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Home My WebLink AboutCOM 0076.002 1998-2000 04 /08 99 THU 13:15 FAX 8083265697 00004 0 � S Stephen K. Yamashiro Harry A. Takahashi Mayor Director County of Hawaii DEPARTMENT OF FINANCE S.K Schunc 25 Aupuni Street, Room 118. Hilo, Hawaii 96720 -4252 CC. Deputy (808) 961.8234 • Fax (808) 961-8248 47 to t_ . rn March 30, 1999 T l r • c0 TO: Council Member J. Curtis Tyler III Council Member Nancy Pisicchio ti FROM: Harry A. Takahashi, Director of Finance- 1 SUBJECT; Bill 22, 1978 Bond Refinance Inquiry Enclosed as requested in your memo of March 29, 1999 are the following projections: 1. Schedule showing three scenarios of maintaining the status quo on the 1978 Bonds, refinancing and using the Sinking Fund to reduce the amount of the refunding bonds and refunding and using the Sinking Fund for working capital. 2. Schedule showing the refunding and new money issues as separate issues and as a combined issue. Please note that the schedules have been prepared with the assumption that the interest rates would remain at 4.4 %. In anticipation of the approval of Bill 22 and Bill 209, we have tentatively engaged the firm of Winthrop, Stimson, Putnam & Roberts for bond counsel services. They are currently reviewing the use of the Sinking Fund. Their lead counsel is Craig Scully, (212) 858 -1311. You have also inquired whether there will be any impact to our bond ratings. The latest bond rating that we received indicated that our next issue will probably retain it A rating. Future impacts would be difficult to ascertain as it will depend upon a number of factors being considered at the time. The Administration has submitted its proposal for the Sinking Fund and the authority to issue the refunding bond. Whether you desire to delay the approval is a policy decision the Council needs to make. Keep in mind that it may take between two to four months to Comm. No. 7 6 • °°2 .- File No. FN pie ND Ref. To! F C RAF APR 8 199"°' 04/08 THU 13:16 FAX 8085285697 Z005 0 0 0 process the bonds depending on the type of issuance. At this point, there are no requirements to establish an additional sinking fund. • O 0 5 • 1999 -2000 2000-01 2001 -02 2002 -03 2003-04 2004 -05 2005 -06 2006 -07 TOTAL it Scenario 1: Stalus Quo Sinking Fund: Interest 5724,975 5724,875" 5694,923 $484,974 5484,974 5484,974 $241,605 5241005 53.992,005 Maturity 52800,000 52,907,594 52,914,419 59,702,013 Total Revenue 5724,875 5724,875 53,484,923 5484,974 5484,974 53.392,568 5241,605 $3,156,024 512694,818 O 7B Refunding Bonds: Principal $1,830,000 51,945,000 52,070,000 52,200,090 52,340,000 52,490,000 52,655,000 52,825,000 $18,355,000 Interest 51,180,728 51,064.523 $941,015 5808,535 5657,735 5515,805 5356,200 5183,625 35319,166 Total Disbursements 53,010,728 53009,523 53,011,015 53,008,535 53.007,735 53005,805 53,011,200 53,008,625 $24, D74,166 Net Effect (52,285,853) (52,284,648) $473,908 (52,523,561) (52,522,761) 5365,763 152,769,595) 5147.399 (511.379,348) Scenario 2: Refund 78 Bonds and Use Sinking Fund to Reduce Amount of Refunding Bonds: New Refunding Bonds Principal 51,050,000 51,095,000 $1,145,000 51.195000 51,245,000 51300,000 51,355,090 51,415,000 59,809,000 fg 4.4% Interest 5431,200 5385,000 5337,000 5286,600 5234,100 5179,300 5122,100 552, 42,037,600 Net Effect (51,431 (51.480,000) (51,482,000) (51,481,600) (51,479,100) (51,479.300) (51,477,100) 151,477,300) ($t1,837,600) c Scenario 3: ro 0 Cash In Sinking Fund, Use Sinking Fund For Working Capital, and Refund 78 Bonds for Amount Outslanding m m Sinking Fund 58,702,013 • $D 50 $0 50 50 $D 50 58,702,013 O up New Refunding Bonds', T Principal 51,990,000 52,075,000 52,170,000 32,265,000 52,365,000 32,470,000 52,575.000 52,690000 518,600,000 04.4% Li. Interest 5818,40D 5730,600 5639,400 5544,000 $444,300 5340,390 5231,700 5118.409 53057,300 m Total Disbursement 52,808,400 52,805,800 $2,809,400 52,809,000 32,009,300 52,810,300 52,806,709 52,808,400 (522,463300) n "' Net Effect 55,893,613 (52,805,600) (52,609,400) (52,809,000) (52,509300) (52,810,300) 132,806,70D) (32,808,400) (513,765,287) x H 0, 0 , op 0 Y O 04:08.99 THU 13:16 FAX 8083265697 Z007 \J 0 e / ' PERIOD SFPARATF ISSIIE5 COMBINED ENDING REFUNDING (1) NEW MONEY (2) TOTAL ISSUE (3) DIFFERENCE 2000 2.800,000 1,500,000 4,300,000 3,900,000 400,000 2001 2,800,000 1,500,000 4,300,000 3,900,000 400,000 2002 2,800,000 2,565,000 5,365,000 3,900,000 1,465,000 2003 2.800,000 2,565,000 5.365,000 3,900,000 1,465,000 2004 2,800,000 2,585,000 5,365.000 3,900,000 1,465,000 2005 2.800,000 2,565,000 5,365,000 3,900,000 1,465,000 2006 2,800,000 2,565,000 5,365,000 3,900,000 1,465,000 2007 2.800,000 2,565,000 5,365,000 3,900.000 1,465,000 2008 2,565,000 2,565,000 3,900,000 (1,335,000) 2009 2.565,000 2,565,000 3,900,000 (1,335,000) 2010 2,565,000 2.565,000 3,900.000 (1,335,000) 2011 2,565,000 2,565,000 3,900,000 (1,335,000) 2012 2,565.000 2,565,000 3,900,000 (1,335,000) 2013 2,585,000 2,565,000 3.900,000 (1,335,000) 2014 2,565,000 2,565,000 3,900,000 (1,335,000) 2015 2,565.000 2,565,000 3,900.000 (1,335,000) 2016 2,565,000 2,565,000 3,900,000 (1,335,000) 2017 2,565,000 2,565,000 3,900,000 (1,335,000) 2018 2,565,000 2,565,000 3,900,000 (1.335,000) 2019 2,565,000, 2,565,000 3,900,000 (1.335.000) 22,400,000 49,170,000 71,570,000 78,000,000 (6,430,000) (1) Assuming separate Refunding; rate 4.4 %. (2) Assuming $30,000,000 New Money with principal payments commencing in third year; rate 5%. (3) Assuming a single level debt service issue for both purposes. 04.08.99 THU 13:15 FAX 8083265697 002 • O O M SYOry� J. CURTIS TYLER, 111 Qmciln,anber ,r,y: - - Tel: (808) 961 - $273 • 4 " o 1� 1 Ban (808) 969 -3291 ill h COUNTY COUNCIL Comity of Hawaii Hawaii County Building 25 A upuni Street Hilo, Hawair 96720 • March 29, 1999 MEMORANDUM TO: Harry A. Takahashi Director of Finance FR: Council Member J. Curtis Tyler III Council Member Nancy Pisicchio RE: Bill 22,197$ Bond Refinance a"^ ' � Q Recent public d regarding the referenced bill have raised a number of important issues and questions. In order to fairly evaluate this proposal, please provide us with the following information: 1. Annual Cash Flow Projections (1999 -2009) for the following: a. No Refinancing of 1978 Bond (Status Quo) b. Refinancing + Leaving Sinking Fund Intact (except for P &I) c. Refinancing + Using Sinking Fund for 1999 -2000 Operating Budget d. New $30 million bond e. Combining 1978 refinance with 1999 new bond issue In addition to showing the net effect of each scenario on the County annual revenue/expense stream, please include any additional collateral set asides or releases, and any tax consequences. In addition, please show totals for the end of the period and final maturity date(s), if different; 2. Any legal and/other other constraints on the use of the 1978 Sinking Fund and any funds therefrom; 3. Any requirements and/or need to establish new and/or additional sinking/collateral funds; 77.6399 Nalani St, Suite 1 -A Kailua -Kona, Hawaii 96740 Kona Telephone: (808) 326 -5684 Fax: (808) 326.5697 04/08/99 THU 19:15 FAX 8083265697 Z003 0 0 .... Harry A. Takahashi March 29, 1999 Page 2 4. Any effects on County's Bond Rating (S &P just reduced Honolulu's); 5. Advisability of deferring action on Bill 22 until the budget is reviewed/finalized by the Council; 6. Name and contact information for the County's Bond CounseL Since we anticipate this matter being heard by the Council on April 7, we would appreciate your earliest response prior to that date. Thank you for your consideration and help in this important public matter. If you have any questions regarding this request, please call us at 326 -5684.