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Council approves bond sale authorization and underwriter for bulkhead replacement project
Summary
The council, acting as the Community Facilities District board, approved Resolution 4525 to adjust bond sale parameters for the bulkhead‑replacement project, including raising the not‑to‑exceed interest rate to 8.1%, authorizing private placement as an alternative and appointing an underwriter.
City staff and municipal advisor Mark Pressman briefed councilors about the financing status for the Community Facilities District 24‑2 bulkhead replacement project. Pressman said higher market interest rates required a change to the previously modeled not‑to‑exceed interest rate and broader authority to pursue either a public offering or a private placement.
"Interest rates are higher than we had modeled originally," Mark Pressman said, describing outreach to private‑placement parties and the need to balance the district’s voter‑authorized maximum tax with prevailing market conditions. The resolution set a revised not‑to‑exceed interest rate of 8.1%, authorized purchase of bond insurance or a reserve policy if those options yield savings, and appointed the underwriter to proceed with market testing.
Council members asked whether property owners and homeowners associations had been informed of the potential cost increases; Pressman said the property owners’ association had been briefed and the city will continue to monitor pricing and placement options. Staff noted property owners retain the ability to prepay their individual assessments and that public‑market refinancing typically includes a 10‑year lockout, but private‑placement terms could vary.
Council approved Resolution 4525 by voice vote. Staff said next steps include finalizing underwriting and placement strategy and returning with documents for bond pricing and closing.
