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Report regarding upcoming bond process for the Community Civic Campus. (Justin Lovell, Financial Services Manager)
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RECOMMENDATION
Recommendation
No formal action is needed. The report is for information only.
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BACKGROUND/DISCUSSION
Bonding Process
The purpose of this memo is to introduce bond issuance in relation to Measure W and the Community Civic Campus. It will also provide an outline for the next steps in the process of the bond issuance. As an overview, Measure W was approved by voters as a half-cent sales tax in November of 2015. The tax became effective April 1, 2016 and has a 30 year term. The Measure W sales tax revenue is used to maintain and enhance locally controlled City services, including the Paving Program and funding the Community Civic Campus.
The Community Civic Campus includes design and construction of a new Library, Park and Recreation facility and a new Police station. Construction of the first phase is slated to begin in January 2020 with the Police station. A majority of the construction costs of the Civic Campus will be funded through the issuance of lease revenue bonds or certificate of participation. These bonds will be secured by a pledge of lease payments in respect to an essential asset that is owned by the City. In this case, the leased asset is expected to be the Civic Campus itself and the City's General Fund will be pledged to make lease payments. More specifically Measure W sales tax revenue will be used as the budgetary source of payments.
Staff has been working with the City's financial advisor, PFM Financial Advisors LLC (PFM), to provide analysis and bonding capacity based on revenue from the Measure W tax. With the project nearing construction the City will begin the first steps in the bond issuance process. The process typically takes four to five months to complete. The key steps in the financing process include the selection of the financing team, drafting of legal and dis...
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