Measure I first-tranche proceeds move projects forward after city’s credit ratings rise to AAA

Santa Clara’s Bond Compliance Oversight Committee received an update May 14 on Measure I implementation, including bond sale results, project status and staffing needs. Mark Freitas, deputy city manager overseeing the Measure I bond program, said voters approved Measure I in November 2024 and authorized up to $400 million in bond funding to address identified infrastructure needs.

Freitas told the committee that the city issued a two‑series first tranche in early 2026 — Series 2026A (tax‑exempt general obligation) and Series 2026B (tax‑exempt bonds for projects used by eligible nonprofits). “Series A was in the amount of approximately $71,000,000,” Freitas said, and “the Series B for the first tranche came in at about $25,000,000,” for a combined sale of about $96,634,500 to fund the phase‑1 project list acknowledged by the committee.

Freitas also reported that presentations to two credit‑rating agencies preceded the sale and that Moody’s and S&P elevated the city’s ratings to triple‑A in January 2026. “That credit rating improvement ... translates into a lower ad valorem tax that will be applied to property taxes,” he said, noting the upgrade should reduce borrowing costs over the life of the bonds.

Matthew Nguyen, principal engineer for public works and bond‑program manager, outlined the delivery lifecycle (scoping, design, bid, construction, beneficial use) and described the current project inventory: 14 projects in scoping and assessment, five in the RFP stage, five in design, two under construction and one completed (the Emergency Operations Center). Nguyen said the International Swim Center (ISC) Phase 1 is under construction after a groundbreaking event that morning; staff removed the diving tower and began demo work, and they are aiming for beneficial use in fall 2027. He said Phase 1 work will renovate the three pools, the diving tower and mechanical systems; whether changing rooms are included in Phase 1 or Phase 2 remains under review.

Nguyen reviewed other major projects: consultant selection for Fire Station 5 is planned to go to city council for award on June 23, work on Fire Station 7 is in review and negotiation with a planned council award in August, library projects are moving into RFP and scoping, and storm‑drain improvements total about $16.4 million with $5 million allocated to start Phase 1 (including the Harrison Street flood protection design expected to go to council in August). He also said the Triton Museum needs a roof replacement and staff will begin consultant procurement for design.

On staffing, Freitas said the program will rely on a combination of existing city employees and new hires: the adopted staffing plan includes a deputy city manager, a management analyst, one principal engineer, two senior engineers and one associate engineer; some positions are still in active recruitment. Nguyen said city public‑works staff currently include one principal engineer, two senior engineers and one associate engineer assigned to bond projects, and the department plans to hire additional staff to support delivery.

A committee member asked why some visible projects (for example, recent parking‑lot work at Central Park) did not appear on the Measure I project list; Freitas said field signage is an indicator of Measure I projects and that work not listed in the expenditure plan is likely funded from other capital improvement programs. The deputy city manager also explained Measure I’s reimbursement mechanism: the bond ordinance permits the city to reimburse projects initiated up to 18 months before bond sale, which staff used to bridge funding for the ISC and EOC so construction would not be delayed.

Public concern about a rumored leak from a pond into the ISC pool was raised; Freitas and Nguyen said they were not aware of verified evidence. “We asked the contractor to show us the evidence,” Nguyen said, and staff did not receive substantiation, so from the city’s perspective the issue is a nonissue unless the contractor produces proof.

Freitas concluded by proposing the committee meet again later in 2026 after the fiscal year audit (the fiscal year ends June 30, 2026). He said the next meeting would include expenditure reports with actual costs, a discussion of meeting frequency and training on the rules that govern amendments to the Measure I expenditure plan. The committee’s update was taken as an informational report to note and file; no further action was required at the meeting.