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Successor agency approves up to $48 million in tax allocation refunding bonds
Summary
The successor agency continued a bond refinancing approved earlier in April, increasing a not-to-exceed principal to $48 million and setting minimum net-present-value savings, with staff estimating about $7.8 million in gross debt service savings subject to final market conditions and Department of Finance approval.
The successor agency to the former redevelopment project area moved forward on bond refinancing at the May 12 San Marcos City Council meeting. The action amends an earlier resolution to increase the not-to-exceed principal amount for refunding bonds and confirms preliminary financing documents.
Staff said the bonds would refund series 2015A tax allocation refunding bonds previously issued. “Revised good faith estimates… show that the estimated total debt service payment savings is about $7,800,000 with an interest cost estimated at 3.68%,” the presenter said, describing the consultant’s estimate. The presentation noted approximately $5.1 million in funds already distributed to the successor agency and estimated a future net increase of about $2.7 million in property tax residual distributions to impacted taxing entities; exact savings will be determined at the time of the bond issuance and market conditions.
The presenter told the board that the county oversight board approved the issuance in April 2025 and that required documents were submitted to the California Department of Finance for review; DOF approval was estimated for May 23. The resolution before the body amended the prior authorization to increase the refunding bond limit to $48,000,000 and revised the required net-present-value savings threshold to not less than 3% for the successor agency.
A motion to approve the resolution was made, seconded, and approved by unanimous vote at the meeting.
Staff said the refinancing would remain subject to final market pricing, successful DOF approval, and compliance with Health and Safety Code section 34177.5(a)(1).
