Fiscal Year 2013-2015 Special Budget Meeting

B FILED OFFICE OF THE CH T Cl EB> OAKLAND DISTRIBUTION DATE: 6/18/13 immZl AM 8:57 MEMORANDUM CITY OF OAKtAND TO: HONORABLE MAYOR & FROM: Katano Kasaine . CITY COUNCIL SUBJECT: Results of City of Oakland 2013-14 DATE: June 18, 2013 Tax and Revenue Anticipation Notes Market Pricing City Administrator ' Date Approval /s/ Scott P. Johnson 6/18/13 INFORMATION The purpose of this-informational report is to provide the City Council with an update on the recent pricing for the $78,230,000 City of Oakland 2013-2014 Tax and Revenue Anficipation Notes (TRAN) (the "2014 Notes"). The City continues to experience gradual economic improvement and produce stable financial results. On June 6, 2013 the City competitively sold its 2014 Notes through MuniAuction, an online bidding platform. With the generally improved market tone and reception for the City's debt, it was not until last year (2013) that the City was able to make use of the competitive sale process for the 2013 Tax and Revenue Anticipation Notes, which resulted in participation by eleven (11) bidders with the lowest all-in true interest cost of 0:209%. During the period surrounding the 2008 financial crisis, negotiated sale (through a selected financial institution(s)), was the predominant method of sale for bonds and notes due to the general' lack of liquidity and financial market volatility. The turmoil in the market had created a shortage of buyers of notes. Therefore, in order to ensure a successful sale, until its 2013 TRAN sale, the City had sold its TRANs through a negotiated sale during that time, which is not the most economically efficient process and which may have resulted in higher borrowing costs to the City. The City has demonstrated strong financial management pracfices to investors over the years and has continued to maintain high credit rafings for the 2014 Notes, which resulted in participation by eleven (1 l)-bidders who submitted a total of thirty-eight (38) bids. RBC Capital Markets was the winning bid with an all-in true interest cost (TIC) of 0.178% - the second lowest cost of funds compared to other comparable California municipalifies that have priced in the market since the note season began in early June 2013. Below is a schedule summarizing the bid results,