Financing authority authorizes 2026 refunding bonds to refinance Sacramento Area Sewer District 2010 and 2015 debt

The Sacramento Area Sewer District / Northern California Sanitation Agency financing authority on May 13 authorized issuance of 2026 tax-exempt refunding bonds to refinance the district's 2010A Build America Bonds and 2015 collection-system bonds.

Glenn Romura, who identified himself as the senior county manager, told the board the district holds two outstanding series: 2015 bonds (callable) and 2010A Build America Bonds (with a make-whole call provision). Romura said current short- and long-term interest rates created a favorable opportunity to refinance both issues "at no cost to the district," estimating roughly $7,000,000 in savings and a net present value of about $5,000,000.

Romura said the 2010 bonds depend on a federal subsidy that covers about one-third of the interest cost and noted sequestration has reduced that subsidy by about 5.7 percent, creating a risk the subsidy may not continue. He described two primary goals for the refunding: eliminate subsidy risk on the 2010 bonds and generate debt-service savings.

Staff provided a sources-and-uses outline showing all bond proceeds would be used to redeem the 2010 and 2015 series and to pay issuance costs. Romura said the proposed 2026 bonds would not extend the current amortization schedule (which runs to 2040) and would not add new money or additional district debt. He estimated annual debt-service would fall from about $14,200,000 to roughly $13,300,000.

Romura identified Montague, DeRoz and Associates as the bond advisor, Wells Fargo as the lead underwriter selected through a competitive RFP, and Siebert, Williams & Shanks as co-manager. He recommended the financing authority adopt the SAC Sewer resolution and authorize the treasurer and the district finance director or district engineer to approve distribution of the preliminary official statement and to execute issuance documents.

There were no members of the public signed up to comment. A motion to adopt the financing-authority resolution and to authorize staff actions was moved and seconded and passed by voice vote; Directors Orozco, Serna, Weddington and McGill recorded "aye," and the motion passed unanimously among members present.

After the vote, a board member noted a related SAC Sewer resolution and asked whether the SAC Sewer board could approve it should a quorum be reached; staff confirmed that would be possible. The chair later confirmed the full district board did not have a quorum to complete the remainder of the agenda, apologized to the public and colleagues, and said staff would agendize a future item to consider procedures to improve quorum attendance. The meeting was adjourned.