Merced Designated Local Authority As Successor Agency to the - PowerPoint PPT Presentation

Presentation to Standard and Poor’s Merced Designated Local Authority As Successor Agency to the Redevelopment Agency of the City of Merced 2015 Tax Allocation Refunding Bonds June 18, 2015

Table of Contents  General Information  Community Overview  Combined Project Area Overview  Outstanding Bonds  Proposed Refunding  Appendix A: Gateways Project Area  Appendix B: Project Area No. 2 2

General Information

Financing Team ISSUER Merced Designated Local Authority As Successor Agency To The Redevelopment Agency of the City of Merced Chris Jicha, DLA Staff  Joy Otsuki, DLA General Counsel  FINANCIAL ADVISOR UNDERWRITER Kosmont Transactions Services Southwest Securities Dan Massiello, Senior Managing Director Mike Cavanaugh, Senior Vice President   Brian Moncrief, Managing Director Todd Smith, Senior Vice President   Jonathan Dieguez, Managing Director  UNDERWRITER COUNSEL Fernando Sanchez, Project Analyst  Nixon Peabody LLP Rudy S. Salo, Partner  BOND COUNSEL The Weist Law Firm Cameron A. Weist, Esq.  4

Executive Summary  The Successor Agency to the Redevelopment Agency of the City of Merced (the “Agency”) is currently undertaking the issuance of approximately $16 million of 2015 Tax Allocation Refunding Bonds (the “Refunding Bonds”)  Refunding of:  2001A Tax Allocation Bonds, Gateways Project Area  2009A Tax Allocation Bonds, Gateways Project Area  Annual debt service savings estimated at $100,000  The Refunding Bonds will be secured by an upfront RPTTF pledge  Approximate 2x’s annual coverage 5

Designated Local Authority Designated Local Authority (“DLA”)  Authorized under the Dissolution Act to serve as Successor Agency should cities elect not to serve  City of Merced elected not to serve as Successor Agency  DLA governed by 3 member board appointed by Governor of California  Ambiguities and lack of direction from AB x1 26 resulted in impairments to DLA until late in 2012  DLA has since operated effectively for the past two years 6

Community Overview

City of Merced Community Overview The City Incorporated in 1889  Operates as a charter city  Merced County seat  13 square miles  81,130 population  Location Located in the San Joaquin Valley  Located at the intersection of Highway 99  and Highway 140 Known as the “Gateway to Yosemite”  Approximately 70 miles southwest of  Yosemite National Park Employment/Wealth Levels Median Household Income: $38,253  Income per Capita: $17,331  Unemployment Rate: 8.9%  8

Economic Base Summary County of Merced Principal Employers Employer Name # of Employees Foster Farms Inc. 3,710 UC Merced 1,879 Merced County 1,821 Mercy Medical Center 1,255 Merced County Office of Education 1,254 Merced City School District 1,070 Major sectors of employment in the Dole Packaged Foods 1,000  Area: Merced Union HSD 982 Merced CCD 832 Government  Liberty Packing Company 650 Education  Healthcare  Retail  Agriculture  Castle Air Force Base  9

Economic Development City of Merced Taxable Sales History Retail Stores Total Outlets Taxable Taxable Year Retail Permits Transactions ($mil) Total Permits Transactions ($mil) 2009 905 $694 1,332 $826 2010 934 715 1,370 843 2011 954 749 1,359 884 2012 1,016 795 1,441 942 2013 1,017 818 1,427 973 City of Merced Building Permit Valuations ($000’s) 2009 2010 2011 2012 2013 Residential $3,247 3,609 0 2,529 1,331 Non-Residential 13,478 6,210 2,840 5,649 1,639 Total 16,725 9,819 2,840 8,178 2,970 SF Units 15 47 0 0 0 MF Units 0 2 0 0 49 Total 15 49 0 0 49 10

Combined Project Area Overview

Map of Project Areas 12

Combined Project Areas Land Use Breakdown # of % of Land Use Parcels Secured AV(1) Value Commercial 572 341,251,626 39.18% Industrial 77 258,021,566 29.62% Residential 2,747 243,644,879 27.97% Vacant Land 244 22,015,092 2.53% Agricultural 14 3,099,252 0.36% Institutional 46 2,344,016 0.27% Governmental 16 629,825 0.07% Miscellaneous 10 77,077 0.01% Total 3,726 871,083,333 100.00% (1) AV net of applicable exemptions 13

Combined Project Areas Largest Taxpayers for 2014/15 % of Assessed % of Increm. Taxpayer Name Land Use Value Total AV AV 1 World Color LLC* Industrial $110,667,264 11.05% 18.34% 2 Scholle Corporation Industrial 35,383,850 3.53% 5.86% 3 Safeway Inc Industrial 26,878,740 2.68% 4.45% 4 Comast Inc* Unsecured 23,974,355 2.39% 3.97% 5 Costco Wholesale Corp Commercial 21,827,195 2.18% 3.62% 6 Razzari Timothy F & Billie K Co-Trustees Commercial/Unsecured 11,915,809 1.19% 1.97% 7 Playa Merced LLC Commercial 11,510,258 1.15% 1.91% 8 Wal-Mart Stores East LP Industrial 9,990,998 1.00% 1.66% 9 Greif Containers Inc Industrial 9,662,996 0.97% 1.60% 10 Encina Investment Group Mainplace Merced LLC Commercial 9,315,510 0.93% 1.54% Subtotal $271,126,975 27.08% 44.94% Total Incremental AV $603,341,727 Total AV $1,001,127,057 * Assessment appeals currently pending 14

Combined Project Areas AV Appeals FISCAL YEAR 2009-10 2010-11 2011-12 2012-13 2013-14 Project Area Total Assessed Value $1,193,583,872 $1,094,718,225 $1,008,976,645 $952,235,111 $943,587,922 Project Area Incremental Assessed Value $795,798,542 $696,932,895 $611,191,315 $554,449,781 $545,802,592 APPEALS SUMMARY Successful/Stipulated Appeals 3 10 11 6 5 Denied/Withdrawn Appeals 27 15 18 18 5 Pending Appeals 3 1 4 4 7 Total Appeals 33 26 33 28 17 ALL APPEALS (STIPULATED, DENIED/WITHDRAWN, PENDING) Assessed Value of All Appeals $300,030,222 $237,642,310 $101,059,675 $171,449,182 $155,307,416 % of Total AV 25% 22% 10% 18% 16% % of Incremental AV 38% 34% 17% 31% 28% RESOLVED APPEALS ANALYSIS (STIPULATED,DENIED/WITHDRAWN APPEALS) Assessor's Roll Value $299,042,093 $236,747,310 $81,137,873 $153,213,318 $27,655,368 Applicant Opinion of Value $154,188,684 $111,083,750 $46,165,242 $97,048,805 $10,983,853 Total Requested Reduction Amount $144,853,409 $125,663,560 $34,972,631 $56,164,513 $16,671,515 % of Total AV 12.14% 11.48% 3.47% 5.90% 1.77% % of Incremental AV 18.20% 18.03% 5.72% 10.13% 3.05% SUCCESSFUL APPEALS Total Requested Reduction Amount $144,853,409 $125,663,560 $34,972,631 $56,164,513 $16,671,515 Total Granted Reduction Amount $54,869,032 $54,894,992 $6,496,788 $1,962,833 $979,513 Granted Reduction % 37.88% 43.68% 18.58% 3.49% 5.88% % of Total AV 4.60% 5.01% 0.64% 0.21% 0.10% % of Incremental AV 6.89% 7.88% 1.06% 0.35% 0.18% PENDING ASSESSMENT APPEALS Assessor's Roll Value $988,129 $895,000 $19,921,802 $18,235,864 $127,652,048 Applicant Opinion of Value $803,000 $500,000 $1,953,505 $6,197,571 $68,320,489 Total Requested Reduction Amount $185,129 $395,000 $17,968,297 $12,038,293 $59,331,559 % of Total AV 0.02% 0.04% 1.78% 1.26% 6.29% % of Incremental AV 0.02% 0.06% 2.94% 2.17% 10.87% POTENTIAL IMPACT TO TAX INCREMENT REVENUES Prorated Share of Total Requested AV Reduction 1 $138,202 $359,259 $16,159,978 $10,737,306 $52,574,962 Est. Pending Reduction in Property Tax Revenues 2 $1,382 $3,593 $161,600 $107,373 $525,750 1 Assumes 100% of the requested reduction amount is granted 2 Based on the application of the 1% general levy Source: County Assessor 15

Combined Project Areas Actual Receipts  The Project Areas are part of the County Teeter Plan Fiscal Incremental Estimated Year Value TI Actual TI 2009-10 $795,798,542 $7,957,985 $8,076,655 2010-11 696,932,895 6,969,329 6,951,152 2011-12 611,191,315 6,111,913 6,531,295 2012-13 554,449,781 5,544,498 5,738,870 2013-14 545,802,592 5,458,026 5,907,267 2014-15 603,341,727 6,033,417 n.a. 16

Outstanding Bonds

Outstanding Debt 1999A 2001A 2003A 2009A Tax-Exempt Tax-Exempt Tax Status Tax-Exempt Tax-Exempt PA #2 Project Area PA #2 Gateways Gateways Housing & Non- Security Non-Housing Non-Housing Non-Housing Housing Par Value 24,220,000 2,400,000 9,007,825.20 13,120,000 Current Outstanding 1,910,000 1,830,000 7,692,825.20 12,210,000 Par Cash Cash Cash Reserve Fund Cash 5/28/2009 Issuance Date 3/25/1999 12/11/2001 5/29/2003 Final Maturity 12/1/2015 9/1/2031 12/1/2023 9/1/2039 Current Par Non-Callable 2019 Par Call Optional Redemption Current Par Call Call The Series 1999A and 2003A Bonds will remain outstanding and are paid from Project Area  No. 2 revenues prior to the Refunding Bonds The Series 2001A and 2009A Bonds will be refunded  18

Proposed Refunding

The Refunding Opportunity Refund Series 2001A and 2009A TABs  2001A TABs are all callable at par  2009A TABs are callable at par in 2019  Refund Series 2001A and 2009A TABs Purpose 2015 Refunding will be fully amortizing from 2015 to 2039 Structure Paid from RPTTF. The existing Series 1999A and 2003A TABs have priority on Project Area Security No. 2 revenues. Standard three-pronged DSR test to be satisfied with a Surety Bond Reserve Fund Approximately 2x coverage Debt Service Coverage No additional parity bonds other than for refunding purposes Parity Bonds Agency will include full debt payment on ROPS B (January 2 nd ) disbursement schedule. ROPS & Flow of Funds 20