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Oxnard committee backs up to $55 million refunding of 2014 wastewater bonds to save about $375,000 a year
Summary
The Finance and Governance Committee voted 3-0 to recommend that the City Council authorize issuance of 2025 wastewater revenue refunding bonds not to exceed $55 million to refund callable 2014 wastewater bonds; staff and consultants estimated annual savings of roughly $375,000 and outlined timing and next steps.
The Oxnard Finance and Governance Committee on June 24, 2025, voted 3-0 to recommend that the City Council adopt a resolution authorizing the issuance of 2025 wastewater revenue refunding bonds in an amount not to exceed $55,000,000, to refund outstanding 2014 wastewater revenue bonds.
Consultants from NHAdvisors, led by Christian Sprunger, presented the refinancing plan and estimated that refunding the outstanding 2014 bonds would save the city and ratepayers about $375,000 a year — roughly a 5.5% net present value savings under current market assumptions. Sprunger said the 2014 bonds carry approximately 5% interest and about $51,700,000 of outstanding par; the proposed 2025 refunding would be fixed‑rate debt with the same final maturity and an estimated par near $50,000,000 in current market conditions. The resolution before the committee includes a not‑to‑exceed amount of $55,000,000 to provide flexibility for market pricing and structure on the day of sale.
Sprunger summarized the planned timeline: staff and bond counsel will complete financing documents, proceed through the rating/placement process, return to council in July and potentially sell the bonds in the market with a closing likely in August.
Committee members and the public asked detailed questions about a separately planned State Revolving Fund (SRF) loan for wastewater work. City staff said the SRF program could make up to $88,000,000 available to the city at an estimated 0.9% interest rate; the city had not drawn on the SRF loan in prior fiscal years. Staff and consultants noted the SRF loan would be subject to an application and award process and that the loan can have favorable below‑market pricing, a delayed repayment start and funding limits determined by state allocations.
Regarding debt structure and seniority, NHAdvisors said all outstanding wastewater debt — the 2014 bonds, 2018 bonds and the SRF loan as proposed — would be on a parity basis with an equal pledge on net revenues of the wastewater fund; there was no senior/subordinate priority between the existing issues and the proposed refunding bonds. Committee members asked staff to provide additional analysis of the wastewater fund’s debt‑service coverage ratios when the SRF loan repayment begins in fiscal 2029 so the council can assess whether rate adjustments may be necessary.
A member of the public, Jim, and Committee Member Lavery raised procedural and cost questions about fees, underwriter compensation and how the city will evaluate whether it received competitive pricing. NHAdvisors said the municipal advisor is a fiduciary to the city and that underwriter compensation (the underwriting discount) is commonly under 1% — the staff report used an estimate of 0.75% — and that the advisor will make a day‑of‑sale recommendation to the council assessing comparable transactions.
After discussion, the committee moved the recommendation to council. The motion passed unanimously.
