Board approves up to $95 million refunding for former redevelopment agency bonds

Santa Cruz County supervisors voted unanimously on Feb. 11 to adopt a resolution authorizing the issuance of tax allocation refunding bonds 2025 Series A in an amount not to exceed $95,000,000 to refinance portions of outstanding redevelopment successor agency debt.

The move is intended to reduce annual debt service on the successor agency’s obligations and thereby reduce the amount of tax‑increment revenue required for debt payments. Suzanne Harrell, the county’s financial advisor, told the board the average reduction in debt service is expected to be about 7.5 percent, or almost $8.8 million in total annual savings; the county’s share of the projected savings is roughly $1.5 million.

Harrell said only the 2015 Series A and the 2016 series have sufficient savings to make refinancing economical now. She outlined the required post‑dissolution approval process: successor agency approval, consolidated oversight board approval and a Department of Finance review with a 60‑day clock to authorize the refunding. Harrell said she does not expect bonds to be issued until June and that funding would be available to redeem the outstanding bonds in September 2025.

The board voted to approve a form of indenture of trust, two escrow agreements, an official notice of sale, the preliminary official statement and a continuing disclosure certificate, and to authorize a not‑to‑exceed amount for the sale. County policy requires refinancing savings exceed 4 percent; staff said the estimated savings meet that threshold.

Supervisor Cummings moved the staff recommendation; Supervisor Koenig seconded. Roll call votes were recorded as aye from Supervisor DeCerpa, Supervisor Cummings, Supervisor Martinez, Supervisor Koenig and Chair Hernandez. The motion passed unanimously.

What happens next: the successor agency must approve the transaction, the consolidated oversight board must concur and the Department of Finance must review the documentation before a competitive sale. If the schedule presented by Harrell holds, taxpayers and local taxing entities will see reduced debt‑service requirements beginning with the 2025‑2026 fiscal flow of funds.