Airport authority approves preliminary statement for $35M refunding, projects $7M NPV savings

The Victorville City Council, acting in its capacity as the Southern California Logistics Airport Authority (SCLAA), on Oct. 7 approved the form of a preliminary official statement and a continuing disclosure certificate to enable a refunding of five tax allocation bond series secured by tax increment from the VITA project area.

City staff and the financing team told the council the proposed refunding would refinance five tax‑exempt series of the authority’s outstanding tax allocation bonds, producing estimated total cash‑flow savings of $35 million through 2043 and net present value savings of about $7 million, or roughly 7% of the refunded principal. “This refinancing will generate $35,000,000 in total cash flow savings, through 2043,” the authority’s municipal adviser said when presenting the estimated results. The council approved the motion unanimously.

Staff described the mechanics: three of the refunding bonds’ cash‑funded reserve funds would be substituted with surety policies, freeing cash to lower bond issuance size and increase investor savings. The plan also aligns the project’s debt service with the semiannual RPTTF (redevelopment successor) distributions to reduce the “lumpiness” between property tax receipts and bond payments. The financing team indicated a bond sale is targeted for the week of Oct. 20 with a closing in mid‑November; S&P Global Ratings had been briefed and a rating decision was expected the morning following the meeting.

The projected savings are net of estimated issuance costs and include the city’s estimated share of the savings (11.6 percent), equal to roughly $4 million in savings to the City of Victorville through 2043, staff said. The presentation included a plan to refinance without creating a December 1 maturity in the new structure, which staff said increases near‑term savings.

Approvals completed earlier in the year for the overall refunding plan — by the authority commission, the city (as a pledged taxing jurisdiction), the successor agency and the San Bernardino Countywide Oversight Board — were recapped; the Department of Finance had issued its approval in May. The item before council on Oct. 7 ratified publication of the offering materials and the continuing disclosure certificate needed for underwriter compliance with federal securities laws.

The council’s vote authorized staff to proceed with posting the preliminary official statement and continuing disclosure certificate, and to complete other ministerial steps needed for the planned bond sale. No bond pricing or final sale terms were set at the meeting; those will be determined during the underwriting and pricing period on the targeted Oct. 20 sale date.