The City of Cotati (the "City") began researching cost optimization strategies for multiple City projects including financing all or part of the City's street improvement projects and CalPERS unfunded accrued liability.
After careful review and analysis of all financing options, Weist Law worked with the City to determine that a comprehensive approach to managing City reserves, street improvement project funding, and UAL repayment was the most advantageous course of action. This comprehensive financing structure was optimal for tackling each goal of the City at the same time. Combining additional street improvement project financing with the pension refunding provided for greater cost of issuance efficiency and time savings for the City staff.
Weist Law and CalMuni Advisors, as the financing team for the City, was able to reach out to many financial institutions with the opportunity to work with them to pioneer this comprehensive lease finance structure. The financing team was able to obtain optimal rates and have the financial institution commit to holding the rates for a longer period of 75 days versus the standard 60 days.
The teams at Weist Law and CalMuni Advisors were able to guide the City through the complex, creative financing structure. Weist Law structured the transaction as a private placement with two set of lease financing agreements separated by the collateral pledged on each agreement. The Series A agreements pledged the City streets and Series B agreements pledged two essential assets of the City.
Weist Law was able to create a first-of-kind financing structure for the City of Cotati, pioneering a truly innovative structure that allowed the City to accomplish multiple goals at once. The City's final result was cost reduction in procurement, cash-flow balancing and future budget predictability for multiple projects.
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