City Completes Sale of Refunding Bonds for Norco Hills Community Facilities District and Generates Significant Savings for District Taxpayers
Taking advantage of an attractive opportunity, the City of Norco has completed the sale of the 2018 Special Tax Refunding Bonds for the Norco Community Facilities District No. 97-1 (Norco Hills) through a direct bank placement. Proceeds from the 2018 Special Tax Refunding Bonds were used by the City to refinance the remaining outstanding balance of the District’s 2005 Refunding Bonds in order to generate significant future reduction in special taxes for property owners in the District.
The 2018 Bonds in the amount of $4.55 million were sold through a direct placement to Opus Bank (Direct Purchaser). Members of the financing team that assisted the City in the transaction include: Stradling, Yocca Carlson and Rauth (Bond Counsel); Fieldman, Rolapp & Associates, Inc. (Financial Advisor); Willdan Financial Services (Special Tax Consultant); and Stifel, Nicolaus & Company, Incorporated (Placement Agent). Based on the final pricing of the Bonds, the City’s Financial Advisor has calculated the actual savings to property owners in the District to range between $343 and $454 per parcel per year depending on lot size. These savings are relatively level and average approximately $414 per parcel per year over the remaining life of the Bonds (through 2030). This represents nearly 7.5% in net present value savings over the old Bonds.
The Norco Hills Community Facilities District is located about one half mile east of Interstate 15 at the intersection of Norco Hills Road and Hidden Valley Parkway in the southeast portion of the City. The District consists of approximately 235 acres and is comprised of 217 residential lots subject to the special tax. The direct placement approach enabled the City and the financing team to achieve higher savings by locking in an attractive interest rate for the refunding and insulating the District from the volatility in the municipal market that saw interest rates increasing. The Direct Purchaser was impressed with the District’s financial fundamentals, including recent strong growth in assessed values and diverse residential ownership of parcels in the District. This refunding transaction closed on March 13, 2018.