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Council authorizes up to $465 million in lease revenue bonds to fund city CIP, approves ballpark refunding
Summary
The council authorized up to $465 million in general‑fund‑backed lease revenue bonds for capital projects through FY27 and separately authorized refunding of outstanding 2016 ballpark refunding bonds; staff said refundings will proceed only if debt policy savings thresholds are met.
City finance staff asked the City Council on June 3 to authorize up to $465 million in new, general‑fund‑backed lease revenue bonds to fund previously appropriated capital improvement program (CIP) projects through fiscal year 2027 and to authorize potential refundings of outstanding 2015 lease revenue bonds and 2016 ballpark refunding bonds.
Krista Davidson, financing coordinator, explained the structuring elements: the bonds are expected to be tax‑exempt lease revenue bonds issued under amendments to the city’s 2012 master lease; repayment is expected to be through annual base rental payments from the general fund. Staff said the not‑to‑exceed interest rate is 7%, though market expectations flagged a mid‑single‑digit rate (around 4.5%) and that staff may capitalize a portion of FY26 interest to ease immediate general fund pressure.
The financing included potential refundings that staff said would be undertaken only if the refundings met the city’s debt policy threshold of 3% present value savings. Staff identified four city properties that could be added to the lease pool if necessary to support the issuance — three libraries and a fire station — and said a final list would be presented when the preliminary official statement returns to council in September.
Council members asked about the decision to prefer a bond issuance over expanding the general‑fund commercial paper program and about contingency options if market conditions change; staff said they would right‑size issuance and coordinate with the municipal advisor. Council voted unanimously to authorize the actions; the Public Facilities Financing Authority (PFFA) also approved the related authority item in a separate vote.
Public comment included a question about the morality of using cultural or civic assets (for example library property) in lease revenue deals. Staff said the properties are part of the master lease support and that a final list would be provided in September when the financing plan is refined.
