DEBT SERVICE SCHEDULE
The City of West Covina, Community
Development Commission Agency, and
Public Financing Authority (PFA) have
issued debt instruments to finance capital
projects and equipment. The three
governmental units, although related, are
distinct legal entities.
The City and Community Development
Commission Agency have tax-based
revenue from which to repay debt. The PFA
has no ability to generate revenues, other
than through charges for the use of money
and property. Accordingly, projects funded
through the PFA are secured by the issuer's
leases or notes receivable from the City,
Community Development Commission
Agency and project developers. Debt
between related governments has not been
budgeted, as doing so would result in
double-counting the debt and related
revenues.
Following is a summary of the debt issued
and outstanding by the issuing agency:
I. Debt Issued by the City of West Covina
Leases Payable: The City is leasing computers, software, vehicles, portable classrooms and copiers under
capitalized leases. The equipment acquired secures lease payments. The City is obligated for the
following debt service payments under capitalized leases:
II. Debt Issued by the West Covina Community Development Commission Agency
Bonds Payable: The Community Development Commission Agency has several outstanding bond
issues, as follows:
1996 Special Tax Refunding Bonds Community Facilities District No. 1989-1 (The Fashion Plaza Project) Original Issue - $51,220,000. Special Tax and other revenues secure repayment. Final maturity is in September 2022.
1988 Lease Revenue Refunding Bonds (The Lakes Public Parking Project) - Original Issue $7,750,000: A facilities lease secures repayment. Final maturity is in August 2018. The bonds bear interest at a variable rate. Interest rates on the bonds are calculated weekly, based upon the prevailing
market conditions, not to exceed 12% over the life of the bonds. The Community Development Commission and the Parking Authority jointly issued the bonds.
2002 Tax Allocation Revenue Refunding Bonds, Series 2002
Original Issue - $ 12,200,000
The CDC executed long-term agreements with the West Covina Public Financing Authority to prepay all the outstanding balance of the West Covina Public Financing Authority Tax Allocation Bonds. The Bonds are payable from tax revenues of the Agency. Interest rates range from 1.75% to 5.10%. The
Bonds mature in September 2025.
Advances from City to the West Covina Community Development Commission (CDC) The City has advanced funds to the CDC for operations since the Agency was first formed. As of June 30, 2005, the outstanding balance on the note was $23,469,655. Principal and interest are payable as funds become available. Starting FY 05-06, all future repayments were restructured at $3.3 million annually, with a final repayment of $1.3 million in 2017-18.
Sales and Use Tax Reimbursement Agreement
Under the agreement, all previously foregone sales tax through FY 05-06 totaling $9.6 million will be repaid starting FY 05-06, spread over 20 years at 4% interest. These repayments will be combined with the annual reimbursement of future sales tax amounts. The total annual payments would range from $1.5 million in 2005-06 to a high of $2.9 million in 2021-22 with final
payments totaling $1.2 million in 2024-25. Should CDC not have sufficient revenues to make the scheduled payments, the amount will carry forward with no default on the agreement. Said agreement may be amended so long as owners of obligations payable form the tax increment are not harmed.
Line of Credit with the City
The City provided the CDC with a line of credit in the amount of $5.6 million. Any amounts drawn down accrue interest at a rate equal to the State of California Local Agency Investment Fund (LAIF) plus two percent. As of June 30, 2005, the entire amount had been drawn down. Interest payments in the amount of $392,000 were budgeted for 2006-07.
Short Term Loans
The CDC also has short term operating loans from the City to provide liquidity due to the timing of tax increment payments. Total balances of these loans are $3 million with a 6% interest rate. Total principal and interest will be paid before the completion of 2005-06.
III. Debt Issued by City of West Covina Public Financing Authority
Bonds Payable: The Public Financing Authority has several outstanding bond issues, as follows:
1998 Housing Set-aside Tax Allocation Bonds (Executive Lodge Project) Tax-exempt and Taxable Series) Original Issue - $6,145,000. Repayment is secured by the 20% of future tax increment that must
be set-aside for low and moderate-income housing projects. Final maturity is in September 2025.
Series A (Tax Exempt)
Series B (Taxable)
1999 West Covina Public Financing Authority Taxable Variable Rate Demand Tax Allocation Bonds $3,945,000. Repayment is secured by tax increment of the Project Area. Final maturity is in November 2029.
2001 Housing Set-aside Tax Allocation Bonds Original Issue - $11,275,000.
Repayment is secured by the 20% of future tax increment that must be set-aside for low and moderate-income housing projects. Final maturity is in September 2031.
2002 Lease Revenue Refunding Bonds, Series B (Public Facilities Project) $19,205,000
2005 Lease Variable Rate Lease Revenue Refunding Bonds 2005 - Series C $2,725,000
This was composed of Series A $2,690,000 Taxable Variable Lease Revenue Refunding Bonds and Series B $19,205,000 Variable Rate Lease Revenue Refunding Bonds (Series B). Series A bonds were subject to mandatory redemption on September 1, 2005. It was refunded and to that end the Authority issued the
Variable Rate Lease Revenue Refunding Bonds (Series C) for $2,725,000
Principal on Series B bonds are due annually beginning September 1, 2006; the bond matures on September 30, 2035. Series C bonds are subject to mandatory redemption in part of September 1 of years indicated below.
Series B
Series C
2003 West Covina Public Financing Authority Lease Revenue Bonds, Series A (Community Center Project) $3,625,000
Bonds are payable from the revenues consisting primarily of lease payments to be made by the City of West Covina to the WC Public Financing Authority. Interest ranges from 1.6% to 5.45%. Maturity is in August 2023.
2004 West Covina Public Finance Authority Lease Revenue Bonds, Series A and B (Golf Course Project) ---$13,500,000
Series A bond proceeds of $8,165,000 and Series B bond proceeds of $5,335,000 with interest rate of 2.5% for the year ended August 1, 2006 and 3.3% thereafter through maturity date of May 1, 2034.
Notes Payable:
Butler Note - $248,000
This note began January 24, 2002 with interest only payment for ten years and a balloon payment of
principal on December 24, 2011. The proceeds of the Note were used to finance the purchase of a real
property. Interest rate for the first 36 months is fixed at 0.5% in excess of the 1-year treasury note on
January 24, 2002. Thereafter, interest is adjusted every three years based on 1-year treasury constant
maturity plus 0.5%.
Valencia Note - $ 1,215,000
This note for $1,215,000 began May 1, 2003 to be fully amortized and payable over 20 years with monthly installments of principal and interest.
The interest rate for the first 18 months is fixed at 5.31%. Every three years thereafter, interest is adjusted to the current 2-year treasury bill plus 0.5%. The latest adjustment date is December 1, 2004 for an interest rate of 3.086%.
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