Joint Special CC/BFPD/Odesa
02/17/26 05:15 PM
Finance
Sydnie Harris
Bond
Doc ID: 6299
AGENDA ITEM
AGENDA MATTER:
CITY OF BARSTOW LOCAL MEASURE I TRANSPORTATION SALES TAX REVENUE CERTIFICATES OF PARTICIPATION, SERIES 2026 (“2026 COPS”) EXECUTIVE SUMMARY:
On January 20, 2026, the City Council held a workshop to discuss the conditions of the City’s streets and roads as well as priority projects. The City Council considered Local Measure I Transportation Sales Tax financing options regarding implementation, structure, and potential impacts on future Measure I funds available for maintenance. Ultimately, the City Council gave direction to staff to proceed with pursuing a financing secured by Local Measure I funds that would maximize proceeds for the FY25-26 Street Rehabilitation Project (“Project”).
On February 3, 2026, the City Council awarded the Project to Sully Miller Contracting, approved an overall Project budget of $16,323,788, and approved a Task Order with Merrell Johnson Engineering for construction management, surveying, and inspection services in the amount of $1,598,2920.
Given the size and scope of the Project, funding it on a pay-go basis (i.e., waiting to construct the Project until enough Measure I funds-which currently sunset in 2040-are accumulated) would severely delay the Project and likely result in much higher construction costs due to inflation.
Staff and the financing team are now ready to present, for consideration by the City Council, the execution and delivery of City of Barstow Local Measure I Transportation Sales Tax Revenue Certificates of Participation, Series 2026 (“2026 COPS”) to generate approximately $12.5 million in proceeds to fund a portion of the Project. Fiscal Year 2025-26 Measure I receipts will not be leveraged for the financing, and the City can use these receipts toward the Project or keep them in the Measure I fund balance for future uses. Moneys advanced from the General Fund, if any, between now and the delivery of the 2026 COPS will be reimbursed from 2026 COP proceeds.
Staff recommends that the City Council adopt the proposed resolution of the City Council of the City of Barstow approving the execution and delivery of the City of Barstow Local Measure I Transportation Sales Tax Revenue Certificates Of Participation, Series 2026 in an aggregate principal amount of not to exceed $13,000,000 authorizing the execution and delivery of a Trust Agreement, an Installment Sale Agreement, and a Certificate Purchase Agreement and authorizing necessary actions and execution of other necessary documents in connection therewith.
Council Members will receive a presentation on debt issuance disclosure training.
DISCUSSION:
Staff and consultants have had an initial discussion with the San Bernardino County Transportation Joint Special CC/BFPD/Odesa
02/17/26 05:15 PM
Finance
Sydnie Harris
Bond
Doc ID: 6299
AGENDA ITEM
Authority (“SBCTA”) and expects to receive a letter from SBCTA acknowledging that each of the projects in Exhibit A of the proposed resolution is eligible to be funded with the City’s local share of Measure I funds. The projects described in Exhibit A of the resolution include projects in addition to the FY25-26 Street Rehabilitation Project in order to obtain broader project approval from SBCTA and to provide flexibility to the City. Barring unforeseen circumstances or unless otherwise directed by City Council, 2026 COP proceeds will be directed to the FY25-26 Street Rehabilitation Project.
If approved by the City Council, the City of Barstow would authorize the preparation, sale and delivery of the 2026 COPS in an aggregate principal amount not to exceed $13,000,000. Debt service on the 2026 COPS would be repaid with Installment Sale Payments made by the City (to purchase the Project over time) to the Public Property Financing Corporation of California (“PPFCC”), a nonprofit public benefit corporation serving as the counterparty to the Installment Sale Agreement. Measure I receipts, as and when received by the City, will be applied to make the Installment Sale Payments. The PPFCC would assign its right to receive the Instalment Sale Payments to U.S. Bank Trust Company, National Association, (the “Trustee”) under the Trust Agreement.
Not all the projected local share of Measure I funds would be consumed by debt service. For the 2026 COPS to be marketable to investors, the financing would be structured with 1.5x debt service coverage.
For example, the City received $1,712,469 in local share of Measure I funds in Fiscal Year 2024-25.
Assuming no growth or decline in revenues, the maximum annual debt service, through a final maturity of 2040, would be approximately $1.14 million to achieve 1.5x debt service coverage ($1.71 million/$1.14 million). Therefore, an estimated $570,000 of local share Measure I funds would remain available each year for other qualified Measure I expenditures, including maintenance. In the current market, leveraging Measure I receipts from Fiscal Year 2026-27 through Fiscal Year 2039-40, approximately $12.5 million in project proceeds could be generated with this type of financing structure.
The proposed resolution approves the financing plan outlined above, appoints professionals to assist with the financing, authorizes reimbursement of funds spent on the Project with 2026 COP proceeds, and approves all documents and actions needed to authorize the execution and delivery of the 2026 COPs, including the following substantially final form financing documents together with any changes or additions deemed advisable and approved by an Authorized City Representative:
Installment Sale Agreement: The Installment Sale Agreement between the City and the PPFCC provides for the PPFCC to finance the costs of and transfer the completed financed portion of the Project to the City, in consideration of which the City will obligate itself to make Installment Sale Payments for the Project to the PPFCC in the amounts and on the dates set forth in the Installment Sale Agreement. The Installment Sale Payments will be due on dates and in amounts sufficient to pay scheduled debt service on the 2026 COPS. Trust Agreement: The City, the PPFCC, and the Trustee will enter into the Trust Agreement, pursuant to which the PPFCC will assign to the Trustee its right to receive the Installment Sale Payments and pursuant to which the Trustee will execute and deliver the 2026 COPS, evidencing fractional interests in the Installment Sale Payments. The Trust Agreement defines the terms and Joint Special CC/BFPD/Odesa
02/17/26 05:15 PM
Finance
Sydnie Harris
Bond
Doc ID: 6299
AGENDA ITEM
conditions of the 2026 COPS, including collection and application of the Installment Sale Payments under the Installment Sale Agreement, prepayment provisions, investment and management of funds and accounts, and the rights and obligations of the City, the PPFCC, the municipal bond insurer, if any, the Trustee, and the Certificate holders. Certificate Purchase Agreement: The Certificate Purchase Agreement between the City and the Underwriter (Stifel, Nicolaus & Company, Incorporated), defines the terms and conditions under which the 2026 COPs will be purchased by the underwriter.
The proposed resolution also sets forth certain not-to-exceed parameters for the 2026 COPS, including a principal amount not exceeding $13 million, a true interest cost not exceeding 4.0%, and an underwriter’s discount not exceeding 0.8% of the principal amount of the 2026 COPS. The 2026 COP proceeds in excess of estimated project proceeds cover costs of issuance, including but not limited to consultant fees, underwriter’s discount, counterparty’s fee, trustee’s fee, credit rating, bond insurance, reserve surety policy, and printing. The table below summarizes the finance charge, project proceeds, average annual debt service, and total debt service amount assuming the 2026 COPS were delivered at a true interest cost of 4.00% (instead of current market rates as described in the Good Faith Estimates in the Fiscal Impact section).
If the City Council adopts the proposed resolution authorizing the Trustee to execute and deliver the 2026 COPS, the financing team would proceed with developing the Preliminary Official Statement (the offering document for the marketing and sale of the 2026 COPS) and the Continuing Disclosure Certificate (an agreement that would obligate the City to continue providing certain information to certificate holders) as well as seeking a credit rating and bond insurance/surety policy. Staff would then bring the Preliminary Official Statement and Continuing Disclosure Certificate for approval by the City Council on April 7, 2026.
The 2026 COPS are anticipated to be sold and delivered in May 2026, at which time the City would receive the project proceeds.
Council Members will receive a presentation on debt issuance disclosure training.
FISCAL IMPACT:
Pursuant to Government Code Section 5852.1, good faith estimates (obtained from the underwriter or the municipal advisor) must be disclosed at a public meeting before the authorization of the 2026 COPS.
Required good faith estimates are provided in the resolution; the table below summarizes those estimates and includes additional information.
Joint Special CC/BFPD/Odesa
02/17/26 05:15 PM
Finance
Sydnie Harris
Bond
Doc ID: 6299
AGENDA ITEM
* These are good faith estimates only and are based on market rates as of February 4, 2026. Final results will likely differ based on market conditions as of the actual sale date and other factors. However, for the financing to proceed, the not-to-exceed parameters described in the previous section must be met.
RECOMMENDED ACTION:
Adopt Resolution No. 5272-2026 of the City Council of the City of Barstow approving the execution and delivery of the City of Barstow Local Measure I Transportation Sales Tax Revenue Certificates Of Participation, Series 2026 in an aggregate principal amount of not to exceed $13,000,000 authorizing the execution and delivery of a Trust Agreement, an Installment Sale Agreement, and a Certificate Purchase Agreement and authorizing necessary actions and execution of other necessary documents in connection therewith.
ATTACHMENTS:
1. City Resolution No. 5272-2026
2. Form of Installment Sale Agreement
3. Form of Trust Agreement
4. Form of Certificate Purchase Agreement