Council authorizes $~71.5M in 2025 refunding bonds to refinance 2015 issuance

The Sacramento City Council authorized the Sacramento City Financing Authority to issue refunding revenue bonds in 2025 to refinance a 2015 refunding revenue issue, a move the city estimated will yield roughly $3.67 million in aggregate cash-flow savings for certain city funds.

Claudia Lara, a debt analyst in the City Treasurer's Office, presented the financing plan and said the 2015 refunding revenue bonds currently have an outstanding par amount of $69,890,000 and a final maturity date of Dec. 1, 2036. The proposed 2025 bonds would keep the same final maturity and are structured to front-load savings through fiscal year 2029.

"The financing plan for the 2025 bonds is based on market conditions ... and is estimated to generate an aggregate cash flow savings of $3,670,000," Lara said. She added the pricing and closing schedule was moved earlier in the calendar to August 21 for pricing and an expected closing on or around Sept. 4 to avoid competing bond issues later in the season.

Vice Mayor Talamantes moved to authorize the bond issuance; Councilmember Kaplan publicly praised the treasurer's staff, noting the plan will generate savings for the general fund, the solid waste fund and the parking fund. The motion carried by voice vote with one councilmember absent.

Staff materials show estimated total sources and uses around $71,500,000 and an expected distribution of savings across funds, including an estimated general fund benefit of roughly $695,000 in the first year and more than $800,000 in subsequent near-term years.

Council voted to approve the financing authority's action and authorized associated staff actions necessary to complete pricing and closing according to the updated schedule.