Fresno council authorizes lease revenue bond package to fund fire, 9‑1‑1 and police projects
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Summary
The Fresno City Council on Aug. 14 approved a lease revenue bond authorization that will provide funding for three public‑safety projects — a new Fire Station 12, a 9‑1‑1 dispatch center and tenant improvements for a new police headquarters — with the administration citing an A+ credit rating and a plan to mix impact fees and general‑fund resources to pay debt service.
The Fresno City Council on Aug. 14 approved a lease revenue financing package that will fund three public‑safety projects: a replacement Fire Station 12, a new 9‑1‑1 dispatch center and tenant improvements at a planned police headquarters.
In a staff presentation, Finance Director Santino D'Nisi told the council the proposed issuance would cover an estimated $18 million for Fire Station 12, $16.8 million for the 9‑1‑1 call center and about $12 million for police headquarters tenant improvements. D'Nisi said the administration is seeking authority to sell up to $56 million of bonds to provide market contingency and to capitalize interest so debt service payments begin in fiscal 2029‑30. "That helps the city with lowering borrowing costs and interest costs," he said, noting S&P affirmed an A+ rating for this issuance.
Why it matters: City leaders said the aging facilities — including a police building with recurring HVAC and electrical problems and an older fire station — hamper operations and employee safety. Mayor Jerry Dyer argued the timing is favorable for borrowing: "When we borrow money cheaper, we save taxpayer dollars on that debt service," he said, adding the projects will improve service and working conditions for first responders.
Council questions and staff responses: Council members pressed staff on two main issues: (1) why the requested authorization exceeds the three projects' line‑item estimates (about $47 million) and (2) how the ongoing debt will be paid.
- On size: D'Nisi and staff said the $56 million cap includes a market contingency buffer (to cover possible higher interest rates or market changes between authorization and sale) and capitalized interest to delay the start of payments. Assistant city staff clarified the extra $9 million is authority "not to exceed" in case market conditions change.
- On repayment: City staff explained roughly half of the public‑safety debt service is expected to be covered by development impact fees earmarked for police and fire facilities; the other half would come from the general fund once pension obligations roll off in 2029. Santino D'Nisi estimated total annual debt service on the combined financing at about $3.9 million, with roughly half paid from impact fees.
Operational details and oversight: The council heard project schedules and construction status: Fire Station 12 and the 9‑1‑1 center already have construction awards (Soltek Pacific) and target late‑2026 completions; the police headquarters financing covers tenant improvements for a privately owned building to be leased by the city under a 21‑year lease.
The vote and next steps: The Fresno Joint Powers Finance Authority approved its resolution 3‑0, and the City Council approved the city resolution 7‑0. Council members said they intend to monitor the debt service impact and how impact fee revenues materialize. Staff will proceed with final sale preparations and return with bond documents and schedules.
What remains: Staff said the administration will finalize sale timing and return to council with the financing details. Council members asked for follow‑up information on the split between impact fees and general‑fund responsibility and sought assurances the city would continue to prioritize other aging facilities when current funding and capacity allow.
Vote: Council approved the financing package 7‑0. The JPFA vote was 3‑0.
