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Atascadero council and financing authority approve lease revenue bonds to fund new public-safety facilities
Summary
The Atascadero City Council and the Atascadero Financing Authority unanimously approved a package of lease revenue bond authorizations to finance construction and renovations for two fire stations and upgrades to the police building using Measure D20 funds.
The Atascadero City Council, sitting also as the Atascadero Financing Authority, voted unanimously to approve resolutions authorizing the issuance of lease revenue bonds to fund a public safety facilities project, city staff said at a public hearing.
Administrative Services Director Rangel summarized the financing and its purpose: "These bonds are being issued for the public safety facilities project, which is a critical investment for the safety and well-being of our community," and said the city will make semiannual debt-service payments from Measure D20 funds.
Nut graf: The financing will provide the capital to rebuild Fire Station 1, comprehensively renovate Fire Station 2 and complete targeted upgrades at the police station, including a new dispatch center and security and locker-room improvements. Staff and the city’s municipal adviser told council the plan uses voter-approved Measure D20 revenue already set aside for public-safety capital costs and should not raise local taxes.
Project scope and timeline: Assistant City Manager Christiansen described the three main elements. Fire Station 1 will be replaced with a new two-story facility to add living quarters, administrative space and an emergency operations center that Christiansen said "will also give the city a emergency operations center." Fire Station 2 will receive new living quarters, upgraded apparatus bays and an exhaust system to meet current safety standards. The police station work includes a new dispatch center and interior upgrades. Staff estimated Fire Station 2 work to finish in early 2027 and Fire Station 1 later in 2027; the police dispatch work is expected to be completed in phases beginning earlier in the program.
Financing details and safeguards: The bond team said the financing is being structured to issue roughly $29.5 million in bonds to raise about $30 million for project funds after premium and costs; the sale was presented with a not-to-exceed authorization of $33 million to allow market flexibility. As underwriter Ralph Holmes summarized to council, "We're issuing bonds to finance these projects, roughly 29 and a half million dollars in bonds to raise about $30,000,000 in project funds." Staff reported projected annual debt service of less than $2 million and a 30-year amortization with semiannual payments in November and May.
The documents authorize the financing authority to lease the new and renovated facilities to the city; city hall is included in the initial lease structure but staff said city hall will be removed from the lease after the new facilities are completed. The financing package requires the city to maintain insurance, including rental-interruption insurance, and comply with continuing-disclosure requirements.
Council and next steps: Councilmember Funk moved to adopt the draft resolutions; Mayor Pro Tem Mark Deras seconded. The council conducted a roll-call vote and the measure passed unanimously. Bond counsel said the city team would finalize the preliminary official statement and proceed to pricing following a scheduled credit rating call; staff emphasized the council retains discretion to delay pricing if market conditions change before sale.
Ending: With the approvals complete, staff said they will post required disclosure documents and proceed with the sale and closing steps, subject to the financing timelines and market conditions.
