Upper Dublin Township REFINANCING DISCUSSION July 9, 2019 - PDF document

Upper Dublin Township REFINANCING DISCUSSION July 9, 2019 Prepared by: Scott Shearer Managing Director & Ben Kapenstein Senior Analyst PFM Financial Advisors LLC One Keystone Plaza, Suite 300 North Front & Market Streets Harrisburg, PA 17101 717.232.2723 (P) 717.232.8610 (F) www.pfm.com

Upper Dublin Township Topics of Discussion July 9, 2019 I) Refinancing Opportunity: The Township’s Financial Advisor, PFM Financial Advisors, has identified a refinancing opportunity on the Series of 2014 Bonds. The goal of the refinancing will be to realize interest rate savings. Current projections show savings of approximately $230,000. • Outstanding Par $7,220,000 • Interest Rates Series of 2014 2.00% ‐ 4.00% • Call Date 1/15/2020 II) Timeline DATE OBJECTIVE * Regularly Scheduled Board Meeting * July 9, 2019 ‐ Presentation on 2019 Refinancing Opportunity ‐ Authorize Financing Team to Proceed July – August Transactional Due Diligence (POS, Rating Call, etc.) * Regularly Scheduled Board Meeting * August 13, 2019 ‐ Board considers Maximum Parameters Ordinance Mid/Late August Bond Sale – Lock in Rates October 17, 2019 Settlement Date January 15, 2020 Call Bonds IiI) Review – Maximum Parameters Ordinance  Provisions of a maximum parameters ordinance: ♦ Flexibility in the pricing date so that bonds are priced during favorable market conditions.  Eliminates the need to time the pricing of bonds with a board meeting date. ♦ Establishment of maximum par amount, interest rates, maturity dates, etc. which are typically higher than what is needed for actual pricing – this creates flexibility to achieve best rates. ♦ This is the same process the Township has utilized for previous bond issuances. PFM Financial Advisors LLC 1

MUNICIPAL MARKET UPDATE July 1, 2019 HISTORICAL MMD CURVE ILLUSTRATION ‐ SINCE JANUARY 1, 1998 7.00 6.00 5.00 Yield (%) 4.00 3.00 2.00 1.00 Range Average Current 0.00 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Year 21 Year 22 Year 23 Year 24 Year 25 Year 26 Year 27 Year 28 Year 29 Year 30 Year Maturity Year SPOT ANALYSIS ‐ 10 YEAR MMD ‐ SINCE JANUARY 1, 1998 5.10 Since 1/1/1998 Amount Date Min 1.290 6/27/2016 4.60 Max 5.370 5/18/2000 Average 3.205 n/a 4.10 Current 1.630 7/1/2019 3.60 Yield (%) 3.10 2.60 2.10 1.60 1.10 SPOT ANALYSIS ‐ 10 YEAR MMD ‐ SINCE JANUARY 1, 2018 2.900 2.700 2.500 2.300 Yield (%) 2.100 Since 1/1/2018 Amount Date Min 1.610 6/7/2019 1.900 Max 2.770 11/2/2018 Average 2.292 n/a 1.700 Current 1.630 7/1/2019 1.500 Jan‐18 Feb‐18Mar‐18 Apr‐18 May‐18 Jun‐18 Jul‐18 Aug‐18 Sep‐18 Oct‐18 Nov‐18 Dec‐18 Jan‐19 Feb‐19Mar‐19 Apr‐19 May‐19 Jun‐19 PFM Financial Advisors LLC 7/1/2019 2

UPPER DUBLIN TOWNSHIP SUMMARY OF OUTSTANDING INDEBTEDNESS A Debt Service Requirements 1 2 3 4 5 6 7 8 9 10 NON-ELECTORAL ELECTORAL Fiscal G.O. Notes G.O. Bonds G.O. Bonds G.O. Note G.O. Bonds G.O. Notes G.O. Bonds G.O. Bonds Total Year Series of Series A of Series of Series of Series of Series of Series of Series of Debt Ended 2008 (Del Val) [1] 2013 2014 2016 (Del Val) [2] 2016 2017 (Del Val) [3] 2015 2016 Service 12/31/2019 681,115 311,500 586,775 242,798 1,187,211 575,505 172,065 31,500 3,788,470 12/31/2020 679,820 312,000 587,475 243,243 1,191,761 575,382 169,865 30,900 3,790,447 12/31/2021 679,748 45,900 590,075 242,621 1,463,111 576,025 172,665 30,300 3,800,445 12/31/2022 678,858 592,475 242,922 530,661 577,407 170,365 2,792,689 12/31/2023 678,130 589,675 243,141 527,311 577,508 167,950 2,783,716 12/31/2024 677,524 585,788 243,278 528,811 578,349 170,075 2,783,824 12/31/2025 676,997 591,288 243,332 525,161 578,906 172,075 2,787,759 12/31/2026 676,510 590,913 243,304 526,139 580,178 173,950 2,790,993 12/31/2027 676,022 589,650 243,194 531,636 580,142 170,375 2,791,019 12/31/2028 674,511 587,688 243,002 526,924 581,818 166,800 2,780,742 12/31/2029 589,338 242,728 527,054 582,161 168,225 2,109,504 12/31/2030 589,388 242,371 526,974 583,192 174,175 2,116,099 12/31/2031 588,950 242,917 526,684 583,888 169,825 2,112,263 12/31/2032 588,025 242,375 531,131 585,246 170,475 2,117,253 12/31/2033 589,088 242,736 530,316 585,246 170,600 2,117,986 12/31/2034 589,400 242,994 64,069 586,906 170,563 1,653,932 12/31/2035 587,600 242,165 62,494 587,182 170,363 1,649,803 12/31/2036 242,238 65,853 588,094 896,185 12/31/2037 589,617 589,617 Totals 6,779,235 669,400 10,013,588 4,371,361 10,373,302 11,052,751 2,900,410 92,700 46,252,747 Principal [4] : 5,104,000 650,000 7,580,000 3,500,000 8,105,000 8,657,000 2,255,000 60,000 35,911,000 Call Date: Make-Whole 7/15/2018 1/15/2020 3/25/2021 3/15/2022 7/15/2020 3/15/2022 New Money Partial Adv Ref Purpose: New Money New Money New Money Cur Ref 2011 New Money Cur Ref 2010 Cur Ref 2011 2010 Adv Ref 2013A [1] For these purposes, assumes a fixed rate of 4.088% for the live of the 2008 Del Val Loan [2] For these purposes, assumes a fixed rate of 2.055% for the live of the 2016 Del Val Loan [3] For these purposes, assumes a fixed rate of 2.579% for the live of the 2017 Del Val Loan [4] Outstanding as of July 2, 2019 PFM Financial Advisors LLC 7/2/2019 3

UPPER DUBLIN TOWNSHIP SERIES OF 2014 Bonds to be Refunded Optional Redemption: January 15, 2020 1 2 3 4 5 6 Semi-Annual Fiscal Year Date Principal Rate Interest Debt Service Debt Service 1/15/2020 108,737.50 108,737.50 7/15/2020 370,000 2.000 108,737.50 478,737.50 587,475.00 1/15/2021 105,037.50 105,037.50 7/15/2021 380,000 2.000 105,037.50 485,037.50 590,075.00 1/15/2022 101,237.50 101,237.50 7/15/2022 390,000 2.000 101,237.50 491,237.50 592,475.00 1/15/2023 97,337.50 97,337.50 7/15/2023 395,000 2.250 97,337.50 492,337.50 589,675.00 1/15/2024 92,893.75 92,893.75 7/15/2024 400,000 2.375 92,893.75 492,893.75 585,787.50 1/15/2025 88,143.75 88,143.75 7/15/2025 415,000 2.500 88,143.75 503,143.75 591,287.50 1/15/2026 82,956.25 82,956.25 7/15/2026 425,000 2.650 82,956.25 507,956.25 590,912.50 1/15/2027 77,325.00 77,325.00 7/15/2027 435,000 2.750 77,325.00 512,325.00 589,650.00 1/15/2028 71,343.75 71,343.75 7/15/2028 445,000 3.000 71,343.75 516,343.75 587,687.50 1/15/2029 64,668.75 64,668.75 7/15/2029 460,000 3.250 64,668.75 524,668.75 589,337.50 1/15/2030 57,193.75 57,193.75 7/15/2030 475,000 3.250 57,193.75 532,193.75 589,387.50 1/15/2031 49,475.00 49,475.00 7/15/2031 490,000 3.250 49,475.00 539,475.00 588,950.00 1/15/2032 41,512.50 41,512.50 7/15/2032 505,000 3.750 41,512.50 546,512.50 588,025.00 1/15/2033 32,043.75 32,043.75 7/15/2033 525,000 3.750 32,043.75 557,043.75 589,087.50 1/15/2034 22,200.00 22,200.00 7/15/2034 545,000 4.000 22,200.00 567,200.00 589,400.00 1/15/2035 11,300.00 11,300.00 7/15/2035 565,000 4.000 11,300.00 576,300.00 587,600.00 TOTALS 7,220,000 2,206,812.50 9,426,812.50 9,426,812.50 PFM Financial Advisors LLC 7/2/2019 4

UPPER DUBLIN TOWNSHIP RESTRICTED YIELD ESCROW 1 2 3 4 5 6 7 8 9 10 SERIES OF 2014 Optional Redemption Date: January 15, 2020 ESCROW REQUIREMENTS ESCROW EARNINGS* SETTLE 10/17/2019 Escrow Date Principal Interest Agent Required Par Coupon Earnings Cash Flow Balance 1/15/2020 7,220,000.00 108,737.50 7,328,737.50 7,290,091.00 2.150 38,647.47 7,328,738.47 0.97 TOTALS 7,220,000.00 108,737.50 0.00 7,328,737.50 7,290,091.00 38,647.47 7,328,738.47 2.445451 Actual Escrow Yield 7,290,091.00 Actual Escrow Cost 2.654931 Maximum Escrow Yield (Yield on new Bonds) 7,281,641.11 Perfect Escrow Cost (8,449.89) Difference *Depending on current market conditions at time of pricing, escrow may be gross funded with securities purchased at settlement. PFM Financial Advisors LLC 7/2/2019 5