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HomeMy WebLinkAboutMinutes_Workshop_08/02/1984,~ Y MINUTES OF THE VILLAGE COUNCIL WORKSHOP MEETING OF THE VILLAGE OF TEQUESTA, FLORIDA AUGUST 2, 1984 A Workshop Meeting was held by the Village Council of the Village of Tequesta at 5:00 P.M., in the Village Hall, 357 Tequesta Drive, Tequesta, Florida. Councilmembers present were: Mapes, Murphy and Stoddard. Brown had advised he would be unable to attend and Wagar was on vacation. Also present were Robert Harp, Village Manager and Cyrese Colbert, Village Clerk. The purpose of this meeting was to discuss the possible refunding of Outstanding Water Refunding Revenue Bonds - Series 1978. Mr. Joe B. Wise, William R. Hough & Company was present and reviewed with Council the "Refunding Analysis for Outstanding Water Refunding Revenue Bonds - Series 1978" which is attached and has become a part of these minutes. Council discussed with Mr. Wise several points in the analysis. Council set a "Special Council Meeting" for 5:30 P.M., Tuesday, August 7, 1984 in the Village Hall, to take action on this subject. Meeting was adjourned at 5:48 P.M. CYRESE COLBERT 1Hilliam H.HouQh&Co. THE FIRST AMERICAN BUILDING SUITE 306 701 U.S. HIGHWAY ONE POST OFFICE BOX 14095 NORTH PALM BEACH, FLORIDA 33408 (305) 848.8111 Mr. Robert Harp Village Manager Village of Tequesta P. 0. Box 3273 Tequesta, Florida 33458 Dear Bob: July 20, 1984 JOE B. WISE VICE PRESIDENT RESIDENT MANAGER ANTHONY C.SOVIERO VICE PRESIDENT JUDY M. ROULIS REPRESENTATIVE pursuant to our conversation last week, enclosed please find ten copies of our "Refunding Analysis for Outstanding. Water Refunding Revenue Bonds, Series 1978". Under, General Comments Concerning This Refunding Analysis, we have outlined the basic reasons for refunding, explained some of the constraints and presented two basic approaches to refunding. We have then structured a refunding program for Tequesta's 1978 Water Revenue Issue providing the maximum advantages without the disadvantages of each of the two approaches. Admittedly, the explanation of "how it works" is complex and difficult to follow, at best. The bottom line is that if the issue had beenlmarketed on July 12, 1984 the difference in net debt service between the outstanding issue and the projected refunding issue is $618,586.95, Net Future Ualue Savings, which translates to $400,115.56 of Net Present Value Savings. This is a most worthwhile savings in dollars and in addition, there may be provisions in the existing bond resolution which may be amended or changed, if desired. It certainly seems evident that the Village should take advantage of this opportunity to reduce current annual debt service on its bonds. At our mutual convenience, we will be pleased to present the ANALYSIS to your Council and staff. The complexity of the issue lends itself to workshop and special meetings rather than taking time from your regular Council meeting agenda. We look forward to hearing from you in the very near future. Sincerely, • `" WI IA~M--R. HOUGH & CO. i' JUL ~ ;3 , oe B. Wise ~ 1l~ / ice President and Resident Manager ~, ~ ~ JBW/dg `~~iti~ ~~. cc: Evan Wa~•~ ~ ~~; r= STATE, COUNTY AND iti1UNICIPAL BONDS VILLAGE OF TEQUESTA, FLORIDA REFUNDING ANALYSIS FOR OUTSTANDING WATER REFUNDING REVENUE BONDS SERIES 1978 lUilliam RHough & a.~ ~~f . ,~, Ulilliam H.HouQh&Co. THE F[RST AMERICAN RUILDING JOF B. 1YISE SUITE 306 vlcE rRESIDENr RESIUEhT MANAGER 70] U.S. HIGHWAY ONE ANTHONY C. SOVIERO P057 OFFICE BOX 74095 VICE PRESIUENi NOR7Fi PALM BEACH, FLORIDA 33406 _ CLARK D. BENNETT (a05) 848-871] VICE PRESIDENT August 2, 1984 JUDY M ROULIS REPRE SE NiATIVE Honorable Mayor and Members of Village Council Village of Tequesta, Florida Post Office Box 3273 Tequesta, Florida 33458 Honorable Mayor and Members of Council: William R. Hough & Co. is pleased to submit to the Village Council the follow- ing proposed agreement under which William R. Hough & Co. will serve as Investment Banker to the Village of Tequesta in connection with such proposed capital improve- ments financing and/or bond refunding programs as may hereafter be authorized by the Village. 1. INTRODUCTION A. This Agreement between the Village of Tequesta, Florida and William R. Hough & Co. concerns the services to be rendered by William R. Hough & Co, to the Council, compensation for such services, and related expenses for the proposed issuance and sale of the Village's Bonds or Bond Anticipation Notes ("Notes"). B. The parties agree that Bond Counsel shall be a law firm acceptable to both the Village and William R. Hough & Co. 2. SERVICES TO BE PERFORMED BY WILLIAM R. HOUGH b CO. AS INVESTMENT BANKER A. William R. Hough & Co. will assist the Council, the Village Manager, Finance Director, Village Attorney and other staff members or consultants of the Village in developing a Financing Plan or Plans for consideration of, and approval by, the Village Council. Such Financing Plan(s) shall be developed within the framework of the short and long-term objectives of the Village. is B. Upon acceptance of a Financing Plan by the Council, William R. Hough & Co., after consultation with appropriate Village Officials, will prepare and submit to the Village Attorney and the Bond Counsel for the Village, all of the information and details necessary for preparation of the Authorizing Resolution/Ordinance, Validation Papers, and other documents required for the successful issuance and sale of the Bonds or Notes. STATE, COUNTY AND MUNICIPAL BONDS lUilliam 6. h{cugh !~ Co. The Mayor and Members of Village Council Village of Tequesta August 2 , 1984 Page Two C. Assist the Village Attorney with the validation proceedings, and attend the validation hearing if requested to testify for the Village as an expert witness on the Financing Plan. D. In cooperation with the appropriate Village Officials, William R. Hough & Co. will prepare Official Statement(s) fully describing the proposed Bonds or Notes. Hough and the Village agree to use due diligence to determine. and disclose all material facts affecting the Bond or Note Issues in the Official Statement(s) in conformance with present full disclosure guidelines as promulgated by the Municipal Finance Officers Association. E. Supply the necessary information and consult with the two ma- jor bond rating agencies and/or municipal bond insurors to obtain the best possible rating on the Bonds or Notes if such rating or insurance is determined necessary to effect or enhance the financing program. F. After validation of the Bonds and expiration of the appeal period William R. Hough & Co. will, within a period not ex- ceeding two weeks thereafter, or at such mutually agreeable time thereafter, submit a firm purchase proposal to the Village for the purchase of the Bonds or Notes. Such proposal will set forth the purchase price and the terms and conditions of the sale of the Bonds or Notes. This proposal will be accompanied by a good faith check in the amount of 2% of the par value of the issue. The proposal will specify the time allowed for the Village to accept or reject the proposal. At the time of submission of such proposal Hough will present to the Village evidence of the fairness of the proposal together with data on comparable bond or note issues being marketed at that time. Hough and the Village hereby agree to attempt to negotiate, in good faith, satisfactory terms for the sale of the Bonds or Notes. It is clearly understood that if the Village sells the Bonds or Notes to Hough in accordance with this paragraph Hough will not be paid any fee as financial consultant since its compensation with respect to this financing is intended to be solely through purchasing and selling the Bonds or Notes at a profit. The usual components and underwriters profit will be fully disclosed and negotiated to the satisfaction of the Villaye at the time the purchase proposal is presented. These components include: Management Fee, Underwriters Expenses, Average Takedown (selling concessions) and Under- writers Risk Profit. UJ I~~~I:l nl H. Hn~gh ~ ~o. The Mayor and Members of Village Council Village of Tequesta August 2, 1984 Page Three G. If the purchase proposal is accepted by the Village, William R. Hough & Co. will: (1) Arrange for the printing, signing, and delivery of the Bonds or Notes. (2) Provide the Village with a final amortization schedule for the Issue. (3) If desired by Village, implement the investment of Bond or Note proceeds until needed for dis- bursement. (4) Prepare an annual report on the Bonds or Notes which will be made available to institutional holders of the Bonds or Notes and other interest- ed parties. H. The Village Council is under no obligation to accept the pur- chase proposal, and if the purchase proposal is rejected and the Village elects to sell the Bonds or Notes by either competitive public sale or direct placement, William R. Hough & Co. shall act as the Village's Financial Consultant for a fee mutually agreeable to both parties. 3. EXPENSES Expenses incident to the issuance of the Bonds or Notes, including out-of- state travel expenses of William R. Hough & Co. but excluding other travel and communications expenses of William R. Hough & Co ., will be paid by the Village. In lieu of paying for the cost of having the~Official Statement typeset and printed by a printing firm, the Village may direct William R. Hough & Co. to prepare the Official Statement and have the same completed by use of the photo- offset method. If the Village so directs, William R. Hough & Co, shall prepare said Official Statement and have the same completed by use of the photo-offset method at a cost to the Village of $75.00 per page, payable to William R. Hough & Co ., plus the cost of the photo-offset printing. In the event it become necessary to utilize computers in structuring a particular Bond or Note issue of the Village, the Village may direct William R. Hough & Co. to perform the necessary computer computations. If so directed, William R. Hough & Co. shall perform all necessary computer operations at a cost to the Village of the greater of $1.00 per thousand dollars of par amount of any Bonds or Notes issued, or $10,000. William N. Hough & Co. The Mayor and Members of Village Council Village of Teyuesta August 2 , 1984 Page Four 4. COE~PENSATION A. As Investment Banker, William R. Hough & Co. shall not be' entitled to any fee for services rendered (pursuant to Section 2 subsection F above). B. If the Bonds or Notes are sold to an agency of the United States Government or to the State of Florida or an agency thereof, William R. Hough & Co, will be paid the appropriate financial consulting fee. C. If, for reasons other than those stated above, the Village determines not to sell the Bonds or Notes, it shall be under no obligation to pay compensation to William R. Hough & Co. for services rendered. 5. DIRECT PLACEMENT BY WILLIAM R. HOUGH ~ CO. AS AGENT FOR THE YILLAGE A. At the direction of Council, William R. Hough & Co. may directly place the Bonds or Notes with institutional and other investors. B. The fee for direct placement service will be negotiated at the time of the direct placement, on terms acceptable to the Council. The placement fee is for services beyond those ordinarily performed by an Investment Banker. 6. DURATION OF THIS AGREEMENT A. Thi s Agreement wi 11 remai n in effect unti 1 terminated by the Village, or may be terminated by either party for cause, upon 60 days prior written notice. ~l•,'illi~m h. N,augh R Co. The Mayor and Members of Village Council Village of Teyuesta August 2 , 1984 Page Five B. Any party failing to meet the terms of this Agreement will pay all expenses and attorney's fees incurred by the other party as a result of any defaults. Respectfully submitted, WLLLIAM R. HOUGH & CO. ~~~~~~ ~' JeB.Wise (~ ice President and Resident Manager l./ ACCEPTED BY: VILLAGE OF TEQUESTA, FLORIDA By ATTEST: DATE ACCEPTED: ulilliam R No,+.rah cC Co. VILLAGE OF TEQUESTA PROPOSED SEQUENCE OF EVENTS SCHEDULE 1984 REFUNDING PROGRAM, WATER DEPARTMENT BONDS Review & Discussion of Preliminary Financing Plans Finalize Financing Plans Financing Plans Approved by Village Council Consulting Engineer Begin Summary Report Bond Counsel Begins Preparation of Resolution Comment Drafts of Resolution Circulated Bond Resolutions Finalized & Distributed Village Council Passes Bond Resolution Village Attorney Files for Validation Investment Bankers Begin Preliminary Official Statement Circulate "Comment Draft" of Preliminary Official Statement Validation Hearing Complete Preliminary Official Statement Formal Request for Ratings and MBIA Insurance Distribute Preliminary Official Statement Presentation to Rating Agencies and MBIA in New York Validation Appeal Period Expires Ratings and Insurance Commitment Received Selection of Escrow Agent & Registrar Purchase of Bonds Verification of Refunding Numbers Submit "SLUG" Subscriptions to Fed Begin Printing of Bonds Make Arrangements for N.Y. Closing "Due Diligence" by Underwriter's Counsel Auditor's and Engineer's "Comfort Letters" Received Revise and Finalize Official Statement Final Official Statement Printed and Shipped Closing and Delivery of Bonds in New York Prepared by: Joe B. Wise August 1, 1984 EXHIBIT B Week of July 30 - Aug. 13 Aug . 27 Aug . 27 Aug . 27 Sept . 24 Oct . 1 Oct . 8 Oct . 8 Oct . 22 Oct . 22 Oct. 29 or Nov. 5 Oct. 29 Oct. 29 Oct . 29 Nov. 5 o r 12 Nov. 26 or Dec. 3 Nov . 12 or 19 Nov . 12 Nov . 19 Nov . 12 Nov. 12 Nov . 12 Nov. 12 Nov. 12 Nov . 12 Nov. 19 or 26 Nov. 19 or 26 Nov. 26 or Dec. 3 William H.Houoh & Co. EXHIBIT C VILLAGE OF TEQUESTA, FLORIDA PROPOSED 4JATER REVEt.UE REFUldDINI; BO~~D ISSUE, 1984 ESTIMATED ISSUANCE EXPENSES Bond Counsel $15,000 Local Counsel 10,000 Consulting Engineer 5,000 Computer Fee 20,000(1) Local CPA 4,000 CPA Verification 5,000 Printing of Bonds 1,500 Printing of Official Statement 7,000 Bond Rating 5,000 Signature Company 500 City Travel Expense 1,000 Closing 2,000 Escrow Agent's Fee 5,000 Paying Ayent & Registrar's Fee 2,500(2) Contingency 6,500 TOTAL - $90,000 (1) Subject to change. (2) "Up-front" fees. i• II it r GENERAL COM~NTS CONCERNING THIS REFUNDING ANALYSIS An issuer may choose to refund an outstanding bond issue for one or more of several reasons: To extinguish the existing bond covenants and substitute new, more satisfac- tory covenants; ° To alter the debt payment structure in order to more efficiently time re- ceipt of revenues with payment of debt; ° To realize net debt service savings. Perhaps the most significant reason for issuing refunding bonds is to realize savings in the form of lower debt payments. Savings generally occur when interest rates have declined subsequent to the issuance of the outstanding bonds, and the refunding bonds are issued at a lower net interest cost than the out- standing bonds. The realization of savings and the extent of those savings are dependent upon several factors, including the costs incurred in the issuance of the refunding bonds (which are recoverable in substantial part), the timing of the retirement of the outstanding bonds and the efficiency of the investment of the refunding bond proceeds that will be used to pay the outstanding bonds. The legal effect of issuing refunding bonds is the satisfaction of the issuer's obligations to its existing bondholders. This satisfaction, or defeas- ance, is accomplished by taking the proceeds derived from the sale of the refunding bonds and investing them in debt obligations of the United States. In order to defease the outstanding bonds, it is necessary to have sufficient proceeds of the refunding bonds to invest in United States obligations such that those obligations, together with interest earnings (in the case of most refunding bonds issues) are sufficient to pay the interest and principal of the outstanding bonds. Because the proceeds of the refunding bonds, as invested, satisfy the issuer's requirement of paying the principal of and interest on the outstanding bonds, the issuer is able to use the revenues or funds previously pledged to pay debt service on the outstanding bonds to pay the debt service on the new refund- ing bonds. The structuring of a refunding bond issue is subject to several considera- tions and constraints. The primary consideration with respect to the structuring of a refunding is compliance with Federal tax law. The Internal Revenue Service has promulgated strict and complex rules and regulations that pertain to the issuance of municipal refunding bonds. Although these rules and regulations are complex in their application, their general concept is straightforward: an issuer cannot invest the proceeds of a refunding bond issue at a yield in excess of the yield on the refunding bonds. In other words, it is impermissable to in- vest the monies received from the sale of the refunding bonds at a rate that is higher than the rate on the refunding bonds. I t i s a si mpl a concept, but one which is complex in its application. There are questions as to the method for calculating yields on both the refunding bonds and the escrow into which the pro- ceeds of the refunding bonds are deposited. There are many different factors that affect these yields, including the timing of interest payments and invest- ment rates on the escrow investments. There are questions concerning the deter- mination of what constitutes proceeds of the refunding bonds, for while other funds may be used to fund the escrow, it is only proceeds of the refunding bonds which are restricted as to their investment yield. And there are, of course, other issues just as complex which must be addressed whenever an issuer under- takes a refunding. i i~ i~ One consideration, relative to advance refundings, which has recently rec- eived a great deal of attention is the concept of refunding outstanding bonds that were i ssued i n conjunction with an i nvested sinking fund. Because of a change in Federal tax regulations there have not been any issues with invested sinking funds sold since May, 1978. However, it is possible at the present time to issue refunding bonds to defease a prior issue that has an invested sinking fund and obtain a benefit in terms of debt service savings. This benefit results from being able to invest refunding bond proceeds deposited into the escrow at a yield greater than the yield on the refunding bonds, thereby reducing the amount of refunding bonds that need to be issued. This in turn reduces the debt service payments of the issuer. The reason that refunding bond proceeds may be invested at such higher yield is due to an adjustment that is made in the form of taking into account the lower yield (relative to the yield on the refunding bonds) that the issuer will receive on the U.S. Treasuries to be purchased subsequent to the closing of the refunding bonds. There are two basic approaches to an invested sinking fund refunding. One approach requires that the benefit derived from the future purchases of U.S. Treasuries pursuant to the invested sinking fund contract accrue to the escrow established to pay off the outstanding bonds. This goal is achieved by issuing sufficient refunding bonds to purchase State and Local Government Series Trea- suries for the escrow which in turn mature in time for their proceeds to be used to purchase the remaining Invested Sinking Fund (ISF) Treasuries. The advantage to this approach is that it provides the issuer with greater flexibility relative to rescheduling and reshaping its debt structure. This is because the issuer no longer must provide for the purchase of the ISF Treasuries from revenues. The disadvantage to this approach is that until all the future Treasuries are pur- chased, the issuer only has an "economic defeasance" rather than a "legal defea- sance". As a consequence, the refunding bonds are still subject to the provi- sions of the existing indenture and the majority of bond counsel firms will not issue an opinion that the outstanding issue is defeased. A number of plans have been advanced to deal with this situation, but none to date appear to be completely satisfactory from either the underwriter's or the issuer's standpoint. The second approach requires that the future purchases of the ISF Treasuries be made from revenues of the issuer. The benefit from these Treasuries flow to the refunding bonds. The advantage to this approach is that the issuer achieves a legal defeasance and, therefore, freedom from the constrictions of the existing indenture. The disadvantage is that the required future purchases of ISF Trea- surys must be made from revenues. This severely hampers the ability to re- schedule and restructure the existing debt structure and often makes it impos- sible for the issuer to receive the savings benefit of the refunding in the first five to seven years where it is generally most welcome. In response to this dilemma, our firm, in conjunction with nationally recog- nized bond counsel, has constructed a refunding which appears to provide the advantages of both methods without the disadvantages of either. The structure that our firm is proposing consists of four principal components: 1. Treasury Bonds purchased for the Invested Sinking Fund prior to the closing date are sold, reinvested in stripped Treasury Coupons or "TIGR's" and placed in the refunding escrow, long, for maximum benefit. n ~~ i~ i~ i~ i~ ~i 2. The existing Reserve Account and the already purchased invested sinking fund investments are liquidated and reinvested in stripped Treasury Coupons or "TIGR's" and placed in the refunding escrow, long, for maximum benefit. Funds on hand, in the Principal Account and the Interest Account are also invested in TIGR's for the refunding escrow. 3. Refunding Bonds proceeds are used to purchase Treasuries (State and Local Government Series) in amounts sufficient to provide for the remaining amount of funds required to fully fund the refunding escrow and to fund a Debt Service Reserve. 4. The Treasuries (State and Local Government Series) deposited into the debt service reserve are scheduled to mature on the purchase dates of, and are used to purchase, Treasury Bonds required to be purchased for the Invested Sinking Fund subsequent to the closing date, which Treasury Bonds, when so purchased, are deposited into the Debt Service reserve in lieu of the treasuries (State and Local Government Series). The key to our proposal is that the existing debt service reserve is liqui- dated and its proceeds are placed in the refunding escrow to the benefit of the refunded bonds. In its place, refunding bond proceeds are used to purchase Treasurys (State and Local Government Series) to establish a new debt service reserve for the refunding bonds. In turn, these Treasurys are designed to come due in time to make the future purchases of a portion of the ISF Treasurys. These Treasurys become the new debt service reserve. The remaining ISF Trea- surys (that amount which exceeds a reasonably required reserve) are purchased with revenues. All of the benefits of the future ISF Treasurys accrue to the refunding bonds. As is demonstrated in Exhibit I - Schedule 4, such a structure allows the major part of the savings on the refunding to be realized in the first 12 years of the new issue. It has the additional benefit of significantly reducing the cost of the escrow required to retire the outstanding bonds. Most significantly, this structure is a legal defeasance. FURTHER CONSIDERATIONS In an Invested Sinking Fund refunding, as in any other refunding, the ultimate size of the refunding issue is dependent upon the cost of the res- tricted portion of the escrow established to meet the debt service requirements of the outstanding issue. This in turn is dependent upon the ability to obtain a rate of return on the U.S. Treasury State and Local Government Series securities used in the escrow equal to the arbitrage yield calculated on the refunding bonds. The rates of return available on the State and Local Govern- ment Series (BEGS) are established by the Treasury to track current yields on treasury obligations traded on the open market. Normally, the spread between the market rates on the municipal bonds and the market rates on treasury obli- gations are sufficient to allow a yield on the refunding escrow equal to the allowable yield on the refunding bonds. Sometimes, however, due to the addi- tional yield realizable on the refunding escrow from the allowable yield meld on an invested sinking fund refunding such as this one, an escrow structured to meet the arbitrage regulations promulgated by the Internal Revenue Service cannot produce enough return to equal the arbitrage yield on the proposed refunding bonds. This condition is referred to as a "market limited escrow." i~ Because we believe that the particular structure of the escrow required to effectuate a defeasance in this case increases the probability of a market limited situation, prudence would dictate that the underwriter chosen to structure and market this refunding should endeavor to insure that the Issuer is not put into a disadvantageous position by an unexpected movement in the bond market prior to closing. Should such a circumstance occur, however, there is a technique known as a "Triple Meld" which can help recover most of the lost savings due to a market limited escrow. To render this method effective, the refunding proceeds used to establish the new refunding debt service reserve are invested for the life of said reserve in State and Local Government Series securities at the highest available rate. The yield on this reserve is then "melded" with the yield on the restricted portion of the refunding escrow to comply with current I.R.S. arbitrage regulations. The benefit to this method is that the long rates on the State and Local Government Series securities are currently higher than the int- erest rate on the Future ISF Treasuries, thereby allowing the issuer to recover some of the lost earnings from the restricted portion of the refunding escrow over the life of the issue. The disadvantage is that once the new refunding debt service reserve is invested in State and Local Government Series securities and the yield meld is performed, the debt service reserve is locked in to said securities for the life of the reserve. D(NIBIT I J The schedules attached to Exhibit I demonstrate a typical structure and savings obtainable by use of the technique described above assuming an escrow without any market limit. For this exercise we have used the insured AAA rated scale. Schedule 1 provides a Sources and Uses of Funds and a Summary of Savings. Most interesting to the issuer are the savings, which are $618,586.95 in future value and $400,115.56 in present value (or today's dollars). Schedule 2 depicts the net outstanding debt service on a fiscal year basis. This schedule details all of the cash flows which affect the outstanding Water Refunding Revenue Bonds, Series 1978 including the income generated by the investment of the existing debt service reserve. This latter inclusion is important for an equitable comparison of refunding versus refunded net debt service for savings. Schedule 3 demonstrates the cash flow requirements of the proposed refund- ing bond issue. It should be noted that the column entitled "Plus Cost To Pur- chase Future ISF Treasurys" reflects only that portion of the cost required to be funded from revenues. The balance of the future purchases are made by the receipts from maturing State and Local Government Series Treasurys purchased with bond proceeds and placed in the new debt service reserve. The income from these future purchases are depicted in the column entitled "Less Income From Debt Service Reserve at 7.625%." ' Schedule 4 shows the savings attributable to this technique. Note that debt service, net of funds from existing Principal, Interest and ISF Accounts invested in the escrow, produces the most savings which occur primarily in the first half of the life of the refunding issue. Should the Issuer desire, there are techniques which can push the obtainable savings earlier in the life of the refunding issue. i~ i~ ii L C i~ VILLAGE OF TEQUESTA, FLORIDA REFUNDING ANALYSIS FOR OUTSTANDING HATER REFUNDING REVENUE BONDS, SERIES 1978 Sources and Uses of Funds Sources: Par Amount of Bonds Proceeds from Liquidation of General Reserve Account Proceeds from Liquidation of Existing Invested Sinking Fund Investments Accrued Interest in Sinking Funds Account TOTAL SOURCES Uses: Cost of Refunding Escrow Deposit to Reserve Account AMBAC Insurance Premium Issuance Expenses Underwriter's Spread Original Issue Discount. Contingency TOTAL USES Suw~ary of Savings Net Outstanding Debt Service (Schedule 2) Less Debt Service Reserve and Interest Earned Thereon (Schedule 2) Total Net Outstanding Debt Service (Schedule 2) Gross Refunding Debt Service (Schedule 3) Plus Cost of Future Invested Sinking Fund Investments Purchased from Revenues (Schedule 3) Less Income on Future Invested Sinking Fund Investments (Schedule 3) Less Income from Debt Service Reserve (Schedule 3) Less Income from Debt Service Reserve SLGS (Schedule 3) Total Net Refunding Debt Service (Schedule 3) Gross Savings Less Existing Sinking Fund Moneys Applied to Escrow Net Future Value Savings (Schedule 4) Net Present Value Savings (Schedule 4) Schedule 1 $ 2,855,000.00 268,414.11 559,932.69 88,087.50 3,771,434.30 $ 2,230,954.72 251,515.84 43,447.79 90,000.00 45,452.51 1,107,437.35 2,626.09 ; 3,771,434.30 $ 5,102,810.49 ( 671,022.37 ) $ 4,431,788.12 $ 5,430,973.96 714,785.27 (1,683,725.00) (690,665.63) ( 46 ,254.93 ) $ 3,725,113.67 $ 706,674.45 (88,087.50) 618,586.95 400,115.56 Village of fequesta, Florida Scheeule 1 ' 9cltlrl• Bi, Nk IMt Strrice to Iltttr Rtfetliiy Rtventt londe, Series 1978 i~It Senict Glalatioe Bete: 4/Ol/1484 8ttstetdinr! Mt 5trrict Reserve: 268,418.00 ' PrrcAtetd InrtstN Sinking Fund: 885,000.00 Annualised Less Total Net Gross Incest froe Plus Cost Lrss [ncoee Dn Less incoee On Outstandin4 Debt Service Debt Service To Purchase Existing ISf Future ISF Total Net Debt Service Period Outstanding Coupon ]ntertst Before Reserve Reserve At Future [SF Treasurys At Treasurys At Outstanding Not Including En din4 Principal Rate Expense Earnin4s 7.1000001 Treasurys 7.6250002 1.625000X Debt Service Reserve Iricon ' 101 1/84 131,131.15 132,131.15 10,327.53 37,477.54 33,140.63 126,040.62 136,358.17 4/ 1185 111,131.15 132,131.15 10,327.55 33,258.15 33,740.63 1,525.00 119,196.93 10! 1/85 132,131.25 132,131.25 10,327.55 37,917.54 33,740.63 1,839.38 113,181.24 263,533.17 ' 4! 1186 132,131.25 23 132 131 (32,131.75 132 131 15 10,327.55 321 55 10 31,461.14 42 681 13 33,740.63 33 140 b3 4,394.38 5,904.38 121,615.84 124,840.93 267,141.91 10/ 1/86 , . , . . , . , , . 4/ 1181 171,131.25 112,131.25 10,327.55 42,675.54 33,740.63 1,625.00 123,113.62 10/ 1/87 132,131.23 132,131.15 10,327.33 41,687.23 33,740.63 9,340.63 12(,404.58 265,178.40 4/ 1/88 132,131.25 137,131.23 !0,321.55 47,39(.80 33,740.63 11,056.23 124,348.63 ' 101 1188 132,131.25 132,131.25 10,327.33 17,386.56 33,740.63 12,462.30 121,481.14 267,540.96 4/ 1189 131,!31.25 132,131.73 10,327.55 47,373.40 33,740.63 14,86B.15 120,561.13 101 1/89 132,131.15 131,131.15 10,327.53 52,083.82 33,740.63 16,773.00 123,371.90 264,594.72 4/ 1190 132,13(.25 112,131.25 10,327.55 56,775.44 33,7/0.63 18,871.88 123,966.64 ' t0/ 1190 132,131.25 132,131.25 10,327.55 52,106.61 33,140.63 11,154.38 114,010.31 255,612.05 4! 1/91 132,131.15 132,13(.15 10,327.55 61,509.11 33,740. b3 23,256.25 116,315.94 10/ 1191 132,131.25 131,131.25 10,327.55 56,816.31 33,740.63 25,734.38 119,!45.01 266,116.05 4/ 1141 !32,131.25 131,131.25 10,327.55 66,228.52 13,140.61 28,021.88 126,269.12 ' 10! 1142 132,131.25 132,131.25 10,327.55 66,135.69 33,140.63 30,690.63 123,608.14 210,512.96 4/ 1143 132,131.15 132,131.25 10,327.55 66,111.50 33,740.63 33,354.38 120,921.10 101 1143 137,131.25 132,131.73 10,327.55 10,945.39 33,140.63 36,028.13 122,980.33 264,336.63 4/ 1/44 70,000 6.150X 132,131.25 202,131.15 10,327.55 33,140.61 38,887.50 119,173.38 ' 101 1/94 15,000 6.750X 119,768.15 204,168.75 1 237 50 10,327.55 327 10 55 33,740.63 33 740 63 38,881.50 887.50 38 121,813.08 !24 281.83 261,543.15 4/ 1195 80,000 b.i50X 127,237.50 , . 20 . , , . , , 101 1195 80,000 b.150X 124,537.50 104,531.50 10,321.55 33,740.53 38,887.50 121,581.83 266,519.75 4/ 1146 80,000 6.150X 121,837.50 101,831.50 10,327.55 33,1/0.63 38,887.50 118,881.83 101 1;96 85,000 b.150X 119,131.50 204,137.50 10,321.55 33,140. b3 38,887.50 121,181.83 250,118.75 4/ 1147 90,000 6.150X 116,168.75 206,169.75 10,321.55 33,740.5 38,887.50 113,313.08 101 1/47 90,000 6.750X 111,231.25 103,231.15 10,327.55 33,740.63 38,887.50 120,2,'5.59 254,243.15 4; 1/48 95,000 6.7502 110,193.75 203,193.15 10,311.55 33,140.51 39,887.50 112,238.08 10/ 1198 95,000 b.150X 106,987.50 201,987.50 10,327.55 33,740.63 38,881.50 114,031.83 251,925.00 ' 4i 1149 100,000 b.150X 103,,'81.25 203,781.25 10,321.55 33,740.63 38,881.50 120,825.58 IOi 1;49 105,000 6.150X 100,406.25 105,406.25 10,327.55 33,140.63 38,881.50 122,450.58 253,431.25 4/ 1/00 105,000 6.750X 46,862.50 201,962.50 10,327.55 33,140.61 38,881.50 118,906.83 101 1100 110,000 6.750X 93,318.75 203,318.75 10,321.55 33,140.63 39,887.50 120,363.08 254,925.00 ' 4! 1101 115,000 b.150X 84,606.15 104,606.25 10,377.55 33,740.63 38,881.50 111,650.58 10/ 1i 01 120,000 b.750X 85,715.00 205,725.00 10,121.55 33,740.83 38,987.50 122,164.33 255,015.00 4/ 1r01 110,000 6.750X 81,675.00 201,675.00 10,327.55 33,140.63 38,887.50 118,119.33 10/ 1/02 130,000 6.750X 17,625.00 207,625.00 10,327.55 33,140.63 38,981.50 124,564.33 254,043.75 4/ 1/03 130,000 5.750X 73,231.50 203,231.50 10,327.55 33,140.63 38,881.50 120,291.83 10! 1103 135,000 6.750X 68,850.00 203,850.00 278,575.55 33,740.83 38,981.50 l 141,353.871 251,931.25 4! 1104 64,293.75 64,243.75 33,740.83 38,897.50 i 8,3.14.391 101 1104 64,243.75 64,293.15 33,?40.63 38,987.50 ! 9,334.381 i 15,568.15. 4i 1/OS 54,293.75 84,293.75 33,740.63 38,881.50 i 8,334.381 ' 101 ]105 64,243.75 64,293.15 33,740.63 38,987.50 ( 9,334.381 ( 15,658.151 4! 1/Ob 64,293.75 64,243.75 33,740.63 38,881.50 l 8,334.381 101 1106 64,793.75 64,293.15 33,740.63 38,981.50 i 9,334.381 15,689.751 4/ 1107 1,905,000 6.750X 64,243.75 1,469,243.15 919,740.83 t 058 887.50 ~- ~ 8 ~.,4..,8i ' .. , , Total 3,415,000 5,032,468.15 9,941,468.15 671,021.31 966,301.!1 2,431,068.75 2,374,390.63 4,431,188.11 5,102,810.44 CitT iff Te~wsta, Florida t SdwMlt OF Mt Dolt Service oe 1984 Re4wding Bands Odt 9wrice Calculation Date: 8/01/1984 Nn Da4ft Sarrice Aestrre: 265,000.00 Invested Sintin9 Fwd: 753,000.00 Total Cotlined Reserve 1,020,000.00 1 Period Refunding Ending Principal 101 1184 41 Ives for 1185 4i IlBb 101.1/86 4/ 1187 101 1187 4/ 1186 101 1/BB 41 1169 10/ t/84 4/ 1190 10/ 1140 4r 1/9l 10/ 1/41 4/ 1192 10/ 1/92 4/ 1/43 !0/ 1193 41 1194 10/ 1/44 4l 1145 10/ 1195 5,000 4/ 1;96 75,000 101 1i 96 90,000 4J 1147 85,000 10/ 1i 47 85,000 4i 1198 90,000 101 1.98 45,000 4/ 1199 100,000 101 1199 105,000 41 1100 110,000 10/ 1/00 115,000 4/ 1101 125,000 10/ 1/Ol 130,000 4/ 1102 135,000 10! 1/02 145,000 4/ i/G3 150,000 101 1103 4i 1(04 30,000 IOr 1/04 30,000 4/ Ir05 30,000 101 1/OS 30,000 4/ 1105 30,000 10/ 1106 36,000 4! 1107 1,045,006 101 1/G7 lotai ^_,355,000 Gross Debt Service Laupon Interest Before Reserve Rate Expense Earnings 27,348.96 27,398.96 82,196.88 82,196.88 82,196.88 82,196.88 82,146.88 82,196.88 62,196.88 82,196.88 82,196.88 82,196.88 82,146.88 82,196.88 82,196.88 82,146.88 82,196.88 82,196.88 82,196.88 82,146.88 82,146.88 81,196.88 82,196.88 82,146.88 82,196.88 82,196.88 82,196.88 82,146.89 82,196.88 82,146.88 82,146.88 82,196.98 82,196.88 82,196.88 82,146.88 82,196.88 82,146.88 82,196.88 82,196.88 82,196.88 82,146.88 82,196.88 82,:45.88 82,196.88 4.400X 82,146. BB 87,146.88 9.6002 A1,9b1.8B 156,461.88 9.6002 18,361.88 158,36(.88 9.8002 74,511.88 154,521.88 4.8002 70,356.88 155,356.88 9.4002 66,141.88 156,141.88 9.4002 61,136.88 156,736.88 10.0002 57,034.38 157,034.38 10.0002 52,034.38 157,034.38 10.0002 46,784.38 156,784.38 10.0002 41,284.38 156,284.38 10.3752 35,534.38 160,534.39 10.3152 29,050.00 (59,050.00 10.3751 22,306.25 157,3C5.25 10.3752 15,303.13 160,303.13 10.3752 7,181.25 151,791.25 30,000.00 30,000. v0 30,000.00 30,000.00 30,000.00 30,000.00 1,045,000.00 2,575,473.46 5,430,9'3.96 Less Incoae Froa Debt Service Reserve At 7.6250002 1,525.00 2,859.38 4,384.38 5,909.38 1,625.00 4,340.63 10,103.13 10,103.13 IO,l03.1I 10,103.13 10,103.13 10,103.13 10,103.13 10,103.13 10,103.13 10,103.13 10,103.13 10,103.13 10,103.13 10,103.13 10,103.(3 10,103.13 10,103.13 10,103.13 10,103.13 10,103.13 10,103.13 10,103.13 10,103.13 10,103.13 14,103.13 10,103. i3 10,103.13 !0,103.13 10,103.13 16,103.13 10,103.13 10,103.13 16,103.13 10,103.13 10,103.(3 10,103.13 10,103.13 10,103.13 275,103.13 Less Plus Cost Income From To Purchase Debt Service Future ISF Reserve SLBS Treasurys 4,180.45 12,401.36 10,358.24 8,180.88 5,447.78 3,544.67 1,091.55 23,115.13 47,391.80 47,386.56 47,373.40 52,083.82 56,775.44 52,106.61 61,509.11 56,816.31 66,228.52 66,235.64 66,217.50 70,945.38 690,665.63 46,254.93 7!4,785.27 Schedule S Annualised Totai Net Less lncwe On less Incoae Dn Refunding Existing ISF future ISF Total Net Debt 9erv;ce Treasurys At Treasurys At Refunding Nat lncluding 1.6250002 7.6250001 Debt Service Reserve Inccee ,218.51 23,218.51 67,110.52 68,974.26 141,134.15 69,631.62 7G,289.72 150,.15.09 71,027.21 95,474.83 183,412.66 953.13 118,532.43 2,859.38 116,620.44 255,359.61 4,165.63 114,7GL53 b,57k.88 I17,SG5.70 252,413.41 8,768.75 120,100.44 11,056.25 113,144.11 25,45v.9G 13,153.13 120,449. N 15,63E 25 113,278.81 25:,434.90 17,918.15 120,403.52 20,587.50 117,741.94 258,:51.7. 23,256.25 115,055.00 25,925.00 lI7,lU.13 252,3,'5.39 28,184.38 43,309.38 28,784.38 43,309.38 106,525.Ou 28,784.38 43,309.38 28,184.38 48,309.38 111,925.x0 28,784.38 118,074.38 28,784.39 119,474.38 25',755.60 28,784.38 120,634.38 28,1B4.38 116,464.38 25',316.66 28,184.38 ,17,304.38 28,784.38 111,849.39 255,36G.~G 28,784.38 118,146.88 29,784.38 118,146.88 256,50G.J6 28,784.38 11',895.68 28,794.38 117,346.88 255,500.00 28,184.38 121,546.88 28,'94.38 120,162,50 262,015.63 28,184.38 118,418.75 28,784.38 121,415.63 260,046.53 28,784.36 !18,893.75 28,'94.38 ~, 39,981.501 !x0,212.50 28,74,38 t 6,887.561 28,784.;9 ( 9,88'.5x1 2,33L25 28,784.38 i 9,88'.561 29,'84.38 9,881.501 2,43L25 28,784.38 ( 8,881.501 28,184.38 i 8,887.501 '.,431.25 763,784.38 ! 13,881.501 --------- 261.2:5.53 -------------- -------------- -------------- 1,683,725.00 ----- 3,'25,113.67 4,415,"74.30 ' Village of.Tequesta, Florida Schedule 4 Savings Generated By Refunding Outstanding Mater Refunding Revenue Bonds, Series 1978 ' P.V. Calculation Date: 8/01/84 total Net Total Net P.V. Of Period Outstanding Refunding Annualized Cu~ulative Difference At Endinq Debt Service Debt Service Difference ~ Gifference Gifference 10.000000X 8/ 1184 88,081.50 i 88,081.50} t ( 88,081.501 ' 101 1/84 126,040.62 23,218.51 102,822.11 14,734.61 14,134.61 !01,163.40 4I 1/85 119,746.83 67,170.52 52,026.31 66,160.42 48,149.55 107 1165 123,181.24 68,919.26 54,201.98 106,228.29 120,462.90 48,369.11 ' 4i ' 1,•'86 121,645.84 69,631.62 52,014.22 172,477.12 44,207.01 10, 1i 86 124,840.93 10,284.72 54,551.21 206,565.43 221,528.34 44,155.43 4i 1/81 !23,113.62 11,027.21 52,086.41 279,614.15 40,152.71 10! 7187 121,409.68 95,479.83 25,929.85 18,016.26 305,544.60 19,037.12 ' 4/ 1;88 124,348.63 118,532.43 5,866.20 311,410.80 4,101.75 l0i 1;88 122,481.14 116,620.94 5,866.20 11,732.40 311,277.00 3,406.43 ' 4I 10,' 1189 1189 120,561.73 123,311.90 114,701.53 !11,505.70 5,866.20 5,866.20 11,732.40 323,143.21 ,329,009.41 3,720.41 3,543.24 4r 1/90 125,966.64 120,100.44 5,866.20 334,875.61 3,314.52 101 1,•'90 119,010.31 113,144.11 5,866.20 11,732.40 340,141.81 3,213.83 ' 4/ 1191 126,315.94 120,449.14 5,866.20 346,608.01 3,060.79 107 ]/91 119,145.01 113,278.81 5,8b6.2D 11,132.40 352,474.22 2,915.03 4i 1/42 126,264.12 120,403.52 5,866.20 358,340.42 2,776.22 10/ 1/42 123,608.14 117,741.94 5,866.20 11,132.40 364y206.62 2,644.02 ' 4/ 1/93 120,921.20 115,055.00 5,866.20 370,072.82 2,518.12 101 1i 93 122,980.33 117,114.13 5,866.20 11,132.40 375,939.02 2,348.21 4/ 1194 114,175.58 43,304.38 15,966.20 451,805.23 29,538.51 107 1/94 121,813.08 43,309.38 78,503.70 154,369.40 530,308.93 29,104.92 41 1/95 124,281.33 43,304.38 90,472.45 611,291.38 28,545.58 1G~' ]/95 121,581.83 48,309.38 13,212.45 154,244.90 684,553.83 24,644.10 ''~, ' 4/ 1196 118,881.83 118,014.38 801.45 685,361.28 258.64 107 7196 121,181.83 119,474.38 1,707.45 2,514.40 681,068.14 520.84 4/ 1/97 123,313.08 110,634.38 2;679.70 689,747.44 778.27 10/ 1(47 120,275.58 116,469.38 3,806.20 6,484.90 643,553.64 1,053.14 ' 4/ 1198 122,238.08 117,304.38 4,933.70 648,491.34 1,300.17 S0/ 1798 119,031.83 117,849.38 1,!82.45 6,/]6.15 699,669.79 246.77 4/ 1194 120,825.58 118,146.88- 2,618.70 702,348.50 640.28 ' 1G/ 1/49 122,450.58 118,146.88 4,303.70 6,982.40 106,652.20 919.72 4i 1700 118,906.83 117,896.88 1,009:95 101,662.15 218.46 10/ 1;00 120,363.08 117,396.88 2,466.20 3,476.15 110,628.35 612.46 4i 1/vl 121,650.58 121,646.88 3.70 110,632.05 .13 1 107 1701 122,169.33 120,162.50 2,606.83 2,610,53 713,238.88 488.22 4i 1/02 1!9,714.33 118,418.,'5 300.58 713,534.46 53. b1 ' 107 4/ 1102 1103 124,669.33 120,281.83 121,415.63 118,843.15 3,253.70 1,388.08 3,554.28 716,743.16 118,181.24 552.71 224.51 Zvi 1IG3 ( 147,353.67) ( 38,887.50? ( 108,466.111 ( 107,078.10) 609,115.06 ( 16,712.361 4I 1,•'G4 ( 8,334.381 ( 8,887.501 553.13 610,268.14 81.17 10/ 1lG4 ( 9,134.391 ( 8,881.501 553.13 1,/06.25 610,821.31 77.30 4/ L :•5 i 9,334.39f ( 8,887.501 553.13 611,374.44 13.62 107 1I U5 ( 8,334.38; ! 8,887.501 X53.13 1,106.25 611,427.56 10.11 4l 1706 ( 8,334.381 ( 8,881.501 553.13 612,480.69 66.18 ' 30! 1i 06 i 8,334.38! ( 8,881.501 553.13 1,106.25 613,033.81 63.60 4! 1107 ( 8,334.381 ( 13,887.501 5,553.13 618,586.94 608.07 !0/ 1107 5,553.13 618,586.44 Total 4,431,788.11 3,813,201.17 618,586.94 618,586.44 400,115.56 ' + Exi sting S inking Fund mon ies used to reduce cost of refunding escrow.