BOARD MEETING DATE: July 7, 2006
AGENDA NO. 25

REPORT:

Finance Committee

SYNOPSIS:

The Finance Committee met Friday May 19, 2006 and discussed the issue detailed in the Committee report.

RECOMMENDED ACTION:

Receive and file this report.

William A. Burke
Finance Committee

Attendance: Present were Committee members William A. Burke and Jane Carney.  Absent was Committee member Michael Antonovich.

Discussion Items:

Discussion of Report on Long-Term Debt Reduction Options Available to AQMD Utilizing One-Time Penalty/Settlement Revenues:  Rick Pearce, Chief Financial Officer, presented to the Committee an analysis of AQMD’s current debt service which includes: the Headquarters Installment Sale Revenue Bonds; Series 1992, Series B and Series 2002; and the Pension Obligation Bonds (POB), Series 1995 and 2004.  The analysis included the benefits and constraints associated with either a Legal Defeasance or an Economic Defeasance, and which series of debt (Installment Sale or POBs) provided the greatest economic benefit to the AQMD if defeased.  Staff is recommending Board consideration for an Economic Defeasance utilizing a Guaranteed Investment Contract with a Triple A rated provider that would result (at current market rates) in annual estimated budget savings of approximately $3 million through 2014 at a cost of approximately $19.1 million.  This proposal was approved for transmittal to the Administrative Committee and Board for consideration at the July meeting.

Other Business:   None

Public Comment:   None