CITY OF GROVER BEACH
CITY COUNCIL STAFF REPORT
Agenda Item No. 9
Placement: Consent
Meeting Date: March 23, 2026
TO: Honorable Mayor and City Council
FROM: Matthew Bronson, City Manager
PREPARED BY: Kristin Eriksson, Assistant City Manager
Nick Szamet, Administrative Services Director
SUBJECT: Resolution of Intent to Proceed with Measure K-14 General Obligation Bond Issuance
RECOMMENDATION
Adopt a Resolution providing direction to staff to proceed with the issuance and sale of Measure K-14 General Obligation Bonds for local street repair projects, in an amount not to exceed $5 million.
BACKGROUND
Bond Issuance
In November 2014, the City’s voters approved Measure K-14 which authorized the City to issue up to $48 million in General Obligation (GO) bonds to repair and resurface local streets. The City has issued the first four bonds in the series for a total of $38 million with $10 million in bond authorization remaining. These prior GO bond issuances were as follows:
• $5 million in March 2015
• $8 million in March 2016
• $15 million in December 2017
• $10 million in January 2022
On February 10, 2026, staff provided a comprehensive street repair update to the Council on the citywide street maintenance and rehabilitation efforts, including residential road repairs funded through Measure K-14. Since voters approved Measure K-14 in 2014, the City has completed improvements on nearly 320 residential street blocks, representing more than 70% of the planned program. These efforts have resulted in the City’s overall Pavement Condition Index significantly improving since 2014 from a rating of 39 to 69. There are five projects remaining in the Measure K-14 program, with the next project scheduled to begin this summer.
Following the February 10th meeting, staff worked with Albert Peché of A. M. Peché & Associates LLC (who was involved in the planning for Measure K-14 starting in 2013 and has been the City’s Financial Advisor on the first four bond issuances) to begin planning for the next bond issuance and to estimate the tax rate estimate per $100,000 for this next bond issuance. A.M. Peché & Associates was involved in the planning for Measure K-14 starting in 2013 and has been the City’s financial advisor on the first four bond issuances. During the initial planning process in 2014 for Staff Report: Resolution of Intent to Proceed with Measure K-14 Bond Financing Page 2 March 23, 2026
Measure K-14 and for all subsequent bond issuances, the Financial Advisor used a conservative annual fiscal year assessed valuation (AV) growth rate of 2.5%. The actual annual fiscal year AV growth rate for the City has been substantially higher as shown in the table below:
Assessed
Fiscal Year Valuation Growth
2015-16 1,465,324,529 5.21%
2016-17 1,548,746,463 5.69%
2017-18 1,627,337,660 5.07%
2018-19 1,730,925,741 6.37%
2019-20 1,816,621,652 4.95%
2020-21 1,901,510,870 4.67%
2021-22 1,962,334,679 3.20%
2022-23 2,089,068,965 6.46%
2023-24 2,204,816,722 5.54%
2024-25 2,323,290,141 5.37%
2025-26 2,456,475,342 5.73%
The tax rate for the repayment of all GO bonds is set by the County Auditor-Controller in July for the coming fiscal year. In general, the tax rate is based on three factors: 1) amount of bonds issued, 2) interest rates when the bonds are issued, and 3) the assessed valuation. In addition, when setting the tax rate, the Auditor-Controller takes into consideration the amount of funds on deposit in the Debt Service Fund, where the ad valorem taxes are collected and deposited.
The progression of the actual tax rate per $100,000 of AV is:
Bond Year
Tax
Rate
1 2015-16 $24.00
2 2016-17 $34.31
3 2017-18 $51.35
4 2018-19 $85.00
5 2019-20 $85.00
6 2020-21 $85.00
7 2021-22 $85.00
8 2022-23 $95.00
9 2023-24 $95.00
10 2024-25 $90.00
11 2025-26 $85.00
12 2026-27 $94.01 Estimated
Average $74.06 Thru 2025-26
A Tax Rate Statement related to Measure K-14 was provided in the election materials prior to the November 4, 2014 election. The average tax rate from 2015-16, when the first series of bonds was issued, is $74.06, which is below the estimated $77.66 average estimated in the Tax Rate Statement. The tax rates are lower than originally projected given the continued Citywide growth in AV. For the Council’s reference, Table 1 on the following page shows the projected tax rates shown to Council on November 22, 2021, when the Council was considering a new $10 million in GO bond funding based on estimated “AA” rated interest rates:
Staff Report: Resolution of Intent to Proceed with Measure K-14 Bond Financing Page 3 March 23, 2026
Table 1 Estimated Tax Rate for the 2022 Bonds
Bond Issue 2021-22 Tax Rate Per
$100,000
2022-23 Tax Rate Per
$100,000
$10,000,000 GO Bond Issue $85.00 $99.05
The conservative AV projections compared to the actual growth in AV have continued to produce lower tax rates than initially projected as the GO tax is spread over a larger assessed valuation base. Staff and the Financial Advisor are continuing to use a conservative 2.5% AV growth rate when estimating the tax impact. After the $10 million GO sale (the “2022 GO Bonds”), the actual tax rate along with the prior GO bonds based is shown in Table 2:
Table 2 Actual Tax Rate for the 2022 Bonds
Bond Issue 2021-22 Tax Rate Per
$100,000
2022-23 Tax Rate Per
$100,000
$10,000,000 GO Bond Issue $85.00 $95.00
Staff is now recommending a $5 million issuance in 2026 to provide sufficient funds for Measure K-14 street repair projects over the next year. Although the County Auditor Controller will set the tax rate, it is estimated that the tax rate would be approximately $94.01 per $100,000, as shown in Table 3.
Table 3 Estimated Tax Rate for the 2026 Bonds
Bond Issue 2025-26 Tax Rate Per
$100,000
2026-27 Tax Rate Per
$100,000
$5,000,000 GO Bond Issue $85.00 $94.01
Staff is seeking the Council’s approval to direct staff to commence proceedings for the issuance of the 2026 GO Bonds in a principal amount not to exceed $5 million. This amount would provide sufficient funding for the next two to three years of street repair with $5 million in bond authorization remaining.
In addition, the Financial Advisor has noted that the 2015 Bonds and 2016 Bonds are eligible to be refinanced since they are now callable. Based on current interest rates, there is savings available in refinancing the 2015 Bonds without extending the maturity as well as potential savings in refinancing the 2016 Bonds. Staff will continue to work with the financial advisor to monitor this level of savings and determine by May whether to proceed with a Competitive Sale (if the only issuance is the $5 million in new money), or a Negotiated Sale (if the refinancing will be added to the $5 million in new money). If there is a Negotiated Sale, the City will work with Piper Sandler & Co., as underwriter. Piper Sandler served the City as Placement Agent for the recent issuance of Water Bonds in 2025 and Wastewater Bonds in 2022. Legal documentation reflecting the method of sale and potential savings will be brought back to the Council at the May 26, 2026 City Council meeting for approval.
Pending Council approval, the subsequent schedule of related actions would be:
May 1, 2026 Decision to add a refunding component to the Bond issuance May 26, 2026 Adoption of Resolution of Issuance of Bonds June 30, 2026 Closing of Bond Sale
Staff Report: Resolution of Intent to Proceed with Measure K-14 Bond Financing Page 4 March 23, 2026
Staff is recommending the Council adopt the Resolution of Intent shown in Attachment 1. This Resolution provides not only direction to staff to proceed with planning for this next bond issuance but also authorizes the City Manager or designee to enter into amended agreements with A. M.
Peché & Associates LLC to act as Financial Advisor and Albert Reyes with Kutak Rock LLP to act as Bond / Disclosure Counsel. If the City proceeds with a Negotiated Sale, a Bond Purchase Agreement between the City and Piper Sandler will be brought back to the Council for approval at the May 26, 2026, meeting.
The Financial Advisor, the Bond/Disclosure Counsel, and the Underwriter (the “Financing Team”) will be paid along with other costs of issuance from the proceeds of the 2026 Bonds once the transaction closes. Payment to the Financing Team is contingent upon the sale of the 2026 Bonds.
As was the case with the first four bond issues, these costs will be paid from the premium generated for the 2026 GO Bonds and the full par amount of $5 million will be deposited into the Project Fund to be used solely for Measure K-14 street repair work.
FISCAL IMPACT
There is no direct fiscal impact resulting from the Council taking action to initiate the process of issuing and selling the 2026 Bonds. Once the 2026 Bonds close in June 2026, the additional funds would be made available for street repair projects in early July 2026. The final debt service schedule will be submitted to the County Auditor-Controller, and the County will place the debt service on the tax rolls for 2026-27. Compensation to the Financing Team is continent upon, and payable from, the sale of bonds.
ALTERNATIVES
The Council has the following alternatives to consider:
1. Adopt the resolution directing staff to proceed with the issuance and sale of Measure K-14 General Obligation Bonds for local street repair projects, in an amount not to exceed $5 million; or
2. Provide alternative direction to staff.
PUBLIC NOTIFICATION
The agenda was posted in accordance with the Brown Act.
ATTACHMENTS
1. Resolution of Intent
Multi-Year Goals
☐ Public Safety and Community Services ☐ Economic Development and Housing ☐ Community Infrastructure ☒ Financial and Organization Sustainability Council Priorities
☐ Water & Wastewater Infrastructure ☐ Community Engagement ☒ Street Improvements and Maintenance
4914-6222-8367.4
RESOLUTION NO. 26-__
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GROVER BEACH,
CALIFORNIA, DIRECTING STAFF TO PROCEED WITH PLANNING FOR THE
ISSUANCE OF GENERAL OBLIGATION BONDS TO FINANCE AND
REFINANCE CERTAIN STREET IMPROVEMENTS AND APPOINTING A
FINANCING TEAM IN CONNECTION THEREWITH
WHEREAS, the City of Grover Beach (the “City”) is a municipal corporation duly organized and existing under the laws of the State of California; and WHEREAS, the City is empowered under Article 1 of Chapter 4 of Part 3 of Division 4 of Title 4 of the Government Code of the State of California, commencing with Section 43600 thereof, and Section 53506 et seq. of the Government Code of the State of California, to its issue general obligation bonds which are authorized by two-thirds of the electors voting on the proposition; and WHEREAS, more than two-thirds of the electors voting at a municipal election held on November 4, 2014, voted in favor of Proposition K-14 (the “Bond Authorization”) authorizing the issuance by the City of general obligation bonds in the aggregate principal amount of up to $48,000,000 for the purpose of providing funds to repair and resurface deteriorating residential and major streets (the “Improvements”); and
WHEREAS, the City Council desires to direct staff to pursue the steps necessary to issue general obligation bonds (the “Obligations”) under the Bond Authorization: (i) to finance certain Improvements (the “2026 Streets Project”) in the principal amount of not to exceed $5,000,000; and (ii) in the discretion of City staff, and provided that debt service savings can be achieved, to refund, either in whole or in part, one or more series of outstanding bonds that were previously issued pursuant to the Bond Authorization (the “Refunding Project”); and WHEREAS, the City Council previously authorized the City Manager to enter into agreements prior to the Bond Authorization with A. M. Peché & Associates LLC, as municipal advisor, and Kutak Rock LLP, as bond and disclosure counsel, in connection with the issuance of the Obligations; and
WHEREAS, in the event that City staff determines that the Refunding Project will result in debt service savings to the City and its residents, the Obligations will be sold through a negotiated underwriting with Piper Sandler & Co.
NOW, THEREFORE, BE IT RESOLVED, DETERMINED AND ORDERED BY THE CITY OF GROVER BEACH AS FOLLOWS:
SECTION 1. Direction to Staff. The City Manager and Assistant City Manager and all other employees of City are hereby authorized and directed to take such actions as are necessary or appropriate to provide for the issuance of the Obligations to finance the 2026 Streets Project and refinance the Refunding Project. At such time as determined appropriate, the City Manager and Assistant City Manager and all other employees of City are hereby authorized and directed to present to this City Council all resolutions and documents necessary in connection therewith.
Nothing in this Resolution shall in any way commit the City to issue the Obligations, and the City is under no obligation to go forward with issuance of the Obligations unless satisfactory terms are presented to the City.
Attachment 1
-2- 4914-6222-8367.4
SECTION 2. Approval of Consultants. The City Council hereby reaffirms the City’s agreements with the firms of A. M. Peché & Associates LLC, as municipal advisor, and Kutak Rock LLP, as bond and disclosure counsel, in connection with the proposed issuance of the Obligations. The City Council hereby authorizes the Mayor, City Manager and Assistant City Manager to update and amend such agreements with said firms for their respective services, if needed, including as required to reflect the issuance of Obligations for the Refunding Project.
Payment of fees and expenses with respect to such agreements shall be contingent upon the issuance of the Obligations. In addition, in the event that City staff determines that the Refunding Project will result in debt service savings to the City and its residents, City staff will appoint Piper Sandler & Co. to undertake a negotiated underwriting of the Obligations.
SECTION 3. Other Acts. The officers and staff of the City are hereby authorized and directed, jointly and severally, to do any and all things, to execute and deliver any and all documents, which in consultation with the City Attorney and Kutak Rock LLP, bond and disclosure counsel, they may deem necessary or advisable in order to effectuate the purposes of this Resolution, and any and all such actions previously taken by such Officers or staff members are hereby ratified and confirmed.
SECTION 4. Effective Date. This Resolution shall take effect upon adoption.
On motion by ______________, seconded by ______________, and on the following roll call vote, to wit:
AYES: Council Members:
NOES: Council Members:
ABSENT: Council Members:
ABSTAIN: Council Members:
the foregoing Resolution was PASSED, APPROVED, AND ADOPTED at the Regular Meeting of the City Council of the City of Grover Beach, California, this 23RD day of March 2026. ___________________________________
KASSI DEE, MAYOR
ATTEST:
______________________________
WENDI SIMS, CITY CLERK