HomeMy WebLinkAbout15.b. Receive report on recent completion of 2009 Bond Refinancing Page 1 of 37
Item 15.b.
CENTRALSAN
CENTRAL CONTRA COSTA SANITARY DISTRICT
October 4, 2018
TO: HONORABLE BOARD OF DIRECTORS
FROM: PHIL LEIBER, DIRECTOR OF FINANCE AND ADMINISTRATION
REVIEWED BY: ANN SASAKI, DEPUTY GENERAL MANAGER
ROGER S. BAILEY, GENERAL MANAGER
SUBJECT: RECEIVE REPORT ON RECENT COMPLETION OF 2009 BOND
REFINANCING
Per Board Policy 029 - Debt Management and Continuing Disclosure, "any refunding transaction
executed will be followed with a report on actual savings." This memorandum documents such savings
with regard to the recent 2009 bond refinancing.
The Board approved a resolution at the J my 19, 2018 meeting allowing for the issuance of 2018 bonds to
refinance outstanding Series 2009A and Series 2009B certificates of participation. The refunding as of
that date was anticipated to save $2.428 million (present value) in interest costs through 2029 (FY 2029-
30).
Bond pricing took place the morning of August 14, 2018. On this date, the underwriter (Piper Jaffray)took
preliminary orders for the Series 2018A tax-exempt bonds based on an initial pricing scale reflecting yields
of between 10-20 basis points below the benchmark Municipal Market Data (MMD) index of tax-exempt
bonds. There was very significant investor demand based on these initial prices resulting in an
"oversubscription" of up to 14 times the amount of bonds Central San had to offer. Market demand was
closer to supply for the Series 2018B taxable bonds (which were only oversubscribed by a factor of about
3 times). In consultation with PFM and Central San staff, the proposed prices were adjusted to decrease
yields to investors by a further 12 basis points on average for the tax-exempt bonds, and about 2 basis
points on average for the taxable bonds. This resulted in the tax-exempt bonds being priced at the lowest
spreads to MMD of any comparable 2018 transactions that either PFM or Piper Jaffray was aware of.
Even with this, demand for Central San bonds was exceptionally high, with investors placing orders totaling
$98.1 million for the $15.1 million of the tax-exempt bonds that were available. See PFM's pricing analysis
in Attachment 1. This bodes well for future Central San issuances.
The final issuance amounts and yields were:
• Series 2018A (Final maturity: September 1, 2029) in the amount of $15.135 million of tax-exempt
Wastewater Revenue Refunding Bonds with proceeds used to refund $19.635 million outstanding
October 4, 2018 Regular Board Meeting Agenda Packet- Page 185 of 265
Page 2 of 37
2009A Wastewater Revenue Certificates of Participation (Taxable Build America Bonds). Average
net interest cost of 2.34%. (See Attachment 2, page 3)
• Series 2018B (Final maturity: September 1, 2023) in the amount of$4.315 million in taxable
Wastewater Revenue Refunding Bonds with proceeds used to advance refund the outstanding
$6.980 million 2009B Wastewater Revenue Certificates of Participation. Average net interest cost
of 3.08%. (See Attachment 2, page 3)
The difference in face values of new and old bonds was due primarily to the use of the existing $4.86
million debt service reserve to reduce the required issuance amount of the new bonds.
Based on yields set at the August 14 bond pricing (and the lower amount of new bonds versus old bonds),
Central San will see total gross interest savings through 2029 of$8.2 million compared to the interest
payments on the old bonds (including the expected reduction in the Build America Bond 35% interest
subsidy payments on the Series 2009A bonds that has existed since the Federal budget sequestration
took effect in 2013). The present value of the interest savings, net of the use of the debt service reserve
fund (cash on hand)to reduce the par value of the refunding bonds, was $2,603,896 (see Attachment 2,
page 3). This was above the previous estimate presented to the Board in July of$2,428,188, and more
than twice what was expected this spring (due to being able to execute an extraordinary redemption of the
Series 2009A bonds rather than using an escrow and calling those bonds on September 1, 2019).
A major difference between the gross interest savings of$8.2 million and the net present value of the
interest savings of$2.6 million is the fact that the debt service reserve on the old bonds of$4.86 million
has been applied to reduce the principal amount of the new debt. Because of the lower principal amount,
interest costs are reduced apart from any change in interest rates. The $8.2 million in gross interest
savings is reconciled to the $2.6 million net present value as follows:
Gross difference in interest savings $8.23 million
Discount the gross savings back to present value (0.77) million
Apply debt service reserve fund reducing principal of new bonds (4.86) million
Present value of savings $2.60 million
These savings, which now have been incorporated into the long-term financial plan for Central San, could
be reflected through lower future rate increases, or through reduced bond issuance amounts.
In addition to the refunding savings, more positive factors affecting the financial plan include the FY 2017-
18 favorable variance of$11.7 million as well as other factors, including a stronger forecast for ad valorem
tax collections. Cumulatively, these factors can facilitate a reduction in the required debt issuance, and
allow for the first issuance to be pushed back a year:
FY2019-20 FY2021-22 Total
Previous Plan $50 million $135 million $185 million
FY2020-21 FY2022-23 Total
Updated Plan $77 million $77 million $154 million
These items will be presented in further detail at an October 18, 2018 Board Financial Workshop.
A full analysis of the new bond characteristics and refunding data is provided as Attachment 2. The official
closing date of the new bonds was September 13. On that date, the funds from the new Series 2018A
bonds were used to extinguish the Series 2009A bonds. Additionally, funds from the Series 2018B
Bonds were used to fund an escrow account that will be used to redeem (call)the Series 2009B bonds
when they are callable in September 2019.
October 4, 2018 Regular Board Meeting Agenda Packet- Page 186 of 265
Page 3 of 37
This matter was presented to the Finance Committee on September 25, 2018.
Strategic Plan Tie-In
GOAL THREE: Be a Fiscally Sound and Effective Water Sector Utility
Strategy 1 - Conduct long-range financial planning, Strategy 2- Manage costs
ATTACHMENTS:
1. Bond Order Details
2. Bond Details
3. Presentation
October 4, 2018 Regular Board Meeting Agenda Packet- Page 187 of 265
Central Contra Costa Sanitary District 2018A - Updated Order Monitor Analytics
Quick Statistics Top Ten Investors Maturity Overview (Including Stock)
I I # Full
• Series Overview • Account Overview counts b-orders # Full Orders Total Orders (M) % Par Maturity Cou' • Orders OrderjlLotal Orders (M) Par Amount % Subscripti
i Wells Fargo Asset Management 10 10 $15,135 100.0% 9/1/2020 4.00% 6 5 $6,875 $1,225 opp0 561.22%
Blackrock SMA 10 9 $14,660 96.9% 9/1/2021 5.00% 7 5 $6,635 $1,270 oop0 522.44%
Nuveen Asset Management 9 9 $13,910 91.9% 9/1/2022 5.00% 6 4 $6,040 $1,335 oA 452.43%
# Maturities: 10 #Accounts: 15 US Trust Bank Of America 9 9 $13,285 87.8% 9/1/2023 5.00% 8 6 $9,060 $1,395 'A 649.46%
I I '
Issuance Par: Total Orders: 152 JP MORGAN 7 7 $11,305 74.7% 9/1/2024 5.00% 5 5 $7,325 $1,465 oUQ0 500.00%
$15,135M # Full Orders: 60 First Republic Bank 5 5 $8,135 53.7% 9/1/2025 5.00% 7 6 $9,510 $1,535 of 619.54%
i Franklin Asse /lanagement 5 4 $6,820 45.1% 9/1/2026 5.00% 7 7 $11,270 $1,610 'A 700.00%
----------------- ------------------------- ----------------- ---------------
Northern Trust 4 3 $4,615 30.5% 9/1/2027 5.00% 8 8 $13,490 $1,685 oUQ0 800.59%
Credit Suisse Asset Management 2 2 $3,470 22.9% 9/1/2028 5.00% 12 8 $15,780 $1,765 'A 894.05%
Subscription: Total Orders: McDonnell Investment Management, LLC 4 0 $2,500 16.5% 9/1/2029 5.00% 8 6 $12,150 $1,850 opp0 656.76%
648.4% $98,135M
• . 1 1 ' , • • I $98,135
I I
• Order Overview • Order Statistics ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
I ,
Maturity Overview
--------------------------------------------------------------------------------------------------- , y
18,000
Total Order Breakdown 16,000
I I
14,000
I I
• JP MORGAN 12,000
12% ^
■ 10,000
Other Combined � C
Investors I I
. US Trust Bank Of 30% 0 8,000
America
Q
14%
6,000
4,000
I I
I 2,000 I
• Nuveen Asset I 0 - I
Management
14% OHO O�'� O�� OHO O�'� O�� OHO OSI 00� OHO i
■ Wells Fargo AssetIIIIIII
Und
Managementerwriter Overview
15% •
Blackrock SMA ;
15% MaturityManager r'AR• • - Amount
Amount Offered Total Orders I Piper Jaffray& Co 648% 98,085 74 0 98,085 98,135
Total: 648% 98,085 74 98,085 98,135
8/14/2018 16:34 1 pfrn
October 4, 2018 Regular Board Meeting Agenda Packet- Page 188 of 265
Central Contra Costa Sanitary District 2018A - Updated Order Detail Analysis
9/1/2020 9/1/2021 9/1/2022 9/1/2023 9/1/2024 9/1/2025 9/1/2026 9/1/2027 9/1/2028 9/1/2029 Grand Total
Account 1,225 1,270 1,335 1,395 1,465 1,535 1,610 1,685 1,765 1,850
Wells Fargo Asset Management $1,225 $1,270 $1,335 $1,395 $1,465 $1,535 $1,610 $1,685 $1,765 $1,850 $15,135
Blackrock SMA $750 $1,270 $1,335 $1,395 $1,465 $1,535 $1,610 $1,685 $1,765 $1,850 $14,660
Nuveen Asset Management $1,270 $1,335 $1,395 $1,465 $1,535 $1,610 $1,685 $1,765 $1,850 $13,910
US Trust Bank Of America $1,225 $1,270 $1,335 $1,395 $1,465 $1,535 $1,610 $1,685 $1,765 $13,285
P MORGAN $1,395 $1,465 $1,535 $1,610 $1,685 $1,765 $1,850 $11,305
First Republic Bank $1,225 $1,610 $1,685 $1,765 $1,850 $8,135
Franklin Asset Management a$225 $1,535 $1,610 $1,685 $1,765 $6,820
Northern Trust $1,270 $1,395 $100 $1,850 $4,615
Credit Suisse Asset Management jo $1,695 $1,775 $3,470
McDonnell Investment Management, LLC $500 $500 $500 $1,000 $2,500
Bank of America Capital Management $1,225 $1,225
Atlantic Trust Pell Rudman $1,225 $1,225
HIGHMARK CAPITAL $1,000 2 $1,000
Golub Group, Inc. $60 $200 $190 $300 $750
Riverbend Capital Advisors, LLC $50 $50
Note: Data listed in the table above does not include
Member or Stock Orders. P f m
October 4, 2018 Regular Board Meeting Agenda Packet- Page 189 of 265 2
Page 6 of 37
TABLE OF CONTENTS
Central Contra Costa Sanitary District
Combined Refunding of 2009A and 2009B
Final and Verified Numbers
Report Page
Sources and Uses of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Summary of Bonds Refunded . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Summary of Refunding Results . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Prior Bond Debt Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Savings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Bond Pricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Bond Summary Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Bond Debt Service Breakdown . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Escrow Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Escrow Descriptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Escrow Cost Detail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Escrow Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Escrow Sufficiency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Escrow Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Cost of Issuance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Underwriter's Discount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Form 8038 Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Aug 14,2018 12:21 pm
October 4, 2018 Regular Board Meeting Agenda Packet- Page 190 of 265
Page 7 of 37
SOURCES AND USES OF FUNDS
Central Contra Costa Sanitary District
Combined Refunding of 2009A and 2009B
Final and Verified Numbers
Dated Date 09/13/2018
Delivery Date 09/13/2018
Tax-Exempt
Extraordinary Taxable
Optional Advanced
Redemption of Refunding of
Sources: 2009A BABs 2009B Total
Bond Proceeds:
Par Amount 15,135,000.00 4,315,000.00 19,450,000.00
Premium 2,777,190.35 2,777,190.35
17,912,190.35 4,315,000.00 22,227,190.35
Other Sources of Funds:
2009A Reserve Fund 1,963,500.01 1,963,500.01
2009B Reserve Fund 2,892,950.02 2,892,950.02
1,963,500.01 2,892,950.02 4,856,450.03
19,875,690.36 7,207,950.02 27,083,640.38
Tax-Exempt
Extraordinary Taxable
Optional Advanced
Redemption of Refunding of
Uses: 2009A BABs 2009B Total
Refunding Escrow Deposits:
Cash Deposit 19,674,694.67 0.25 19,674,694.92
SLGS Purchases 7,146,625.00 7,146,625.00
19,674,694.67 7,146,625.25 26,821,319.92
Cost of Issuance:
Bond/Disclosure Counsel 80,149.36 22,850.64 103,000.00
Financial Advisor 37,740.23 10,759.77 48,500.00
Rating Agency S&P 17,508.35 4,991.65 22,500.00
Trustee 6,225.19 1,774.81 8,000.00
Verification Agent 778.15 221.85 1,000.00
Printer 1,743.05 496.95 2,240.00
Contingency 7,781.49 2,218.51 10,000.00
151,925.82 43,314.18 195,240.00
Delivery Date Expenses:
Underwriter's Discount 48,280.65 13,764.85 62,045.50
Other Uses of Funds:
Additional Proceeds 789.22 4,245.74 5,034.96
19,875,690.36 7,207,950.02 27,083,640.38
Aug 14,2018 12:21 pm Page 1
October 4, 2018 Regular Board Meeting Agenda Packet- Page 191 of 265
Page 8 of 37
SUMMARY OF BONDS REFUNDED
Central Contra Costa Sanitary District
Combined Refunding of 2009A and 2009B
Final and Verified Numbers
Maturity Interest Par Call Call
Bond Date Rate Amount Date Price
2009 Wastewater Revenue COPS Series A:Build America Bonds:
2009ASB 09/01/2020 5.200% 1,660,000.00 09/13/2018 100.000
09/01/2021 5.350% 1,715,000.00 09/13/2018 100.000
09/01/2022 5.500% 1,775,000.00 09/13/2018 100.000
09/01/2023 5.600% 1,835,000.00 09/13/2018 100.000
09/01/2024 5.700% 1,905,000.00 09/13/2018 100.000
2009ATB 09/01/2029 6.550% 10,745,000.00 09/13/2018 100.000
19,635,000.00
2009 Wastewater Revenue COPS Series B:
SER-23 09/01/2019 4.000% 2,580,000.00
09/01/2020 4.000% 1,025,000.00 09/01/2019 100.000
09/01/2021 5.000% 1,070,000.00 09/01/2019 100.000
09/01/2022 5.000% 1,125,000.00 09/01/2019 100.000
09/01/2023 5.000% 1,180,000.00 09/01/2019 100.000
6,980,000.00
26,615,000.00
Aug 14,2018 12:21 pm Page 2
October 4, 2018 Regular Board Meeting Agenda Packet- Page 192 of 265
Page 9 of 37
SUMMARY OF REFUNDING RESULTS
Central Contra Costa Sanitary District
Combined Refunding of 2009A and 2009B
Final and Verified Numbers
Tax-Exempt
Extraordinary
Optional Taxable Advanced
Redemption of Refunding of
2009A BABs 2009B Total
Dated Date 09/13/2018 09/13/2018 09/13/2018
Delivery Date 09/13/2018 09/13/2018 09/13/2018
Arbitrage Yield 2.014200% 2.933742% 2.014200%
Escrow Yield 2.387833%
Value of Negative Arbitrage 53,902.53 53,902.53
Bond Par Amount 15,135,000.00 4,315,000.00 19,450,000.00
True Interest Cost 2.101376% 3.083927% 2.180697%
Net Interest Cost 2.343957% 3.079630% 2.406831%
Average Coupon 4.976757% 2.937521% 4.802476%
Average Life 6.848 2.245 5.827
Par amount of refunded bonds 19,635,000.00 6,980,000.00 26,615,000.00
Average coupon of refunded bonds 6.277846% 4.749556% 6.095727%
Average life of refunded bonds 6.779 2.580 5.678
PV of prior debt 22,350,021.18 7,462,968.32 29,812,989.49
Net PV Savings 2,430,558.30 173,338.52 2,603,896.82
Percentage savings of refunded bonds 12.378703% 2.483360% 9.783569%
Percentage savings of refunding bonds 16.059189% 4.017115% 13.387644%
Aug 14,2018 12:21 pm Page 3
October 4, 2018 Regular Board Meeting Agenda Packet- Page 193 of 265
Page 10 of 37
PRIOR BOND DEBT SERVICE
Central Contra Costa Sanitary District
Tax-Exempt Extraordinary Optional Redemption of 2009A BABs
***Preliminary and Subject to Change***
Uniform Savings
2009 Wastewater Revenue COPS Series A: Build America Bonds
Period Other
Ending Principal Coupon Interest Debt Service Cash Flow Total
09/01/2019 1,190,840.00 1,190,840.00 -390,952.78 799,887.22
09/01/2020 1,660,000 5.200% 1,190,840.00 2,850,840.00 -390,952.78 2,459,887.22
09/01/2021 1,715,000 5.350% 1,104,520.00 2,819,520.00 -362,613.92 2,456,906.08
09/01/2022 1,775,000 5.500% 1,012,767.50 2,787,767.50 -332,491.58 2,455,275.92
09/01/2023 1,835,000 5.600% 915,142.50 2,750,142.50 -300,441.28 2,449,701.22
09/01/2024 1,905,000 5.700% 812,382.50 2,717,382.50 -266,705.18 2,450,677.32
09/01/2025 1,975,000 6.550% 703,797.50 2,678,797.50 -231,056.72 2,447,740.78
09/01/2026 2,060,000 6.550% 574,435.00 2,634,435.00 -188,587.02 2,445,847.98
09/01/2027 2,145,000 6.550% 439,505.00 2,584,505.00 -144,289.50 2,440,215.50
09/01/2028 2,235,000 6.550% 299,007.50 2,534,007.50 -98,164.16 2,435,843.34
09/01/2029 2,330,000 6.550% 152,615.00 2,482,615.00 -50,103.50 2,432,511.50
19,635,000 8,395,852.50 28,030,852.50 -2,756,358.42 25,274,494.08
Aug 14,2018 12:21 pm Page 4
October 4, 2018 Regular Board Meeting Agenda Packet- Page 194 of 265
Page 11 of 37
PRIOR BOND DEBT SERVICE
Central Contra Costa Sanitary District
Taxable Advanced Refunding of 2009B
***Preliminary and Subject to Change***
Uniform Savings
2009 Wastewater Revenue COPS Series B
Period Debt
Ending Principal Coupon Interest Service
09/01/2019 2,580,000 4.000% 312,950 2,892,950
09/01/2020 1,025,000 4.000% 209,750 1,234,750
09/01/2021 1,070,000 5.000% 168,750 1,238,750
09/01/2022 1,125,000 5.000% 115,250 1,240,250
09/01/2023 1,180,000 5.000% 59,000 1,239,000
6,980,000 865,700 7,845,700
Aug 14,2018 12:21 pm Page 5
October 4, 2018 Regular Board Meeting Agenda Packet- Page 195 of 265
Page 12 of 37
SAVINGS
Central Contra Costa Sanitary District
Tax-Exempt Extraordinary Optional Redemption of 2009A BABs
***Preliminary and Subject to Change***
Uniform Savings
Present Value
Prior Refunding to 09/13/2018
Date Debt Service Debt Service Savings @ 2.0142004%
09/01/2019 799,887.22 719,683.33 80,203.89 79,183.72
09/01/2020 2,459,887.22 1,969,500.00 490,387.22 471,702.95
09/01/2021 2,456,906.08 1,965,500.00 491,406.08 463,260.96
09/01/2022 2,455,275.92 1,967,000.00 488,275.92 451,186.79
09/01/2023 2,449,701.22 1,960,250.00 489,451.22 443,303.75
09/01/2024 2,450,677.32 1,960,500.00 490,177.32 435,155.33
09/01/2025 2,447,740.78 1,957,250.00 490,490.78 426,795.07
09/01/2026 2,445,847.98 1,955,500.00 490,347.98 418,161.43
09/01/2027 2,440,215.50 1,950,000.00 490,215.50 409,711.05
09/01/2028 2,435,843.34 1,945,750.00 490,093.34 401,439.88
09/01/2029 2,432,511.50 1,942,500.00 490,011.50 393,368.16
25,274,494.08 20,293,433.33 4,981,060.75 4,393,269.09
Savings Summga
Dated Date 09/13/2018
Delivery Date 09/13/2018
PV of savings from cash flow 4,393,269.09
Less:Prior funds on hand -1,963,500.01
Plus:Refunding funds on hand 789.22
Net PV Savings 2,430,558.30
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October 4, 2018 Regular Board Meeting Agenda Packet- Page 196 of 265
Page 13 of 37
SAVINGS
Central Contra Costa Sanitary District
Taxable Advanced Refunding of 2009B
***Preliminary and Subject to Change***
Uniform Savings
Present Value
Prior Refunding to 09/13/2018
Date Debt Service Debt Service Savings @ 2.0142004%
09/01/2019 2,892,950.00 2,261,980.20 630,969.80 619,851.33
09/01/2020 1,234,750.00 579,815.00 654,935.00 630,324.80
09/01/2021 1,238,750.00 585,395.00 653,355.00 616,203.13
09/01/2022 1,240,250.00 584,559.00 655,691.00 605,958.90
09/01/2023 1,239,000.00 587,784.00 651,216.00 589,704.64
7,845,700.00 4,599,533.20 3,246,166.80 3,062,042.80
Savings Summga
Dated Date 09/13/2018
Delivery Date 09/13/2018
PV of savings from cash flow 3,062,042.80
Less:Prior funds on hand -2,892,950.02
Plus:Refunding funds on hand 4,245.74
Net PV Savings 173,338.52
Aug 14,2018 12:21 pm Page 7
October 4, 2018 Regular Board Meeting Agenda Packet- Page 197 of 265
Page 14 of 37
BOND PRICING
Central Contra Costa Sanitary District
Combined Refunding of 2009A and 2009B
Final and Verified Numbers
Maturity Call Call
Bond Component Date Amount Rate Yield Price Date Price
Refunding Serial Bonds;Final Maturity 9/1/2029:
09/01/2020 1,225,000 4.000% 1.390% 105.045
09/01/2021 1,270,000 5.000% 1.450% 110.271
09/01/2022 1,335,000 5.000% 1.560% 113.181
09/01/2023 1,395,000 5.000% 1.670% 115.807
09/01/2024 1,465,000 5.000% 1.790% 118.088
09/01/2025 1,535,000 5.000% 1.890% 120.210
09/01/2026 1,610,000 5.000% 2.040% 121.662
09/01/2027 1,685,000 5.000% 2.130% 123.312
09/01/2028 1,765,000 5.000% 2.220% 124.732
09/01/2029 1,850,000 5.000% 2.340% 123.523 C 09/01/2028 100.000
15,135,000
Taxable Refunding Serial Bonds;Maturing 9/1/2023:
09/01/2019 2,145,000 2.620% 2.620% 100.000
09/01/2020 515,000 2.800% 2.800% 100.000
09/01/2021 535,000 2.960% 2.960% 100.000
09/01/2022 550,000 3.050% 3.050% 100.000
09/01/2023 570,000 3.120% 3.120% 100.000
4,315,000
19,450,000
Dated Date 09/13/2018
Delivery Date 09/13/2018
First Coupon 03/01/2019
Par Amount 19,450,000.00
Premium 2,777,190.35
Production 22,227,190.35 114.278614%
Underwriter's Discount -62,045.50 -0.319000%
Purchase Price 22,165,144.85 113.959614%
Accrued Interest
Net Proceeds 22,165,144.85
Aug 14,2018 12:21 pm Page 8
October 4, 2018 Regular Board Meeting Agenda Packet- Page 198 of 265
Page 15 of 37
BOND SUMMARY STATISTICS
Central Contra Costa Sanitary District
Tax-Exempt Extraordinary Optional Redemption of 2009A BABs
***Preliminary and Subject to Change***
Uniform Savings
Dated Date 09/13/2018
Delivery Date 09/13/2018
Last Maturity 09/01/2029
Arbitrage Yield 2.014200%
True Interest Cost(TIC) 2.101376%
Net Interest Cost(NIC) 2.343957%
All-In TIC 2.245346%
Average Coupon 4.976757%
Average Life(years) 6.848
Weighted Average Maturity(years) 6.985
Duration of Issue(years) 6.004
Par Amount 15,135,000.00
Bond Proceeds 17,912,190.35
Total Interest 5,158,433.33
Net Interest 2,429,523.63
Total Debt Service 20,293,433.33
Maximum Annual Debt Service 1,969,500.00
Average Annual Debt Service 1,850,465.05
Underwriter's Fees(per$1000)
Average Takedown
Other Fee 3.190000
Total Underwriter's Discount 3.190000
Bid Price 118.030457
Par Average Average
Bond Component Value Price Coupon Life
Refunding Serial Bonds;Final Maturity 9/1/2029 15,135,000.00 118.349 4.977% 6.848
15,135,000.00 6.848
All-In Arbitrage
TIC TIC Yield
Par Value 15,135,000.00 15,135,000.00 15,135,000.00
+Accrued Interest
+Premium(Discount) 2,777,190.35 2,777,190.35 2,777,190.35
-Underwriter's Discount -48,280.65 -48,280.65
-Cost of Issuance Expense -151,925.82
-Other Amounts
Target Value 17,863,909.70 17,711,983.88 17,912,190.35
Target Date 09/13/2018 09/13/2018 09/13/2018
Yield 2.101376% 2.245346% 2.014200%
Aug 14,2018 12:21 pm Page 9
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BOND SUMMARY STATISTICS
Central Contra Costa Sanitary District
Taxable Advanced Refunding of 2009B
***Preliminary and Subject to Change***
Uniform Savings
Dated Date 09/13/2018
Delivery Date 09/13/2018
Last Maturity 09/01/2023
Arbitrage Yield 2.933742%
True Interest Cost(TIC) 3.083927%
Net Interest Cost(NIC) 3.079630%
All-In TIC 3.561870%
Average Coupon 2.937521%
Average Life(years) 2.245
Weighted Average Maturity(years) 2.245
Duration of Issue(years) 2.158
Par Amount 4,315,000.00
Bond Proceeds 4,315,000.00
Total Interest 284,533.20
Net Interest 298,298.05
Total Debt Service 4,599,533.20
Maximum Annual Debt Service 2,261,980.20
Average Annual Debt Service 926,080.51
Underwriter's Fees(per$1000)
Average Takedown
Other Fee 3.190000
Total Underwriter's Discount 3.190000
Bid Price 99.681000
Par Average Average
Bond Component Value Price Coupon Life
Taxable Refunding Serial Bonds;Maturing 9/1/2023 4,315,000.00 100.000 2.938% 2.245
4,315,000.00 2.245
All-In Arbitrage
TIC TIC Yield
Par Value 4,315,000.00 4,315,000.00 4,315,000.00
+Accrued Interest
+Premium(Discount)
-Underwriter's Discount -13,764.85 -13,764.85
-Cost of Issuance Expense -43,314.18
-Other Amounts
Target Value 4,301,235.15 4,257,920.97 4,315,000.00
Target Date 09/13/2018 09/13/2018 09/13/2018
Yield 3.083927% 3.561870% 2.933742%
Aug 14,2018 12:21 pm Page 10
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BOND DEBT SERVICE BREAKDOWN
Central Contra Costa Sanitary District
Combined Refunding of 2009A and 2009B
Final and Verified Numbers
Tax-Exempt
Extraordinary
Optional Taxable Advanced
Period Redemption of Refunding of Annual
Ending 2009A BABs 2009B Total Total
03/01/2019 347,433.33 56,473.20 403,906.53
09/01/2019 372,250.00 2,205,507.00 2,577,757.00 2,981,663.53
03/01/2020 372,250.00 32,407.50 404,657.50
09/01/2020 1,597,250.00 547,407.50 2,144,657.50 2,549,315.00
03/01/2021 347,750.00 25,197.50 372,947.50
09/01/2021 1,617,750.00 560,197.50 2,177,947.50 2,550,895.00
03/01/2022 316,000.00 17,279.50 333,279.50
09/01/2022 1,651,000.00 567,279.50 2,218,279.50 2,551,559.00
03/01/2023 282,625.00 8,892.00 291,517.00
09/01/2023 1,677,625.00 578,892.00 2,256,517.00 2,548,034.00
03/01/2024 247,750.00 247,750.00
09/01/2024 1,712,750.00 1,712,750.00 1,960,500.00
03/01/2025 211,125.00 211,125.00
09/01/2025 1,746,125.00 1,746,125.00 1,957,250.00
03/01/2026 172,750.00 172,750.00
09/01/2026 1,782,750.00 1,782,750.00 1,955,500.00
03/01/2027 132,500.00 132,500.00
09/01/2027 1,817,500.00 1,817,500.00 1,950,000.00
03/01/2028 90,375.00 90,375.00
09/01/2028 1,855,375.00 1,855,375.00 1,945,750.00
03/01/2029 46,250.00 46,250.00
09/01/2029 1,896,250.00 1,896,250.00 1,942,500.00
20,293,433.33 4,599,533.20 24,892,966.53 24,892,966.53
Aug 14,2018 12:21 pm Page 11
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ESCROW REQUIREMENTS
Central Contra Costa Sanitary District
Tax-Exempt Extraordinary Optional Redemption of 2009A BABs
***Preliminary and Subject to Change***
Uniform Savings
Dated Date 09/13/2018
Delivery Date 09/13/2018
2009 Wastewater Revenue COPS Series A: Build America Bonds
Period Principal
Ending Interest Redeemed Total
09/13/2018 39,694.67 19,635,000.00 19,674,694.67
39,694.67 19,63 5,000.00 19,674,694.67
Aug 14,2018 12:21 pm Page 12
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ESCROW REQUIREMENTS
Central Contra Costa Sanitary District
Taxable Advanced Refunding of 2009B
***Preliminary and Subject to Change***
Uniform Savings
Dated Date 09/13/2018
Delivery Date 09/13/2018
2009 Wastewater Revenue COPS Series B
Period Principal
Ending Principal Interest Redeemed Total
03/01/2019 156,475.00 156,475.00
09/01/2019 2,580,000.00 156,475.00 4,400,000.00 7,136,475.00
2,580,000.00 312,950.00 4,400,000.00 7,292,950.00
Aug 14,2018 12:21 pm Page 13
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ESCROW DESCRIPTIONS
Central Contra Costa Sanitary District
Combined Refunding of 2009A and 2009B
Final and Verified Numbers
Type of Type of Maturity First Int Par Max Total
Security SLGS Date Pmt Date Amount Rate Rate Cost
Sep 13,2018:
SLGS Certificate 03/01/2019 155,218 1.750% 155,218.00
SLGS Certificate 09/01/2019 09/01/2019 4,253,675 2.400% 2.400% 4,253,675.00
SLGS Certificate 09/01/2019 2,737,732 1.750% 2,737,732.00
7,146,625 7,146,625.00
SLGS Summary
SLGS Rates File 14AUG18
Total Certificates of Indebtedness 7,146,625.00
Aug 14,2018 12:21 pm Page 14
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ESCROW COST DETAIL
Central Contra Costa Sanitary District
Combined Refunding of 2009A and 2009B
Final and Verified Numbers
Type of Maturity Par Total
Security Date Amount Rate Cost
Taxable Advanced Refunding of 200913,DSRF:
SLGS 03/01/2019 155,218 1.750% 155,218.00
SLGS 09/01/2019 2,737,732 1.750% 2,737,732.00
2,892,950 2,892,950.00
Taxable Advanced Refunding of 200913,BP:
SLGS 09/01/2019 4,253,675 2.400% 4,253,675.00
7,146,625 7,146,625.00
Purchase Cost of Cash Total
Escrow Date Securities Deposit Escrow Cost Yield
Tax-Exempt Extraordinary Optional Redemption of 2009A BABs:
DSRF 09/13/2018 1,963,500.01 1,963,500.01
BP 09/13/2018 17,711,194.66 17,711,194.66
19,674,694.67 19,674,694.67
Taxable Advanced Refunding of 200913:
DSRF 09/13/2018 2,892,950 0.02 2,892,950.02 1.743549%
BP 09/13/2018 4,253,675 0.23 4,253,675.23 2.387833%
7,146,625 0.25 7,146,625.25
7,146,625 19,674,694.92 26,821,319.92
Aug 14,2018 12:21 pm Page 15
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ESCROW CASH FLOW
Central Contra Costa Sanitary District
Combined Refunding of 2009A and 2009B
Final and Verified Numbers
Net Escrow
Date Principal Interest Receipts
09/01/2019 7,146,625.00 146,324.75 7,292,949.75
7,146,625.00 146,324.75 7,292,949.75
Escrow Cost Summary
Purchase date 09/13/2018
Purchase cost of securities 7,146,625.00
Aug 14,2018 12:21 pm Page 16
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ESCROW SUFFICIENCY
Central Contra Costa Sanitary District
Tax-Exempt Extraordinary Optional Redemption of 2009A BABs
***Preliminary and Subject to Change***
Uniform Savings
Escrow Net Escrow Excess Excess
Date Requirement Receipts Receipts Balance
09/01/2019 19,674,694.67 19,674,694.67
19,674,694.67 19,674,694.67 0.00
Aug 14,2018 12:21 pm Page 17
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ESCROW SUFFICIENCY
Central Contra Costa Sanitary District
Taxable Advanced Refunding of 2009B
***Preliminary and Subject to Change***
Uniform Savings
Escrow Net Escrow Excess Excess
Date Requirement Receipts Receipts Balance
09/01/2019 7,292,950.00 7,292,950.00
7,292,950.00 7,292,950.00 0.00
Aug 14,2018 12:21 pm Page 18
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ESCROW STATISTICS
Central Contra Costa Sanitary District
Tax-Exempt Extraordinary Optional Redemption of 2009A BABs
***Preliminary and Subject to Change***
Uniform Savings
Modified Yield to Yield to Perfect Value of
Total Duration Receipt Disbursement Escrow Negative Cost of
Escrow Escrow Cost (years) Date Date Cost Arbitrage Dead Time
DSRF 1,963,500.01 1,963,500.01
BP 17,711,194.66 17,711,194.66
19,674,694.67 19,674,694.67 0.00 0.00
Delivery date 09/13/2018
Arbitrage yield 2.014200%
Aug 14,2018 12:21 pm Page 19
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ESCROW STATISTICS
Central Contra Costa Sanitary District
Taxable Advanced Refunding of 2009B
***Preliminary and Subject to Change***
Uniform Savings
Modified Yield to Yield to Perfect Value of
Total Duration Receipt Disbursement Escrow Negative Cost of
Escrow Escrow Cost (years) Date Date Cost Arbitrage Dead Time
DSRF 2,892,950.02 0.932 1.743549% 1.743548% 2,861,142.34 31,807.67 0.01
BP 4,253,675.23 0.955 2.387833% 2.387833% 4,231,580.37 22,094.86
7,146,625.25 7,092,722.71 53,902.53 0.01
Delivery date 09/13/2018
Arbitrage yield 2.933742%
Aug 14,2018 12:21 pm Page 20
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COST OF ISSUANCE
Central Contra Costa Sanitary District
Combined Refunding of 2009A and 2009B
Final and Verified Numbers
Tax-Exempt
Extraordinary Taxable
Optional Advanced
Redemption of Refunding of
2009A BABs 2009B Total
Bond/Disclosure Counsel 80,149.36 22,850.64 103,000.00
Financial Advisor 37,740.23 10,759.77 48,500.00
Rating Agency S&P 17,508.35 4,991.65 22,500.00
Trustee 6,225.19 1,774.81 8,000.00
Verification Agent 778.15 221.85 1,000.00
Printer 1,743.05 496.95 2,240.00
Contingency 7,781.49 2,218.51 10,000.00
151,925.82 43,314.18 195,240.00
Aug 14,2018 12:21 pm Page 21
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UNDERWRITER'S DISCOUNT
Central Contra Costa Sanitary District
Combined Refunding of 2009A and 2009B
Final and Verified Numbers
Tax-Exempt
Extraordinary Taxable
Optional Advanced
Redemption of Refunding of
2009A BABs 2009B Total
Other Underwriter's Discount 48,280.65 13,764.85 62,045.50
48,280.65 13,764.85 62,045.50
Aug 14,2018 12:21 pm Page 22
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FORM 8038 STATISTICS
Central Contra Costa Sanitary District
Tax-Exempt Extraordinary Optional Redemption of 2009A BABs
***Preliminary and Subject to Change***
Uniform Savings
Dated Date 09/13/2018
Delivery Date 09/13/2018
Redemption
Bond Component Date Principal Coupon Price Issue Price at Maturity
Refunding Serial Bonds;Final Maturity 9/1/2029:
09/01/2020 1,225,000.00 4.000% 105.045 1,286,801.25 1,225,000.00
09/01/2021 1,270,000.00 5.000% 110.271 1,400,441.70 1,270,000.00
09/01/2022 1,335,000.00 5.000% 113.181 1,510,966.35 1,335,000.00
09/01/2023 1,395,000.00 5.000% 115.807 1,615,507.65 1,395,000.00
09/01/2024 1,465,000.00 5.000% 118.088 1,729,989.20 1,465,000.00
09/01/2025 1,535,000.00 5.000% 120.210 1,845,223.50 1,535,000.00
09/01/2026 1,610,000.00 5.000% 121.662 1,958,758.20 1,610,000.00
09/01/2027 1,685,000.00 5.000% 123.312 2,077,807.20 1,685,000.00
09/01/2028 1,765,000.00 5.000% 124.732 2,201,519.80 1,765,000.00
09/01/2029 1,850,000.00 5.000% 123.523 2,285,175.50 1,850,000.00
15,135,000.00 17,912,190.35 15,135,000.00
Stated Weighted
Maturity Interest Issue Redemption Average
Date Rate Price at Maturity Maturity Yield
Final Maturity 09/01/2029 5.000% 2,285,175.50 1,850,000.00
Entire Issue 17,912,190.35 15,135,000.00 6.9851 2.0142%
Proceeds used for accrued interest 0.00
Proceeds used for bond issuance costs(including underwriters'discount) 200,206.47
Proceeds used for credit enhancement 0.00
Proceeds allocated to reasonably required reserve or replacement fund 0.00
Proceeds used to currently refund prior issues 17,711,194.66
Proceeds used to advance refund prior issues 0.00
Remaining weighted average maturity of the bonds to be currently refunded 6.7698
Remaining weighted average maturity of the bonds to be advance refunded 0.0000
Aug 14,2018 12:21 pm Page 23
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FORM 8038 STATISTICS
Central Contra Costa Sanitary District
Tax-Exempt Extraordinary Optional Redemption of 2009A BABs
***Preliminary and Subject to Change***
Uniform Savings
Refunded Bonds
Bond
Component Date Principal Coupon Price Issue Price
2009 Wastewater Revenue COPS Series A:Build America Bonds:
2009ASB 09/01/2020 1,660,000.00 5.200% 99.104 1,645,126.40
2009ASB 09/01/2021 1,715,000.00 5.350% 99.052 1,698,741.80
2009ASB 09/01/2022 1,775,000.00 5.500% 99.004 1,757,321.00
2009ASB 09/01/2023 1,835,000.00 5.600% 98.959 1,815,897.65
2009ASB 09/01/2024 1,905,000.00 5.700% 98.917 1,884,368.85
2009ATB 09/01/2025 1,975,000.00 6.550% 98.312 1,941,662.00
2009ATB 09/01/2026 2,060,000.00 6.550% 98.312 2,025,227.20
2009ATB 09/01/2027 2,145,000.00 6.550% 98.312 2,108,792.40
2009ATB 09/01/2028 2,235,000.00 6.550% 98.312 2,197,273.20
2009ATB 09/01/2029 2,330,000.00 6.550% 98.312 2,290,669.60
19,635,000.00 19,365,080.10
Remaining
Last Weighted
Call Issue Average
Date Date Maturity
2009 Wastewater Revenue COPs Series A:Build America Bonds 09/13/2018 11/12/2009 6.7698
All Refunded Issues 09/13/2018 6.7698
Aug 14,2018 12:21 pm Page 24
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FORM 8038 STATISTICS
Central Contra Costa Sanitary District
Taxable Advanced Refunding of 2009B
***Preliminary and Subject to Change***
Uniform Savings
Dated Date 09/13/2018
Delivery Date 09/13/2018
Redemption
Bond Component Date Principal Coupon Price Issue Price at Maturity
Taxable Refunding Serial Bonds;Maturing 9/1/2023:
09/01/2019 2,145,000.00 2.620% 100.000 2,145,000.00 2,145,000.00
09/01/2020 515,000.00 2.800% 100.000 515,000.00 515,000.00
09/01/2021 535,000.00 2.960% 100.000 535,000.00 535,000.00
09/01/2022 550,000.00 3.050% 100.000 550,000.00 550,000.00
09/01/2023 570,000.00 3.120% 100.000 570,000.00 570,000.00
4,315,000.00 4,315,000.00 4,315,000.00
Stated Weighted
Maturity Interest Issue Redemption Average
Date Rate Price at Maturity Maturity Yield
Final Maturity 09/01/2023 3.120% 570,000.00 570,000.00
Entire Issue 4,315,000.00 4,315,000.00 2.2448 2.9337%
Proceeds used for accrued interest 0.00
Proceeds used for bond issuance costs(including underwriters'discount) 57,079.03
Proceeds used for credit enhancement 0.00
Proceeds allocated to reasonably required reserve or replacement fund 0.00
Proceeds used to currently refund prior issues 0.00
Proceeds used to advance refund prior issues 4,253,675.23
Remaining weighted average maturity of the bonds to be currently refunded 0.0000
Remaining weighted average maturity of the bonds to be advance refunded 2.6121
Aug 14,2018 12:21 pm Page 25
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FORM 8038 STATISTICS
Central Contra Costa Sanitary District
Taxable Advanced Refunding of 2009B
***Preliminary and Subject to Change***
Uniform Savings
Refunded Bonds
Bond
Component Date Principal Coupon Price Issue Price
2009 Wastewater Revenue COPS Series B:
SER 23 09/01/2019 2,580,000.00 4.000% 105.191 2,713,927.80
SER 23 09/01/2020 1,025,000.00 4.000% 103.926 1,065,241.50
SER 23 09/01/2021 1,070,000.00 5.000% 110.981 1,187,496.70
SER 23 09/01/2022 1,125,000.00 5.000% 110.376 1,241,730.00
SER 23 09/01/2023 1,180,000.00 5.000% 109.776 1,295,356.80
6,980,000.00 7,503,752.80
Remaining
Last Weighted
Call Issue Average
Date Date Maturity
2009 Wastewater Revenue COPs Series B 09/01/2019 12/03/2009 2.6121
All Refunded Issues 09/01/2019 2.6121
Aug 14,2018 12:21 pm Page 26
October 4, 2018 Regular Board Meeting Agenda Packet- Page 216 of 265
ATTACH ME NT 3
ML
r BOND REFINANCING REPORT
PHILIP R. LEIBER
DIRECTOR OF FINANCE & ADMINISTRATION
OCTOBER 4, 2018
October 4, 2 �;.¢ and Meeti - _
OVERVIEWC9NANCING
2018A: $15.135 million in tax-exempt Wastewater Revenue Refunding Bonds
Proceeds used to refund $19.635 million outstanding 2009A Wastewater
Revenue Certificates of Participation (Taxable Build America Bonds)
2009A Certificates subject to Extraordinary Optional Prepayment based on reduction of
BAB subsidy under sequestration
Final maturity: September 1 , 2029
2018B: $4.315 million in taxable Wastewater Revenue Refunding Bonds
Proceeds used to advance refund the outstanding $6.98 million 2009B
Wastewater Revenue Certificates of Participation
Final maturity: September 1 , 2023
2
4' 9egul - Pnno 91
REFINANCING 2009 BONDS
SUMMARY REPORT
Obtained lower interest rate; saved $2.6 million Present Value (PV) of
interest. $8.2 million in gross interest savings resulted from lower interest
rates and reduced debt outstanding.
Achieved exceptionally low interest rate demonstrating strong interest in
Central San Bonds for future sales.
3. Timing very favorable. Interest rates (10-year treasury) have increased 18
basis points since August pricing (2.89% to 3.07%).
4. Bond official statement updated for next sale.
5. Revenue Bond structure avoids potential negative market concerns about
Certificates of Participation that may arise in future.
6. Interest savings incorporated in financial model. Overall need for debt
falls from $185 million to $154 million, due to (1 ) these savings, (2) the FY
2017-18 budget variance and (3) other model changes (ad valorem
outlook).
� 3
gul - _
INTEREST SAVINGS
• Total cash flow savings of $8.2 . .
million comes from both lower ` ' ' '
interest rates and lesser amount of 09/01/19 $80,204 $630,970 Savings$711,174
debt outstanding (used previous 09/01/20 490,387 654,935 1,145,322
Debt Service Reserve Fund 09/01/21 491,406 653,355 1,144,761
(DSRF) to reduce principal 09/01/22 488,276 655,691 1,143,967
outstanding) 09/01/23 489,451 651,216 1,140,667
• Equivalent to $2.6 million in Net 09/01/24 490,177 490,177
Present Value (NPV) savings 09/01/25 490,491 490,491
09/01/26 490,348 490,348
09/01/27 490,216 490,216
09/01/28 490,093 490,093
Cash Flow $4,981,061 $3,246,167 $ 8,227,228 09/01/29 490,012 490,012
Savings Total $4,981,061 $3,246,167 $8,227,228
NPV Savings
2,430,558 173,338 $2,603,896
($)
NPV Savings 12.38% 2.48% 9.78%
(% of refunded
par)
4
EXT STEPS
1 . Board Financial Workshop on October 18
2. Exploration of, and applications for, other financing sources: SRF (State
Revolving Fund), WIFIA (Water Infrastructure Finance & Innovation Act)
Targeted date for new money bond issuance: Calendar year 2020
5
gul -