HomeMy WebLinkAboutCouncil Presentation - Reso 2024-009 COUNCIL_PRESENTATION_Marana,_T_of_REV_&_REF_2024_1-5-24MAPANA AZ
Town of Marana, Arizona
Pledged Excise Tax Revenue Obligations,
Series 2024
Pledged Excise Tax Revenue Refunding Obligations,
Series 2024
Information in Connection with the Issuance of
Pledged Excise Tax Revenue Obligations
Tuesday, January 16, 2024
Tax -Exempt Interest Rate Movement
STIFEU Public Finance
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1%
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30-Year MMD 10-Year MMD
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Sources: TM3. As of December29, 2023.
Page 2
_ STIFEU Public Finance
Municipal Market Update Week of January 2, 2024
RATE DATA
TODAY
WEEK PRIOR
MONTH PRIOR
YEAR PRIOR
AAA GO
2 YEAR
2.52
2.54
2.83
2.60
5 YEAR
2.28
2.28
2.57
2.52
10 YEAR
2.28
2.28
2.61
2.63
15 YEAR
2.77
2.79
3.13
3.15
20 YEAR
3.08
3.11
3.44
3.37
30 YEAR
3.42
3.47
3.77
3.58
US TREASURY
2 YEAR
4.25
4.30
4.61
4.43
5 YEAR
3.85
3.89
4.19
4.00
10 YEAR
3.88
3.90
4.25
3.88
30 YEAR
4.03
4.05
4.42
3.96
FED FUNDS
5.25-5.50
5.25-5.50
5.25-5.50
4.25-4.50
PRIME RATE
8.50
8.50
8.50
7.50
Page 3
Public Policy Objectives
STIFEU Public Finance
New Money Obligations
1. Issue Revenue Bonds to fund $51.15 million (total project costs of $64 million) for the
Community Center and Aquatic Center
2. Manage interest costs by investing any unspent bond proceeds until draws are needed
3. Pay debt service with the special 0.50% TPT tax
4. Pay off bonds early with any excess collections from the 0.50% special TPT tax
■ Estimated actual payback period using Town's project would be approximately 6 years
from the closing date of the issue
Refunding Obligations
1. Issue Refunding Bonds to refinance the Town's outstanding 2013 and 2017C bonds for debt
service savings
2. Estimated savings are currently $210,000 per year / $2 million on a net present value basis
/ 9.0% net present value savings as a percent of refinanced principal
Page 4
Preliminary Bond Market Update and Interest Rates
STIFEU Public Finance
Town of Marana Credit Ratings: The Town currently has a very strong credit rating of AA from S&P
Type of Bonds to be Issued:
Source of Repayment:
Amortization Period:
Pledged Excise Tax Revenue Obligations
0.50% special TPT tax
20 years
Estimated Tax -Exempt Interest Rates:
2.55% - 3.98% (new money series / 5-year prepayment feature)
2.55% - 2.85% (refunding series)
Estimated Debt Service Structure and
Alternatives:
See Pages 7 and 8 herein
Page 5
STIFEU Public Finance
Pledged Excise Tax Revenues
Category
Town Sales Tax (a)
State -shared Sales Taxes
State -shared Income Taxes
Licenses and permits
Fines and forfeitures and
Actual
2018/19 2019/20 2020121 2021/22 2022/23
$ 37,562,162 $ 39,415,820 $ 41,600,386 $ 46,602,074 $ 59,564,053
4,524,009
4,872,825
5,816,852
7,324,638
8,114,630
5,424,305
6,078,686
7,007,072
6,771,044
10,413,667
5,774,930
6,021,017
7,248,432
11,190,222
7,776,633
527,447
515,514
436,491
383,241
364,942
$ 53,812,853
$ 56,903,862
$ 62,109,233
$ 72,271,219
$ 86,233,925
(a) Does not include any restricted use sales tax collections (for example, the 0.50% sales tax dedicated to Marano Community Center and
Aquatic Center and amounts that are restricted for tourism purposes from the Additional Bed Tax). Amounts collected from the 0.50%
sales tax are available to pay debt service on the Obligations issued for the Marana Community Center and Aquatic Center, but are not
pledged as legal security for the Obligations.
Page 6
Estimated Debt Service Requirements and Coverage*
STIFEL Public Finance
20 YearAmortization
(1) (2) (3) (4) (5) (6) (7) (8)
Fiscal
Year
2022/23
Pledged Outstanding
Revenues Debt Service
$86,233,925
5-year
Principal
call feature
The Obligations*
Estimated
Interest
Debt Service
Total
Estimated
Annual
Debt Service
Requirements*
Projected
Maximum
Annual
Debt Service
Coverage
2023/24
$8,265,572
$2,650,000
$1,004,167
$3,654,167
$11,919,739
2024/25
8,280,033
1,380,000
2,277,500
3,657,500
11,937,533
7.22x
2025/26
7,620,886
1,445,000
2,208,500
3,653,500
11,274,386
2026/27
7,625,136
1,520,000
2,136,250
3,656,250
11,281,386
2027/28
7,682,636
1,595,000
2,060,250
3,655,250
11,337,886
2028/29
3,750,136
1,675,000
1,980,500
3,655,500
7,405,636
2029/30
3,790,836
1,760,000
1,896,750
3,656,750
7,447,586
2030/31
3,847,136
1,845,000
1,808,750
3,653,750
7,500,886
2031/32
3,882,386
1,940,000
1,716,500
3,656,500
7,538,886
2032/33
3,871,636
2,035,000
1,619,500
3,654,500
7,526,136
2033/34
3,861,886
2,135,000
1,517,750
3,652,750
7,514,636
2034/35
3,857,886
2,245,000
1,411,000
3,656,000
7,513,886
2035/36
3,619,886
2,355,000
1,298,750
3,653,750
7,273,636
2036/37
3,623,086
2,475,000
1,181,000
3,656,000
7,279,086
2037/38
3,608,979
2,600,000
1,057,250
3,657,250
7,266,229
2038/39
2,620,612
2,725,000
927,250
3,652,250
6,272,862
2039/40
2,600,276
2,865,000
791,000
3,656,000
6,256,276
2040/41
2,576,836
3,005,000
647,750
3,652,750
6,229,586
2041/42
2,573,636
3,155,000
497,500
3,652,500
6,226,136
2042/43
56,836
3,315,000
339,750
3,654,750
3,711,586
2043/44
56,836
3,480,000
174,000
3,654,000
3,710,836
2044/45
56,836
56,836
2045/46
56,836
56,836
2046/47
56,836
56,836
$48,200,000
$28,551,667
$76,751,667
$164,424,814
* Subject to change. Outstanding debt service shown is not inclusive of the savings to be achieved through the Refunding Bonds.
Page 7
Estimated Debt Service Requirements and Coverage*
Projected Early Payoff Schedule
STIFEL Public Finance
(1) (2) (3) (4)
5-year call feature
The Obligations*
Fiscal
Year
2022/23
Principal
Estimated
Interest
2023/24
$2,660,000
$1,004,167
2024/25
1,380,000
2,277,000
2025/26
1,450,000
2,208,000
2026/27
1,525,000
2,135,500
2027128
1,600,000
2,059,250
2028/29
31,565,000
1,979,250
2029/30
8,020,000
401,000
$48,200,000 $12,064,167
Debt Service
$3, 664,167
3,657,000
3,658,000
3,660,500
3,659,250
33,544,250 Projected excess collections used
8,421,000 to prepay bonds after year 5
$60, 264,167
* Subject to change. Assumes the Bonds are sold with a 5-year prepayment option.
Page 8
Refunding Bonds*
Current Projected Savings
(1) (2) (3) (4) (5) (6) (7)
Maturity
Year
1uz4
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
Totals
2,653,500
3,196,250
3,195,000
3,193,250
3,190,750
1,967,250
2,007,950
2,064,250
2,099,500
2,088,750
2,079,000
$ 27,735,450
Savings
Refunding
BondsEstimated
Interest
$ 2,005,000 $
421,563
$ 2,426,563
$ 226,937
$ 224,030
2,060,000
911,500
2,971,500
224,750
215,554
2,165,000
808,500
2,973,500
221,500
205,909
2,270,000
700,250
2,970,250
223,000
200,923
2,385,000
586,750
2,971,750
219,000
191,250
1,300,000
467,500
1,767,500
199,750
169,081
1,375,000
402,500
1,777,500
230,450
189,135
1,495,000
333,750
1,828,750
235,500
187,416
1,605,000
259,000
1,864,000
235,500
181,644
1,675,000
178,750
1,853,750
235,000
175,673
1,900,000
95,000
1,995,000
84,000
60,872
$ 20,235,000 $ 5,165,063 $ 25,400,063 $2,335,387 $ 2,001,486
Net PV Savings:
Net PV Savings as a Percent of Refunded Bonds:
STIFEL Public Finance
Tax Status
Issuance Date
ParAmount
Refunded Par
Avg. Ref. Coupon
All -In TIC
Escrow Yield
Positive Arbitrage
Avg. Life (Years)
NPV Savings ($)
NPV Savings (%)
Avg Annual Savings
Total Savings
Tax -Exempt
2/1/2024
$20,235,000
$22,130,000
4.85%
2.89%
5.42%
$125,135
5.11
$2,001,486
9.04%
$212,308
$2,335,387
✓ Replace 2013 and 2017C Bonds with an average interest rate of 4.85% with Refunding Bonds
at a 2.89% interest rate
✓ Average of $210,000 per year in cash flow savings
✓ $2.0 million of net present value savings
✓ 9.0% net present value savings as a percent of refinanced principal ($22,130,000)
✓ 3.0% is generally considered an efficient refinancing
* Subject to change.
Page 9
Tentative Financing Calendar
* STIFEU Public Finance
Town Council considers a Resolution, that among other things, gives authority
January 16th to the Town Manager, Deputy Town Manager and Finance Director to effectuate
the transaction (assumes emergency clause adoption).
January 17th Receive credit rating and distribute bond offering document (Preliminary Official
Statement) to prospective investors.
Week of nd to Price the Town's Obligations in the market, subject to market conditions.
January 22 or 29
Week of Closing. Funds wired to the Town's Bond Trustee. Net Obligation Proceeds are
February 12th or 19th then available for the Project.
* Preliminary, subject to change. Page 10
Disclosure
STIFEU Public Finance
Stifel, Nicolaus & Company, Incorporated ("Stifel") has been engaged or appointed to serve as an underwriter or placement agent with respect to a particular issuance of municipal securities to which the
attached material relates and Stifel is providing all information and advice contained in the attached material in its capacity as underwriter or placement agent for that particular issuance. As outlined in the
SEC's Municipal Advisor Rule, Stifel has not acted, and will not act, as your municipal advisor with respect to the issuance of the municipal securities that is the subject to the engagement.
Stifel is providing information and is declaring to the proposed municipal issuer that it has done so within the regulatory framework of MSRB Rule G-23 as an underwriter (by definition also including the role
of placement agent) and not as a financial advisor, as defined therein, with respect to the referenced proposed issuance of municipal securities. The primary role of Stifel, as an underwriter, is to purchase
securities for resale to investors in an arm's-length commercial transaction. Serving in the role of underwriter, Stifel has financial and other interests that differ from those of the issuer. The issuer should
consult with its own financial and/or municipal, legal, accounting, tax and other advisors, as applicable, to the extent it deems appropriate.
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to further discussion and negotiation. Stifel does not express any view as to whether financing options presented in these materials are achievable or will be available at the time of any contemplated
transaction. These materials do not constitute an offer or solicitation to sell or purchase any securities and are not a commitment by Stifel to provide or arrange any financing for any transaction or to
purchase any security in connection therewith and may not be relied upon as an indication that such an offer will be provided in the future. Where indicated, this presentation may contain information
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