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THE CITY OF CITY COUNCIL _ f A..1. PLEASANTON JOINT POWERS FINANCING AUTHORITY AGENDA REPORT �L£�S�4NTONo 16 May 7, 2013 Finance TITLE: AUTHORIZE THE PAYOFF OF THE OUTSTANDING 2003 CERTIFICATES OF PARTICIPATION (GOLF COURSE/SENIOR CENTER PROJECT) SUMMARY In April 2003, the City issued tax-exempt, fixed rate certificates of participation in the amount of $28,425,000 (COPs) for the acquisition and construction of the Callippe Preserve Golf Course and to refinance the City's outstanding 1991 Certificates of Participation that were originally issued for the construction of the Senior Center on Sunol Boulevard. At this time, $20,650,000 in COPs remain outstanding. Recently City staff reviewed the payoff of the remaining COPs in advance of their malurity (October 1, 2032) and determined that the payoff of the COPs resulted in a significant financial benefit to the City of approximately $10.7 million in interest cost savings. RECOMMENDATION Staff recommends the City Council and the Joint Powers Financing Authority Board adopt by resolution the First Amendment to the Lease Agreement and authorize the call of the outstanding COPs on or about June 15, 2013, in the principal amount of $20,650,000 plus interest to the call date ($193,254) for a total of $20,843,254. The following are the reserves that will be committed to the payoff of the COPs: • Golf Course Reserve - General Fund $ 2,000,000 • Golf Course Reserve - Golf Course Fund 1,192,611 • Temporary Recession Reserve - General Fund 11,170,000 • Internal Service Funds 6.480.643 Total Funds $20,843,254 FINANCIAL STATEMENT By the City paying off the COPs on or about June 15, 2013 rather than making principal and interest payments annually in the amount of $1.6 million until October 1, 2032, the City will save interest costs of approximately $10.7 million. The City is borrowing funds from several reserves in order to accomplish the early payoff of the COPs. If the City repays these reserves by transferring the otherwise $1.6 million annually to the repayment of the reserves, it will repay the reserves in 13 years rather 4han 20 years as currently required in the COPs repayment documents.