Certificates of Participation
THIS SUMMARY IS SUBJECT IN ALL RESPECTS TO THE MORE COMPLETE INFORMATION IN THE ENTIRE OFFICIAL STATEMENT INCLUDING THE COVER PAGE AND APPENDICES HERETO AND THE OFFERING OF THE BONDS TO POTENTIAL INVESTORS IS MADE ONLY BY MEANS OF THE ENTIRE OFFICIAL STATEMENT.
In Fiscal Year 2010-2011, the City issued $20,085,000 of Series 2010A (Tax Exempt) and $106,575,000 of Series 2010B (Federally Taxable Direct Pay Build America Bonds) Certificates of Participation. The 2010A Certificates were issued to prepay the $3,990,000 principal outstanding on the 1998 Library Certificates of Participation. The refunding was undertaken to reduce total debt service payments over the next nine years by $1,084,556 and resulted in a net present value savings of $429,500. Accordingly, the 1998 Library Certificates have been defeased pursuant to the defeasance provisions of the 1998 Trust Agreement. The remaining proceeds from the Series 2010A Certificates are to be used to finance the acquisition, improvement and equipping of the Civic Center Project. The Series 2010B Certificates were issued to provide additional financing for the Civic Center Project. The proceeds of the Certificates will also be applied to pay certain costs of issuance incurred in connection with the Certificates.
The lease payments made by the City are held by a trustee who makes semi-annual payments on the Certificates of Participation. The lease payments began January 1, 2011, and are in amounts sufficient to cover the payment of principal and interest of the Certificates. Interest on the Certificates is payable semiannually on January 1 and July 1 of each year. The City has designated the Series 2010B Certificates as “Build America Bonds” (BABs) under the provisions of the American Recovery and Reinvestment Act of 2009. Thus, the City expected to receive periodic payments from the United States Treasury equal to 35% of the interest payable on the 2010B Certificates. However, due to sequestration that began on March 1, 2013, the City now expects to receive refundable credits from the United States Treasury equal to about 33% of the interest payable on the 2010B Certificates. Principal payments are payable annually on July 1 of each year. Future principal payments for the Series 2010A, which commenced July 1, 2011 and continue through July 1, 2019, range from $410,000 to $425,000. The future principal payments for the Series 2010B Certificates, which commence July 1, 2018 and are payable through July 1, 2040, range from $2,900,000 to $7,245,000.
Associated Documents
Annual amortization requirements of Certificates of Participation:
| YEAR ENDING JUNE 30 | PRINCIPAL | INTEREST | BAB SUBSIDY | TOTAL |
| 2019 |
$ 3,310,000 |
$ 7,204,077 |
$ (2,346,775) |
$ 8,167,302 |
| 2020 |
3,405,000 |
7,052,048 |
(2,302,536) |
8,154,512 |
| 2021 |
3,065,000 |
6,895,351 |
(2,254,090) |
7,706,261 |
| 2022 | 3,165,000 | 6,733,265 | (2,201,104) | 7,697,161 |
| 2023 | 3,275,000 | 6,556,869 | (2,143,441) | 7,688,428 |
| 2024-2027 |
14,425,000 |
24,021,825 |
(7,852,735) |
30,594,090 |
| 2028-2031 |
17,240,000 |
19,577,283 |
(6,399,814) |
30,417,469 |
| 2032-2035 |
20,620,000 |
14,194,432 |
(4,640,160) |
30,174,272 |
| 2036-2039 |
24,740,000 |
7,709,184 |
(2,520,132) |
29,929,052 |
| 2040-2041 |
14,165,000 |
1,026,996 |
(335,725) |
14,856,271 |
| TOTAL |
$107,410,000 |
$100,971,330 |
$(32,996,512) |
$175,384,818 |
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