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Riverside council authorizes steps to refund 2015 sewer bonds, cites $14.8M estimated savings
Summary
Council approved staff recommendations to move forward with refunding outstanding 2015A sewer revenue bonds; staff said the plan could save roughly $14.8 million (as of June) and reduce near‑term rate pressure for sewer ratepayers while delegating final maturities to the financing team.
The Riverside City Council on Aug. 5 approved staff recommendations to pursue a refunding of the city’s outstanding 2015A sewer revenue bonds, a financing move staff said could save ratepayers millions and reduce near‑term pressure on sewer rates.
City finance staff reported the 2015A bonds were originally issued with roughly $200 million par in 2015 and that $161.1 million remained outstanding as of June 30, 2025. Staff said the existing bonds become callable on Aug. 1, 2025, and that their analysis identified an estimated savings of about $14.8 million as of mid‑June; staff noted market conditions can alter the final savings between prepricing and sale.
The proposed refunding structure — selected after evaluating several debt structures — was presented as a hybrid that balances short‑term and longer‑term savings while limiting the scale of potential future rate increases. Staff presented an indicative true interest cost of about 3.56% for the proposed 2025 issuance and recommended the council approve the financing team, delegate final maturities to that team at sale, and authorize the city manager and CFO to execute financing documents and make necessary budget adjustments in accordance with GASB standards.
Councilmembers asked for clarification about the relationship between the 2015 refunding and earlier refundings; finance staff explained the 2015 bonds had themselves refunded the city’s 2008 bonds, and that the 2025 refunding would follow suit by refunding the 2015 issuance. Councilmember questions focused on how the refinancing would affect capital improvement plans and whether the savings would be passed to ratepayers; staff said savings would be realized by the sewer fund and could mitigate or delay near‑term rate increases while preserving planned capital projects.
Council moved and staff reported the motion as carried unanimously.
Staff said they will proceed with prepricing and bond sale steps, with final parameters set by the authorized financing team at the time of sale and market conditions.
