1. FINANCE DEPARTMENT STANDBY BOND PURCHASE AGREEMENT WITH BANK OF THE WEST Vic Erganian Deputy Finance Director/City Treasurer Finance Committee/City Council September 8, 2014

2. FINANCE DEPARTMENT 2 BACKGROUND In 2000, the City issued $32.385 Million bonds – Paseo Colorado Bonds. Bonds were issued as Taxable Variable Rate Demand Lease Revenue Bonds (VRDBs) and refunded in 2008. VRDBs legally require a liquidity facility such as a standby bond purchase agreement or a letter of credit. In 2000, the City entered into a SBPA with KBC Bank. The SBPA expires on 9/15/2014. Staff extended the SBPA to March 2015 and concurrently issued an RFP for a new SBPA.

3. FINANCE DEPARTMENT 3 BACKGROUND The City issued the RFP to 28 banks including several banks located and/or headquartered in Pasadena. The City received two responses:  Bank of the West  Mitsubishi UFJ Financial Group (MUFG) Both banks have presence in Pasadena.

4. FINANCE DEPARTMENT 4 Staff recommends entering into a new SBPA with Bank of the West for a term of five years. Annual SBPA fee will be 0.30% versus the current fee of 0.58%

5. FINANCE DEPARTMENT 5 The City will save $48,000 in FY2015 and $292,500 during the remaining term of the contract. The City’s cost of the borrowing will be:  SBPA fee 0.30%  Current interest 0.35%  Remarketing fee 0.08% Total: 0.73% One-time cost of reissuing the bonds will be approximately $164,000. FISCAL IMPACT

6. FINANCE DEPARTMENT 6 RATINGS S&P affirmed its rating of AA+/A-1 for the bonds. Fitch affirmed its short-term rating of F1 for the bonds.

7. FINANCE DEPARTMENT RECOMMENDATION Joint Action: City Council and PPFA Adopt a resolution approving the form of and authorizing the execution and delivery of a standby bond purchase agreement with Bank of the West; approving the form of and authorizing the distribution of a reoffering memorandum; and authorizing the execution and delivery of other related documents and approval of other documents and actions in connection therewith 7