Financial Report - Moreno Valley

Note 6: Long Term Debt (Continued)
Auto Mall Special Tax Bonds
City of Moreno Valley
Notes to Financial Statements
Year Ended June 30, 2011 (Continued)
Community Facilities District No. 3, Auto Mall Special Tax Bonds 2000, Refinancing in
March 2000, the Community Facilities District No. 3 of the City of Moreno Valley issued
Special Tax Bonds 2000 (Refinancing Bonds) in the amount of $8,075,000 to refund on
June 1, 2000 $7,828,258 of outstanding Auto Mall Special Tax Bonds (Refunded Bonds). The
Refinancing Bonds mature in serial and term fashion through September 2030 and bear
interest payable semi-annually at rates ranging from 5.25% to 7.50%. The bonds are subject
to optional and mandatory redemption prior to maturity beginning September 1, 2010. The
bonds are payable from and secured by a special tax levy against parcels within the District.
Under an arrangement (Owner Participation Agreement) involving the parcel owners, the
District, the City and the City's Redevelopment Agency, the required tax levy is to be offset by
available property tax increment from the Agency. Should available increment be insufficient
to offset the levy, available project sales tax collected by the City will be used. This
refinancing increased the aggregate debt service payments that were required on the
Refunded Bonds by approximately $3,100,000 and produced an economic loss (the excess
of the present value of the new over old debt service payments) of approximately $418,000.
The refinancing was undertaken to cure a debt service payment default that had occurred on
the now refunded bonds. Special tax delinquencies were the primary cause of the default.
The annual debt service requirements for the Auto Mall Special Tax Bonds payable
outstanding at June 30, 2011, are as follows:
Auto Mall Special Tax Bonds
Principal Interest
Year Ending June 30,
2011-2012 $ 15,000 $ 98,813
2012-2013 15,000 97,688
2013-2014 20,000 96,375
2014-2015 25,000 94,688
2015-2016 30,000 92,625
2017-2021 205,000 423,563
2022-2026 380,000 316,125
2027-2031 635,000 127,688
Totals $ 1,325,000 $ 1,347,565
Refunding Certificates of Participation, Series 1997
Refunding Certificates of Participation (City Hall) Series 1997 in the original issue of
$10,955,000, with a variable interest rate due through 2016, were issued to advance refund
$10,180,000 of outstanding 1995 Certificates of Participation. The source of repayment for
the Certificates is lease payments to be made by the Moreno Valley Public Facilities
Financing Corporation whereby scheduled lease payments equal the amount of principal and
interest due on the Certificates. The City has the option to convert the variable rate
certificates at any time. The Refunding Certificates are subject to purchase on the demand of
the holder while they are outstanding at a variable rate upon seven days notice. Payment of
these demand certificates shall be made from the proceeds of the resale of such certificates
by the City's remarketing agent. Should there be insufficient funds from this source, funds will
be made available from an irrevocable bank letter of credit. The letter of credit is valid
through the date the Certificates bear interest at a fixed rate or May 1, 2007. Repayment of
the letter of credit shall occur from any available funds with the trustee of the issue, including
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