BOARD MEETING DATE: May 3, 2002
AGENDA NO. 23

Finance Committee

SYNOPSIS: 

The Finance Committee met Friday April 19, 2002 and discussed the issues detailed in the Committee report.

RECOMMENDED ACTION:

Receive and file this report.

Norma J. Glover, Chairman
Finance Committee

Attendance: Present were Committee members Michael Antonovich, Jane Carney, Norma Glover and Leonard Paulitz. Absent was Committee member William Burke.

Discussion Item:

Report on Evaluation of 3^rd Floor North Diamond Bar Facility: Mr. James Rabe, Keyser Marston Assoc., and Mr. David Vogel, International Parking Design, presented their space analysis report regarding completion of 3^rd Floor North, which would add approximately 16,000 sq. ft. of additional space available for leasing. The analysis looked at factors that could impact the build-out of the 3^rd Floor. These factors include additional parking; relocation of AQMD storage; limitation of leasing space for private use; review of leasing market in the area; and the financial feasibility of the project requirements for additional parking and leasing options. The report recommendations include the redesign of the parking lot to add 97 additional spaces; the need to further evaluate AQMD storage requirements; and the use of a real estate broker experienced with State and/or County leases. The estimated project cost to complete 3^rd Floor North and redesign the parking lot is approximately $1,000,000 representing a projected 8.16% return on costs.

Financing Considerations regarding 3^rd Floor North Recommendation: Rick Pearce, Chief Financial Officer, briefed the Committee on potential financing options available to complete the 3^rd Floor with the required additional parking. Based on the analysis of Keyser Marston, a parking structure to meet the additional parking demand will not be required. This reduces the potential project cost by about half ($1 million) and would therefore not require additional borrowing. Mr. Pearce proposed that the construction could be funded by using the remaining balance in the Building Corporation’s construction fund combined with the estimated FY 2002-2003 budget savings from the proposed refinancing of the Diamond Bar Headquarters debt.

Action Items:

Recommendation to Adopt an Ordinance Approving Addendum No.3 to the Installment Purchase Agreement Relating to the Diamond Bar Headquarters Facilities: Rick Pearce and Kurt Yeager, Bond Counsel, Stradling, Yocca, Carlson & Rauth, briefed the Committee on the proposed Current Refunding of callable outstanding debt. The Diamond Bar Facility has twelve years remaining (2014) on its debt payments. The current par amount of its bonds outstanding is $56.2 million with $25.4 million callable. The District, through the AQMD Building Corporation, is proposing to refund the callable portion of its debt resulting in estimated present value savings of $700 thousand. In addition, the 1998 redemption of the 2009 Term Bond produced a large single budget savings in 2009, it is proposed to restructure the debt payment schedule (to spread budget savings) adjusting the annual payments over the remaining twelve years. The AQMD must adopt an Ordinance approving the addendum to the Installment Purchase Agreement with the SCAQMD Building Corporation for the purpose of refunding the callable portion of the outstanding debt. The Committee approved this letter and its attachments for Board consideration at its May 3, 2002 meeting.

Recommendation to Adopt a Resolution Approving the Third Supplemental Trust Agreement, the Escrow Agreement, and the Preliminary Official Statement for the SCAQMD Building Corporation Bonds Relating to the Diamond Bar Headquarters Facilities: Rick Pearce explained that this item was related to the above item and that Board action is required to approve the Trust Agreement, Escrow Agreement and Preliminary Official Statement relating to the refunding. These documents have been prepared with input from District staff by outside Bond/Disclosure Counsel. The Preliminary Official Statement when finalized will be used to provide detailed financial information about the District to prospective bond purchasers. The Committee approved this letter and its attachments for Board consideration at its May 3, 2002 meeting.

Other Business: None

Public Comment: None

/ / /