2003-12-02 Joint ARRA APFA MinutesMINUTES OF THE SPECIAL JOINT ALAMEDA REUSE
AND REDEVELOPMENT AUTHORITY AND ALAMEDA
PUBLIC FINANCING AUTHORITY MEETING
TUESDAY - - - DECEMBER 2, 2003 - - - 7:27 P.M.
Chair Johnson convened the Special Joint meeting at 8:18 p.m.
ROLL CALL - Present: Authority Members Daysog, Gilmore, Kerr,
Matarrese and Chair Johnson - 5.
Absent: None.
AGENDA ITEM
ARRA Resolution No. 33, "Approving an Assignment Agreement by and
between the Alameda Reuse and Redevelopment Authority and the
Alameda Public Financing Authority in Connection with the Issuance
by the Alameda Public Financing Authority of Its Revenue Bonds to
Finance and Refinance the Acquisition, Construction, Installation
and Equipping of Various Capital Improvements to Alameda Point (the
Former Alameda Naval Air Station) and Approving Related Documents
and Official Actions." Adopted.
(03 -04) APFA Resolution No.03 -14, "Authorizing the Issuance and
Sale of Revenue Bonds by the Alameda Public Financing Authority in
the Maximum Aggregate Principal Amount of $15 Million to Finance
and Refinance the Acquisition, Construction, Installation, and
Equipping of Various Capital Improvements to Alameda Point (the
Former Alameda Naval Air Station) and Approving Related Documents
and Official Actions." Adopted.
Authority Member Daysog stated a $10 million bond issuance from
several years ago is being retired; an additional $3.5 million is
being issued for a total of $13.5 million; however, the amount
requested is not to exceed $15 million; inquired why a $1.5 million
difference is included.
The Finance Director responded that bond resolutions typically have
a "not to exceed" amount to allow staff to price the bonds; stated
the $10 million from 1999 is being refunded; $3.5 million, which
includes issuance costs and reserve funds, is being issued for new
projects.
Authority Member Daysog inquired how much financing the $3.5
million would cost in principal plus interest.
Bill Reynolds, Gardner and Associates, responded debt is being
issued as a taxable, variable rate debt; the total cost is not
known; the rates should be very low; the rates on the 1999 tax -
exempt issuance have averaged well under 20; the current issuance
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will be slightly higher.
Authority Member Daysog inquired what the amount would be assuming
a minimum rate for a 30 -year period.
Mr. Reynolds responded assuming 70, which is higher than the
anticipated rate, the City would pay approximately $2 million in
interest.
Kira Grisgavage, JP Morgan, stated assuming a $4.4 million initial
issuance, the total for the taxable portion was $8.8 million.
Authority Member Daysog stated if the initial issuance were $3.5
million, the total probably would be $7.5 million.
Authority Member Kerr inquired whether money would be borrowed to
pay salaries, to which the Executive Director responded in the
affirmative.
Authority Member Kerr stated cutting the budget was discussed,
however, the budget seems to be expanding; that she has concerns
about borrowing money since the future of Alameda Point is unknown.
The Executive Director stated that the delay in property conveyance
made borrowing additional funds necessary; expenditures have been
reduced by $1.3 million; staff would continue to review ways to
further reduce costs at Alameda Point.
Chair Johnson noted borrowing money is necessary because General
Fund money cannot be spent to finance Alameda Point operations.
Chair Johnson inquired when a budget would be presented, to which
the Executive Director responded within two weeks.
Authority Member Matarrese stated that the $3.5 million is
necessary to allow the conveyance and entitlement process to move
forward and would provide leverage for projects that must be
completed prior to development of the land.
Authority Member Gilmore thanked staff for providing an explanation
on bond counsel and consultant selection procedures.
Authority Member Daysog stated that by issuing debt, many
generations of Alamedans would pay for the $3.5 million; the cost
would be about $7 million over the life of the project; cutting the
budget is another way of financing services.
Chair Johnson stated the budget should be reviewed; ARRA /APFA
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members need to review the spending cycle throughout the process.
The Executive Director stated monthly progress reports and
quarterly financial reports would be provided.
Authority Member Matarrese inquired when the $3.5 million would
begin to be repaid, to which the Finance Director responded that
the bonds could begin to be repaid as soon as cash is available.
Authority Member Matarrese stated the debt would be covered by the
value of the land conveyed from the City to the master developer;
the only risk is whether the Navy will convey the land to the City.
Authority Member Gilmore inquired whether the debt type and amount
precludes acquiring fixed rate financing, to which Mr. Reynolds
responded variable rate debt provides flexibility to pay down debt
at any time without worrying about call protection.
Chair Johnson noted development must go forward regardless of who
is the master developer.
Authority Member Matarrese moved adoption of resolutions.
Authority Member Gilmore seconded the motion, which carried by the
following voice vote: Ayes: Authority Members Gilmore, Matarrese
and Chair Johnson - 3. Noes: Authority Members Daysog and Kerr - 2.
Authority Member Matarrese inquired whether the requested monthly
and quarterly reports would be presented in open session, to which
the Legal Counsel responded in the affirmative.
ADJOURNMENT
There being no further business, Chair Johnson adjourned the
Special Joint meeting at 8:48 p.m.
Respectfully submitted,
Lara Weisiger, Secretary
Alameda Public Financing
Authority
The agenda for this meeting was posted in accordance with the
Brown Act.
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