SANITARY DISTRICT NO. 5 OF MARIN COUNTY
March 26, 2020
Sanitary District No.5 of Marin County closed a bond refinancing transaction during the week of March 23, 2020 to refinance an existing obligation at lower interest rates, achieving significant savings for the District.
The existing obligation was the 2012 Main Plant Rehabilitation Project Bond that allowed the District to upgrade its Wastewater Treatment Facility located at 2001 Paradise Drive.
On March 26th, the District closed on a 2020 Revenue Refunding Loan Agreement that was sold to a private bank investor via a competitive private placement offering by DA Davidson & Company. The District issued $7.9 million in bonds and used the proceeds to pay off its outstanding 2012 Revenue Bonds. The 2012 Bonds were set to pay a 5% coupon rate from 2023 through its maturity of 2031. The new Bonds have a matching maturity to the 2012 Bonds of 2031 and were sold to investors at an interest rate of 2.48%. The effective lowering of the rate from 5% to 2.48% will allow the District to save a total of $553,458.60 in cash flow savings. Annually the District will save approximately $46,000 per year through 2031.
These savings will greatly assist the District in completing projects listed on its 10-year capital improvement program schedule. Especially considering the District is about to undertake a large capital project that consists of installing a new 2100 linear foot Cove Road Force Main Sewer Line, (Belvederes main sewer line that conveys sewer from Belvedere to the treatment plant located on 2001 Paradise Drive) The Projects estimated cost is around $1 Million Dollars. This project is estimated to cut into half of Belvederes Capital Improvement Reserve.
The District’s Board and Staff worked diligently with its Municipal Advisor, Wulff, Hansen & Co. and its Bond Counsel, Jones Hall, over the course of the winter to refinance this obligation at a time when the market was seeing unprecedented volatility and interest rates were approaching all-time lows never seen before in the bond market.
For more information regarding the Districts refinance or its future Cove Road Force Main Rehabilitation Project, you may contact our office at any time. 415-435-1501