Adopt resolution authorizing the Chief Financial Officer (CFO) and/or County Administrative Officer (CAO) to execute redemption of the outstanding 2012 Refunding Certificates of Participation for the District Attorney Building at 301 Second Street in Woodland, execute the Escrow agreement and authorize the CFO and/or CAO to take necessary actions to complete the redemption. (No general fund impact) (Haynes/Xiong)

The County of Yolo financed the acquisition of the District Attorney Building at 301 Second Street, Woodland, California in 1998 for $4.485 million for a 30-year term. In 2012, the County refunded the outstanding debt (equivalent to a refinancing) of $3.410 million and maintained the maturity date of 2028 on the building. As of June 2022, $1.7 million of principal is still outstanding on the 2012 Refunding Certificates of Participation ("the Certificates"). These outstanding Certificates carry an average interest rate of 3.5% and, if left outstanding until maturity, would require the County to make $1.922 million in remaining payments. 

The County set aside a fund ("the Chula Vista Fund") to reduce the County's outstanding obligations on July 21, 2021. This was in acknowledgement that an Appeals court decision allowed the County to receive a higher amount of distributions from the prior redevelopment areas as it allowed for the County of Yolo to share in residual proceeds, which it had not received in prior years. As this resource is temporary and would only exacerbate revenue declines at the time redevelopment wind-down is completed, the Board of Supervisors adopted a resolution that focus these additional revenues for (1) Reserve Accumulation, (2) reduction in long-term liabilities, or (3) protect County's essential services from potential impacts of unanticipated events and circumstances not occurring during the normal course of operations (i.e., a fiscal emergency). 

County staff recommend that the resources set aside in the Chula Vista fund be used to perform a redemption (early payoff) of the Certificates outstanding related to the District Attorney Building during the 2021-22 fiscal year. This will relieve the County from making payments toward this obligation in future fiscal years that would otherwise be a burden on County funds. The annual debt service savings is approximately $275,000 per fiscal year. 

As the Certificates are a legal instrument, in order to demonstrate the intent to redeem and notify the paying agent bank and investors of the redemption, staff are seeking authorization from the Board on a Resolution (Attachment A) to execute an escrow agreement until redemption is completed (Attachment B) and to authorize the Chief Financial Officer and/or County Administrator to take actions necessary to execute the redemption. As part of the resolution, the Board also authorizes the consolidation of collateral on the outstanding 2012 Certificates of Participation for the Solar projects. Originally these Certificates were collateralized by both the Bauer Health Building and the Erwin Meier Administration building. The Resolution, subject to approval by the bond insurer, Assured Guaranty, would allow the consolidation down to one facility. The completion of this redemption will improve the financial condition of the County and save $192,523 in interest that would otherwise be owed, as well as improve the ability of the County to contemplate future financings due to improved collateral positioning.

The Department of Financial Services collaborated with Government Financial Strategies, as financial advisor, and Parker Covert LLP, as bond counsel, in order to complete the Certificate redemption.