Agenda Item   

AGENDA STAFF REPORT

 

                                                                                                                        ASR Control  23-000183

 

MEETING DATE:

03/28/23

legal entity taking action:

Community Facilities District No. 2004-1

board of supervisors district(s):

5

SUBMITTING Agency/Department:

County Executive Office   (Approved)

Department contact person(s):

Louis McClure (714) 834-5999 

 

 

Kim Engelby (714) 834-3530

 

 

Subject:  Approval of Ladera Ranch Community Facilities District 2004-1 Refunding

 

      ceo CONCUR

County Counsel Review

Clerk of the Board

          Concur

Approved Resolution to Form

Discussion

 

 

4/5 Vote

 

 

 

    Budgeted: No

Current Year Cost:   See Financial Impact Section

Annual Cost: See Financial Impact Section

 

 

 

    Staffing Impact:

No

# of Positions:            

Sole Source:   N/A

    Current Fiscal Year Revenue: N/A

   Funding Source:     Special Taxes: 100%

County Audit in last 3 years: No

   Levine Act Review Completed: Yes

 

    Prior Board Action:         10/4/2022 #14, 1/14/2014 #16, 12/21/2004 #71

 

RECOMMENDED ACTION(S):

 

The Board of Supervisors, acting as the legislative body of Community Facilities District No. 2004-1:

 

1.

Adopt the attached resolution of the Board of Supervisors of the County of Orange, acting as the legislative body of Community Facilities District No. 2004-1 of the County of Orange (Ladera Ranch), authorizing the issuance of its 2023 Special Tax Refunding Bonds in a principal amount not to exceed $38,000,000 and approving certain documents and taking certain other actions in connection therewith.

 

2.

Direct the Orange County Auditor-Controller to increase appropriations and revenues, pursuant to Government Code Section 29130 as follows: (Requires 4/5 vote)

 

 

Fund

Budget Ctrl.

Unit

Object

Description

Amount

530

530

5300

1900

Cost of Issuance

334,200

530

530

5300

4700

Payment to Refunding

36,390,800

530

530

5300

7820

Premium on Bonds

4,100,000

530

530

5300

7840

Bond Proceeds

32,625,000

 

 

 

 

 

SUMMARY:

 

Approval of the recommended actions will allow the County Executive Office to refund the bonds within Community Facilities District No. 2004-1 to generate savings in debt service and special taxes that will benefit the property owners within the district.

 

 

 

BACKGROUND INFORMATION:

 

Community Facilities District No. 2004-1 (CFD 2004-1) is the sixth and final phase of Ladera Ranch, a planned community located in the unincorporated southeast portion of the County. CFD 2004-1 is comprised of 774 single-family homes and 229 custom home lots on approximately 640 acres.  CFD 2004-1 is substantially built out with 999 out of 1,003 parcels individually owned.  On December 21, 2004, the Board of Supervisors (Board) approved the issuance of Special Tax Bonds for CFD 2004-1, in the amount of $75.6 million.  The Special Tax Bonds were issued to pay the costs of constructing and acquiring public facilities.  Due to favorable market conditions, On January 14, 2014, the Board approved the issuance of refunding bonds for debt service savings.  Two series of refunding bonds were issued, the Series A bonds (2014 Series A Bonds) in an outstanding amount of $36.5 million and the Series B bonds in the outstanding amount of $14.2 million.  The Series A Bonds will be callable with no premium on or after August 15, 2023.

 

The proposed 2023 bonds (Series 2023 Bonds) will be used to refund the 2014 Series A Bonds for a reduction in debt service which reduces the special taxes paid by the property owners within CFD 2004-1.  The Series B bonds are not callable and will remain outstanding and on parity with the Series 2023 Bonds.  The estimated net present value savings from the refunding is approximately 11.5 percent or $4.2 million.  This translates to an estimated average annual per parcel savings of $560 for taxpayers.

 

The Series 2023 Bonds are expected to be publicly offered in the estimated amount of $32.6 million and will be secured solely from the special taxes levied against property in CFD 2004-1.  The estimated true interest cost is 3.27 percent.  The not to exceed amount in the recommended action provides flexibility should market conditions change.    The final maturity of the bonds is August 15, 2034.  The assessed value-to-lien including the Series 2023 Bonds and overlapping debt is 27 to 1.  As of February 2023, delinquencies were 3 percent based on first installment delinquencies only.  Delinquencies are expected to decrease by the time the second installment is due.  In addition, CFD 2004-1 participates in the County’s Teeter Plan and receives 100 percent of the property tax due in exchange for the penalty revenue.

 

The County made a credit presentation to S&P Global Ratings on March 15, 2023 and expects to receive a rating prior to the pricing of the Series 2023 Bonds in April.

 

The Public Financing Advisory Committee (PFAC) and the Board approved this refunding in concept at their September 15, 2022 and October 4, 2022 meetings respectively.  PFAC approved recommendation of this financing at its meeting of March 9, 2023.

 

 

 

 

 

 

 

FINANCIAL IMPACT:

 

The reduction in debt service from the refunding will save property owners within CFD 2004-1 an estimated average annual savings per parcel of $560.  The recommended action will provide appropriations for this transaction in Budget Control 530.

 

 

 

STAFFING IMPACT:

 

N/A

 

 

 

ATTACHMENT(S):

 

Attachment A - Resolution Authorizing Issuance
Attachment B - Preliminary Official Statement
Attachment C - Bond Purchase Agreement
Attachment D - Continuing Disclosure Certificate
Attachment E - Escrow Agreement
Attachment F - Paying Agent Agreement
Attachment G - Cost of Issuance Agreement
Attachment H- Government Code Section 29130