Goodyear Utilities #1 CFD

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Map for CF Utilities 1/89-359 

The Goodyear Community Facilities Utilities District No. 1 (District) is a special purpose district created specifically to acquire or construct public infrastructure within specific areas of the City of Goodyear, Arizona, and is authorized under state law to collect for operations and maintenance (O&M), issue general obligation (GO) or revenue bonds to be repaid by property (ad valorem) taxes levied on property within the District (for GO debt), or by specific revenues generated within the District (revenue bonds).  The District was created by petition to the City Council by property owners within the area to be covered by the District, and debt may be issued only after approval of the voters within the District.

The District, a component unit of the City of Goodyear, Arizona (City), was established August 8, 1989, and is a political subdivision of the State of Arizona as well as a municipal corporation by Arizona Law.  The City Council serves as the Board of Directors.  All transactions of the District are included in the City’s financial statements.  However, the City has no liability for the debt.

The Utilities District No. 1 will appear on your property tax statement from Maricopa County as "CFD - GOODYEAR UTILITIES #1".  The GO debt and O&M is paid for through the normal property tax process with the county.  Payment of the debt service and O&M is through collections of an ad valorem property tax levy on properties within the district based upon the assessed valuation.  The Maricopa County Assessor determines the assessed value of the property and the Maricopa County Treasurer collects the property tax.

On June 11, 2014, the District issued $14,755,000 of General Obligation Bonds, with an average interest rate of 3.99%, to do an advanced refunding for a portion of the District’s 1998, 2000 and 2003 General Obligation Bonds. Under the terms of the refunding issue, sufficient assets to pay $2,550,000 of the 1998, $5,175,000 of the 2000 and $7,030,000 of the 2003 principal and interest on the refunding bonds issued have been placed in irrevocable trust accounts at commercial banks and invested in U.S. Government Securities, which together with interest earned thereon, will provide amount sufficient for future payment of principal and interest of the issues refunded.  As a result, the bonds are considered to be defeased and the liability for those bonds has been removed from the financial statements.  The $383,166 deferred amount on retirement of bonds is being amortized over the shorter of the lives for the refunded or refunding bonds on a straight-line basis.  The transaction resulted in an economic gain (difference between the present value of the debt service on the old and the new bonds) of approximately $2,090,047.  The savings are realized by lower debt service payments on the District's general obligation bonds.

On June 10, 2015, the District issued $7,015,000 of General Obligation Bonds, with an average interest rate of 3.79 percent, to do an advanced refunding for the remaining outstanding principal of the Series 2005 and Series 2005 Refunding General Obligation Bonds. Under the terms of the refunding issue, sufficient assets to pay $6,210,000 of the 2005 and $805,000 of the Refunding 2005 principal and interest on the refunding bonds issued have been placed in irrevocable trust accounts at commercial banks and invested in U.S. Government Securities, which together with interest earned thereon will provide an amount sufficient for future payment of principal and interest of the issues refunded.  As a result, the bonds are considered to be defeased and the liability for those bonds has been removed from the financial statements.  The $238,955 deferred amount on retirement of bonds is being amortized over the shorter of the lives for the refunding bonds on a straight-line basis.  The transaction will reduce total debt service payments by $484,553 and result in an economic gain (difference between the present value of the debt service on the old and the new bonds) of approximately $500,095.  The savings are realized by lower debt service payments on the District's general obligation bonds.

On May 25, 2016 the District issued $18,535,000 of General Obligation Refunding Bonds with an average interest rate of 3.95 percent to refund $18,880,000 of outstanding 2007 Series General Obligation Bonds with an average interest rate of 4.84 percent. The net proceeds of $20,106,713 (after payment of $473,025 in underwriting fees and other issuance costs) were used to purchase U.S. government securities. Those securities were deposited into an irrevocable trust with an escrow agent to provide for future debt service payments on the 2007 Series General Obligation Bonds.  As a result, the 2007 Series General Obligation Bonds are considered to be defeased and the liability for those bonds has been removed from the financial statements.  Although the refunding resulted in the recognition of a deferred loss on refunding of $994,971 for the fiscal year ended June 30, 2016, the District in effect reduced its aggregate debt service payments by
$2,916,204 over the next 17 years and obtained an economic gain (difference between the present values of the old and new debt service payments) of $2,444,650.  The savings are realized by lower debt service payments on the District's general obligation bonds.

During the year ended June 30, 2018, the District partially defeased $2,595,000 in Series 2014 General Obligation refunding bonds. Existing resources of $2,715,702, (after payment of $22,859 in underwriting fees, insurance, and other issuance costs) were used to purchase U.S. government securities, which are essentially risk-free as to amount, timing, and collection of interest and principal. Those securities were deposited in an irrevocable trust with an escrow agent, to provide for all future debt service payments of the refunded general obligation bonds.  As a result, the refunded general obligation bonds are considered to be defeased, and the liability for those bonds has been removed from the government-wide financial statements.  The reacquisition price exceeded the net carrying amount of the old debt by $36,893. This amount is reported as a special item on the Statement of Activities in the current year. This partial defeasance was undertaken to reduce total debt service payments.

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