PowerPoint Presentation (added 9/7/2023)

Council Workshop
Excise Tax Refunding & Cash Defeasance
September 12, 2023

Senior Lien Excise Tax Obligations Series 2023
2
• The City is refunding the outstanding Excise Tax Series 2012B 
and Series 2012C Obligations (Bonds)
o Currently estimated to save $11.8 million through this refinancing
• In conjunction with RBC Capital Markets, staff identified an 
additional opportunity to lower its debt service payments on its 
outstanding Excise Tax debt portfolio via defeasance of existing 
higher interest rate bonds that are replaced with a new money 
issuance at lower rates

Cash Optimization Refunding Opportunity
3
• The proposed financing plan entails:
o Optimizing use of a portion of the City’s unrestricted cash on hand 
budgeted for pay-as-you-go capital projects, by applying the cash to 
defease, or pay off, certain higher interest rate Excise Tax Bonds of 
the City
o Immediately replace the cash used by issuing new debt for the 
capital projects at a lower interest rate
o By replacing higher interest debt with lower interest debt, the 
proposed financing plan generates debt service savings for the City
o Combining the proposed financing with the approved refunding of 
the City’s Excise Tax Bonds further enhances the savings due to 
economies of scale

Cash Optimization Refunding Opportunity 
Overview
4
• To accomplish the proposed financing plan requires adoption of 
an Ordinance by the Council that: 
o Authorizes using cash to pay off and defease existing Excise Tax 
Bonds
o Authorizes the issuance of new money Excise Tax Bonds in an 
amount sufficient to replace the cash used for defeasance and pay 
costs of issuance

Cash Optimization Refunding 
Opportunity Overview- Continued
5
• The following Excise Tax Bonds are viable for this plan:
o $51.7 million of principal and interest payments on the outstanding 
Series 2015A bonds that mature from July 1, 2026 through July 1, 
2031 – callable on July  1, 2025; and 
o $26.3 million of principal and interest payments on the outstanding 
Series 2016 bonds that mature from July 1, 2027 through July 1, 
2033 – callable on July 1, 2026
o An estimated $61.3 million is required to pay off $78.0 million of 
future principal and interest payments on both series of bonds
• The proposed Ordinance will permit the cash defeasance and 
issuance of new bonds for capital projects to occur in one or 
more transactions to allow the City to maximize debt service 
savings based on market conditions

Estimated Savings to be Achieved
6
•
Series 2015A and Series 2016 bonds carry average interest rates of 
5.00% and 3.84%, respectively
o Replaced by bonds at a true interest cost of 3.45%, based on current market 
condition
•
At these estimated levels, the City would be saving approximately:
o $2.7 million through July 1, 2031 (which equates to approximately $2.4 million 
on a present, or current, value basis) relating to the Series 2015A Obligations; 
and
o $1.2 million through July 1, 2033 (which equates to approximately $0.9 million 
on a present, or current, value basis) relating to the Series 2016 Obligations
•
The actual savings achieved will be a function of the interest rates 
achieved on the new Series 2023 bonds
•
Given current market conditions, the expectation is to move forward with 
the Series 2016 Obligations while waiting on the Series 2015 Obligations 
for possibly higher savings

Planned Series 2023 Issuance
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•
The Series 2023 Obligations will be issued as Senior Lien Excise Tax 
Obligations to replace the Senior Lien Excise Tax Series 2015A and 
Series 2016 Obligations being paid off
o The Series 2023 Obligations issued will have the same maturity length as 
the Obligations being paid off
o The expectation is that the Series 2023 Obligations will carry ratings of 
“AA+” by Standard & Poor’s and “AA” by Fitch Ratings, consistent with 
existing rating levels
o These are very high ratings (at the 2nd and 3rd highest rating levels 
possible) reflecting the strong credit profile of the City of Glendale
•
The Obligations are expected to be sold to investors in the public tax-
exempt market by RBC Capital Markets in mid- to late-October, 
depending on market conditions, with closing occurring approximately 
two weeks after pricing

Next Steps
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• If there is consensus to proceed with the transaction we 
will return to council on September 26th for adoption of 
an Ordinance authorizing the use of cash to defease 
existing excise tax bonds and authorize the issuance of 
new money excise tax bonds.