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Valley Center approves sale of two general‑obligation bond series to fund capital projects
Summary
The council accepted bids for two series of general‑obligation bonds sold at a municipal bond sale and approved ordinances and resolutions to finalize the sales; proceeds will repay temporary notes and reimburse capital projects over a 20‑year repayment period.
The Valley Center City Council on action taken at its meeting approved the sale results and adopting ordinances and resolutions for two series of general‑obligation bonds issued in connection with city capital projects.
Garth Herman of bond counsel firm Gilmore & Bell told councilors the city held a bond sale at 11 a.m. the day of the meeting and received competitive bids. For the tax‑exempt series 2025‑1 general obligation bonds, Janney Montgomery Scott LLC submitted the winning bid with a true interest cost of 3.39 percent; the second‑place bid (KeyBank Capital Markets) had a true interest cost of about 3.40 percent. Herman said Janney used optional bond insurance, which carries a $42,000 premium paid by the bidder and embedded in the underwriting structure; that approach produced a slightly lower true interest cost to the city when accounting for underwriting discount and the time value of money. Council voted to accept the bid and approved Ordinance 14‑38‑25 and Resolution 802‑25 to authorize and prescribe the details of the series 2025‑1 sale.
For the taxable series 2025‑2, the council accepted the winning bid from Bernardi Securities Inc., with a stated true interest cost of 4.61 percent, and approved Ordinance 14‑39‑25 and Resolution 803‑25. Bond counsel explained the taxable series was necessary because a small portion of project costs (related to a development guarantee tied to a TIF project) could not be financed with tax‑exempt debt.
Herman told the council the proceeds will be used to pay off two outstanding temporary notes (series 2023‑1 and a portion of 2024‑1) and to reimburse the city for costs on capital projects. Projects specifically mentioned in the staff presentation as being funded or reimbursed from the bond issue included internal improvement work in Sunflower Valley addition, Prairie Lakes additions (phases 3 and 4), several Meridian projects listed in the capital improvements plan, the Pool and Recreation Center project and a bridge/floodway item noted in the packet. The bonds are 20‑year obligations with repayments beginning in 2027 and a final maturity in 2048; counsel said the planned closing date for the sale is Nov. 20, 2025, pending final documentation and standard closing steps.
“It was a very competitive market today and, in Clayton’s words, a good day to sell bonds,” Herman said during his presentation.
Councilors asked clarifying questions about how bids were evaluated, the underwriting discount and why some bidders included optional bond insurance. Herman explained the award is based on true interest cost, which factors underwriting discounts and the time value of money in addition to net interest dollars.
Actions the council took included accepting the winning bid from Janney Montgomery Scott LLC for series 2025‑1, passing Ordinance 14‑38‑25 and adopting Resolution 802‑25; and accepting the winning bid from Bernardi Securities Inc. for series 2025‑2, passing Ordinance 14‑39‑25 and adopting Resolution 803‑25. Councilors approved the related motions and waived first readings as part of the meeting actions.
The bond counsel and city staff said their firms would complete documentation and close the transactions on the planned Nov. 20, 2025 closing date without a further council meeting.
