Aliso Viejo Ranch Presentation

8/13/2019 Aliso Viejo Ranch Presentation

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Aliso Viejo Ranch Presentation

February 5, 2014

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Site Plan for Aliso Viejo Ranch Project

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Overview of Aliso Viejo Ranch Project

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City is currently evaluating a potential development

of a 7.7acre site located at 100 Park Avenue

Preliminary conceptual plans include a recreation

facility, a full gymnasium and supporting amenities

3 scenarios were identified in August 2013, only two

of those scenarios are currently being considered

for development of the Aliso Viejo Ranch and eachscenario will be discussed along with estimated

costs

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Overview of Build-Out Scenarios

Scenario 1- Complete the entire project at the estimated

cost of $19.2 million to include a Community Building,Full Gymnasium and a Multipurpose room as detailed inthe specifications of the project design

Scenario 2- Complete the project at the estimated cost of$19.8 million in two phases for cash flow purposes:

Phase I - Complete the Community Building and theGymnasium at an estimated cost of $14.4 million asdetailed in the specifications of the project design

Phase II - Complete the Multipurpose room at anestimated cost of $5.4 million as detailed in thespecifications of the project design

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Discussion of Credit Rating Agencies Guidelines

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Debt Policy Guidelines for Strong Government Credits

Description Standard and Poors Fitch Ratings

Debt Level


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Optimal Debt Issuance Under

Standard & Poors Categories

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(1)Projected FY 2013-14 General Fund Expenditures of $13,925,159 (excluding LTD) provided by the City.(2) Assumes Aliso Viejo population of 49,477 as of 1/1/2013 provided by the California Department of Finance.(3) Assumes Aliso Viejo FY 2013-14 AV of $7,860,254,707as reported by the OC Assessor.

Description 30 Year Term

8% of FY 13-14

GF Expenditures(1)

$1,114,013

Par Amount $17,545,000

Project Fund $17,364,034

Average AnnualDebt Service $1,101,890

Debt Per Capita(2) $354.61

Debt to Market

Value(3)

0.22%

10-year Debt

Amortization Rate23%

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Optimal Debt Issuance Under

Fitch Ratings Categories

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(1)Projected FY 2013-14 General Fund Expenditures of $13,925,159 (excluding LTD) provided by the City.(2) Assumes Aliso Viejo population of 49,477 as of 1/1/2013 provided by the California Department of Finance.(3) Assumes Aliso Viejo FY 2013-14 AV of $7,860,254,707as reported by the OC Assessor.

Description 30 Year Term

6% of FY 13-14

GF Expenditures(1)

$835,510

Par Amount $13,150,000

Project Fund $12,977,084

Average AnnualDebt Service $825,747

Debt Per Capita(2) $265.78

Debt to Market

Value(3)

0.17%

10-year Debt

Amortization Rate23%

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What Can The City Afford?

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Aliso Viejo Ranch Improvements

Description

Scenario 1

(Community Building, full

Gymnasium and a Multipurpose

room)

Scenario 2

(Community Building, full

Gymnasium and a Multi-purpose

Room: Two-Phase Approach)

Project Cost $19.2 M$14.4M Phase I

and $5.4M Phase II

City Equity Contribution $10.5 M $10.5M

Financed Amount $8.7 M $3.9M (Phase I)

Annual Debt Service $565,000 $260,000

Projected Fund Balance in FY

2017-18Lower than recommended level Higher than recommended level

Based on current interest rates for a comparable type of credit with a term of 30 years and a level debt service profile.

Assumes the City has paid off the outstanding 2006 COPs and maintains minimum recommended level of cash flow/operation and asset

replacement reserves.

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Options available to fund the Project

Option 1 Issuance of debt to finance the whole Project of

$19.2 million (Not Recommended) Does not meet the Debt Affordability criteria

Exceeds the amount of debt that can be supported by the General Fund

Option 2 Use existing City Reserves and CommunityEnhancement Funds to pay for the whole Project of $19.2million (Not Recommended)

Will result in the depletion of the Citys reserves

Will expose the City to financial and economic uncertainty

Option 3 - Use a combination of City Reserves, Community

Enhancement Funds and debt to pay for the whole Projectof $19.8 million in two phases (Recommended) A combination of affordable amount of debt and a prudent use of

reserves

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Basic Assumptions Used in the Analysis

1) Boys & Girls Club contracts for operations and provides

janitorial, furniture, and operational costs

2) City maintains the facility and grounds but does not provide

City staffing

3) Assumes no rental income from Community Building

4) Basic operations continue at the Family Resource Center with

annual costs of $250,000

5) Asset Replacement Reserves are included at 50% of annualdepreciation per recommended accounting standards and the

Council Policy adopted by the City

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Basic Assumptions Used in the Analysis (Contd)

6) Assumes use of 90% of $3.4 million of Community

Enhancement Funds

7) Forecast includes $50,000 of General Fund monies in matching

funds for potential receipt of grants monies

8) Forecast does not assume any funding for wish list projects on

the Citys Strategic Initiative list

9) Forecast includes funding for the Cattery in the amount of

$199,100 from Community Enhancement Funds

10) Forecast does not include impacts of the recent negotiations

by Orange County Sheriffs Department (OCSD)

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Estimated Fiscal Impact over next five years

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Scenario 1

(1) Reflects cash flow required for daily operations as majority of the revenues are received by the City in December, January, May and June.

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Estimated Fiscal Impact over next five years

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Scenario 2

(1) Reflects cash flow required for daily operations as majority of the revenues are received by the City in December, January, May and June.

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Questions

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Aliso Viejo Ranch Presentation

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