec uHy-submitted,
411121101
Theresa •ass, CMC
Secretary, Anaheim Housing and Public Improvements Authority