City plans $1.76 billion refunding and to modernize utility master bond ordinance; staff proposes 9–10% cap though budgeted transfer starts at 5%

Melissa Dubeowski, the city's finance director, presented detailed plans for a multi-part bond transaction affecting the Combined Utility System (CUS).

Dubeowski told the committee the city's CUS has "$1,770,000,000 of 1st lien revenue bonds that are currently callable" and that the administration plans to examine refundings for present-value and cash-flow savings while ‘‘moderniz[ing] and update[ing] the master bond ordinance.’’ She said the FY27 budget includes structural changes—most notably moving the solid-waste department into CUS and a proposed 5% right-of-way transfer—but staff is proposing that the master bond ordinance include a higher cap ("somewhere between the 9 to 10% range") so future councils have flexibility while preserving bondholder protections.

Staff outlined the refunding strategy: replace variable-rate exposure by converting swaps and variable-rate debt into long-term fixed-rate bonds, refund commercial paper, and pursue a tender process that in past transactions attracted roughly 30% participation. The transaction size across series is "expected to be about $1,760,000,000" (2026b ~$785,000,000; 2026c/d ~$975,000,000). Staff estimated around $4,000,000 in savings (~0.25%) and an estimated true interest cost near 4.25% given recent benchmark-rate increases. The RCA is expected to go to city council in October, with pricing in November and the transaction closing in December.