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West Sacramento approves EIFD and Bridge IFD bond package worth up to $86.5 million
Summary
The City of West Sacramento on May 21 approved a linked package of resolutions authorizing the sale of tax-increment bonds for the city's Enhanced Infrastructure Financing District No. 1 and the smaller Bridge-area Infrastructure Financing District No. 1, clearing the way for up to $80 million in EIFD bonds and up to $6.5 million in IFD bonds.
The City of West Sacramento on May 21 approved a package of five related financing resolutions authorizing the issuance and sale of tax-increment bonds for the city's Enhanced Infrastructure Financing District (EIFD No. 1) and the smaller, interior Bridge-area Infrastructure Financing District (IFD No. 1).
The actions included council resolutions authorizing an EIFD bond issuance not to exceed $80,000,000 and IFD bond authorizations not to exceed $6,500,000, plus related pledge and bond-purchase agreements adopted by the West Sacramento Financing Authority. Council members voted aloud on each item; each motion passed by recorded roll call.
The package will let the city move forward with a first-of-its-kind EIFD public offering and a smaller, nonrated IFD sale. Municipal advisor Del Rio Advisors and underwriters told Council they expect to deliver roughly $50 million in project proceeds on a rated EIFD issuance and up to about $55.3 million if the city secures bond insurance and a surety for the reserve fund. The IFD proceeds were estimated in staff materials at about $3.85 million in project funds. Municipal advisor Ken Deacker told the Council, "This will be the first EIFD bond issued in the state of California." He said the EIFD issuance plan assumes limited near-term assessed-value growth and will rely on scheduled revenue bumps when successor-agency obligations mature in the late 2030s and mid-2040s.
Why it matters: the EIFD and IFD use incremental property-tax revenue tied to increases in assessed value within defined district boundaries; they are not a new tax. The bonds provide up-front capital to accelerate projects identified in the districts' infrastructure financing plans, including transportation, parking, utilities, parks and other public improvements. The city must spend at least 85% of EIFD bond funds on eligible projects within three years of issuance, staff said.
What the council approved (votes at a glance) - Item 15 (City council resolution 25-43): Authorize EIFD No. 1 bonds, not to exceed $80,000,000; approve related pledge agreement and facilities to be financed. Motion: moved by Council member Orozco; seconded by Mayor Pro Tem Sulpizio Hall. Roll call: Council member Ocala — aye; Council member Orozco — aye; Mayor Pro Tem Sulpizio Hall — aye; Mayor Guerrero — aye. Outcome: approved.
- Item 16 (City council resolution 25-44): Authorize IFD No. 1 (Bridge District area) bonds, not to exceed $6,500,000; approve related pledge agreement. Motion: moved by Council member Roscoe; seconded by Mayor Pro Tem Sulpizio Hall. Roll call: Council member Ocala — aye; Council member Orozco — aye; Mayor Pro Tem Sulpizio Hall — aye; Mayor Guerrero — aye. Outcome: approved.
- Item 17 (City council resolution 25-45): As legislative body for IFD No. 1 Bridge District area, authorize issuance and sale of IFD bonds not to exceed $6,500,000. Motion: moved (Mayor Pro Tem Sulpizio Hall presiding for legislative action). Roll call recorded: Council member Ocala — aye; Council member Orozco — aye; Mayor Pro Tem Sulpizio Hall — aye; Mayor Guerrero — aye. Outcome: approved.
- Item 18 (West Sacramento Financing Authority resolution): Approve form and authorize execution of the bond purchase agreement for EIFD No. 1 tax-increment bonds. Motion: moved by Council member Orozco; seconded by Mayor Pro Tem Sulpizio Hall. Roll call: Council member Ocala — aye; Council member Orozco — aye; Mayor Pro Tem Sulpizio Hall — aye; Mayor Guerrero — aye. Outcome: approved.
- Item 19 (West Sacramento Financing Authority resolution): Approve form and authorize execution of the bond purchase agreement for IFD No. 1 Bridge-area tax-increment bonds. Motion: moved by Mayor Pro Tem Sulpizio Hall; seconded by Council member Roscoe. Roll call: Council member Ocala — aye; Council member Roscoe — aye; Mayor Pro Tem Sulpizio Hall — aye; Mayor Guerrero — aye. Outcome: approved.
Key financing details and next steps: City staff and the municipal advisor said they will finalize insurance and surety negotiations, print the official statements and then offer the bonds for public sale in June with a target close and transfer of proceeds in July. The EIFD plan includes a variable debt-service coverage approach that starts higher and may decline as the credit strengthens; Standard & Poor's provided indicative ratings scenarios in staff materials. Staff emphasized the EIFD and IFD proceeds will be allocated to eligible projects in upcoming capital programming and that projects must meet federal and state legal requirements for EIFD/IFD use.
What the city emphasized: city staff said the EIFD is intended to catalyze private development, improve public infrastructure and enhance residents' quality of life by leveraging tax-increment revenue already tied to growth in assessed value.
A photo opportunity with staff and advisors followed the votes.
